Logisitics, industry analysis,

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Logisitics, industry analysis,

  1. 1. AbstractLogistics services market India is on a growth trajectory owing to rapid globalization and100% FDI allowance. Logistics services broadly encompass courier services, freight forwarding,third party logistics and reverse logistics. Growth in international trade is providing hugeimpetus to the demand for the logistics services. Growing competition in retail sector transcendsneed of reverse logistics to handle returns and store up gradation. Third party logistics providersneed to customize their services and charge competitive rates to benefit from retail boom in India.The report begins with an introduction section, classifying the logistics sector intotransportation, storage and logistics services, Government Initiatives and regulations, futureprospective of the industry. The next section briefly illustrates the evolution of the logisticsindustry in India, literature review reports.Market overview section provides a brief snapshot of the logistics services market in India. Tobegin with, the share of logistics services in overall logistics market is shown, followed by themarket size and growth in logistics services market in India.Company profile section briefly explains about the top five companies in logisticsindustry in India namely Container Corporation of India, Arshiya international, Aegis logistics,Aqua logistics, Allcargo logistics SWOT analysis of each company. SWOT analysis helps tofind out the weak points of the companies and to find out the way to overcome this problem.The Competitive Landscape section profiles the major players in logistics servicesmarket in India in details within the report which enables readers to get a clear picture of thecurrent competitive scenario. The section lists the basic details of the players such as corporateinformation, business highlights and key members. The section also features financial analysis ofkey vendors which in turn provides us with the financial health of players.GE matrix used for analyzing the market attractiveness and business strategic Unit. Inwhich to give strategic decisions for attains the market position.The report concludes with a strategic recommendations section that provides suggestions andstrategies for the existing and new players in the logistics services market in India.
  2. 2. ACKNOWLEDGEMENTIn a special way, I submit my whole hearted thanks to my parents for theircontinuous motivation and the trust on me. It is my pleasure to reveal my thanksto all my friends who offered me a great support for collecting the data from therespondents.I am extremely thankful and indebted to Dr. S.SARAVANASANKER,VICE-CHANCELLOR, KALASALINGAM UNIVERSITY who has given methe prestigious opportunity to do my project successfully.I am extremely thankful and indebted to Dr. M.SATHIVEL RANI MBA,PH.D. HEAD OF THE DEPARTMENT, BUSINESS ADMINISTRATION,KALASALINGAM UNIVERSITY who has given me the prestigiousopportunity to do my project successfully.I acknowledge with a sense of gratitude of sincere thanks to my ProjectGuide Ms .M.SELVARANI, Assistant professor of the Department of BusinessAdministration, Kalasalingam University who provided a great Opportunityfor doing this project. Who enlightened me ‘What research is & how it canbe performed’, His active motivation provided me an invaluable guidance &Encouragement towards Research that made me to perform this project.I hearty thank Mr. SETHURAMAN “AKARA RESEARCH &TECHNOLOGY CHENNAI” for showing tremendous patience and giving fullfreedom in guiding me towards the successful completion of my project.In a special way, I submit my grateful thanks to my parents who providedme all the supports throughout the period of project development. I also rendermy deep thanks to my friends and well wishers who had been a source ofencouragement throughout the period of training.
