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Four s fortnightly logistics track 21 may - 2nd june 2012
1. FOUR-S Consumer 21st May‘12 –2nd Jun‘12
(Soft) Track
LOGISTICS TRACK
Fortnightly Update on Indian Logistics Industry
News of the week Content
Logistics companies report growth at lower margins in News of the week 1
FY12
The logistics sector managed to post a reasonable 14% growth Investment Activity 2
in net profits in FY12. However, margins were hit, since
revenues were up 31%. This is excluding shipping companies,
which had a horrible year in FY12. Profits dropped for every News Update 3
shipping company, with the sector leader Shipping Corporation
being the worst affected. SCI reported a loss of Rs 4.28bn as
compared a profit of Rs 5.67bn in FY11.
Stock Market Updates 5
The largest container rail operator in the country – Container
Corporation of India (CONCOR) has posted marginal 6% growth
in both revenues and PAT. For FY’12 CONCOR’s EBITDA and Net Peer Benchmarking 6
Profit Margin remained at 25% and 22% respectively.
Aegis Logistics, the leader in oil & gas logistics business, posted
a high growth of 147% in revenues during FY’12 as compared to About Four-S Services 7
Four-S India Logistics Report – 2012
last fiscal. Its margins have significantly decreased, though. Its
EBITDA for FY12 was a negligible Rs 49mn on a revenue of Rs Four-S is launching comprehensive report
44,725mn.
on Logistics Space. The report presents
Integrated supply chain and logistics solutions provider current industry trends and snapshot of all
Transport Corporation of India’s (TCI) revenue for the fiscal was key segments in Logistics & Supply Chain
Rs 19,553mn, up by 6% while EBITDA and PAT were Rs 1580mn Industry along with profiles of interesting
and Rs 595mn increased by 13% and 19% respectively over the listed and unlisted players in the space. The
last fiscal. The EBITDA and PAT margins were 8% and 3%.
report is useful for Board members & Senior
Express cargo leader Blue Dart Express’ net profit for this Management of Logistics companies, PE
quarter Q4FY’12 increased by 22%. Its revenue, at Rs 4114mn, Fund Managers and other investors.
s was up by 30%. To book your copy, please write to
Devendra Deole at devendra.deole@four-
Port related logistics services provider Gateway Distriparks Ltd.
s.com.
has posted a robust growth of 36% in both revenues and PAT
for the fiscal. Revenues increased to ` 8,235mn from ` 6,034mn
and PAT increased to ` 1,320mn from ` 9,68mn in FY’11.
Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
2. Four-S Logistics Track
Investment Activity
PE Deals in 2011
Amount
Date Investor Target Stake (%) Strategy
($ mn)
6-Jan India Equity Partners Foursee Infrastructure Equipments Ltd. NA 10.0 Growth
23-Mar Infrastructure India Holdings Fund LLC Aegis Logistics 6.4 15.1 PIPE
11-Apr Warburg Pincus Continental Warehousing Corporation NA 100.0 Late
22-Apr Fidelity Growth Partners Transpole Logistics NA 13.5 Growth
5-May Mumbai Angels MVS Efarms 25 NA Early
24-Jun IL&FS PE JICS Logistics NA 8.8 Growth
4-Jul Rajasthan VC Fund Leeway Logistics NA 3.3 Early
5-Jul Standard Chartered PE Redington India 10.0 81.1 PIPE
5-Jul ECL Finance Ltd. Redington India 2.0 16.2 PIPE
19-Aug Ascent Capital Karaikal Port NA 30.0 Growth
13-Dec India Equity Partners TNT Express NA NA Buyout
Mergers & Acquisitions in 2011
Amount
Date Investor Target Stake (%) Business
($ mn)
19-Jan TVS Logistics MESCO (US) 100 NA Logistics Services
