PATEL INTEGRATED LOGISTICS LTD.
CHURIWALA
st
CMP : 35 31 Jan 10 SECURITIES
Set to Create… MAGIC
COMPANY OVERVIEW
Key Management
Patel Integrated Logistics is a part of Patel family based in Mumbai headed by
Mr. Arif Patel.
Background
Patel Integrated Logistics Limited (PILL) is primarily into logistics business since more than 4
decades. PILL stands as the merged entity of the erstwhile Patel Roadways and POBC.
Company provides unified solutions through door-to-door express cargo service, surface
transport, besides offering services in warehousing and secondary distribution. Company
enjoys strong foothold in the given space.
FINANCIAL SNAPSHOT (Figs. In crs)
NET SALES (08-09) : 283 MARKET CAP : 52crs
EBIDTA : 13.84 EQUITY : 15.12
NET PROFIT (08-09) : 2.90 FACE VALUE : Rs. 10
52 WEEK H/L : 48/14
RECENT DEVELOPMENTS
• Excellent Q3 results Profit of Rs. 1.31 crs against 41 lakhs.
• Company has done restructuring with the help of Avon Consultants which has
helped company to realign business strategy & rationalize its manpower cost
resulting in saving of Rs. 25 lakhs per month.
• Company has adopted & implemented technology by modernizing its fleet of
trucks with GPS tracking systems.
• Company has merged SHPL without issuing new shares to the promoters. SHPL
was holding office building of PILL and assets has been transferred in the books at
book value.
• Promoters has existed one of the group company Wall Street Finance at a
premium, which is taken by [Link] group
• Company has set up state of the art owned warehouses at Bhiwandi, Hyderabad
& custom notified at Chennai for door to door express cargo business.
• Pending TDS refund of approx Rs. 11crs which company will be receiving in parts.
BETWEEN THE LINES
The company has been dormant for many years but initiatives taken by the
management in last 2 years has helped PILL to transform itself from a mere trucking &
transportation company to move up the value chain to become an Express Delivery
Logistics company.
Company & promoters has a deep understanding and vast experience in the business.
Group has realigned their business strategy with a clear and single minded focus on
Logistics business by exiting Wall Street Finance. Company has strong team of
professionals to run and look after day to day business activities. Promoters & senior
management is very upbeat about the recent initiatives taken by the company which
will provide strength & synergy to the core business activities.
Keeping in view Logistics business is a capital intensive business & company has sufficient
amount of funds for future growth of the company and the major capex has been
carried out in 2009-10.
Strengths
• Company has own state of the art warehouses in major cities of the country.
• Out of the total fleet of 300+ trucks, company owns 80-100 trucks.
• The age of the fleet is not more than 4 years thereby ensuring efficiency.
• Company has more than 300 branches all over the country.
• Company has a strong corporate clientele.
• Company has been paying dividend since last 3 years.
We Would Not Like To Miss…
• PILL has moved from a plain vanilla to complete logistics solution provider & now
55% of the business is from value added express cargo business
• PILL is set to report close to Rs. 4.5crs profit for 2009-10. Next quarter results
expected to be extremely good.
• Company has reserves of Rs. 67crs and debt of 36crs on account of working
capital & market cap is just Rs. 52crs.
• Pending TDS refund of approx Rs. 11crs which company will be receiving in parts
i.e Rs. 2.4crs in 2009-10, Rs. 4.5 crs in 2010-11 & Rs. 5.5crs in 2011-12.
• Company is holding blue chip equity portfolio valued at approx. Rs. 7crs.
• PILL is holding 1.70 lakh shares of Wall Street Finance which will be booked at Rs.
55 and reflected in FY 2009-10 results.
• The office building transferred at book value in PILL is more than half the value of
company’s current market cap.
• Promoters are sitting on pile of cash as they have sold their holding in Wall Street
Finance and there is no other company with promoters than PILL.
• Logistics amongst the high PE sectors. Currently commanding a PE of 18-20.
• Aqua Logistics has done a private placement of 15 lakh shares at Rs. 225 to ENAM
& other high profile investors having a topline of Rs. 200crs and PAT of Rs. 10crs.
In last 2 years several PE funds has raised capital over $1.5bn to invest in Logistics sector in
India. Keeping in view, after GST coming into play logistics sector as a whole will get
re-rated and logistic players would be benefited at large. Given the size of opportunity in
the logistics space, strong parentage & renewed focus, PILL has all the ingredients to
emerge as a winner.
We believe Patel Integrated Logistics provides an excellent investment opportunity, as
current valuations are unjustifiably low and also the sector PILL operates in is set to witness
best of the times ahead and would provide substantial gains.
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