ABG Infralogistics Limited - Myiris.combreport.myiris.com/firstcall/ABGHEAIN_20120211.pdf · 2012....
Transcript of ABG Infralogistics Limited - Myiris.combreport.myiris.com/firstcall/ABGHEAIN_20120211.pdf · 2012....
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SYNOPSIS
ABG Infralogistics Ltd incorporated
in 1983 specializes in Ports and
Terminals, Port Services, Crane
Hiring and Project Services.
The Company nationwide network of
operations delivers seamless and
efficient solutions to meet the
growing needs of the Indian
economy.
During the quarter ended, the
robust growth of Net Profit is
increased by 129% to Rs.42.20
million.
ABG Infralogistics Ltd has approved
and declared interim dividend for the
financial year 2011-12 @ Rs. 5 per
share of Rs. 10/- each i.e. @ 50% to
the equity shareholders.
Net Sales of the company is expected
to grow at a CAGR of 6% and 5%
over 2010 to 2013E respectively.
Years Net sales EBITDA Net Profit EPS P/E
FY 11 1453.70 910.50 84.30 7.04 33.35
FY 12E 1540.92 936.88 104.42 8.72 26.92
FY 13E 1617.97 983.72 118.55 9.90 23.71
Stock Data:
Sector: Marine Port & Services
Face Value Rs. 10.00
52 wk. High/Low (Rs.) 275.00/156.30
Volume (2 wk. Avg.) 3197.00
BSE Code 520155
Market Cap (Rs.In mn) 2811.15
Share Holding Pattern
1 Year Comparative Graph
C.M.P: Rs. 234.85 Target Price: Rs. 270.00 Date: Feb 11th, 2012 BUY
ABG Infralogistics Ltd Result Update: Q2 FY 12
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Peer Group Comparison
Name of the company CMP(Rs.) Market
Cap.(Rs.Mn.) EPS(Rs.) P/E(x) P/Bv(x) Dividend (%)
ABG Infralogistics Ltd 234.85 2811.15 7.04 33.35 1.21 50.00
Adani Ports and SEZ 149.50 299407.2 5.45 27.42 6.98 45.00
Western India Ship 7.45 2195.10 0.56 13.30 19.61 0.00
VMS Industries 42.55 700.90 0.00 0.00 2.45 0.00
Investment Highlights
Q2 FY12 Results Update
ABG Infralogistics Ltd disclosed a phenomenon rise in standalone net profit for the
quarter ended Sep 2011. During the quarter, the profit of the company surged
129% to Rs 42.20 million from Rs 18.40 million in the same quarter previous year.
Net sales for the quarter for the quarter rose 4% to Rs 369.50 million from
Rs.353.80 million, when compared with the prior year period. It reported earnings
of Rs 3.53 a share during the quarter, registering 146% increase over previous year
period.
Quarterly Results - Standalone (Rs in mn)
As At Sep-11 Sep -10 %change
Net sales 369.50 353.80 4
PAT 42.20 18.40 129
Basic EPS 3.53 1.44 146
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Break up of Expenditure
Declares Interim Dividend
ABG Infralogistics Ltd has approved and declared interim dividend for the financial
year 2011-12 @ Rs. 5 per share of Rs. 10/- each i.e. @ 50% to the equity
shareholders.
Company Profile
ABG Infralogistics Limited Established in 1983 as a crane rental Company. Thereafter
rapidly expanded to nationwide network and become one of India’s foremost
infrastructure solution providers in Ports and Terminals, Port Services, Crane Hiring
and Project Services.
Each of company businesses has been achieving new milestones in efficiency,
productivity and profitability. In the crane rental business, ABG is owning and
operating cranes up to 1250 MT capacity. There are plans to further enhance the
range and limits of capacity to meet India’s growing needs for energy, infrastructure
and natural resources.
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ABG, delivers seamless and efficient solutions to meet the growing needs of the Indian
economy in collaboration with global Port and Logistic providers, has participated in
several infrastructure projects all over the country.