  3. 3. Last but not least my prayers and thanks to the “almighty” without whom thework would not have materialized.I also extend my thanks to all the other faculty members for extendingtheir helping hands to complete this project effectively. Finally, I would like toprofoundly thank all the respondents who helped me in collecting the necessaryinformation for completing this project.Mr.T.AMULRAJ
  4. 4. CHAPTER-I1. LOGISTICS INDUSTRY IN INDIA1.1.1 INTRODUCTIONIndia has become the prime destination for logistics service providers all over the world.The demand for logistics services in India has been largely driven by the remarkable growth ofthe economy. The growth is being projected at 9-10 per cent in next few years, with the CAGR(compounded annual growth rate) expected to grow at a rate of 7-8 per cent. This growth isexpected to gain greater momentum due to the exponential growth of the Indian economy. Indiais also experiencing a big retail boom as the buying capacity of the middle and upper middlesegment of the population has scaled new heights. Many large multinationals from the retailindustry are planning to set up operation in India and large local retailers are also planning toexpand their operations. But with the infrastructure largely under-developed and incapable ofcatering to a growing economy, logistics management in India becomes too complex. The poorcondition of infrastructure directly translates to higher turnover, pushing up the operating costsand reducing efficiency. There are other problems such as complex regulatory compliance andlimited adoption and utilization of technology, which has resulted in increased paperwork andinability to communicate effectively with customers.In spite of dismal infrastructural scenario, the hopes of the logistics sector are kept up by thevarious upcoming infrastructural projects like logistics parks and hubs and other initiatives bypublic and private sector. The future of the logistics sector depends not only on the continueddevelopment of infrastructure but also on the capability of the service providers in adaptingthemselves and making optimal utilization of technology.India is emerging as one of the world’s leading consumer market with the raise of middle incomegroup. Estimated at US$991 billion in 2020, Total consumption expenditure is expected togrow to nearly US$ 3.6 trillion in 2020. Food, housing & consumer durable and transport &communication are expected to be the top 3 categories, accounting for 65% of consumption in2020. The FMCG sector alone is expected to grow at a base rate of 12 % annually to become anINR 4000 billion industry by 2020. The logistics sector is expected to play an important role in
  5. 5. accessing this emerging market and enabling this growth.1.1.2 INDUSTRY TRENDSTransportation: Container cargo represents only about 30% (by value) of Indias external trade-much lower when compared with the global containerized cargo average of 70-75%. At a growthrate of 12%, Indias container cargo traffic is estimated to reach 15 million TEUs by FY16E fromabout 7.5 million TEUs now (at 12 major ports). In comparison, China has created capacity atits ports to handle more than 100 million TEUs a year. Out of the 15 mn TEUs of total containertraffic, we estimate Exim rail container traffic to be 5 mn TEUs by FY16E. This would be a hugeopportunity and will significantly benefit container rail operators.Rising investment in the rail and port spaces also fuels growth in allied industries like wagonmanufacturing, port handling equipment, railway electrification systems and constructioncompanies.To reduce the transportation cost and for quicker movement of cargo Multimodal transportoperation is introduced (MTO). MTO helps exporters with less documentation for instance singledocument for all modes of transport.Third Party Logistics (3PL): Outsourcing is everywhere. Logistics industry is no exception.Logistics services like transportation, warehousing, cross docking, Inventory management,packaging and freight forwarding all are part of third party logistic services. Companies in Indiacurrently outsource an estimated of 52% of logistics. And 3PL industry is estimated to be US$1.5bn in FY14. 3PL represents only 1% of logistics cost emphasis its significance in the industry.Future is no doubt lying in outsourcing. As the growth in the 3PL market is expected to be inthe range of 25-30% CAGR over FY11-14E. As of now, the 3PL activity is limited to only fewindustries like automotive, IT hardware, telecom and infrastructure equipment.The organised 3PL market in India can be categorised into three major segments – publicsector, private sector and foreign entrants. Some of the major players in each category are: TVSlogistics, DIESL (TATA), Panalpina, TCI, Gati, Allcargo, V Trans, Total, VRL and Reliance etc.