16-Feb Infrastructure India Plc Vikram Logistics & Maritime Services 37.39 NA Tranportation
26-Apr Aqua Logistics Ltd Nikkos Logistics 70 NA Logistics Services
29-Apr SBS Holdings Atlas Logistics 80 33.3 Logistics Services
12-Jul Royal Vopak CRL Terminals 100 61.8 Liquid Storage
31-Oct Vikram Logistics ETA Engineering and its sub. Freightstar NA 14.4 Multimodal Logistics
12-Dec IL&FS Transportation Networks Ltd. Chongqing Yuhe Expressway Co Ltd. 49 NA Road Transport Infra
14-Dec Future Supply Chain Solutions Transmart India NA NA Warehousing
PE Deals in 2012
Amount
Date Investor Target Stake (%) Strategy
($ mn)
6-Jan General Atlantic Foursee Infrastructure Equipments Ltd. NA 20.8 Growth
23-Feb IDFC PE StarAgri Warehousing & Collateral Mgmt NA 30.0 Growth
23-Feb Global Super Angels Chhotu.in (Santa Claus Couriers Pvt Ltd) NA NA Angel
28-Mar Ambit Pragma Spear Logistics NA 1.7 Growth
30-Mar VenturEast, Zephyr Peacock e2E Rail NA 6.0 Early
26-Apr New Silk Route VRL Logistics NA 33.4 Late
19-Apr KKR, Goldman Sachs TVS Logistics 20.0 55.0 Growth
Mergers & Acquisitions in 2012
Amount
Date Investor Target Stake (%) Business
($ mn)
1-Feb Oil Field Warehousing & Services (OWS) Raamns Shipping & Logistics NA NA Logistics Services
20-Apr DHL Express (India) Pvt Ltd DHL Lemuir Logistics Pvt Ltd 24.0 NA Logistics Services
15-May DTDC Eurostar Express NA NA Courier Services
Source: Four-S Database
About Four-S Services
Four-S Services is India's leading provider of Research, Financial Consulting and Investment Banking services with offices in Gurgaon, Mumbai and
Bangalore. We have a proven track record of consistently delivering high quality solutions, enabling our clients to improve the effectiveness of decision
making and acting as a catalyst in achieving business success. We have executed more than 120 mandates across diverse range of industries including
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3. Four-S Logistics Track
News Update
Karnataka approves ` 10bn investments in logistics Shipping Corp won’t order ships this fiscal
Ahead of the Global Investors Meet (GIM), the Karnataka Shipping Corp. of India Ltd (SCI), India’s biggest ocean carrier,
Government has cleared investments in logistics and said it will not order any new ships this fiscal after reporting a
warehouses to the tune of ` 10bn. Also on its own, the ` 4.28bn loss, its first in 28 years, in the year ended March.
government plans to build four Logistics Parks with a total The Mumbai-based firm also plans to merge some of its
investment of ` 18bn through private partnership route. To container shipping services and return two hired container
facilitate development across the state, the Infrastructure ships by September as part of a plan to cut costs and return to
Development Department has initiated moves to build profitability. Globally, rates for transporting cargo has been
Logistics Parks in Bangalore, Hassan and Hubli on public- hit by waning demand, excess supply of ships and rising costs.
private partnership (PPP) mode. According to a senior SCI last reported a loss in 1983-84. In fiscal 2012, SCI was hit
Infrastructure Development Department (IDD) official, the by a ` 2.97bn mark-to-market loss on account of loan
government is looking for an integrated approach by revaluation. Depreciation costs rose to ` 6.08bn from `
providing multi-modal/integrated logistics transport centre, 4.65bn a year ago as it added several new ships to its fleet.
