Sical Logistics

With retail being the latest talk of the town, it's not difficult to explain why the logistics industry will be benefitted with new, big players entering the country. Sical Logistics is one company that seems to understand that, with it's recent forays in ramping trucking operations (May '06), raising USD 75m through FCCBs (Apr '06), building an iron-ore terminal (Jul '06), buying another logistics company (Sep '06) etc.

The financial details are enclosed :
Share capital - Rs. 30.19 crs
Loans - Rs. 313.4 crs
Investments - Rs. 41.0 crs
NCA - 338. 69 crs
PAT - Rs. 65.1 crs (FY 05-06)

Three key observations in FY 05-06 data :
1. There was no dividend given by the company for the last 4 yrs inspite of making profits as high as Rs. 65 crs in the last year
2. There was a drop of 15% in the operating income of the company as compared to 2004-05
3. Strangely, it's investment column speaks of a company named Southern Petrochemical Industries Corporation Ltd. where they had invested 3.01 million shares at a cost of 12.3 crs. The scrip had delisted from the stock exchange on Oct 2004. Am not sure it's listed anywhere .. this fact was not mentioned in the balance sheet.

This year, Sical will close at around 33 crs of net profit. That's an EPS of Rs. 10.91. At a CMP of Rs. 236, you're looking at an expensive share - with a P/E of 21.6. I am not tempted to look at the balance sheet strengths as the company has taken enough leverage this year. There was an interesting analyst concall which I went through www.indiaearnings.com. The summary is enclosed -
1. The company is divesting it's non-core businesses totalling Rs. 100-107 crs
2. Expected topline for the company is 500-600 crs (even lower than last year) but margins of 10-11%, a PAT fo 50-66 crs. At this number, the PER turns to between 10.7 and 14.2.

I could find two news items on moneycontrol.com which were bullish on Sical. BRICs went whole-hog on this company with a price target of Rs. 701 (here), while Edelweiss was more sedate in it's evaluation (here). Net net, Sical is a company to keep a watch for. If you find any reports on Sical, kindly email them to me.