Medium to Long Term Target: Rs. 125; STOP LOSS – Rs. 78.89; Market Cap: Rs. 1,427.30 Cr; 52 Week High/Low: Rs. 103.80 / Rs. 47.00.
Temperature Controlled Logistics (TCL) is responsible for preserving the quality to enable their availability during an off – season or making them available at locations far from the production/ processing locations. The temperature sensitive products like dairy & perishable products is stored & preserved in a custom built temperature controlled warehouses. These temperature controlled warehouse generally consists of temperature zones which are capable of warehousing goods in the range of –25ºC to +20ºC. Similarly, temperature controlled distribution entails primary and secondary transportation of temperature sensitive products from source to stores using temperature controlled containerized trucks and cargo trains. Certain containerized trucks are also modified to enable installation of temperature controlled zones. Businesses which utilize cold chains in India include dairy, poultry and meat, seafood, ready – to eat, chocolates, healthcare and pharmaceuticals, industrial products and fruit and vegetables. India’s temperature controlled logistics industry is estimated to be around Rs. 12,000 Cr to Rs. 15,000 Cr and is expected to grow at 15 % to 20 %, year on year, for the next 3 to 4 years to Rs. 22,000 Cr to Rs. 25,000 Cr. The growth is expected to be driven by an increase in the consumption of temperature sensitive perishables; Greater use of temperature controlled logistics in categories such as pharmaceuticals and fruits and vegetables and from the increase in the consumption of a gamut of niche and high end products that need to be maintained in temperature controlled environment. Since FY12, Cold Storage business in India has been given the "Infrastructure status", which makes bank financing easier. Also, Snowman Logistics is eligible for 100 % deduction under section 35AD for all capex made till AY13. This investment deduction allowance rate has increased from 100 % to 150 % in AY14. The tax benefits given to warehousing income under section 80 (I) (B) along with subsidy schemes will also be helpful for the company to aggressively pursue capex and growth. Snowman Logistics has asset light business model, given that 83 % of its entire fleet is on lease. Similarly for Warehouse division, company usually leases out the land on a long term basis and constructs its own building used for storage purposes. Snowman Logistics owns, both land and building at 9 of these 23 temperature controlled warehouses. This asset light strategy has helped the company to quickly scale up its businesses, thereby generating quicker pay-back period for investment made and higher Return on Networth. Management has maintained that money raised from issue proceeds would be deployed for capacity expansion, thereby restricting any further RoNW expansion in FY15E.
|SALES (₹ Crs)||153.40||193.80||254.50||331.20|
|NET PROFIT (₹ Cr)||22.50||22.60||27.40||40.00|