Started in 1994, Orissa Bengal Carrier Limited is one of the logistics company headquartered at Raipur, Chhattisgarh, serving a broad range of industries, including the steel, coal, aluminium, cement, petrochemicals, paper, marble, tiles, infra, textile, FMCG. The various types of services provided by company include: Full Truck Load Transport Services, Parcel and Part Truck Load Services/less than Truck Load (LTL),. The main business activity of company is Full Truck Load Transport service where in company does transport the consignment by road all over India. Company is maintaining its own fleet contains 93 commercial vehicles which includes trucks and trailers. In addition to this company hire around 300 vehicles from local market in the area from where service is to be provided which enable them to timely arrangement of vehicle at the customer place. The specification of vehicle is depending on the type of service required by Customer. The fleet operates across the country ensuring nation-wide services to corporate and government customers. Company has a growing network 45 branch offices spread across the various regions of the country, which serves as strategic hubs for its operations. Company has a diversified customer base spreading to over 200 customers as on September 30, 2017. As of September 30, 2017 company has 83 employees, including drivers, who are based at different locations across the country. On financial performance front, OBCL has posted revenue/net profits of Rs. 135.46 cr. / Rs. - (0.16) cr. (FY13), Rs. 185.19 cr. / Rs. 0.20 cr. (FY14), Rs. 206.50 cr. / Rs. 0.92 cr. (FY15), Rs. 220.56 cr. / Rs. 1.82 cr. (FY16) and Rs. 213.00 cr. / Rs. 3.95 cr. (FY17). For H1 of FY18, it has earned net profit of Rs. 3.51 cr. on revenue of Rs. 164.01 cr. For last three fiscals it has posted an average EPS of Rs. 15.88 and an average RoNW of 10.24% on an equity base of Rs. 1.72 cr. Issue is priced at a P/BV of 1.31 on the basis of its post issue NAV of Rs. 22.92. If we annualise latest earnings and attribute it on fully diluted post issue equity then asking price is at a P/E of around 9 against industry average of 29. It has shown its listed peers as Tiger Logistics, VRL Logistics and Chartered Logistics who are current trading at a P/E of around 19, 39 and 15 respectively. Thus issue appears reasonably priced. On merchant banker's front, this is the 25th IPO in last three fiscals. Out of last 10 listings, 1 opened at discount to offer price, 1 at par and the rest eight with a premium ranging from 2.6% to 20% on the day of listing. As per financials, growth in bottom-line is very good, but top-line is almost static since FY15 to FY17, RoNW is 10.24% for last three fiscals and issue is reasonably priced as per latest earnings. There is sudden jump in bottom-line and top-line for H1 of FY18. So we give NEUTRAL rating to this SME IPO as per current market scenario.
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