  6. 6. Private Participation: The industry is becoming more competent with the entry of globalgiants like Gazeley Broekmen (Wal-Marts logistics partner), CH Robinson and Kerry logisticsand large Indian corporate houses like Tata, Reliance and Bharti group. A series of mergersand acquisition like DHL acquired Blue Dart, TNT acquired Speedage Express Cargo Serviceand Fedex bought over Pafex, are also leading to consolidation industry at various levels andsegments. Many of these companies are planning to broaden their areas of operation and are alsoplanning to develop their own logistic parks across the country. If the trend continues as per theestimates, the market share of the organized logistics players is expected to double from 6% in2013 to approx. 12% by 2020.Express logistics: Organised players have monopoly over the express logistics industry. 65%of express business is in the hands of organized players, while semi-organised and unorganisedplayers accounts for 25% and the remaining 10% of the market by EMS Speed Post. Butaltogether different picture can be witnessed in the domestic segment. In domestic front,unorganised players hold 41% of the market share based on price advantage. While organisedplayers accounts for 45% and EMS Speed Post the remaining 14%.Warehouses: Recently, warehouses have become key growth drivers in the logistics industry.Apart from conventional storing services, warehouses now providing value-added services likeconsolidation and breaking up of cargo, packaging, labelling, bar coding and reverse logisticsetc. warehousing and related activities account for approx. 20% of the total logistics industry.Most of the warehousing space in India lies with unorganised players in domestic front, whichis causing wide supply and demand gap in storage space. According to KPMG, an additional120million square feet of warehousing space is needed by 2013 to bridge this gap.Currently, the organised warehousing industry in India has a capacity of approx. 80millionmetric tonnes and is growing at 35 to 40 per cent per annum. An investment of approximatelyUS$ 500million is being planned by various logistics companies for the development of about45million square feet of warehouse space by 2013.Many players in this segment such as MultiModal Logistics Park, Mega Food Parks and Free Trade Warehousing Zones have planned nextgeneration storage models.
  7. 7. Logistic parks: About 110 logistics parks spread over approximately 3,500 acres at an estimatedcost of $1 bn are expected to be operational and an estimated 45 mn ft2 of warehousing spacewith an investment of $ 500 mn is expected to be developed by various logistics companies by2020.Majority of these logistics parks are planned in close proximity to state capitals. However,availability of large land parcels at relatively low cost, connectivity to multiple markets acrossstates and industrial clusters has led to the emergence of some tier-2 and tier-3 cities as favoureddestinations for the development of logistics parks and warehouses.1.1.3 Government Initiatives and regulationsInitiatives:To emphasis the significance of transportation in logistics industry and to increase thecompetence in the sector government introduced private participation, especially in port sector.The major initiative in transport infrastructure is introduction of National Maritime DevelopmentProgram (NMDP) with an investment of Rs 568bn. NMDP would be addressing the challengesof the growing international traffic demand of the country along with developing the portfacilities at par with world standards. While liberalizing the railway services, government openedthe doors of container business to the private parties. A total of 15 players immediately enteredthe market.FDI regulations• In general 100% FDI under the automatic route is permitted for all logistic services• FDI up to 100% subject to FIPB approval is permitted for courier services.• FDI up to 49% under the automatic route is permitted for air transport services, includingair cargo services.• 100% FDI is permitted in Ports and Harbours under automatic route• 100% FDI is permitted under the automatic route for storage and warehousing includingwarehousing of agricultural products with cold storage.
  8. 8. • 100% FDI is permitted in transport and transport support services through automaticroute.1.1.4 Indian Logistics Industry- Future TrendsThere have been several key indicators to the future trend in the Indian logisticssector. The demand for logistics services has been largely driven by the remarkablegrowth of the Indian economy. Logistics spend in India is estimated to be around 13% ofthe GDP, which is comparatively higher than other developed countries.The air transport sector’s contribution has been around 0.2 per cent of the country’sGDP, while the transport sector’s contribution to the GDP has been growing over the lastcouple of years. India’s air cargo is predicted to grow at over CAGR of 11.5 per cent inthe next few years.The contribution of the marine transport sector has also been around 0.2% to thecountry’s GDP. The sector’s contribution to the GDP has been increasing mostly becauseof the growing economic developments in the country. The role of the shipping industryin the growth of Indian economy has been very significant. Major ports in India togetherhave handled around 500 million tonnes of cargo in the past two years and this figure isgrowing significantly.The Indian railways has realised the necessity to improve the infrastructureprovide better service. The plan to develop Logistics Parks or hubs has the potential tostreamline and optimize the supply chain and reduce the costs. Currently around 80% ofthe goods in India move by road, the railways has to essentially devise plans to divert thistraffic to the rail.India’s logistics sector attracted huge investments, leaving behind some of themajor sectors including aviation, metals, and consumer durables. The growths in theretail and manufacturing industry, commodity markets and development of SEZs have
