ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 13 August 2019 | 1

Current Reco : BUY 1QFY20 RESULT REVIEW

Previous Reco
CMP
: BUY
: INR97
Allcargo Logistics
Target Price : INR140 Earnings growth steady; growth from Logistics Parks
Potential Return : 44% segment key monitorable ahead
https://www.euromoney.com/Brokers AGLL reported topline growth of 12%YoY in 1QFY20 led by MTO/CFS/P&E
Asiamoney Brokers’ Poll 2019
https://www.euromoney.com/Brokers
https://www.euromoney.com/Brokers
P Vote for ANTIQUE segment growth of 10%/8%/62%YoY. EBITDA grew 37% YoY to INR1.4bn in
https://www.euromoney.com/Brokers
https://www.euromoney.com/Brokers
https://www.euromoney.com/Brokers 1Q as margins expanded to 7.7% (reflecting impact of IND-AS vs. 6.3% YoY
https://www.euromoney.com/Brokers
Voting closes on 16th August (6.2% QoQ). Volume growth slowed in both MTO/CFS segments - party
https://www.euromoney.com/Brokers
reflecting Industry trends. Equipment leasing assets saw improved utilization
Prateek Kumar (~65-70%). Incremental capital employed is expected to flow in Logistics Park/
+91 22 4031 3440 Warehousing business - which would contribute to revenues from 2HFY20
prateek.kumar@antiquelimited.com (~INR1bn annually - implying yield of 12% as per management). FY20 is
will see another ~INR4bn capex towards the Logistics Park segment, after a
Nishant Shah similar capex in FY19. Pickup in profit contribution from Logistics Parks
+91 22 4031 3473 segment is a key monitorable here and would likely drive up return ratios
nishant.shah@antiquelimited.com for the company over medium term. We adjust our estimates factoring IND-
AS. Current valuations of 10x FY19 looks inexpensive. We value the stock at
Market data Price target of INR140 implying 10x FY21 EPS.
Sensex : 37,582 Volume growth slow; margins look higher in relation to IND-AS impact
Sector : Logistics
AGLL's 1QFY20 topline grew 12%YoY to INR18.2bn (Antique est: INR18.7bn) led by MTO/
Market Cap (INRbn) : 23.8 CFS/P&E segment growth of 10%/8%/62%YoY. EBITDA grew 37%YoY to INR1.4Bn (Antique
Market Cap (USDbn) : 0.337 est: INR1.2bn) in 1Q led by higher operating margins YoY at 7.7% vs. 6.3%YoY (6.2%
O/S Shares (m) : 245.7 QoQ). Higher margins primarily reflected impact of IND-AS116 (i.e. positive EBITDA impact
52-wk HI/LO (INR) : 126/89 of ~INR190-200mn). PAT grew 19% YoY to INR630mn (Antique est: INR663mn). Attributable
Avg Daily Vol ('000) : 108 to IND-AS impact, Interest cost saw a sharp jump of 49% YoY/76% QoQ to INR117mn
Bloomberg : AGLL IN (impact of INR30mn) while depreciation too grew 38% YoY/51% QoQ (impact of INR170mn).
Source: Bloomberg Impact of IND-AS 116 was more on MTO and CFS segments. Net debt position at INR4.75bn
inched up QoQ in relation to investment in logistics parks.
Valuation
Segmental performance
FY19 FY20e FY21e
EPS (INR) 9.8 11.5 13.8
MTO Segment: Volume growth remained in mid-single digit at ~6% YoY for the second
straight quarter (volumes at 184,342 Teus) while realization grew 4% YoY (-5% QoQ). Volume
P/E 9.8 8.4 7.0
growth was impacted due to global trade tensions and overall subdued macro scenario.
P/BV 1.2 1.1 1.0
Despite a 10% YoY revenue growth, PBIT grew 4.5% YoY as PBIT margins fell to 3.8% vs. 4%
EV/EBITDA 6.1 4.7 3.6 YoY (3.7% QoQ). EBIT/Teu fell to INR3281 vs. INR3327 YoY / INR3401 QoQ - partly reflecting
Dividend Yield (%) 3.6 2.1 2.1 increasing mix of Full Container Cargo mix.
Source: Company, Antique CFS Segment: 1Q revenue growth of 8% YoY (+6% QoQ) was led by ~3.4% YoY growth
Returns (%) in volumes (to 85,004 Teus) and realisation growth of 4% YoY (+1% QoQ). Volume growth
1m 3m 6m 12m was driven by growth at Kolkata & Chennai operations. Management feels DPD environment
Absolute (0) (8) (3) (19)
has stabilized as of now. Segment PBIT jumped 18% YoY as PBIT margin expanded to 30.8%
vs. ~28% YoY (27.5% QoQ). EBIT/TEU stood at INR4301 vs. INR3760YoY/ INR3815QoQ
Relative 3 (8) (5) (18)
partly benefitting from company's cost saving initiatives (and IND-AS impact). Management
Source: Bloomberg
targets to grow 6%+ in CFS business, higher than the Industry growth 2-3%.
Shareholding pattern P&E segment: Segment revenue grew 62% YoY to INR1.2Bn while PBIT improved to gain
of INR84mn vs. loss of INR60mn YoY/profit of INR86mn QoQ. Performance improved
Promoters : 70%
substantially YoY due to increase in asset utilization of the equipment leasing business (65-
Public : 30% 70% now versus 40-45% few quarters back) and impact of provision write back (INR25mn
Others : 0% vs Rs60mn QoQ). Current executable order book stands at ~INR1.3bn in project logistics.
Source: Bloomberg
Project Logistics secured its first Project in Africa and company is in discussion for other Projects
in Africa/Bangladesh. P&E segment witnessed capital employed reduction during 1Q in
Price performance vs Nifty relation to impact of a ship divestiture at INR140-150mn. The INR4bn Capital employed of
110 segment includes Working Capital worth of INR1.5bn and INR2-2.5bn towards net assets.
Logistics Parks: Company has started reporting this as a new business segment from
90 4QFY19. 1Q revenue stood at INR20mn vs. INR10mn YoY/INR18mn QoQ; PBIT losses
increased in this segment attributable to opex costs towards development of new assets.
70 Company targets to build warehousing footprint of ~5mn sqft (Build-To-Suit warehouses in
Aug-18 Dec-18 Apr-19 Aug-19 Hyderabad, NCR and Bangalore) by 2021 with ~INR11Bn Investments (excluding land cost
Allcargo Logistics NIFTY of INR2.5-3bn). Of the total expected investment, INR4-5bn is pending which company is
looking to spend in next 5 quarter at a run-rate of INR1bn per quarter (incurred INR1.15bn
Source: Bloomberg Indexed to 100
in 1QFY20). Company has already contracted 3.5-4.2mn sqft with the customers.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 13 August 2019 | 2

