Shreyas shipping is division of a Dubai based Transport Company which started with costal shipping business a couple of years ago. Over the period the company has diversified itself in various segments of logistics such as in road transportation, railway transportation and warehousing too. The parent company handles the shipping business and its subsidiary looks after road transport, railway transport and warehousing.
When we see the financials of Shreyas Shipping in FY10 the company reported a loss of rupees 15 crore. In FY 11 the company revenue jumped 25% to rupees 190 crore compared to FY 10. There was also a turnaround in profits and it reported Profit after Tax (PAT) of rupees 12.7 crore against loss of 15 crores in FY10. The Q1 sales are up by around 10 % (Rs 46 crore). It also reported a loss of rupees 1 crore and a revenue loss of rupees 6.5 crore in quarter one on account of dry docking.
The management is expecting that the company will grow by 100 percent in 2012. They are also on expansion mode in various segments of their business. For their costal business a new ship has been chartered and they are expanding their warehouse segment by adding trailers and increasing the capacity of the warehouses.
Considering all these factors the company has a turnover of around 200 crore. If the company grows with 50 % it will mean a turnover of 300 crores. It has a market cap of 60 crore with high profit and growth potential. We think that the stock is trading at a very cheap level of at rupees 32-33 levels.
“Bell the bull says: Accumulate Shreyas Shipping stock at the current levels”