  9. 9. been key factors in the growth of Indian logistics industry. Recent studies have indicatedthat the Indian logistics industry is expected to grow annually at the rate of 15 to 20%. Anumber of infrastructural projects involving warehouse and logistics parks are beingundertaken are expected to be operational in the next 2-3 years.The setting up special economic zones (SEZs) has led to increased logisticsactivities around them. Several logistics parks have come up at locations like Mumbai,Kolkata, Chennai and Hyderabad because of their excellent port, rail, and roadconnectivity and are witnessing significant investment in infrastructure. Many of thelarge logistics players are in the process of setting up warehouses, container freightstations (CFS), inland container depots(ICD), logistics parks, distribution centers andother facilities to leverage the abundant opportunities. Increase in foreign trade isexpected to further accelerate the demand for logistics services.The future of the Industry is very bright and is sure to witness exponential growthin the coming years. The increased participation of both public and private sector iscrucial for developing logistics and improving supply chain management. Not only dothe logistics companies need to create efficient business to thrive in the logistics sector,but they also need to explore ways for investing energy, costs and time to grow a stronglogistics system
  10. 10. 1.2 OBJECTIVES• To analyze the company performance of selected logistics companies• To find the strength, weakness, opportunities, threads of the selected logistics companiesand industry• To compare the financial performance of selected companies to decide its position in theindustry• To study the company strength and attractive of the industry by using GE matrix.1.3 SCOPE OF THE REPORT- The report covers the overview of Indian logistics industry, market size,cost components, overview of air transport system in India,- Air cargo traffic trends, growth drivers, demand- supply scenario,technology and innovation, and future outlook of the global as well as Indianair cargo industry.- In addition, the report also includes profiles of four major players in thesector.- Detailed analysis of Component & Cost structure of Global Logistics andIndian logistics market. This report talks about growth drivers and theireffected factors.1.4 PROBLEM OF THE STUDY1. The problems of getting data on the market share and market rate.2. This study takes only the domestic players in India. It ignores foreign players like DHL,UPS, TNT etc.3. This study considers top five companies in India.4. There is no clear definition of what constitutes a market.5. A high market share need not necessarily lead to profitability all the time.6. Low share businesses can be profitable too.
  11. 11. Chapter- II2. Literature Survey2.1.1 LogisticsLogistics is the management of the flow of resources between the point of origin and the point ofdestination in order to meet some requirements, for example, of customers or corporations. Theresources managed in logistics can Include physical items, such as food, materials, equipment,liquids, and staff, as well as abstract items, such as Information, particles, and energy. Thelogistics of physical items usually involves the integration of information flow, materialhandling, production, packaging, inventory, transportation, warehousing, and often security. Thecomplexity of logistics can be modeled, analyzed, visualized, and optimized by dedicatedsimulation software. The minimization of the use of resources and time are common motives.2.1.2 Origins and definitionThe term logistics comes from the late 19th century: from French logistique, fromloger to lodge Logistics is considered to have originated in the militarys need to supply itselfwith arms, ammunition, and rations as it moved from a base to a forward position. In the ancientGreek, Roman, and Byzantine Empires, military officers with the title Logistikas wereresponsible for financial and supply distribution matters.The Oxford English Dictionary defines logistics as "the branch of military sciencerelating to procuring, maintaining and transporting material, personnel and facilities."However, the New Oxford American Dictionary defines logistics as "the detailedcoordination of a complex operation involving many people, facilities, or supplies", and theOxford Dictionary online defines it as "the detailed organization and implementation of acomplex operation".Another dictionary definition is "the time-related positioning of resources." As such,logistics is commonly seen as a branch of engineering that creates "people systems" ratherthan "machine systems".According to the Council of Logistics Management, logistics includes the integratedplanning, control, realization, and monitoring of all internal and network-wide material, part, and
