Shares of Allcargo Logistics stood as the top performer among major logistic stocks in the last three months. During this period, the stock has climbed from ₹306.75 to ₹426.25, generating a return of over 39%. The stock witnessed a one-way surge, rising 67% from June-Mid low of ₹255.30. On September 15, the stock reached an all-time high of Rs. 452.
The stock has moved from an all-time low of Rs. 58 to Rs. 390 between March 2020 and December 2021, producing an astounding return of 572%. The stock experienced some corrections following the delivery of 5x returns, dropping to Rs. 250 levels in June 2022. It quickly bounced back, though, and has since climbed to the current level of Rs. 420. Over the last three year period the stock delivered 322% returns to its shareholders.
Allcargo Logistics is a small-cap stock with a market capitalization of over Rs. 10,472.8 crore. The company is engaged in providing integrated logistics solutions and offers specialised logistics services across multimodal transport operations, inland container depot, container freight station operations, contract logistics operations, and project and engineering solutions.
On September 17, the Indian government unveiled a much-awaited national logistics policy which will assist the Indian logistics industry moving forward. The main objective of this policy is to bring down the logistics costs for businesses.
At present, the logistics costs in India are as high as 14-15% of the GDP compared to developed nations such as Singapore and the US, which have managed to cap this cost at 7-8% of the GDP. Through the National Logistics Policy, India aims to bring down the cost to 8% of the GDP by 2030.
To bring logistics costs in line with the developed economies, the government has undertaken several initiatives in NLP, including the Unified Logistics Interface Platform (ULIP), Ease of Logistics Services (E-Logs), and SIG—System Improvement Group.
Adding to that, Allcargo Logistics is bullish on its business prospects and expects to grow at an average of 15% annually, mainly driven by organic growth, its Chairman, Shashi Kiran Shetty, said.
The company is also looking to be among the top 10 players in the global logistics space in the next 3–4 years, he said.
According to a recent investors' presentation, the Allcargo group is aspiring to achieve ₹25,000-30,000 crore of revenue by 2026 with as much as ₹20,000-25,000-crore coming from its international supply-chain business, and ₹2,700-3,500 crore from its express and contract logistics segment.
On October 03, the company started the operations of its Malur Logistic Park in Karnataka. The park was spread over two million square feet and set up with an investment of Rs.700 crore.
Despite macroeconomic headwinds from the Ukraine war, inflation and a slowdown in demand. Allcargo Logistics has managed to post a robust performance in the June-ending quarter. In Q1FY23, the company reported a two-fold jump in its consolidated net profit to Rs.280 crore. It had posted a PAT of Rs.106 crore in the first quarter of the previous fiscal.
The revenue from operations during the first quarter of FY23 rose 65% to ₹5,675 crore from ₹3,449 crore in Q1 FY22. The firm's EBITDA rose to Rs. 434 crore in Q2 from Rs. 217 crore in the year-ago period.
According to Statista, the size of the Indian logistics market was around 250 billion U.S. dollars in the financial year 2021. This market is expected to grow to 380 billion U.S. dollars by 2025, at a compound annual growth rate of 10 to 12%.
An average of 02 analysts polled by MintGenie have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