Business Areas:
Crane Hire
ABG Infralogistics Limited (ABG) over the last decades has become a market leader in
the fields of charter hire of heavy duty cranes & Container Handling & Heavy Plant
erection and construction. ABG has made remarkable achievements in owning,
operating, maintaining & giving on hire cranes including heavy duty cranes to a wide
spectrum of services and Industry. ABG owns/operates over 200 cranes ranging from
1250MT to 9MT. The company has access to the fore most engineering technologies
from leading companies worldwide like Liebherr (Germany), Terex Demag (Germany),
Manitowoc (USA), Kobelco (Japan) etc.
Port Operations
In the world of maritime geography, India has always enjoyed a pride of place on the
main sea routes between East and West. Today, its ports handle more traffic than ever
before.
ABG Kolkata:
ABG Kolkata Container Terminal, located in a natural harbor in the western coast of
India, liked to Hooghly River, is a Riverine Port situated about 219 kilometers
upstream from the mouth of the river at Netaji Subhas Dock. It the ideal port for the
Northern and North-Eastern states of India and offers quick and easy connectivity to
their two neighbor countries, Nepal and Bangladesh. ABG Kolkata Container Terminal
specializing in the supply, operation and maintenance of back-up equipment required
to handle loading and unloading of containers at the Netaji Subhas Dock Kolkata Port.
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ABG Kandla
Knaldla Port is one of the largest ports in India, located on the North Western Coast of
India and 90 kilometers from the mouth of the Gulf of Kutch, quickest connections to
the major shipping lanes of Middle East, Europe and the rest of the World with traffic
of over 64 Million Tones per annum and ABG Kandla Container Terminal, is a 30-year
BOT container terminal project, within Kandla Port Trust.
ABG Paradip:
Paradip Port plays a critical role in serving the Eastern and Central parts of the
country and one of artificial harbour in India’s located in the Bay of Bengal in the
state of Orissa, it is a key seaports, the port primarily traffics bulk cargo. Well
connected by rail as well as road to reach into the states of Orissa, Jharkhand,
Chhatisgarh, West Bengal, Madhya Pradesh and Bihar.
ABG Mangalore:
The New Mangalore Port is located at Panambur in Mangalore and only Major Port of
Karnataka. It is 170 nautical miles (310 km) south of Mormugao Port & 191 nautical
miles (354 km) north of Kochi Port. TheMangalore port specialises in exporting iron
ore concentrates & pellets, iron ore fines, POL products, granite stones, containerised
cargo, etc. and its major imports of the port are crude and POL products, LPG, wood
pulp, timber logs, finished fertilizers, liquid ammonia, phosphoric acid, other liquid
chemicals, containerised cargo, etc.
ABG Vizag:
Vizag port is one of the fastest industrial ports in India. This port is natural and most
easily formed port on the east coast of India with a chain of hill; Flanked by massive
rock hills on Southern and Northen side, and forms an important traffic point on the
eastern coast easily accessible to most of the important cities of that region.
