S J Logistics (India) Limited is engaged in the business of providing logistics and supply chain solutions to the customers. The key services include freight forwarding, custom clearance and transportation handling services. They are a Multimodal Transport Operator registered under the Multimodal transportation of Goods Act 1993 to carry on the business of multimodal transportation. During FY23, company has processed over 3100 bill of lading to countries/ areas including African countries, South American countries, Australia, Bangladesh, European countries, Gulf counties, south east Asian countries, Russia, United States of America etc. Apart from this, the company have entered into mutual cooperation or agency agreements with parties located in countries like Ecuador, Brazil, Chile, Peru, United States of America, Paraguay, Bolivia, Hongkong, China, Taiwan, Vietnam and other countries for the logistics and freight forwarding business for inward and outward movement of the cargo and performing all required operations and documentation work for the cargo movement to and from India to the above mentioned countries. The customers belong to various industry sectors across India, including yarn and textile commodities, automobile, heavy engineering goods, power transmission, rubber tapes, pharmaceutical, carpet, handicraft items, iron and steel items. They have a diverse customer portfolio including multinationals, domestic and the MSME, servicing many of India’s industries across various sectors. The procure orders from the customers by way of direct relationship with customers and their representatives. Each of these sectors has unique considerations that we must take into account in optimizing the service offerings to the customers. Company also undertakes ODC (Over Dimension Cargo) which is out-gauge cargo that requires special handling, low bed trailer transportation, necessary authority approvals for road transport, and a specialized team for handling such cargo at ports until loading on the vessel. As per financial performance, S J Logistics (India) Limited has posted total income / net profits of Rs 124.03 Cr / Rs 0.86 Cr (FY21), Rs 105.31 Cr / Rs 1.88 (FY22), Rs 135 Cr / Rs 7.62 Cr (FY23) and Rs 103.38 Cr / Rs 9.31 Cr (upto Q2 FY24). So as per previous financials data, company has shown zig-zag results, but sudden rise in net profit just before IPO is very surprising. Company has posted an average EPS of Rs 5.58 and average RoNW of 17.36% for last three fiscals. Issue is priced at a P/BV of 2.14 as per NAV of 58.3 as on 30.09.23. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 96.11, 23.77 and 9.72 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Hem Securities Limited is associated with this SME IPO and handled 33 SME IPOs in last 3 years. From last 10 IPOs, all opened above issue price or at par on the listing day. As of now from last 10 IPOs, all are trading above issue price. ( As on 06.12.23 ) As per financials, S J Logistics (India) Limited has shown zig-zag results, RoNW is 17.36% and P/E is respectively 96.11, 23.77 and 9.72 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of providing logistics and supply chain solutions, which is highly fragmented and competitive. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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