  12. 12. product flow, including the necessary information flow, in industrial and trading companiesalong the complete value-added chain (and product life cycle) for the purpose of conforming tocustomer requirements.Logistics is the process of planning, implementing, and controlling the effective andefficient flow of goods and services from the point of origin to the point of consumption.Main logistics targetsLogistics is one of the main functions within a company. The main targets of logisticscan be divided into performance-related and cost-related targets. A few examples are high duedate reliability, short delivery times, low inventory level, and high utilization of capacity. Whendecisions are made, there is a trade-off between targets.Logistics viewpointsInbound logistics is one of the primary processes of logistics, concentrating onpurchasing and arranging the inbound movement of materials, parts, and/or finished inventoryfrom suppliers to manufacturing or assembly plants, warehouses, or retail stores. Outboundlogistics is the process related to the storage and movement of the final product and the relatedinformation flows from the end of the production line to the end user.Logistics fieldsGiven the services performed by logisticians, the main fields of logistics can be brokendown as follows:• Procurement logistics• Production logistics• Distribution logistics• After sales logistics• Disposal logistics• Reverse logistics• Global logistics• Domestics logistics
  13. 13. Procurement logistics consists of activities such as market research, requirements planning,make-or-buy decisions, supplier management, ordering, and order controlling. The targets inprocurement logistics might be contradictory: maximizing efficiency by concentrating on corecompetences, outsourcing while maintaining the autonomy of the company, or minimizingprocurement costs while maximizing security within the supply process.Production logistics connects procurement to distribution logistics. Its main function isto use available production capacities to produce the products needed in distribution logistics.Production logistics activities are related to organizational concepts, layout planning, productionplanning, and control.Distribution logistics has, as main tasks, the delivery of the finished products to thecustomer. It consists of orderprocessing, warehousing, and transportation. Distribution logistics is necessary because the time,place, and quantityof production differs with the time, place, and quantity of consumption.Disposal logistics has as its main function to reduce logistics cost(s) and enhance service(s)related to the disposal of waste produced during the operation of a business.Reverse logistics denotes all those operations related to the reuse of products and materials.The reverse logistics process includes the management and the sale of surpluses, as well asproducts being returned to vendors from buyers.Business logisticsOne definition of business logistics speaks of "having the right item in the right quantityat the right time at the right place for the right price in the right condition to the right customer".As the science of process, business logistics incorporates all industry sectors. Logistics workaims to manage the fruition of project life cycles, supply chains, and resultant efficiencies.Logistics as a business concept evolved in the 1950s due to the increasing complexity of
  14. 14. supplying businesses with materials and shipping out products in an increasingly globalizedsupply chain, leading to a call for experts called "supply chain logisticians". In business, logisticsmay have either an internal focus (inbound logistics) or an external focus (outbound logistics),covering the flow and storage of materials from point of origin to point of consumption (seesupply-chain management). The main functions of a qualified logistician include inventorymanagement, purchasing, transportation, warehousing, consultation, and the organizing andplanning of these activities. Logisticians combine a professional knowledge of each of thesefunctions to coordinate resources in an organization. There are two fundamentally differentforms of logistics: one optimizes a steady flow of material through a network of transport linksand storage nodes, while the other coordinates a sequence of resources to carry out some project.Production logisticsThe term production logistics describes logistic processes within an industry. Productionlogistics aims to ensure that each machine and workstation receives the right product in the rightquantity and quality at the right time. The concern is not the transportation itself, but tostreamline and control the flow through value-adding processes and to eliminate non–value-adding processes. Production logistics can operate in existing as well as new plants.Manufacturing in an existing plant is a constantly changing process. Machines areexchanged and new ones added, which gives the opportunity to improve the production logisticssystem accordingly. Production logistics provides the means to achieve customer response andcapital efficiency. Production logistics becomes more important with decreasing batch sizes. Inmany industries (e.g., mobile phones), the short-term goal is a batch size of one, allowing even asingle customers demand to be fulfilled efficiently.Track and tracing, which is an essential part of production logistics due to product safetyand reliability issues, is also gaining importance, especially in the automotive and medicalindustries.
