In an earlier piece, I had sounded the red alert that all the savvy investors are tucking into logistics stocks and that we also need to our stake our claim to these stocks before it is too late.
I pointed out that investing legend Radhakishan Damani was first in the queue with his brilliant stock picks, GATI and Transport Corporation of India. Inspired, the other stock pickers followed Radhakishan Damani’s lead and bought their own favourite logistics stocks.
Ashish Kacholia already holds a truckload of 15 lakh shares of GATI (as of 30th September) that is worth Rs. 40 crore at the CMP of Rs. 272. The stock has given an incredible gain of 428% on a YOY basis.
His latest stock pick is Shreyas Shipping. In the December 2014 quarter, Ashish Kacholia bought 3,96,006 shares of Shreyas Shipping. This investment is worth Rs. 11.20 crore at the CMP of Rs. 283.
Shreyas Shipping reported blockbuster Q2FY14 results. While the net sales jumped 13 percent from Rs 122.7 crore to Rs 139.5 crore YOY, the net profit surged 505 percent to Rs 22.4 crore as compared to Rs 3.7 crore in the same quarter of FY 13.
|Particulars (Rs cr)||Sep 2014||Sep 2013||%Chg|
Shreyas Shipping has already given a mind-blowing return of 1000+% on a YOY basis. The gains over the past three months is itself 236%.
What appears to have caught the fancy of the market with regard to logistics’ stocks is the expected benefits from GST. Gati’s Founder & CEO, Mahendra Agarwal, came on record a few days ago to state that the logistics costs would come down from 14 percent to 10 percent of GDP. He added that the costs, time and inventory cost would also come down as a result of GST. It is obvious that logistics’ companies will thrive in the new regime.
Hiren Ved of Alchemy confirmed that there is a “multi-year growth” expected in the logistics sector. He did, however, caution that the valuations are very high and one has to be careful to buy these stocks only if there is a steep correction.