sanghvi movers ltdbreport.myiris.com/firstcall/sanmover_20120619.pdf · 2012-06-21 · 1 synopsis...
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SYNOPSIS
We initiated coverage of SANGHVI MOVERS LTD and set a target price of Rs.117.00 for Medium term investment.
SANGVI MOVERS LIMITED is the largest crane services company in India, and ranked 7th largest in the world by cranes International.
During the quarter ended, the Net profit of the company increased to Rs.246.63 millions and registering a growth of 13.53%.
The company has 12 depots across country to ensure timely deployment of cranes and more than 30 operational sites across India.
Sanghvi Movers Ltd has recommended a Final Dividend of Rs. 3 per equity share.
Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 14% over 2011 to 2014E respectively.
Years Net sales (Rs.Mn)
EBITDA (Rs.Mn)
Net Profit (Rs.Mn)
EPS (Rs.) P/E
FY 12 4504.74 3378.19 1017.72 23.51 4.34
FY 13E 5090.36 3793.81 1155.24 26.69 3.83
FY 14E 5650.30 4191.02 1279.00 29.54 3.46
Stock Data:
Sector: Logistics
Face Value Rs. 2.00
52 wk. High/Low (Rs.) 131.30/84.50
Volume (2 wk. Avg.) 2821.00
BSE Code 530073
Market Cap (Rs.In mn) 4419.91
Share Holding Pattern
1 Year Comparative Graph
Sanghvi Movers BSE SENSEX
C.M.P: Rs. 102.10 Target Price: Rs. 117.00 Date: June 19th, 2012 BUY
SANGHVI MOVERS LTD Result Update: Q4 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 (%)
Sanghvi Movers Ltd 102.10 4419.91 23.51 4.34 0.70 150.00
Container Corporation of India 854.50 111070.30 67.54 12.65 2.23 155.00
TIL LTD. 238.00 2406.30 52.82 4.54 0.90 60.00
Action Construction Equipment Ltd 28.45 2642.60 3.32 8.57 1.13 100.00
Investment Highlights
Q4 FY12 Results Update
SANGHVI MOVERS LTD disclosed a phenomenon rise in standalone net profit
for the quarter ended March 2012. During the quarter, the profit of the company
surged 13.53% to Rs 246.63 million from Rs 217.23 million in the same quarter
previous year. Net sales for the quarter rose 15.59% to Rs 1209.75 million from Rs
1046.56 million, when compared with the prior year period. It reported earnings of
Rs 5.70 a share during the quarter, registering 13.53% increase over previous year
period.
Quarterly Results - standalone (Rs in mn)
As At Mar-12 Mar-11 %change
Net sales 1209.75 1046.56 15.59%
PAT 246.63 217.23 13.53%
Basic EPS 5.70 5.02 13.53%
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Break up of Expenditure
Recommends Final Dividend
Sanghvi Movers Ltd has recommended a Final Dividend of Rs. 3 per equity share.
Company Profile
SANGVI MOVERS LIMITED is the largest crane services company in India, and ranked
7th largest in the world by cranes International. The company is engaged in the
business of providing Hydraulic and Crawler Cranes to various industries in the
infrastructure and core sector areas with a fleet of 400 medium to large size Hydraulic
Truck Mounted Telescopic & Lattice Boom Cranes and Crawler Cranes with lifting
capacity 50 MT to 800 MT. It undertakes implementation of turnkey projects, which
includes providing of well maintained equipments, expert technical services and
skilled manpower.
The company has its presence in crane hiring business over two decades. This is the
India’s largest and Asia’s 3rd largest crane hiring company and ranked 7th largest
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crane owning company globally. The company pioneered in catering to crane
requirements of major industries for infra-structure projects in Power, Steel, Cement,
Metal sectors & Metros and caters its product to 75% of traditional Power Sector’s and
65% of the windmill sector’s crane requirement.
It has 12 depots across country to ensure timely deployment of cranes and more than
30 operational sites across India. The company has newly entered the logistics
industry by 132 hydraulic Axles lines. This is Asia’s 1st company to order 132 Axle
lines in a single order and have imported best technology for Indian market.