Quarterly performance
Actual vs estimated performance
(INRmn) Actual Estimated Var (%) Consensus Var (%)
Net sales 18,153 18,695 (2.9) 18,212 (0.3)
EBITDA 1,406 1,234 13.9 1,157 21.5
EBITDA Margin (%) 7.7 6.6 114bps 6.4 139bps
PAT 630 663 (4.9) 626 0.7
EPS 2.6 2.7 (4.9) 2.5 0.7
Source: Company, Antique

Quarterly snapshot
(INR mn) 1QFY20 1QFY19 % Chg YoY 4QFY19 % Chg QoQ
Net sales 18,153 16,258 11.7 17,273 5.1
Expenditure 16,747 15,229 10.0 16,202 3.4
EBITDA 1,406 1,029 36.7 1,072 31.2
Other income 63 43 46.0 108 (41.7)
Interest 117 79 48.7 67 76.0
Depreciation 547 397 37.8 361 51.3
PBT 805 596 35.0 752 7.1
Tax 175 86 104.3 (48) (462.9)
Share of Associates and MI 1 21 (96.6) (6) (110.9)
PAT 630 531 18.7 793 (20.6)
EBITDA margin (%) 7.7 6.3 142bps 6.2 154bps
EPS (Rs) 2.6 2.2 18.7 3.2 (20.6)
Source: Company, Antique

