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Snowman Logistics Ltd
Price band | 44 - 47
Steaming up for the cold zone…
Snowman Logistics Ltd (SLL) with 23 temperature controlled warehouses
across 14 locations and 370 reefer vehicles is a pioneer in operating
temperature controlled and ambient warehouses in India. With majority of
warehouses being ISO 14001 (TUV-SUD) and ISO 22000 (TUV-SUD)
certified and with the ability to provide a wide spectrum of temperature
zones (+20*C to -25*C) to its varied customers from dairy, poultry to
pharmaceuticals sector, SLL is well poised to ride the cold chain growth
opportunity in India. The total industry size of temperature controlled
logistics (TCL) is in the range of | 12000-15000 crore in 2012 and is
expected to grow at 15-20% over the next three to five years to | 20,000-
25000 crore. In terms of volume, the total capacity of the TCL industry
is~30 million tonnes (MT) with 7000-8000 reefer vehicles. With nearly
10% market share of the organised TCL market in terms of revenue, SLL
is a major player in the segment providing complete logistical support.
Further, SLL witnessed significant revenue growth of 45% CAGR over
FY10-14 whereas EBITDA and PAT posted a CAGR of 63% and 53% over
the same period. Going ahead, given the nascent industry and niche
market that SLL is catering to, together with transition from unorganised
to organised, we believe revenue will grow at a CAGR of 29% over FY14-
17E whereas EBITDA and PAT are anticipated to grow at 32% and 21%,
respectively, over the same period.
Investment rationale
Strong player in a nascent industry
SLL with its pan-India presence and domain expertise in the high-end TCL
industry is in a sweet spot to cater to wide range of customers. With the
organised industry poised to grow at 20% CAGR over the next three to
four years, revenue growth and, by virtue of operating leverage, earnings
growth is expected to be highly pronounced.
Established client base
SLL’s ability to cater to a wide range of customers along with its latest
technology and ability to attract competing brands in the competitive
FMCG segment makes SLL a critical player in the supply chain.
Opportunity makes valuation attractive
At the IPO price band of | 44-47, SLL is trading at 33-35xs FY14 diluted
EPS of | 1.35. However, given the current embryonic industry size and
possibility of a shift from the unorganised to organised segment, we
believe, earnings CAGR of 21% over FY14-17E make valuations attractive
for SLL. Consequently, we recommend SUBSCRIBE to the IPO
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
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Snowman Logistics Ltd
Price band | 44 - 47
Steaming up for the cold zone…
Snowman Logistics Ltd (SLL) with 23 temperature controlled warehouses
across 14 locations and 370 reefer vehicles is a pioneer in operating
temperature controlled and ambient warehouses in India. With majority of
warehouses being ISO 14001 (TUV-SUD) and ISO 22000 (TUV-SUD)
certified and with the ability to provide a wide spectrum of temperature
zones (+20*C to -25*C) to its varied customers from dairy, poultry to
pharmaceuticals sector, SLL is well poised to ride the cold chain growth
opportunity in India. The total industry size of temperature controlled
logistics (TCL) is in the range of | 12000-15000 crore in 2012 and is
expected to grow at 15-20% over the next three to five years to | 20,000-
25000 crore. In terms of volume, the total capacity of the TCL industry
is~30 million tonnes (MT) with 7000-8000 reefer vehicles. With nearly
10% market share of the organised TCL market in terms of revenue, SLL
is a major player in the segment providing complete logistical support.
Further, SLL witnessed significant revenue growth of 45% CAGR over
FY10-14 whereas EBITDA and PAT posted a CAGR of 63% and 53% over
the same period. Going ahead, given the nascent industry and niche
market that SLL is catering to, together with transition from unorganised
to organised, we believe revenue will grow at a CAGR of 29% over FY14-
17E whereas EBITDA and PAT are anticipated to grow at 32% and 21%,
respectively, over the same period.
Investment rationale
Strong player in a nascent industry
SLL with its pan-India presence and domain expertise in the high-end TCL
industry is in a sweet spot to cater to wide range of customers. With the
organised industry poised to grow at 20% CAGR over the next three to
four years, revenue growth and, by virtue of operating leverage, earnings
growth is expected to be highly pronounced.
Established client base
SLL’s ability to cater to a wide range of customers along with its latest
technology and ability to attract competing brands in the competitive
FMCG segment makes SLL a critical player in the supply chain.
Opportunity makes valuation attractive
At the IPO price band of | 44-47, SLL is trading at 33-35xs FY14 diluted
EPS of | 1.35. However, given the current embryonic industry size and
possibility of a shift from the unorganised to organised segment, we
believe, earnings CAGR of 21% over FY14-17E make valuations attractive
for SLL. Consequently, we recommend SUBSCRIBE to the IPO
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
��
Link: Snowman Logistics Ltd - IPO :: ICICI Securities
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