Powerfulpicks news update: As I have mentioned in below call, AQUA Logistics, a full scale logistics provider, is hungry and savvy in growing inorganically by acquiring companies in similar business.
The company has announced that they have signed an agreement to acquire Chennai based Logistic Company Star Distribution Logistics Pvt. Ltd. (Star Direct), which has strong focus on Warehousing and Last Mile Distribution. This acquiring will reinforce the company's Distribution & Reverse Logistics capability and help to acquire new clients in FMCG, Pharmaceuticals, Retail & Consumer Electronics space. Infusing USD 3 million initially, Aqua will acquire a 40% stake in STAR and an additional 20% equity stake will be acquired within a period of 2 years subject to STAR meeting its business performance targets.
AQUA has also recently bagged multiple orders worth Rs 110 crores for outsourcing, management of logistics services. The clients include top pharma and FMCG companies including Glaxo Pharma.
AQUA had earlier acquired three Hong Kong-based companies including CIT Logistics, TAG Logistics and AGI Logistics. It bought a 60% stake in each of these players for an aggregate amount of $7.09 million (nearly Rs 32 crores). Aqua Logistics had earlier raised approximately Rs 150 crores through its IPO. The management had earmarked Rs 35 crores of the total funds raised for acquisitions. Senior management of Aqua Logistics pointed out that the combined turnover of these entities was between $13-15 million (nearly Rs 60- 68 crores), during the year ended December 2009.
Growing two-way trade between India and China, coupled with other East Asian countries, the HK acquisitions provides Aqua Logistics opportunities in logistics and allied services in both geographies. Aqua Logistics in its domestic operations follows an asset light model whereby it largely relies on third-party providers for equipment like cranes and allied assets.
On Wed, Sep 29, 2010 at 1:22 PM, powerfulpicks <powerfulpicks@gmail.com> wrote:
Powerfulpicks call opinion: I track AQUA LOGISTICS for quite some time now, although I never felt a compelling reason to recommend a buy. This is an international logistics company, hungry for growth and savvy with acquisitions (had acquired 3 companies in Hong Kong during April-May 2010) like EMAMI. It also has presence in the Middle East, apart from India of course. This script has strength from its ever growing business and logistics is an attractive domain.
The stock is splitting (10:1) with a record date of Oct 4th, so this is the right time to buy and hold for long term. Buy at 650 for a short term target of 735 and a long term target of 780 (divide targets by 10 after the split happens). Script may consolidate a bit after the split, but move faster after that because of increase in free float..like what happened to ITC.
Disclosure: I hold AQUA in my long term portfolio at an average price of 382.
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