Buy Allcargo Logistics - Karvy

Allcargo Logistics (AGLL IN): We initiate coverage on the stock with "BUY" recommendation with a target price of Rs. 213 per share, valuing AGLL at 10.5x its FY13-FY14E average EPS.

- MTO segment buoyed by ECU Line growth: Globally, AGLL is the 2nd largest LCL consolidator (Multimodal Transport Operations) post acquisition of ECU Line. This segment accounts for 80% of total revenues. With ECU Lines' increasing presence in the high growth Asian countries, we expect the MTO revenues to grow at 14% CAGR during FY12-14E.

- Expanding CFS/ ICD capacities to boost profitability: AGLL has three CFS at three major EXIM hubs - JNPT, Mundra and Chennai. It is the number one operator at Chennai and Mundra ports with major concentration towards high realisation import cargo handling.

Source : Equity Bulls

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