Operational results
1QFY20 1QFY19 % Chg YoY 4QFY19 % Chg QoQ
Expenses as % of sales
Operating Expense 72.6 71.7 84bps 71.9 71bps
Employee Expenses 15.1 15.6 -49bps 16.1 -104bps
Other Expenses 4.6 6.4 -177bps 5.8 -121bps
Revenue
Multimodal Transport Operations 15,991 14,554 9.9 15,392 3.9
CFS Operations 1,186 1,102 7.6 1,121 5.8
Project and Engineering 1,171 722 62.3 921 27.1
Logistics Park 18 8 126.3 18 -
Others & Unallocable 65 41 56.9 57 13.6
Source: Company, Antique

Earning estimates
FY20e FY21e
Old New % Chg Old New % Chg
Revenue (INRm) 78,520 76,217 (2.9) 89,073 85,601 (3.9)
EBITDA (INRm) 5,300 5,831 10.0 6,253 6,824 9.1
EBITDA margin (%) 6.7 7.7 -90bps 7.0 8.0 -95bps
Net profit (INRm) 2,833 2,822 (0.4) 3,396 3,389 (0.2)
EPS (INR) 11.5 11.5 (0.4) 13.8 13.8 (0.2)
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 13 August 2019 | 3

Sales and sales YoY growth trend EBITDA and EBITDA YoY growth trend
(INRm) (%) 1,600 44 38 50
20,000 22 25 1,400 40
18,000 19 21 30
1,200
16,000 20
20
14,000 1,000
13 12 12 -1 10
12,000 12 15 800 -6
10 10 0
10,000
8,000 6 10 600 -17
5 -23 -10
6,000 400 -29 -20
4,000 5
2,000 200 -30
- 0 - -40
1QFY18

2QFY18

3QFY18

4QFY18

1QFY19

2QFY19

3QFY19

4QFY19

1QFY20

1QFY18

2QFY18

3QFY18

4QFY18

1QFY19

2QFY19

3QFY19

4QFY19

1QFY20
Net sales (INRm) - LHS Sales YoY grow th (%) - RHS EBITDA (INRm) - LHS EBITDA YoY grow th (%) - RHS
Source: Company, Antique Source: Company, Antique

PAT and PAT YoY growth trend EBITDA margin trend

900 581 700 11
800 600 10
700 500
9
600 400 7.7
500 300 8 6.9 7.2
6.8
400 200 7 6.3 6.3 6.3 6.2
37 19
300 0 -1 -29 -13 -3 100 6
-80 4.9
200 0
5
100 -100
- -200 4
1QFY18

2QFY18

3QFY18

4QFY18

1QFY19

2QFY19

3QFY19

4QFY19

1QFY20
1QFY18

2QFY18

3QFY18

4QFY18

1QFY19

2QFY19

3QFY19

4QFY19

1QFY20

PAT (INRm) - LHS PAT YoY grow th (%) - RHS EBITDA Margin (%)

Source: Company, Antique Source: Company, Antique

P&E revenue and YoY growth trend P&E EBIT margin trend
1,400 62 80 20 9.4 7.2
1,200 60 10 3.8
34 -0.1 -1.0
1,000 24 40 0 -5.7 -8.1
12 -15.3
800 20 -10
600 0 -20
-25 -29 -27
400 -36 -35 -20 -30
200 -40 -40 -49.3
- -60 -50
1QFY18

2QFY18

3QFY18

4QFY18

1QFY19

2QFY19

3QFY19

4QFY19

1QFY20

1QFY18

2QFY18

3QFY18

4QFY18

1QFY19

2QFY19

3QFY19

4QFY19

1QFY20

P&E (INRm) - LHS YoY grow th (%) - RHS P&E EBIT Margin (%)
Source: Company, Antique Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 13 August 2019 | 4

MTO revenue and YoY growth trend MTO EBIT margin trend
18,000 22 25 5
16,000
18 4.4
14,000 20
15 4.1 4.1
12,000 13 4.1 4.1
12 15 4.0
10,000 11
9 10 10 4 3.8
8,000 3.7 3.7
10
6,000
4,000 5
2,000
- 0 3

