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AVG Logistics LtdQ2 FY24

AVG Logistics Ltd Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹176P/E: 28.0Market Cap: ₹330 CrSector: Transport Services

Management growth scorecard

Revenue

Category 2

Margin

Category 1

Fundraise

N/A

Order

N/A

Capex

Yes

2 of 3 growth signals are positive.

Full analysis

Revenue guidance

Category 2
  • AVG Logistics aims to double warehousing space from 8 lakh sq ft to 20 lakh sq ft in the next 3 years, expecting ~125% revenue growth in this segment (from INR25 crores to ~INR50 crores).
  • Rail segment revenue is expected at INR100-110 crores for FY24, with additional trains anticipated to increase capacity.
  • Overall company turnover target is around INR700-750 crores by March 2025, up from INR520-525 crores expected in FY24.
  • Long-term vision is to reach INR1,000 crores turnover in 5 years and INR2,500-3,000 crores in 10 years with 20%-30% year-on-year growth.
  • Expansion focus on higher-margin sectors like reefer (from 15% to 25% business share), liquid logistics, and packers & movers.
  • Growth driven by a multi-modal logistics model (road + rail), new value-added segments, and asset-light “driver to owner” vehicle schemes.

See what AVG Logistics Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

  • Current total debt as of September 2023 is around INR 95-96 crores, reduced from a peak of INR 110-115 crores.
  • The company plans to repay the entire debt and become debt-free by March 2026, targeting turnover of INR 700-800 crores by then.
  • Investment plans include around INR 10 crores for new business types and vehicles, focusing on a light asset model.
  • Capex for vehicle addition is estimated around INR 20 crores, mainly through lease arrangements and a "Driver to Owner" scheme.
  • No explicit mention of upcoming equity fundraising; focus is on internal accruals and cost management.
  • Expansion in warehousing (targeting 20 lakh sq ft from current 8 lakh sq ft) and rail segment growth (expected INR 100-110 crores revenue) indicate capital needs, likely managed through debt and internal funds.

See what AVG Logistics Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes
  • Target to double warehousing space from 8 lakh sq.ft. to 20 lakh sq.ft. in the next 3 years, leading to approx. 125% revenue increase from warehousing (currently INR25 crores, expected INR50 crores next year).
  • Planned investment of around INR10 crores over next 1-2 years focusing on light asset model (no warehouse or tracking investment without confirmed customer business).
  • Capex of about INR20 crores estimated for new vehicle addition, primarily through leasing under the "Driver to Owner" scheme.
  • Investment in reefer business includes 250 vehicles already purchased with plans to increase via partnerships with drivers owning vehicles.
  • Plans to establish 2-3 new cold storage warehouses in Odisha and Maharashtra, leveraging 40% government subsidies.
  • Partnership with Indian Railways targets INR100–110 crores annual revenue from rail logistics, expanding train routes over next six months.
  • Peak debt estimated around INR110–115 crores, with plans to become debt-free by March 2026.

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Margin guidance

Category 1
  • AVG Logistics aims to grow revenue by 20%-30% year-on-year following a recovery from COVID-19 impacts (Page 15).
  • Target revenue of INR 700-750 crores by March 2025, up from around INR 525 crores expected in FY24 (Page 6).
  • Plans to double warehousing space from 8 lakh sq ft to 20 lakh sq ft in next 3 years, projecting ~125% revenue growth in warehousing segment (Page 16).
  • Expect INR 100-110 crores revenue from railway segment starting FY24, with higher margins than road transport (Page 16 & 7).
  • Expansion in high-margin segments like reefer business, packers and movers, liquid logistics expected to improve EBITDA margins from current ~18% to ~22%-30% (Pages 10 & 5).
  • Aim to achieve sustainable PAT margin of 10% on turnover within next 3 years, with PAT profits increasing accordingly (Page 14).
  • Plan to become debt-free by March 2026 to improve financial health (Page 14).
  • EPS growth reflected from INR 0.85 to INR 3.61 in H1 FY24, indicating positive earnings momentum (Page 4).

Order book

The provided transcript and document excerpts do not explicitly mention the current or expected order book or pending orders for AVG Logistics Limited as of November 2023. However, some related points on business outlook and growth plans include: - The company targets a turnover of INR 700-750 crores by March 2025. - New business verticals like reefer logistics, packers and movers, liquid transportation, and warehousing expansions are expected to contribute significantly to growth. - Plans to double the cold chain division turnover from INR 70-80 crores in the next year. - The company is adopting a light asset model, including a "Driver to Owner" scheme, investing around INR 20 crores in leased vehicles. - Customers include top companies like Nestle (~20-22% of business), HUL, ITC. - Management indicated strong customer additions and fleet and warehouse expansions post-COVID. No specific order book or pending order volumes are disclosed.

How does AVG Logistics Ltd rank vs peers in Transport Services?

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