  15. 15. 2.2 Review of literatureThe Indian economy has been growing at an average rate of more than 8 per cent over thelast four years (Srinivas, 2006) putting enormous demands on its productive infrastructure.Whether it is the physical infrastructure of road, ports, water, power etc. or the digitalinfrastructure of broadband networks, telecommunication etc. or the service infrastructure oflogistics – all are being stretched to perform beyond their capabilities. Interestingly, this isleading to an emergence of innovative practices to allow business and public service to operateat a higher growth rate in an environment where the support systems are getting augmentedconcurrently. In this paper, we present the status of the evolving logistics sector in India,innovations therein through interesting business models and the challenges that it faces in yearsto come.Broadly speaking, the Indian logistics sector, as elsewhere, comprises the entire inboundand outbound segments of the manufacturing and service supply chains. Of late, the logisticsinfrastructure has received lot of attention both from business and industry as well as policymakers. However, the role of managing this infrastructure (or the logistics management regimen)to effectively compete has been slightly under-emphasized. Inadequate logistics infrastructurehas an effect of creating bottlenecks in the growth of an economy, the logistics managementregimen has the capability of overcoming the disadvantages of the infrastructure in the short runwhile providing cutting edge competitiveness in the long term. It is here that exist severalchallenges as well as opportunities for the Indian economy. There are several models that seemto be emerging based on the critical needs of the Indian economy that can stand as viable modelsfor other global economies as well.Chandra and Sastry (2004) have pointed towards two key areas that require attention inmanaging the logistics chains across the Indian business sectors – cost and reliable value addservices. Logistics costs (i.e., inventory holding, transportation, warehousing, packaging, lossesand related administration costs) have been estimated at 13-14 per cent of Indian GDP which ishigher than the 8 per cent of USA’s and lower than the 21 per cent of China’s GDP (Sanyal,2006a). Service reliability of the logistics industry in emerging markets, like India, has beenreferred to as slow and requiring high engagement time of the customers, thereby, incurring highindirect variable costs (Dobberstein et. al, 2005).
  16. 16. However, the Indian logistics story is one with islands of excellence though there hasbeen a general improvement on almost all parameters. It is this aspect that we explore further inthis paper. The paper is organized as follows: the next section gives a brief introduction of someof the peculiarities of the Indian logistics sector.
  17. 17. Chapter III3.Research MethodologyResearch methodology is a way to systematically solve the research problem.The research methodology using for find out the solution of the research problemis analytical research methodology and some extend descriptive researchmethodology.Basis of selection of companiesThe companies are selected on the basis of Earning per Share of top fivecompanies in logistics industry. This is listed in BSE, NSE Index in India.List of selected companies for study♦ Container Corporation of India♦ Allcargo Logistics♦ Aqua Logistics♦ Aegis Logistics♦ Arshiya InternationalPeriod of studyThe period of the study is five years that is 2008 to 2012 because ofunderstand the growth of the industry to find out competitive position in market.Nature of dataThis study takes secondary data for the purpose of analysis of industry,SWOT analysis, and competitive position.Sources of dataü Company website, RBI website, Moneycontrol.com, National stockExchange, Bombay Stock Exchange, CII, World Bank data.