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Financial Results
12 Months Ended Profit & Loss Account (Standalone)
Value(Rs.in.mn) FY10 FY11 FY12E FY13E
Description 12m 12m 12m 12m
Net Sales 1370.30 1453.70 1540.92 1617.97
Other Income 76.50 42.30 43.15 45.30
Total Income 1446.80 1496.00 1584.07 1663.27
Expenditure -424.80 -585.50 -647.19 -679.55
Operating Profit 1022.00 910.50 936.88 983.72
Interest -396.90 -356.00 -345.32 -355.68
Gross profit 625.10 554.50 591.56 628.05
Depreciation -465.70 -452.00 -461.04 -479.48
Profit Before Tax 159.40 102.50 130.52 148.56
Tax -55.10 -18.20 -26.10 -30.01
Profit After Tax 104.30 84.30 104.42 118.55
Equity capital 128.20 119.70 119.70 119.70
Reserves 2384.70 2204.50 2308.92 2427.47
Face value 10.00 10.00 10.00 10.00
EPS 8.14 7.04 8.72 9.90
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Quarterly Ended Profit & Loss Account (Standalone)
Value(Rs.in.mn) 30-Jun-11 30-Sep-11 31-Dec-11E
Description 3m 3m 3m
Net sales 377.90 369.50 391.67
Other income 32.70 1.40 1.46
Total Income 410.60 370.90 393.13
Expenditure -159.60 -109.50 -141.00
Operating profit 251.00 261.40 252.12
Interest -86.40 -90.80 -81.72
Gross profit 164.60 170.60 170.40
Depreciation -107.70 -108.50 -106.33
Profit Before Tax 56.90 62.10 64.07
Tax -3.90 -19.90 -10.25
Profit After Tax 53.00 42.20 53.82
Equity capital 119.70 119.70 119.70
Face value 10.00 10.00 10.00
EPS 4.43 3.53 4.50
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Key Ratios
Particulars FY10 FY11 FY12E FY13E
No. of Shares(in mn) 12.82 11.97 11.97 11.97
EBITDA Margin (%) 74.58% 62.63% 60.80% 60.80%
PBT Margin (%) 11.63% 7.05% 8.47% 9.18%
PAT Margin (%) 7.61% 5.80% 6.78% 7.33%
P/E Ratio (x) 28.87 33.35 26.92 23.71
ROE (%) 4.15% 3.63% 4.30% 4.65%
ROCE (%) 24.27% 24.90% 24.38% 24.32%
Debt Equity Ratio 1.44 1.35 1.36 1.36
EV/EBITDA (x) 2.95 3.09 3.00 2.86
Book Value (Rs.) 196.01 194.17 202.89 212.80
P/BV 1.20 1.21 1.16 1.10 Charts: NET SALES & PAT
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P/E RATIO (x):
DEBT EQUITY RATIO:
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EV/EBITDA(x):
P/BV:
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Outlook and Conclusion
At the current market price of Rs.234.85, the stock is trading at 26.92 x FY12E
and 23.71 x FY13E respectively.
Earning per share (EPS) of the company for the earnings for FY12E and FY13E
is seen at Rs.8.72 and Rs.9.90 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 6% and
5% over 2010 to 2013E respectively.
On the basis of EV/EBITDA, the stock trades at 3.00 x for FY12E and 2.86 x for
FY13E.
Price to Book Value of the stock is expected to be at 1.16 x and 1.10 x
respectively for FY12E and FY13E.
We expect that the company will keep its growth story in the coming quarters
also. We recommend ‘BUY’ in this particular scrip with a target price of
Rs.270.00 for Medium to Long term investment.
Industry Overview
Marine Port transport & Services plays critical role in the social an economic
development of a country. India has always enjoyed a pride of place on the main sea
routes and enjoys a vibrant port sector comprising 12 Major ports and 176 notified
non major ports and ranked 16th among the maritime countries and today, ports
handle more traffic than ever before with largest merchant shipping fleet.
Maritime ports handle more traffic than ever before which witnessed sizeable increase
recently across all major ports and traffic grew at 13percent rate per annum
betweem2006-20011 and recorded at 870 million tones total traffic handled by India
ports and 80 percent of total exports are carried by sea out 60 percent through
containerized cargo,
The voluminous traffic at major ports is grow at a compound aggregate growth rate of
8.03 percent by the end 2019-20 is likely to grow at 1214.82 MT. It is estimated that
the capacity at major ports will surpass traffic by 20 per cent by 2020. according to
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the maritime agenda 2020 Government of India Ministry of shipping identified
schemes which would create a capacity to handle traffic well. The proposed investment
during the next 10 years to create the expected capacity will be Rs 277, 000 cores
(US$ 55.29 billion),
Inflow of Investments in Infralogistics sector
• The visakhapatnam port is developing two berths for handling Thermal Coal
and steam coal and this is expected to be completed by March 2013 and port
trust has lined up a mechanization and dredging programme involving an
investment of Rs 260 millions for next two Year.
• To benefit traders in India and offer faster connectivity to china and the Far
East, International Container Transshipment Terminal has launched a direct
service to china.
