Maheshwari Logistics Ltd ..... SME potentially multibagger

Today I am expressing my view on one of the excellent logistic, coal as well as paper sector player listed in NSE SME platform ..... Maheshwari Logistics Limited.

The Company

Incorporated in 2006, Maheshwari Logistics Limited is engaged in providing logistics services, supplying of non-coking coal, manufacturing of kraft paper and trading in a variety of papers. It has its registered office and paper manufacturing facility situated at Gujarat. Further it has 6 branch offices which are situated at Gujarat and Rajasthan.

Set up by Maheshwari and Kabra Group, the Company offers a diversified business model, covering three different sectors ranging from logistics services to fuel to paper. The experience and trade relations developed by its promoters and management have been one of the key instrumental factors in the growth of the Company. With the vision and dedication of its management it has been able to accomplish a revenue growth of more than 80% in past 5 years and achieve a turnover of more than Rs. 600 crores during financial year 2015-16.

Logistic Business

The Company started out with logistics services and over the years has developed a strong clientele network in the sector. It primarily offers full truck load freight services to large and medium size companies mainly across the state of Gujarat and Rajasthan. It has also extended its logistics arm in state of Maharashtra and Madhya Pradesh. It uses its own trucks as well as hires third party transportation services for carrying out its logistics operations.
It has a fleet of more than 60 trucks and an association with more than 1,000 trucks though third parties. It has also set up a full maintenance workshop for all its vehicles at Nimbahera and Jamnagar. Maheshwari's goods transportation services serves a broad range of industries, with its customer belonging to cement, paper, textiles, fertilisers, etc. industries. For the year ended March 31, 2016, its logistics services contributed 36.62% to our total revenue from operations.

Coal Business

Along with logistics services, the Company ventured into trading of non-coking coal. It procures coal either through direct imports or through high seas purchases from other importers. It has also installed a screening plant at Vapi for sizing imported as well as indigenous coal for its customers who have specific requirement of sized coal. For the year ended March 31, 2016, its revenue from coal trading contributed to 51.43% of its total revenue from operations.

Paper Business

Maheshwaris paper journey began with trading of variety of papers. With gaining an insight of the industry coupled with an available opportunity, the Company ventured into manufacturing of Kraft Paper in 2015 by purchasing business vide a business transfer agreement dated September 30, 2015 from M/s. Daman Ganga Recycled Resources LLP. It further entered into a tripartite job work cum plant and equipment operating agreement with Daman Ganga Papers Limited and Daman Ganga Recycled Resources LLP for a period of 20 years. This manufacturing facility is spread over an area of 45,000 square metres and is equipped with the necessary plant & equipments. At present, it has a manufacturing capacity of 750 lakhs kg p.a. Within a short span of time, the Company has been able to create a demand for its manufactured products. From October 2015 to March 2016, the Company generated a turnover of Rs. 4,600.87 lakhs sale of manufactured products. It endeavours to satisfy customer by continuous improvement through process innovation and quality maintenance. It aims to grow its operations on PAN India basis and make its brand as a distinguished name in industry.

Outlook

Promoters hold 58.19% stake of company. For the first half of FY17 top lines and bottom line reported by company is 334.81 cr and 4.71 cr respectively compare to last full year 605.47 cr and 6.92 cr.

Out of the 41.81% of publicly held stake more than 35% of the stake is in locked in period. P/E of stock is around 13.  Stock is available at Rs. 90 and listed only in NSE.

Disc: holding few quantity of stock

NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION  BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”