Allcargo Global Logistics (AGL), a prominent player in multi-transport operations (MTO) and on its way to becoming a pan-India player in the ICD/CFS segment, is gearing up to capitalize on the growing container traffic in India.
AGL also has a strong global footprint via ECU Line. We estimate ECU Line to register 200bp improvement in OPM over CY2008-10E. Hence, we estimate AGL to post Earnings CAGR of 16.7% over CY2008-10E.
At Rs795, the stock is trading at 12.1x CY2010E EPS of Rs65.5 and 5.1x EV/EBIDTA of CY2010E, which we believe factors in near-term growth opportunities.
Our Fair Value for AGL works out to Rs786 (12x CY2010E EPS in line with peers). We Initiate Coverage on the stock with a NEUTRAL rating.
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