Shares of this microcap company surged up to 10 percent in Tuesday’s trading session after receiving an order from Indian Railways for Rs. 105 crores. The shares have delivered a multibagger return of 246 percent to its shareholders in one year.
With a market capitalization of Rs. 737 crores, the shares of AVG Logistics Ltd started Tuesday’s trading session on a lower note at Rs. 602.20 compared to its previous close of Rs. 622.45. During the trading session, the shares hit a high of Rs. 668.40, gaining around 10 percent, also recorded as the company’s fresh 52-week high and are currently trading at Rs. 625 apiece.
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had secured a 6-year long-term contract, valued at Rs. 105 crores, for the lease of Parcel Cargo Express Train (PCET) from the Indian Railways.
This special train connects Korukkupet Goods Shed (Chennai) to New Guwahati Goods Shed (Guwahati) and will complete 4 trips every month over the next 6 years, totalling 313 trips during the contract tenure. The Carrying Capacity during the trip is expected to be 364 tonnes for the first six months. Later, it will be 484 tonnes per trip. The Express Train Service will cover the distance of 2,500 kilometres in 72 hours ensuring expeditious, seamless connectivity between the two locations.
Coming onto the company’s financial statements, the revenue increased by 6 percent from Rs. 117.87 crores during the September quarter to Rs. 124.77 crores in the December quarter. In addition, the net profits magnified by 179 percent from Rs. 1.72 crores to Rs. 4.80 crores during the same period.
The company has a strong customer base in the FMCG sector and plans to expand into the pharma, cement, steel, and auto parts industries. Further, during the recent quarter, they expanded their client base to include major companies like PepsiCo, Colgate, and BigBasket.
Moreover, the company is planning to launch EV electric vehicles and LNG fleets and aiming to add 100 vehicles by December 2024 for green logistics expansion.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 1.21 percent during FY 21-22 to 91.9 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 8.46 percent to 11.72 percent during the same timeframe. Furthermore, the net profit margin increased from 0.22 percent during FY21-22 to 1.84 percent during FY22-23.
Headquartered in Delhi, AVG Logistics was incorporated in 2010. The company provides road transportation services, warehousing facilities and Railway transportation to various domestic and multinational companies.
Written By Vaibhav Patil
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