Logistics:
The transport division is well equipped for the carrying of over dimensional, heavy and
bulk cargo. With experienced professional and the special team the company can carry
any type of Over Dimensional consignments in difficult terrains and long distances
across India. Company is well equipped with the vehicles such as Volvo, MAN, TATA
and hydraulic axles. Pan-India network and customer centric solutions enable the
company to provide a reliable, safe and cost effective service for transportation needs.
Equipments
• Cranes ( Crawler and Truck Mounted)
• Hydrauli Multi Axle Modular Trailer
Clientele:
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Financials Results
12 Months Ended Profit & Loss Account (Standalone)
Value(Rs.in.mn) FY11 FY12 FY13E FY14E
Description 12m 12m 12m 12m
Net Sales 3612.46 4504.74 5090.36 5650.30
Other Income 122.77 209.89 220.38 235.81
Total Income 3735.23 4714.63 5310.74 5886.11
Expenditure -1054.47 -1336.44 -1516.93 -1695.09
Operating Profit 2680.76 3378.19 3793.81 4191.02
Interest -491.96 -770.86 -832.53 -915.78
Gross profit 2188.80 2607.33 2961.29 3275.24
Depreciation -928.85 -1106.03 -1249.81 -1374.80
Profit Before Tax 1259.95 1501.30 1711.47 1900.44
Tax -396.84 -483.58 -556.23 -621.44
Profit After Tax 863.11 1017.72 1155.24 1279.00
Equity capital 86.58 86.58 86.58 86.58
Reserves 5472.79 6188.64 7343.88 8622.88
Face value 2.00 2.00 2.00 2.00
EPS 19.94 23.51 26.69 29.54
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Quarterly Ended Profit & Loss Account (Standalone)
Value(Rs.in.mn) 30-Sep-11 31-Dec-11 31-Mar-12 30-Jun-12E
Description 3m 3m 3m 3m
Net sales 1099.09 1141.00 1209.75 1246.04
Other income 20.90 24.50 23.04 27.19
Total Income 1119.99 1165.50 1232.79 1273.23
Expenditure -316.58 -340.00 -395.07 -372.57
Operating profit 803.41 825.50 837.72 900.66
Interest -256.33 -191.40 -174.03 -191.43
Gross profit 547.08 634.10 663.69 709.23
Depreciation -274.00 -269.10 -304.66 -298.57
Profit Before Tax 273.08 365.00 359.03 410.66
Tax -127.97 -119.20 -112.40 -139.63
Profit After Tax 145.11 245.80 246.63 271.04
Equity capital 86.58 86.60 86.58 86.58
Face value 2.00 2.00 2.00 2.00
EPS 3.35 5.68 5.70 6.26
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Key Ratios
Particulars FY11 FY12 FY13E FY14E
No. of Shares(in mn) 43.29 43.29 43.29 43.29
EBITDA Margin (%) 74.21% 74.99% 74.53% 74.17%
PBT Margin (%) 34.88% 33.33% 33.62% 33.63%
PAT Margin (%) 23.89% 22.59% 22.69% 22.64%
P/E Ratio (x) 5.12 4.34 3.83 3.46
ROE (%) 15.53% 16.22% 15.55% 14.69%
ROCE (%) 30.20% 34.53% 34.84% 34.55%
Debt Equity Ratio 1.15 1.07 0.95 0.85
EV/EBITDA (x) 1.65 1.31 1.17 1.05
Book Value (Rs.) 128.42 144.96 171.64 201.19
P/BV 0.80 0.70 0.59 0.51
Charts:
Net Profit & PAT
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P/E Ratio (X)
Debt Equity Ratio
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EV/EBITDA(X)
P/BV Ratio
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Outlook and Conclusion
At the current market price of Rs.102.10, the stock is trading at 3.83 x FY13E
and 3.46 x FY14E respectively.
