Undervalued at Rs 416 Crore Market Cap? This Logistics Stock Bags Rs 90 Crore Deal and is Expanding Fast!
With 137 new vehicles and a strategic acquisition, this company is strengthening its market position.
AVG Logistics delivered a strong Q3 FY25 performance, driven by strategic growth and operational efficiency. The company’s revenue and profitability improved consistently, reflecting its focus on sustainable expansion. A major highlight of the quarter was securing a prestigious order from a leading cement company, expected to add Rs 90 crore in revenue over the next three years.
Major Contract Win in Cement Industry
AVG Logistics has secured a long-term order from a renowned cement company, marking a significant milestone in its growth journey. This contract, which commenced in Q3 FY25, will contribute approximately Rs 90 crore over three years, strengthening revenue visibility and market position.
Fleet Expansion and Capex Investments
The company has been actively expanding its fleet, adding 137 vehicles in the first nine months of FY25. This investment aligns with its strategy to enhance service capabilities and cater to the growing demand for transportation and logistics solutions. Additionally, AVG Logistics is allocating 55 per cent of its overall capital expenditure towards cold chain expansion, reinforcing its position in temperature-controlled logistics.
Strategic Acquisition of Kaizen Logistics
To strengthen its market presence, AVG Logistics is set to acquire a majority stake in Kaizen Logistics. This acquisition will integrate Kaizen’s expertise in road and multimodal transportation with AVG’s extensive network, improving service efficiency and expanding operational reach. The transaction is expected to close by Q4 FY25.
Business Overview and Clientele
Founded in 2010, AVG Logistics is a leading multimodal logistics provider offering transportation, warehousing, distribution, and supply chain solutions. The company operates 50+ automated branches across India, serving top clients such as Nestle, HUL, ITC, Airtel, MRF, UltraTech Cement, and Coca-Cola. It manages a fleet of over 3,000 vehicles and operates 705,000 sq. ft. of warehousing space.
Stock Valuation
AVG Logistics has a market capitalization of Rs 416 crore, with its stock trading at a P/E ratio of 15.2, significantly lower than the industry average of 25.2. The company has a return on capital employed (ROCE) of 14.8 per cent and a return on equity (ROE) of 14.8 per cent. Its debt-to-equity ratio stands at 0.99, while its enterprise value is Rs 622 crore.
Financial Performance and Growth Plans
In FY24, AVG Logistics reported revenue of Rs 491.07 crore, EBITDA of Rs 108.86 crore, and PAT of Rs 31.92 crore. The company is expanding its infrastructure, with plans to build a 50,000 sq. ft. warehouse in Agartala and focus on cold chain logistics to drive long-term growth.
Disclaimer: The article is for informational purposes only and not investment advice.