• For the development of the dry port, Government of India signing a pact with
neighboring countries. By the development of these ports it bring down cost
for traders and provide them access to international markets by inland terminal
directly connected by rail or road to a sea port, and providing services for
handling Temporary storage inspection and customs clearance for international
fright.
• Government of Kerala owned Vizhinjam Port raising more than Rs160
millions(US $ 319.36 Million) through bonds.
• AMET Majesty the country’s first cruise ship, registered in Chennai with an
Indian flag. With these cruise ship India has joined the Global cruise line club.
Three cruise terminals being planned at Mormogao, Mumbai and Kochi with an
investment of of Rs 48 Millions( US $ 95.81 million),
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Investments Policy Update
The Government of India has taken favorable and investor friendly policy for the
development of shipping industry. The highlights of the policy initiatives taken by the
Ministry of Shipping are:
• For Port development projects 100 per cent FDI under the automatic route.
• 100 per cent exemption of income tax for a period of 10 years
• For transparency in the award of projects. Standardization of bidding
documents to ensure uniformity.
• The Model Concession Agreements have been standardized and simplified
• Tariff Authority for Major Ports (TAMP) being set up for tariff setting mechanism
• Bidding of documents has also been standardized to ensure uniformity and
transparency allotment of projects.
• All types of ships have been brought under the Open General License.
Government Initiatives
• Government aims to bring Indian ports at par with the best international ports
in terms of performance and capacity. India's Ministry of Shipping is
considering removing fixing tariffs for major ports, passing responsibility for
this to the ports themselves.
• The Ministry of Shipping has finalized a National Maritime Development
Programme (NMDP) to implement specific programme / schemes for the
development of the Port sector. Under the NMDP, 276 projects at an estimated
cost of Rs 55,8037.3 millions (US$ 11.14 billion) have been identified in the
major Ports to be taken up over a period of 2011-12.
• The Ministry of Shipping has launched Maritime Agenda 2010-20. The Agenda
is a perspective plan of the Ministry for this decade and provides a road map for
comprehensive development of the maritime sector.
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Road Ahead
India is going global with its maritime ambitions with the Ministry of Shipping
planning to set up an agency, Indian Ports Ltd (IPL), on a 50:50 joint venture basis
between ports administered by the Union Government and financial institutions. It
involves funding from the Government. The major ports are likely to have a capacity of
1,229.21 million tonnes per annum (MTPA), while the non-major ports will have a
capacity of 1,457.42 MTPA by 2017.Indian shipbuilding industry is targeting to
acquire a world share of 5 per cent by 2017 from its current share of 1 per cent and
also plans to raise the share of Indian seafarers from the current level of 7 per cent to
at least 9 per cent by 2015 in the global shipping industry.
Moreover, the Indian tonnage, as part of global shipping has recently crossed the 11
million gross tonnage (GT) mark, stated Mr G K Vasan, Union Minister of Shipping
while inaugurating the India Maritime Week in New Delhi.
The Government has identified 23 projects for award, to increase the capacity of ports
by 236.63 MTPA with an estimated investment of Rs 16,743.92 crores (US$ 3.34
billion) under public-private partnership (PPP) mode.
Furthermore, as per the NMDP around 69 projects including improvement of road
connectivity and internal roads in some of the ports and for capacity addition of
124.09 MT are in progress and 18 projects for capacity addition of 67.18 MT are
approved, for which the work is going to commence shortly after completing basic
formalities etc. The industry hopes to achieve its target and increase its infrastructure
capacities.
_____________ ____ _________________________ Disclaimer:
This document prepared by our research analysts does not constitute an offer or solicitation
for the purchase or sale of any financial instrument or as an official confirmation of any
transaction. The information contained herein is from publicly available data or other
sources believed to be reliable but do not represent that it is accurate or complete and it
should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s
affiliates shall not be in any way responsible for any loss or damage that may arise to any
person from any inadvertent error in the information contained in this report. This document
is provide for assistance only and is not intended to be and must not alone be taken as the
basis for an investment decision.
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