Started in 2010, Delhi based, AVG Logistics Limited is a third-party logistics service operator. The company offers Full Truck Load (FTL) and 'hub-and-spoke' transportation model and warehousing services to selected clients with the pan-India distribution network and automated technology systems. AVG offers its customers services in three key areas:(1) Transportation whereby company provides point-to-point, less than truck-load, time-definite transportation services;(2) Warehousing whereby company provides warehousing, distribution and cold-chain warehousing; and (3) Value-added Services including, temperature-controlled logistics, supply chain solutions and cargo handling services at integrated check posts. As of September 30, 2017, the company had five (5) trans-shipment centres at Guwahati, Bangalore, Hyderabad, DelhiUP border, and Kundli (Delhi-Haryana border) and forty nine (49) branches across India, covering twenty three (23) states as of September 30, 2017. It operates two hundred sixty four (264) owned containerised vehicles which are GPS-enabled vehicles, of which eighty five (85) are refrigerated (reefer) trucks. AVG also provides warehousing facilities to selected customers and the warehouses are well connected to several manufacturing and consumption clusters in India aggregating to 3.54 lakh square feet. It has warehouses in Modinagar, Ghaziabad, Delhi and Panipat. The company is in the process of setting up additional large format, multi-user warehouses in certain strategic locations and have acquired land at Agartala in Tripura and Mysore in Karnataka adding 1.08 lakhs square feet which will enable the expansion of its warehousing space to 4.62 lakhs square feet by April, 2019. As of January 31, 2018, company had 521 full-time employees. On financial performance front, AVG has posted total income/net profits of Rs. 96.32 cr. / Rs. 1.91 cr. (FY13), Rs. 130.41 cr. / Rs. 2.62 cr. (FY14), Rs. 183.32 cr. / Rs. 3.19 cr. (FY15), Rs. 192.29 cr. / Rs. 3.80 cr. (FY16) and Rs. 194.386 cr. / Rs. 4.43 cr. (FY17). For H1 of FY18, it has earned net profit of Rs. 3.46 cr. on a turnover of Rs. 103.59 cr. Thus it has shown consistent good growth in top and bottom lines. For last three fiscals, it has posted an average EPS of Rs. 5.99 and an average RoNW of 21.76%. Issue is priced at a P/BV of 3.01 on the basis of its NAV of Rs. 35.55 as on 30.09.17. If we annualise latest earnings and attribute it on fully diluted post issue equity then asking price is at a P/E of around 16 against industry average of 45. It is considering Sicals Logistics, Tiger Logistics, Total Transport, VRL Logistics and Snowman as its listed peers that are trading at a P/E of around 33, 19, 11, 39 and -431 respectively (as on 21.03.18 on BSE/NSE). So issue looks reasonably priced. On merchant banker's front, this is the 3rd mandate from its stable and out of last two listings, both opened at a premium to offer price ranging between 16 to 20% on the day of listing. As per financials, company's performance is very good, RoNW is 21.76% for last three fiscals and issue is reasonably priced as per latest earnings. Company will use fund generated from IPO to expand its warehousing facilities and that will help it increase revenues. So we give NEUTRAL rating to this SME IPO as per current market situation and investors may invest in this IPO for medium to long term.
✍️ Post a Comment