1QFY18

2QFY18

3QFY18

4QFY18

1QFY19

2QFY19

3QFY19

4QFY19

1QFY20
1QFY18

2QFY18

3QFY18

4QFY18

1QFY19

2QFY19

3QFY19

4QFY19

1QFY20
MTO (INRm) - LHS YoY grow th (%) - RHS MTO EBIT Margin (%)

Source: Company, Antique Source: Company, Antique

MTO EBIT/teu and MTO teu YoY growth trend Baltic Dry Index Price trend
(INRm) 2500
4,500 26 26 30
4,000 22 2000
25
3,500
3,000 16 20 1500
14
2,500 12 15
2,000
7 1000
1,500 5 6 10
1,000
5 500
500
- 0
0
1QFY18

2QFY18

3QFY18

4QFY18

1QFY19

2QFY19

3QFY19

4QFY19

1QFY20

Nov-12
Feb-13
May-13

Nov-13
Feb-14
May-14

Nov-14
Feb-15
May-15

Nov-15
Feb-16
May-16

Nov-16
Feb-17
May-17

Nov-17
Feb-18
May-18

Nov-18
Feb-19
May-19
Aug-12

Aug-13

Aug-14

Aug-15

Aug-16

Aug-17

Aug-18

Aug-19
MTO EBIT/teu (INRm) - LHS MTO teus YoY growth (%) - RHS Baltic Dry Index Price

