Buy Allcargo; target of Rs 386:Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Allcargo LogisticsAllcargo (AGL) reported MTO volumes growth of 9.6% to 2,30,984 TEUs in H1FY16 in a challenging global growth scenario which again re‐inforces our view that LCL volumes continue to grow even amidst choppy global trade environment. CFS business continues to remain a cash cow with 10% revenue growth YoY to Rs1.1bn, EBIT grew 43% led by significant ramp‐up in JNPT 2 volumes, better cargo mix & firm pricing. PES business also showed strong operational growth. AGL trades at 12xFY17E earnings, P/BV of 1.7x, D/E ratio of 0.11x and EV/EBITDA of 5.9x which we feel is a reasonable entry point, considering 20.4% CAGR PAT over FY15‐FY17E period, improving return ratios and strong management bandwidth. Maintain ‘BUY’.AGL has generated cash profit of Rs4.3bn over the last four quarters which has been predominantly used to cut the debt down. At this run‐rate, theoretically AGL can be a net cash company sometime in FY17. Further, AGL is increasingly looking at improving capacity utilization and capex run‐rate can be curtailed to sub Rs1bn per year barring any inorganic opportunity in MTO.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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