Earning per share (EPS) of the company for the earnings for FY13E and FY14E
is seen at Rs.26.69 and Rs.29.54respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 16% and
14% over 2011 to 2014E respectively.
On the basis of EV/EBITDA, the stock trades at 1.17 x for FY13E and 1.05 x for
FY14E.
Price to Book Value of the stock is expected to be at 0.59 x and 0.51 x
respectively for FY13E and FY14E.
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.117.00 for Medium to Long term investment.
Industry Overview
Logistics call for an understanding of the total supply chain, the elements of which
include inventories, packing, forwarding, freight, storage and handling. Logistics is
responsible for all the movement that takes place within the organization whether it
is inbound logistics of incoming, raw materials or movement within the company or
the physical distribution of finished goods, logistics encompasses all of these. Typical
logistics framework mainly consists of Physical Supply, Internal Operations and
Physical Distribution of Goods and Services. To put it more simply, the material
supply logistics starts from the base level of “generation of the demand”, through the
“process of purchase” and “supply of material from the vendor” right through to “final
acceptance” and “payments to the supplier” and “issue to the indenter” and has to be
considered as a “one whole activity” with each stage having an impact on price/cost
of material supply. Logistics is, in itself, a system; it is a network of related activities
with the purpose of managing the orderly flow of material and personnel within the
logistics channel.
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MODES OF TRANSPORTATION IN LOGISTICS
In order to transport material from one place to another Logistics Managers are using
Rail, Road, Air, water & Pipe Line as the modes of Transportation. A logistics expert
need to understand these modes based on priorities, product type. lead time etc. to
decide the appropriate mode of Transportation.
Rail: Used for delivery of a wide range of goods including coal, iron ore, cement, food
grains, fertilizers, steel, petroleum products and other heavy goods.
Road: Used by suppliers to deliver goods in a cost effective manner and best suited
for short distances. Many transport companies have expertise for fast delivery,
packaging etc. for making scheduled delivery.
Air: Used mostly for delivery of high value and tow volume goods from distant
suppliers, usually not connected by any other mode of Transportation. It is also
suitable for emergent item to be imported for some specific requirement.
Water: Used by firms for delivery of goods from distant suppliers, mostly conducted
in containers of varied size. This mode is ideal for transportation of heavy and bulky
goods and suitable for products with long lead times.
Pipe Line: Used by oil sector companies for mass movement of Petroleum products
including gases Due to quite low operating cost it is one of the preferred modes of
transportation
Logistics Industry
The Indian logistics industry accounts for a mere 2% ($100 billion) of the $5000
billion global logistics industry despite having the second largest network of
roads at 3.83 million km, the fourth largest rail network of 63000 km, 128
airports, 12 major ports, 1 trans-shipment port and 187 non major ports.
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Indian Logistics sector grew by 8 to 10 percent annually over the last decade.
Several factors have favorably impacted the growth of the logistics industry, like
the country’s tax regime, growth across major industry segments such as
automobile, pharmaceutical, fast moving consumer goods (FMCG) and the
emergence of organized retail.
Economic survey for 2010-11 reflects that economy is an upswing mode, with a
growth of 8.6% in FY10 and FY11 and is projected to grow at 8.75% - 9.25% in
FY12. Strong economic growth and liberalization have led to considerable
increase in domestic and international trade volumes over the past few years.
Consequently, the requirement for transportation, handling and warehousing is
growing at a robust pace and is driving the demand for integrated logistics
solutions.
Exim trade volume of India is growing consistently from last decade hence India
is set to increase its share in global trade from less than 1% now to about 1.6%
in 2012. India’s level of containerization is less than 25% as against global
average of 60-70%. Average time taken to clear import and export cargo at ports
is about 19 days in India, against 3-4 days in Singapore. The trend towards
containerization picked up in India in the last decade. Container traffic has
seen a 12% CAGR in India from 2.5 million TEU in 2000-01 to 7.5 million TEU
in 2010-11.
The incessant growth in containerized traffic provides significant indication of
increase in multimodal transport as containers are designed for door to door
transportation by different modes.
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________________ ____ _________________________ 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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