Source: Company, Antique Source: Company, Antique

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 13 August 2019 | 5

Financials
Profit and loss account (INRm) Cash flow statement (INRm)
Year ended 31 Mar 2017 2018 2019 FY20e FY21e Year ended 31 Mar 2017 2018 2019 FY20e FY21e
Net Revenue 55,834 60,492 68,949 76,217 85,601 PBT 3,116 2,204 2,969 3,527 4,223
Op. Expenses 51,185 56,721 64,464 70,386 78,777 Depreciation & amortisation 1,662 1,591 1,559 2,175 2,466
EBITDA 4,649 3,771 4,485 5,831 6,824 Interest expense 324 299 295 467 486
Depreciation 1,662 1,591 1,559 2,175 2,466 (Inc)/Dec in working capital (477) (477) (688) (447) (632)
EBIT 2,987 2,181 2,926 3,656 4,358 Tax paid (701) (600) (616) (705) (845)
Other income 453 391 338 338 352 Less: Interest/Div. Income Recd. (54) (26) (44) (338) (352)
Interest Exp. 324 299 295 467 486 Other operating Cash Flow (285) 91 (231) 68 88
Extra Ordinary Items -gain/(loss) - 69 - - - CF from operating activities 3,585 3,082 3,244 4,747 5,435
Reported PBT 3,116 2,273 2,969 3,527 4,223 Capital expenditure (1,245) (304) (3,518) (4,000) (2,000)
Tax 776 513 542 705 845 Inc/(Dec) in investments (1,432) (181) 926 - -
Reported PAT 2,340 1,692 2,426 2,822 3,379 Add: Interest/Div. Income Recd. 28 1 (299) 338 352
Minority Int./Profit (loss) From Asso. (22) 22 (7) 0 10 CF from investing activities (2,649) (483) (2,891) (3,662) (1,648)
Net Profit 2,318 1,714 2,420 2,822 3,389 Inc/(Dec) in share capital (1,257) - (6) - -
Adjusted PAT 2,318 1,765 2,420 2,822 3,389 Inc/(Dec) in debt 901 (1,490) 1,159 500 -
Adjusted EPS (INR) 9.4 7.2 9.8 11.5 13.8 Dividend Paid (484) (803) (1,493) (1,062) (1,081)
CF from financing activities (840) (2,293) (339) (562) (1,081)
Balance sheet (INRm) Net cash flow 96 306 14 523 2,706
Year ended 31 Mar 2017 2018 2019 FY20e FY21e Opening balance 1,777 2,140 2,392 2,406 2,929
Share Capital 491 491 491 491 491 Closing balance 1,873 2,447 2,406 2,929 5,635
Reserves & Surplus 17,431 19,152 19,496 21,724 24,518
Networth 17,922 19,644 19,988 22,215 25,009 Growth indicators (%)
Debt 5,896 4,742 5,982 6,482 6,482 Year ended 31 Mar 2017 2018 2019 FY20e FY21e
Minority Interest 207 172 207 275 352 Revenue(%) (1.0) 8.3 14.0 10.5 12.3
Net deferred Tax liabilities (721) (931) (1,082) (1,082) (1,082) EBITDA(%) (7.7) (18.9) 18.9 30.0 17.0
Capital Employed 23,305 23,626 25,095 27,890 30,762 Adj PAT(%) (3.4) (23.9) 37.1 16.6 20.1
Gross Fixed Assets 18,875 20,821 22,392 28,182 30,182 Adj EPS(%) (3.4) (23.9) 37.1 16.6 20.1
Accumulated Depreciation 6,384 8,552 9,719 11,894 14,360
Capital work in progress 365 224 1,789 - - Valuation (x)
Net Fixed Assets 12,856 12,493 14,462 16,288 15,822 Year ended 31 Mar 2017 2018 2019 FY20e FY21e
Goodwill 2,604 2,880 2,850 2,850 2,850 P/E 10.3 13.5 9.8 8.4 7.0
Investments 3,598 3,705 2,837 2,837 2,837 P/BV 1.3 1.2 1.2 1.1 1.0
Non Current Investments 2,746 2,598 2,586 2,586 2,586 EV/EBITDA 5.8 6.6 6.1 4.7 3.6
Current Investments 852 1,106 251 251 251 EV/Sales 0.5 0.4 0.4 0.4 0.3
Current Assets, Loans & Adv. 12,743 14,041 17,912 19,300 23,667 Dividend Yield (%) - 2.1 3.6 2.1 2.1
Inventory 101 96 89 193 216
Debtors 7,522 8,386 9,422 9,794 11,002
Financial ratios
Cash & Bank balance 1,873 2,447 2,406 2,929 5,635
Year ended 31 Mar 2017 2018 2019 FY20e FY21e
RoE (%) 13.1 9.4 12.2 13.4 14.4
Loans & advances and others 3,247 3,112 5,995 6,385 6,814
RoCE (%) 15.2 11.0 13.4 15.1 16.1
Current Liabilities & Prov. 8,496 9,492 12,967 13,386 14,414
Asset/T.O (x) 3.2 3.5 3.8 3.7 3.6
Liabilities 8,475 9,468 12,943 13,362 14,391
Net Debt/Equity (x) 0.2 0.1 0.2 0.1 0.0
Provisions 21 24 23 23 23
EBIT/Interest (x) 10.6 8.6 11.1 8.5 9.7
Net Current Assets 4,247 4,549 4,945 5,915 9,253
Application of Funds 23,305 23,626 25,095 27,890 30,762
Margins (%)
Per share data Year ended 31 Mar 2017 2018 2019 FY20e FY21e
EBITDA Margin(%) 8.3 6.2 6.5 7.7 8.0
Year ended 31 Mar 2017 2018 2019 FY20e FY21e
EBIT Margin(%) 5.4 3.6 4.2 4.8 5.1
No. of shares (m) 246 246 246 246 246
PAT Margin(%) 4.2 2.9 3.5 3.7 4.0
Diluted no. of shares (m) 246 246 246 246 246
BVPS (INR) 72.9 80.0 81.4 90.4 101.8 Source: Company Antique

CEPS (INR) 16.3 13.4 16.2 20.3 23.8

DPS (INR) - 2.0 3.5 2.0 2.0
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 13 August 2019 | 6

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company, public appearances and trading securities held by a research analyst account. This report is intended for distribution by Antique Stock Broking Limited only to "Major Institutional Investors" as defined
by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient
of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted
onward to any U.S. person, which is not the Major Institutional Investor. In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order
to conduct certain business with Major Institutional Investors, Antique Stock Broking Limited has entered into a chaperoning agreement with a U.S. registered broker-dealer, Marco Polo Securities Inc. ("Marco Polo").
Transactions in securities discussed in this research report should be effected through Marco Polo or another U.S. registered broker dealer.

SEBI Registration Number: INH000001089 as per SEBI (Research Analysts) Regulations, 2014.

CIN: U67120MH1994PLC079444
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