warehouses, inland container depots, domestic rail head, and
air cargo centres. Bharati Shipyard promoters to infuse ` 1.18bn for CDR
An industries department official said among the projects
The promoters of country's second largest private ship-builder
cleared recently is one by Vikram Logistics and Maritime
Bharati Shipyard have agreed to infuse ` 1.18bn fresh capital
Services, which is investing ` 3.4bn to set up logistics services into the debt-laden company, as a precondition for its ` 58bn
at Maranaikanahally and Samanduru villages in Anekal. debt restructuring plan. On June 1, the lenders consortium
The Gurgaon-based Siddhivinayaka Farm Fresh is to set up a approved the ` 58bn CDR proposal of Bharati Shipyard. The
muti-commodity agri-cold chain network and logistic hub at ship-builder has fund and non-fund based debt of ` 58bn
Vishwanathapura near Devanahalli. The project is to come up from as many as 25 banks, including State Bank, Central Bank
on 11 acres on a private land at an investment of ` 16bn. of India and IDBI Bank among others. The lenders' consortium
is led by SBI. The country's second largest private ship-builder
had a debt of ` 38.6bn in its balance-sheet of FY12 end, and
Gangavaram port expansion set to take off; funds tied up
over ` 20bn of non-fund limits, taking the overall CDR scheme
to ` 58bn. Out of this, the fund-based debt of the shipyard is `
Work on Gangavaram port expansion is all set to take off,
32bn, while it has a working capital loan of around ` 6bn and
with the port operator completing award of major contracts
the rest is non-fund-based limits. In the March quarter,
and achieving financial closure for the project. The expansion,
Bharati Shipyard reported a net loss of ` 365mn, while for the
which will see the port's capacity increasing from the current
full fiscal, its net plunged 94% to Rs 59.5mn crore against `
15mn tons to 45 mn tons per annum, envisages an addition of
1.13bn a year ago. Its net sales fell by 20% during the fiscal to
three multi-purpose berths and a coal handling terminal.
` 11bn, while interest burden surged 84% to ` 4.9bn.
Spanish major Duro Felguera bagged the €62mn order for
supply of key equipment for the new coal berth. After the
Aegis Logistics raises ` 250mn via bonds
expansion, the port will be looking for more non-coal cargoes
such as fertilisers, bauxite and food grains. Today, coal
Aegis Logistics has raised ` 250mn ($4.48 million) through 8-
accounts for 70% of its total traffic of about 14 mt.
year bonds at 10.2%. The issue, which was solely arranged by
Gangavaram port is located on India’s east coast near HDFC Bank, has a put/call option at the end of the fifth year,
Visakhapatnam. The port claims to be India’s deepest port. It according to the sources. Aegis, which stores and distributes
is run by a private operator, the DVS Raju family, which owns oil, chemicals and gas, is a key player in the liquefied
58%, while PE fund Warburg Pincus owns 31.5%. petroleum gas (LPG) business.
UPS India appoints Mark Martyn-Fisher as new MD
The US-based logistics major UPS has appointed Mark
Martyn-Fisher as managing director of UPS India. Martyn-
Fisher will oversee UPS's express and supply chain operations
in the country, which includes marketing, business
development, international trade services, among others.
Research Desk
For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
4. Four-S Logistics Track
GATX enters Indian rail wagon leasing market
Global News Update
GATX India Private Limited (GIPL), a subsidiary of GATX
Corporation, has announced its entry into the Indian US Third-Party Logistics Revenue Up 5.9 Percent
marketplace with the purchase of 10 newly manufactured rakes,
each consisting of 45 container flat wagons. GIPL has agreed to U.S. third-party logistics providers’ net revenue rose 5.9% in
lease the rail wagons to Arshiya Rail Infrastructure, a subsidiary 2011, led by domestic transportation management and value-
of Arshiya International, for 10 years. This transaction will allow added warehousing and distribution, according to an analysis
Arshiya to efficiently scale its rail fleet. by Armstrong & Associates. Domestic transportation is the
smallest but fastest-growing 3PL segment. Its estimated net
Titagarh Wagons signs agreement with GATX revenue, or gross margins, rose 12.2% last year to an
estimated $6.3bn. Value-added warehousing and distribution
GIPL earlier this month signed an agreement with Indian increased 8.4%, to $26.6bn in net revenue. 3PLs’ dedicated
Railways to become the first wagon leasing company under the contract carriage services posted 4.7% growth to $10.9bn.
