We initiated coverage on Allcargo Logistics Ltd. on August 14th 2019 with a BUY rating at a market price of Rs.95 and with a target price of Rs.168 based on our expectationsfor FY2022E EPS.
However, the company’s management has recently announced that the Promoter Group has expressed their desire to take the company private by voluntarily delisting the shares of the company. Additional details of the process are expected after the board meeting scheduled for 27th August 2020.
The share price has run up due to this new development and made it’s 52 week high today of Rs.140. Currently the stock is trading at Rs. 130, yielding returns of ~37% from our initiation price. With the company considering delisting its shares, and the ‘Delisting Offer’ price yet to be revealed, there is a lack of visibility regarding the future.
Therefore, we suggest investors can start booking profits in Allcargo as the stock has delivered a return of 37% over 1 year since initiation.
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