AVG Logistics Conversion of Warrants, Shivalic Power Control Business Excellent Results Update And Transformers & Rectifiers

AVG Logistics Ltd.

Recent filing: (CONVERSION OF WARRANTS) Two warrant holders AVG Logistics who have been allotted the convertible warrants dated February 27, 2024 have paid the balance 75% of the consideration aggregating to INR 7.2 Cr and have applied for exercising their right for conversion of 2,60,000 warrants into equivalent number of Equity Shares.

SUMMARY: 4y Operating Profit uptrend | PE 27.6x (Sector PE range 10-40) | Fund raise | Fleet expansion | Institutional entry | Promoter buying | Strategic JV | Logistics

FUTURE OUTLOOK: As per Q1FY25 Concall, Company is targeting a revenue of INR 700 Cr for FY25 | Company is anticipating 15-20% organic growth while exploring additional business opportunities in new sectors | Company expecting EBITDA margin guidance for FY25 to be in the range of 18-19%.

• MCap of INR 647 Crore (share price = INR 473 / share) (as on 8th Oct ‘24)
• TTM PE 27.6x (as on 8th Oct ‘24) Retail float = 15.7% (Jun-24)

FOOD FOR THOUGHT: The Indian logistics sector is highly fragmented, with both large established companies and numerous small to medium-sized unorganized firms. Global competition further intensifies the market, limiting bargaining power and impacting profit margins.

Q1. What are the Products and Services offered by AVG Logistics?

Incorporated in 2010, AVG Logistics is a third-party logistics service operator. It offers Full Truck Load and hub-and-spoke transportation model and warehousing services to select clients with the pan-India distribution network and automated technology systems. It offers its customers services in three key areas Transportation, Warehousing and Value-added Services. The Company specializes in two of the most important functions of logistics, Transportation and Warehousing, with over 50 fully computerized branches all over India. Some of the renowned brands are its clients, like Nestle, ITC, Mondelez, GSK, Amara Raja, Airtel, MRF, Mother Dairy, UltraTech Cement, Coca Cola, IGNOU, Patanjali, etc.

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Shivalic Power Control Ltd.

Recent filing: (BUSINESS UPDATE) Shivalic Power Control has reported a 72% growth in revenue from INR 31 Cr in H1FY24 to INR 53.5 Cr in H1FY25.

SUMMARY: 3y Operating Profit uptrend | PE 51.5x (Sector PE range 30-60) | Institutional Entry | IPO | Electrification | Capital Goods

• MCap of INR 576 Crore (share price = INR 239 / share) (as on 8th Oct ‘24)
• TTM PE 51.5x (as on 8th Oct ‘24) Retail float = NA

FOOD FOR THOUGHT: Negative operating Cash flow for FY24

Q1. What are the Products and Services offered by Shivalic Power Control?

Shivalic Power Control Limited, is in the business of manufacturing LT and HT electric panels, boasts a rich 20-year operating history, with a sprawling 1,25,000 Sq. Feet in-house manufacturing facility, the company prides itself on its ability to produce a varied selection of electric panels, including PCC Panels, IMCC Panels, Smart Panels, MCC Panels, DG synchronization panels, Outdoor panels, and HT Panels up to 33KV.

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Transformers & Rectifiers (India) Ltd.

Recent filing: (EXCELLENT RESULTS) For the quarter ending Sep-24 for Transformers & Rectifiers India Limited, Sales up 79% YoY from INR 257 Cr in Sep-23 to INR 461 Cr in Sep-24. Similarly, Net Profit up 23x from INR 2 Cr to INR 46 Cr. On a QoQ basis, Sales up 43% and Net Profit up 2.2x.

SUMMARY: 5y Operating Profit uptrend | 1q Operating Profit uptrend | PE 81.6x (Sector PE range 30-70) | Excellent Sep-24 results | Fund raise | Institutional Entry | Ace Investor | Capital Goods - Electrical Equipment

FUTURE OUTLOOK: As per Q1FY25 Concall and Investor Presentation, Company Revenue targets for FY25 remain unchanged at INR 2,000 Cr, with EBITDA margins expected to be around 14% and over the next 2-3 years, management targets standalone revenue growth to reach INR 4,500 Cr to 5,000 Cr with EBITDA margins of 16% to 17%. Company unexecuted order book as of 30th June 2024 stands at INR 2,926 Cr and have inquiries about 17,500 Cr under negotiation and meeting stage Company ultimate aim is to transform into a debt-free Company in the near future.

• MCap of INR 10,117 Crore (share price = INR 672 / share) (as on 8th Oct 2024)
• TTM PE 81.6x (as on 8th Oct 2024) Retail float = 14.3% (Sep-24)

FOOD FOR THOUGHT: PE is above sector range.

Q1. What are the Products and Services offered by Transformers & Rectifiers?

Transformers & Rectifiers (India) Ltd. is a leading manufacturer of transformers up to 1,200 kV class. It manufactures a wide range of transformers like power and distribution transformers, furnace transformers, rectifier transformers and special transformers. It has a technical collaboration with Fuji, Japan for 400/765 kV reactors and 400 kV generator transformer. It has a diversified customer base in India with international presence in over 25 countries.

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