Wagon Leasing Scheme in India. Under this scheme, GIPL plans Net revenue for 3PLs specializing in international
to purchase wagons and lease them out to various customers in transportation management rose by 2.1%, to $17.7bn. The
private and public sector. Incorporated in 1997-98, Titagarh small increase contrasted with a 16% compounded annual
Wagons Ltd. is one of the leading private sector wagon growth rate over the previous 15 years. Armstrong expects
manufacturers in India. the overall 3PL market to continue to expand at the rate of
2.5 to 4.5 times growth in GDP. According to the firm, the
Texmaco wagon lease venture market has taken notice, with private-equity investors
pursuing acquisitions among the large non-asset-based 3PLs
Kolkata based wagon manufacturer Texmaco has entered into specializing in domestic transportation and freight brokerage.
an equal joint venture with French group Touax Rail, a lease
finance company, to tap opportunities in the wagon leasing Private Equity Companies Make Bids For GEFCO
market. The joint venture between Texmaco Rail & Engineering
and Touax Rail — Touax Texmaco Railcar Leasing Pvt Ltd — will According to press reports, a number of companies, largely
lease wagons to private players such as individual industries and comprising private equity firms, have submitted offers for a
container cargo movers. The move comes on the back of the stake in GEFCO, valuing the business at up to €1.2 billion. At
decision of the Indian Railways to ease norms in the wagon least six private equity companies including Apollo, Axa
leasing scheme, allowing firms to procure and lease wagons to Private Equity, Bain, CVC, PAI and Pamplona are said to have
other businesses. The joint venture would start its operation made indicative offers for up to 90.0% of the Company, being
with a minimum net worth of ` 250mn which would be sold by PSA Peugeot Citroen. PSA Peugeot Citroen is said to
expanded further. According to the senior official, The market be flexible on the size of stake it will sell, but it is to hold on to
size is about 300,000 wagons and if 10% of that (30,000 units) a strategic shareholding. It is said to aiming to raise around
can be leased out, there is strong business scope. €560.0 million from the sale. The Bids for the stake in GEFCO
are believed to be between four and six times earnings before
Indian Railways to lease locomotives to Pakistan interest, tax, depreciation and amortisation (of around €200.0
million), equating to a value of €800.0 million to €1.2 bn for
To improve trade ties between the two countries, Indian the business. It has been reported that Geodis has
Railways (IR) is working on a proposal to lease 50 locomotives to investigated making an offer for the company, but has not so
Pakistan Railways (PR). Indian Railways will be leasing 50 of the far bid. GEFCO, a subsidiary of the PSA Group offers a range of
3000 HP locomotives at a rate of $30 per hour. It will also transport and logistics services to automotive, industrial,
provide training facilities for Pakistan railwaymen to run Indian retail, 2Wheeler and electronic companies across the world.
locomotives. In Pakistan, as per the current estimate, out of 520
locomotives, only 76 locomotives are operating. Railways supply Maersk Shipping to cut 400 jobs
about 10 locomotives on an average in a year on outright
purchase basis. Indian Railways produces 500 locomotives every Danish container shipper Maersk Linehas announced that it
year from its two engines manufacturing units. Currently, it would eliminate 400 jobs as part of a reorganization strategy.
regularly supplies locomotives to Bangladesh, Sri Lanka, The shipping giant, which current employs 25,000 workers
Vietnam, Myanmar, Mozambique, Tanzania and Ghana. around the globe, said it lost $566mn in the first quarter after
earning a net profit of $416mn in the first three months of
2011. The Copenhagen Post reported Maersk Line, as a
subsidiary of A.P. Moller-Maersk, generates 42% of its parent
company's business.
Research Desk
For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
5. Four-S Logistics Track
FedEx Acquires Brazilian Transportation and Logistics Company
Event Update
FedEx Corp. will acquire the Brazilian transportation and
logistics company Rapidao Cometa Logistica e Transportes S.A.,
the latest step in FedEx's strategy for growth in Latin America.
Event Essentials of Warehouse Automation
FedEx expects that the transaction, which is subject to Date 23rd June 2012
customary closing conditions, will close in the third quarter of Place New Delhi
2012. Rapidao Cometa has been one of FedEx's authorized Organiser ThinkLink Supply Chain Serveice
representatives in Brazil for the past 11 years. The acquisition
Web http://thinklink-scs.com/
includes:
- 45 operational branches and approximately 145 distribution
points
- Approximately 770 vehicles and trailers
- Logistics and distribution, which consists of a wide range of
products and services
- A ground distribution network that provides day-definite
transportation for small packages and heavyweight shipments
- Approximately 9,000 employees across Brazil
The integration of the logistics, distribution and express
businesses of Rapidao Cometa will happen in phases during a
period of 18 to 24 months after closing.
