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SYNOPSIS

ABG Infralogistics Ltd incorporated

in 1983 specializes in Ports and

Terminals, Port Services, Crane

Hiring and Project Services.

The Company nationwide network of

operations delivers seamless and

efficient solutions to meet the

growing needs of the Indian

economy.

During the quarter ended, the

robust growth of Net Profit is

increased by 129% to Rs.42.20

million.

ABG Infralogistics Ltd has approved

and declared interim dividend for the

financial year 2011-12 @ Rs. 5 per

share of Rs. 10/- each i.e. @ 50% to

the equity shareholders.

Net Sales of the company is expected

to grow at a CAGR of 6% and 5%

over 2010 to 2013E respectively.

Years Net sales EBITDA Net Profit EPS P/E

FY 11 1453.70 910.50 84.30 7.04 33.35

FY 12E 1540.92 936.88 104.42 8.72 26.92

FY 13E 1617.97 983.72 118.55 9.90 23.71

Stock Data:

Sector: Marine Port & Services

Face Value Rs. 10.00

52 wk. High/Low (Rs.) 275.00/156.30

Volume (2 wk. Avg.) 3197.00

BSE Code 520155

Market Cap (Rs.In mn) 2811.15

Share Holding Pattern

1 Year Comparative Graph

C.M.P: Rs. 234.85 Target Price: Rs. 270.00 Date: Feb 11th, 2012 BUY

ABG Infralogistics Ltd Result Update: Q2 FY 12

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Peer Group Comparison

Name of the company CMP(Rs.) Market

Cap.(Rs.Mn.) EPS(Rs.) P/E(x) P/Bv(x) Dividend (%)

ABG Infralogistics Ltd 234.85 2811.15 7.04 33.35 1.21 50.00

Adani Ports and SEZ 149.50 299407.2 5.45 27.42 6.98 45.00

Western India Ship 7.45 2195.10 0.56 13.30 19.61 0.00

VMS Industries 42.55 700.90 0.00 0.00 2.45 0.00

Investment Highlights

Q2 FY12 Results Update

ABG Infralogistics Ltd disclosed a phenomenon rise in standalone net profit for the

quarter ended Sep 2011. During the quarter, the profit of the company surged

129% to Rs 42.20 million from Rs 18.40 million in the same quarter previous year.

Net sales for the quarter for the quarter rose 4% to Rs 369.50 million from

Rs.353.80 million, when compared with the prior year period. It reported earnings

of Rs 3.53 a share during the quarter, registering 146% increase over previous year

period.

Quarterly Results - Standalone (Rs in mn)

As At Sep-11 Sep -10 %change

Net sales 369.50 353.80 4

PAT 42.20 18.40 129

Basic EPS 3.53 1.44 146

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Break up of Expenditure

Declares Interim Dividend

ABG Infralogistics Ltd has approved and declared interim dividend for the financial

year 2011-12 @ Rs. 5 per share of Rs. 10/- each i.e. @ 50% to the equity

shareholders.

Company Profile

ABG Infralogistics Limited Established in 1983 as a crane rental Company. Thereafter

rapidly expanded to nationwide network and become one of India’s foremost

infrastructure solution providers in Ports and Terminals, Port Services, Crane Hiring

and Project Services.

Each of company businesses has been achieving new milestones in efficiency,

productivity and profitability. In the crane rental business, ABG is owning and

operating cranes up to 1250 MT capacity. There are plans to further enhance the

range and limits of capacity to meet India’s growing needs for energy, infrastructure

and natural resources.

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ABG, delivers seamless and efficient solutions to meet the growing needs of the Indian

economy in collaboration with global Port and Logistic providers, has participated in

several infrastructure projects all over the country.

