Sovrenn Daily News - 2nd Jan 2025

Ritco Logistics Ltd.

Recent filing: (BUSINESS UPDATE) Company has achieved several milestones, including managing the transport of food grains via Indian Railways for ETG Agro, earning recognition from HPCL-Mittal Energy Limited (HMEL) for handling maximum polymer volume in FY 2023-24, and securing key transportation contracts. Notable contracts include INR 29.7 Cr from RINL, INR 6.4 Cr from SAIL, INR 9.3 Cr from BHEL, INR 31.3 Cr from OPAL, and INR 14.4 Cr from ESL Steels.

SUMMARY: 1y Operating Profit uptrend | 5q Operating Profit uptrend | PE 29.8x (Sector PE range 10-40) | Promoter Buying | Fund raise | Logistics

• MCap of INR 1,156 Crore (share price = INR 408 / share) (as on 2nd Jan ‘25)
• TTM PE 29.8x (as on 2nd Jan ‘25) Retail float = 9.2% (Mar-24)

FOOD FOR THOUGHT: Highly competitive sector.

Company Description: RITCO, founded in 1996, excels in providing top-tier logistics services with over 25 years of experience. The company, ISO 9001:2000 certified and registered with Dun and Bradstreet, boasts a team of over 1000 professionals. Renowned for innovation and personalized solutions, RITCO addresses supply chain challenges with precision and customer satisfaction. In the post-COVID era, they have embraced contactless delivery, utilizing advanced technology to streamline India's transportation networks.

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Gravita India Ltd.

Recent filing: (CAPACITY EXPANSION) Company announced the start of commercial production at its new recycled aluminium alloys plant in Ghana, with an initial capacity of 4,000 MTPA, expandable to 8,000 MTPA. The INR 6.6 Cr investment, funded through internal accruals, will utilize domestic aluminium scrap to cater to automotive and die-casting industries in Europe and Asia.

SUMMARY: 2y Operating Profit uptrend | PE 61.9x (Sector PE range 30-50) | Institutional Entry | Acquisition | Capacity expansion | Sustainability and Recycling

FUTURE OUTLOOK: As per Q1FY25 Concall, Company is guiding for a 25% volume growth and a 35% profit growth on a CAGR basis as well as targeting around 60% to 70% capacity utilization for FY25.

• MCap of INR 16,600 Crore (share price = INR 2,249 / share) (as on 2nd Jan ‘25)
• TTM PE 61.9x (as on 2nd Jan ‘25) Retail float = 14.2% (Jun-24)

FOOD FOR THOUGHT: PE is above sector range.

Company Description: Established in 1992, Gravita is one of the largest recyclers of non-ferrous metals in India. It has diversified into Manufacturing, International Trade, Turnkey Solutions in nonferrous metals, Plastics industry and in Information Technology. It has its offices and plants in India, USA, Singapore, Netherland, Sri Lanka, Ghana, Mozambique, Senegal, Tanzania, Jamaica, Mali, Mauritania, and Nicaragua.

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Power Mech Projects Ltd.

Recent filing: (ORDER) Company has secured an INR 294 Cr order (excluding INR 1.3 Cr per unit incentive) from Adani Power Limited for overhauling, condition assessment, erection, testing, commissioning, and manpower support for Unit 3 and 4 (2x660 MW) of the Korba Phase-II Thermal Power Project. Unit 3 will be completed within 12 months, and Unit 4 within 18 months from the Notice to Proceed.

SUMMARY: 4y Operating Profit uptrend | PE 31.9x (Sector PE range 30-70) | Fund raise | Institutional Entry | Orderbook INR 58,067 Cr (31st Sep- 2024), 13.04x of TTM Sales | Electrification | Capital Goods - Electrical equipments

FUTURE OUTLOOK: As per Q2FY25 Concall, Company is optimistic about achieving revenue growth of 25%-30% for FY25 | Company projects current PAT margins for mining operations at 6%-7% until peak rated capacity is achieved, with potential to improve to 12%-13%

• MCap of INR 8,710 Crore (share price = INR 2,755 / share) (as on 2nd Jan ‘25)
• TTM PE 31.9x (as on 2nd Jan ‘25) Retail float = 10.5% (9th Oct -24)

FOOD FOR THOUGHT: Promoters sold INR 126 Cr worth of shares since Mar ’24.

Company Description: Established in 1999, Power Mech Project is one of the leading infrastructure-construction companies based in Hyderabad with global presence, providing spectrum of services in power and infrastructure sectors. Strategic foray into Railways, Water Projects, Roads, Coal Mining, Cross Country Pipelines, Material Handling & Manufacturing leading to widening focus from Power to Non-Power sectors.