IGI Logo

Result Highlights

* Revenue grew by 18% YoY (higher 7% QoQ) to Rs.2.8 bn. This was marginally higher than our estimates of Rs.2.7 bn

* The company reported gross margin of 33.2% vs 30.0% YoY/ 32.3% QoQ.  Operating profit doubled YoY to Rs.544 mn (Higher than our estimates of Rs.489 mn).  

* Operating Margins improved to 19.4% vs 11.2% YoY/17.3% QoQ. The drop in cost was seen across employee cost, RM cost and other expenses.  

* Higher operating profit saw APAT grow to Rs.426 mn during Q4 FY21 (Rs.190 mn in Q4 FY20). This was higher than our estimate of ~Rs.362 mn.

* The Company declared a Final dividend of Rs.2 per share for FY21 in addition to Rs2 per share as interim dividend.

Our view:  

The margins have been a positive surprise with good demand from SME segment and the Company was able to pass the rising fuel cost to its customers. The company has guided for strong ~40% revenue growth aided by 35% volume growth.

The company believes that the investment in sorting centres and automation will drive the efficiency which would keep margins at elevated levels. Further the company has ventured into two new verticals namely C2C express and Cold chain which are high margin business and would gradually start contributing to the revenues.

The asset light nature of business and healthy balance sheet would allow the Company to capitalize on the expected improvement in business activity. We have revised our FY22 and FY23 estimates to factor in the strong Q4 performance and improved outlook on profitability. Currently stock is trading at 25x FY23E EPS. We remain positive on the growth prospects and maintain our BUY rating for a revised target price of Rs.1,398/sh (32x FY23).

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://yesinvest.in/privacy_policy_disclaimers
SEBI Registration number is INZ000185632

Above views are of the author and not of the website kindly read disclaimer