Business Areas:

Crane Hire

ABG Infralogistics Limited (ABG) over the last decades has become a market leader in

the fields of charter hire of heavy duty cranes & Container Handling & Heavy Plant

erection and construction. ABG has made remarkable achievements in owning,

operating, maintaining & giving on hire cranes including heavy duty cranes to a wide

spectrum of services and Industry. ABG owns/operates over 200 cranes ranging from

1250MT to 9MT. The company has access to the fore most engineering technologies

from leading companies worldwide like Liebherr (Germany), Terex Demag (Germany),

Manitowoc (USA), Kobelco (Japan) etc.

Port Operations

In the world of maritime geography, India has always enjoyed a pride of place on the

main sea routes between East and West. Today, its ports handle more traffic than ever

before.

ABG Kolkata:

ABG Kolkata Container Terminal, located in a natural harbor in the western coast of

India, liked to Hooghly River, is a Riverine Port situated about 219 kilometers

upstream from the mouth of the river at Netaji Subhas Dock. It the ideal port for the

Northern and North-Eastern states of India and offers quick and easy connectivity to

their two neighbor countries, Nepal and Bangladesh. ABG Kolkata Container Terminal

specializing in the supply, operation and maintenance of back-up equipment required

to handle loading and unloading of containers at the Netaji Subhas Dock Kolkata Port.

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ABG Kandla

Knaldla Port is one of the largest ports in India, located on the North Western Coast of

India and 90 kilometers from the mouth of the Gulf of Kutch, quickest connections to

the major shipping lanes of Middle East, Europe and the rest of the World with traffic

of over 64 Million Tones per annum and ABG Kandla Container Terminal, is a 30-year

BOT container terminal project, within Kandla Port Trust.

ABG Paradip:

Paradip Port plays a critical role in serving the Eastern and Central parts of the

country and one of artificial harbour in India’s located in the Bay of Bengal in the

state of Orissa, it is a key seaports, the port primarily traffics bulk cargo. Well

connected by rail as well as road to reach into the states of Orissa, Jharkhand,

Chhatisgarh, West Bengal, Madhya Pradesh and Bihar.

ABG Mangalore:

The New Mangalore Port is located at Panambur in Mangalore and only Major Port of

Karnataka. It is 170 nautical miles (310 km) south of Mormugao Port & 191 nautical

miles (354 km) north of Kochi Port. TheMangalore port specialises in exporting iron

ore concentrates & pellets, iron ore fines, POL products, granite stones, containerised

cargo, etc. and its major imports of the port are crude and POL products, LPG, wood

pulp, timber logs, finished fertilizers, liquid ammonia, phosphoric acid, other liquid

chemicals, containerised cargo, etc.

ABG Vizag:

Vizag port is one of the fastest industrial ports in India. This port is natural and most

easily formed port on the east coast of India with a chain of hill; Flanked by massive

rock hills on Southern and Northen side, and forms an important traffic point on the

eastern coast easily accessible to most of the important cities of that region.

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Financial Results

12 Months Ended Profit & Loss Account (Standalone)

Value(Rs.in.mn) FY10 FY11 FY12E FY13E

Description 12m 12m 12m 12m

Net Sales 1370.30 1453.70 1540.92 1617.97

Other Income 76.50 42.30 43.15 45.30

Total Income 1446.80 1496.00 1584.07 1663.27

Expenditure -424.80 -585.50 -647.19 -679.55

Operating Profit 1022.00 910.50 936.88 983.72

Interest -396.90 -356.00 -345.32 -355.68

Gross profit 625.10 554.50 591.56 628.05

Depreciation -465.70 -452.00 -461.04 -479.48

Profit Before Tax 159.40 102.50 130.52 148.56

Tax -55.10 -18.20 -26.10 -30.01

Profit After Tax 104.30 84.30 104.42 118.55

Equity capital 128.20 119.70 119.70 119.70

Reserves 2384.70 2204.50 2308.92 2427.47

Face value 10.00 10.00 10.00 10.00

EPS 8.14 7.04 8.72 9.90

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Quarterly Ended Profit & Loss Account (Standalone)