Barloworld Logistics Acquires Ecosse Tankers
Barloworld Logistics, one of southern Africa’s leading supply
chain and logistics companies, announced its acquisition of
Ecosse Tankers. CEO of Barloworld Logistics Steve Ford noted
that the acquisition was in line with the company’s strategy to
grow its services and expand expertise in the chemical, fuels and
hazardous goods sectors. Ecosse Tankers is an african group,
specialist transporter in hazardous acid-based chemicals.
SCI Logistics acquires White Glove Transportation Systems Ltd.
SCI Logistics has announced the acquisition of White Glove
Transportation Systems Ltd., a leading provider of highly
specialized transportation solutions for high value products that
require precise handling, special equipment, and highly trained
personnel to execute delivery and value-added on-site services.
SCI Logistics is a recognized leader of integrated supply chain
solutions that leverages the most comprehensive delivery
network in Canada. It operates two primary lines of business:
contract logistics and transportation services and includes
services such as fulfillment, inventory management, returns and
reverse logistics, whiteglove, high value transportation, mission
critical parts, same day courier and transportation
management. The company employs approximately 1,000
people, operates a national network of 15 distribution centers
and 30 critical parts depots of over 2 million square feet and
serves over 600 customers, making it the largest Canadian-
based third-party logistics provider.
Research Desk
For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com
6. Four-S Logistics Track
Stock Market Update
As on 1st June 2012 Market Cap Price Percentage Change (%)
(In ` mn) (In `) 1W 1M 3M 6M 12M
Container Corporation of India 116,965 899.85 4.5% 2.6% -4.8% -2.4% -19.1%
Blue Dart 45,425 1,914.40 -6.7% -3.4% 0.2% 35.7% 44.2%
Great Eastern Shipping 36,550 240.00 -1.5% -5.5% 2.2% 7.6% -17.0%
Essar Ports Ltd. 36,182 88.15 -2.1% -3.1% 29.6% 30.2% -26.9%
Shipping Corporation of India 23,686 50.85 -7.3% -17.5% -28.3% -17.1% -51.7%
Gateway Distriparks 15,213 140.35 -2.1% -7.2% -8.5% 4.4% 14.7%
Allcargo Logistics 14,523 111.25 -2.5% -6.4% -19.6% -19.5% -34.2%
Arshiya International 7,677 130.50 -4.3% -16.1% -11.4% -10.3% -28.8%
Aegis Logistics 4,267 127.75 -11.2% -17.0% -26.4% -7.9% -44.6%
Mercator Ltd. 4,175 17.05 -13.5% -20.0% -43.5% -21.6% -58.2%
Transport Corporation of India 3,938 54.15 -6.0% -14.6% -20.1% -13.8% -41.2%
Sical Logistics 3,745 67.35 -0.1% -1.7% -0.8% -3.9% -8.2%
Gati 3,056 35.30 1.0% 0.7% -0.8% 12.4% -44.3%
Aqua Logistics 2,880 9.60 -6.8% -17.2% -22.6% -25.6% -43.4%
SEAMEC Ltd. 2,770 81.70 2.4% -6.3% -14.2% -11.3% -15.8%
Varun Shipping 2,288 15.25 -3.5% -13.2% -20.3% -11.7% -44.7%
NSE Nifty - 4,841.60 -1.6% -7.8% -9.3% -1.9% -13.4%
BSE Sensex - 15,965.16 -1.6% -7.8% -9.2% -3.1% -14.2%
ET Logistics Index - 15,793.51 0.7% -0.9% -5.1% -0.5% -17.7%
ET Shipping Index - 6,543.77 0.1% -5.5% -8.9% -1.7% -23.6%
Baltic Dry Index (BDIY:IND) - 904.00 -12.6% -21.5% 18.5% -51.5% -38.9%
Baltic Dry Index
Road Freight Index
Source: Baltic Exchange
Source: Transport Corporation of India
Research Desk
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8. Four-S Logistics Track
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9. Four-S Logistics Track
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