Value(Rs.in.mn) 30-Jun-11 30-Sep-11 31-Dec-11E

Description 3m 3m 3m

Net sales 377.90 369.50 391.67

Other income 32.70 1.40 1.46

Total Income 410.60 370.90 393.13

Expenditure -159.60 -109.50 -141.00

Operating profit 251.00 261.40 252.12

Interest -86.40 -90.80 -81.72

Gross profit 164.60 170.60 170.40

Depreciation -107.70 -108.50 -106.33

Profit Before Tax 56.90 62.10 64.07

Tax -3.90 -19.90 -10.25

Profit After Tax 53.00 42.20 53.82

Equity capital 119.70 119.70 119.70

Face value 10.00 10.00 10.00

EPS 4.43 3.53 4.50

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Key Ratios

Particulars FY10 FY11 FY12E FY13E

No. of Shares(in mn) 12.82 11.97 11.97 11.97

EBITDA Margin (%) 74.58% 62.63% 60.80% 60.80%

PBT Margin (%) 11.63% 7.05% 8.47% 9.18%

PAT Margin (%) 7.61% 5.80% 6.78% 7.33%

P/E Ratio (x) 28.87 33.35 26.92 23.71

ROE (%) 4.15% 3.63% 4.30% 4.65%

ROCE (%) 24.27% 24.90% 24.38% 24.32%

Debt Equity Ratio 1.44 1.35 1.36 1.36

EV/EBITDA (x) 2.95 3.09 3.00 2.86

Book Value (Rs.) 196.01 194.17 202.89 212.80

P/BV 1.20 1.21 1.16 1.10 Charts: NET SALES & PAT

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P/E RATIO (x):

DEBT EQUITY RATIO:

10

EV/EBITDA(x):

P/BV:

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Outlook and Conclusion

At the current market price of Rs.234.85, the stock is trading at 26.92 x FY12E

and 23.71 x FY13E respectively.

Earning per share (EPS) of the company for the earnings for FY12E and FY13E

is seen at Rs.8.72 and Rs.9.90 respectively.

Net Sales and PAT of the company are expected to grow at a CAGR of 6% and

5% over 2010 to 2013E respectively.

On the basis of EV/EBITDA, the stock trades at 3.00 x for FY12E and 2.86 x for

FY13E.

Price to Book Value of the stock is expected to be at 1.16 x and 1.10 x

respectively for FY12E and FY13E.

We expect that the company will keep its growth story in the coming quarters

also. We recommend ‘BUY’ in this particular scrip with a target price of

Rs.270.00 for Medium to Long term investment.

Industry Overview

Marine Port transport & Services plays critical role in the social an economic

development of a country. India has always enjoyed a pride of place on the main sea

routes and enjoys a vibrant port sector comprising 12 Major ports and 176 notified

non major ports and ranked 16th among the maritime countries and today, ports

handle more traffic than ever before with largest merchant shipping fleet.

Maritime ports handle more traffic than ever before which witnessed sizeable increase

recently across all major ports and traffic grew at 13percent rate per annum

betweem2006-20011 and recorded at 870 million tones total traffic handled by India

ports and 80 percent of total exports are carried by sea out 60 percent through

containerized cargo,

The voluminous traffic at major ports is grow at a compound aggregate growth rate of

8.03 percent by the end 2019-20 is likely to grow at 1214.82 MT. It is estimated that

the capacity at major ports will surpass traffic by 20 per cent by 2020. according to

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the maritime agenda 2020 Government of India Ministry of shipping identified

schemes which would create a capacity to handle traffic well. The proposed investment

during the next 10 years to create the expected capacity will be Rs 277, 000 cores

(US$ 55.29 billion),

Inflow of Investments in Infralogistics sector

• The visakhapatnam port is developing two berths for handling Thermal Coal

and steam coal and this is expected to be completed by March 2013 and port

trust has lined up a mechanization and dredging programme involving an

investment of Rs 260 millions for next two Year.

• To benefit traders in India and offer faster connectivity to china and the Far

East, International Container Transshipment Terminal has launched a direct

service to china.

• For the development of the dry port, Government of India signing a pact with

neighboring countries. By the development of these ports it bring down cost

for traders and provide them access to international markets by inland terminal

directly connected by rail or road to a sea port, and providing services for

handling Temporary storage inspection and customs clearance for international

fright.

• Government of Kerala owned Vizhinjam Port raising more than Rs160

millions(US $ 319.36 Million) through bonds.

• AMET Majesty the country’s first cruise ship, registered in Chennai with an

Indian flag. With these cruise ship India has joined the Global cruise line club.

Three cruise terminals being planned at Mormogao, Mumbai and Kochi with an

investment of of Rs 48 Millions( US $ 95.81 million),

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Investments Policy Update

The Government of India has taken favorable and investor friendly policy for the

development of shipping industry. The highlights of the policy initiatives taken by the

Ministry of Shipping are:

• For Port development projects 100 per cent FDI under the automatic route.

• 100 per cent exemption of income tax for a period of 10 years

• For transparency in the award of projects. Standardization of bidding

documents to ensure uniformity.

• The Model Concession Agreements have been standardized and simplified

• Tariff Authority for Major Ports (TAMP) being set up for tariff setting mechanism

• Bidding of documents has also been standardized to ensure uniformity and

transparency allotment of projects.

• All types of ships have been brought under the Open General License.

Government Initiatives

• Government aims to bring Indian ports at par with the best international ports

in terms of performance and capacity. India's Ministry of Shipping is

considering removing fixing tariffs for major ports, passing responsibility for

this to the ports themselves.

• The Ministry of Shipping has finalized a National Maritime Development

Programme (NMDP) to implement specific programme / schemes for the

development of the Port sector. Under the NMDP, 276 projects at an estimated

cost of Rs 55,8037.3 millions (US$ 11.14 billion) have been identified in the

major Ports to be taken up over a period of 2011-12.

• The Ministry of Shipping has launched Maritime Agenda 2010-20. The Agenda

is a perspective plan of the Ministry for this decade and provides a road map for

comprehensive development of the maritime sector.

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Road Ahead

India is going global with its maritime ambitions with the Ministry of Shipping

planning to set up an agency, Indian Ports Ltd (IPL), on a 50:50 joint venture basis

between ports administered by the Union Government and financial institutions. It

involves funding from the Government. The major ports are likely to have a capacity of

1,229.21 million tonnes per annum (MTPA), while the non-major ports will have a

capacity of 1,457.42 MTPA by 2017.Indian shipbuilding industry is targeting to

acquire a world share of 5 per cent by 2017 from its current share of 1 per cent and

also plans to raise the share of Indian seafarers from the current level of 7 per cent to

at least 9 per cent by 2015 in the global shipping industry.

Moreover, the Indian tonnage, as part of global shipping has recently crossed the 11

million gross tonnage (GT) mark, stated Mr G K Vasan, Union Minister of Shipping

while inaugurating the India Maritime Week in New Delhi.

The Government has identified 23 projects for award, to increase the capacity of ports

by 236.63 MTPA with an estimated investment of Rs 16,743.92 crores (US$ 3.34

billion) under public-private partnership (PPP) mode.

Furthermore, as per the NMDP around 69 projects including improvement of road

connectivity and internal roads in some of the ports and for capacity addition of

124.09 MT are in progress and 18 projects for capacity addition of 67.18 MT are

approved, for which the work is going to commence shortly after completing basic

formalities etc. The industry hopes to achieve its target and increase its infrastructure

capacities.

_____________ ____ _________________________ Disclaimer:

This document prepared by our research analysts does not constitute an offer or solicitation

for the purchase or sale of any financial instrument or as an official confirmation of any

transaction. The information contained herein is from publicly available data or other

sources believed to be reliable but do not represent that it is accurate or complete and it

should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s

affiliates shall not be in any way responsible for any loss or damage that may arise to any

person from any inadvertent error in the information contained in this report. This document

is provide for assistance only and is not intended to be and must not alone be taken as the

basis for an investment decision.

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