  18. 18. Secondary dataü Balance sheet of companiesü Profit and loss accountsü Directors reportsü News papersü NSE, BSE dataTools and TechniquesThese are the most popular tools of industry analysis. They focus onearnings, growth and value of the companies in the market.ü SWOTü BCG matrixü General Electrical Matrixü Financial ratioü Graphs and tables
  19. 19. 4.1. Container Corporation of India Limited (CONCOR)Container Corporation of India Limited (CONCOR) was set up in March of the year1988 and commenced operation from November of the year 1989 taking over the existingnetwork of 7 Inland Container Depots (ICDs) from the Indian Railways to profitably satisfy thecustomers needs for high- quality, cost-effective logistics services. From its humble beginning,it is now an undisputed market leader having the largest network of 57 ICDs/CFSs in Indiaoffering scheduled and on demand rapid rail and road services between the hinderland and ports,and between major metros.In addition to providing inland transport by rail for containers, it has also expanded tocover management of Ports, air cargo complexes and establishing cold-chain. It has and willcontinue to play the role of promoting containerization of India by virtue of its modern railwagon fleet, customer friendly commercial practices and extensively used InformationTechnology.The company developed multimodal logistics support for Indias International andDomestic containerization and trade. CONCORs core business is characterised by three distinctactivities, that of• Carrier,• Terminal operator• Warehouse operatorCONCOR had been certified to ISO/IEC 27001: 2005 standard for establishing andmaintaining Information Security Management System (ISMS) for its IT functionality.CONCOR had commissioned seven container transfer/handling facilities during the year 1990.In addition to three ICDs at Ahmedabad, Pune & Hyderabad, two full-fledged Container FreightStations (CFSs) were commissioned at Moradabad and Panipat as cargo consolidation andclearance centres with linkage to the OCD at New Delhi.The Company had commissioned Port Side Container Terminal (PSCT) at Todiarpet inMarch of the year 1991, situated in the vicinity of Chennai Harbor. A similar terminal wascommissioned at Wadi Bunder in close proximity of Mumbai Port in April of the year 1991. In1992-93, the company achieved the first ever movement of refrigerated cargo containers by rail.CONCOR had introduced this service to give a boost to export frozen and chilledproducts. CONCOR commissioned Inland Containers Depots at Tughalakabad in Delhi andWhitefield in Bangalore during the year 1993. In addition, the first phase of expansion andupgradation of ICD a Tondiarpet in Chennai was commissioned and completed during the sameperiod. During the year 1994, the company made a small footstep as a Multi modal transportoperator and also as a consultancy organization for multi-modalism.
  20. 20. The Government of India disinvested 20% of its equity shares in the company. A newCFS was commissioned in 1995 at New Mulund (Mumbai) and a new export warehouse of thecompany also started at ICD, Sabarmati. In the same year CONCOR obtained approval fromWorld Bank to increase the quantity of wagons to be procured in the second Tranche from 750 to1500. Scheduled reefer services between ICD Thughlakabad during the year 1996 and also in thesame period the Muboni Port was introduced.The new ICDs were commissioned at Agra in November of the year 1996, linked withports directly by road ICD Tughlakabad by rail and another ICDs were commissioned at Nagpurin January of the year1997, a rail linked with the twin ports of Mumbai and SNPT. In January ofthe year 1997, the CONTRACK services were launched by the company offering movement ofpiecemeal domestic cargo in containers through specialized, scheduled and reliable container-railservices.Two new ICDs of the company were commissioned, one at Moradabad in February ofthe year 1998 and the other at Malanpur/Gwalior in June of the year 1998. Second bondedwarehouse was commissioned at ICD/Whitefield. The Company had launched a daily servicebetween Chennai port and Whitefield ICD, Bangalore in the year 1999. During the year 2000,CONCOR had fashioned a separate domestic division to give a major heighten to the companysgrowing interest in domestic container movement.The Company had introduced an express parcel service vans between Chennai andDelhi. Private sector warehousing company, Continental Warehousing Corporation had enteredinto a strategic alliance with CONCOR in the identical year 2000 for handling domestic cargo.The Company had launched a fixed-day fixed-time weekly freight service between Shalimar(Howrah)& Mumbai and Shalimar & Ahmedabad with transshipment at Nagpur during the year2001.CONCOR had introduced Asias biggest ICD at Dadri in the year 2003. In the same yearthe company made a tie up with Kolkata Port Trust to provide services to shippers to transportcontainers using sea rail-mode between Nepal and Kolkata Dock Systems (KDS). During theyear 2004, CONCOR inked pact with Transworld to set up CFS at Dadri, forged alliance withAPL for box freight station at Dadri complex and also inked pact with APEDA for movement ofperishable goods.A joint venture for Management and operations of Rail Container Terminal in Birgunj(Nepal) was also finalized in form of M/s Himalayan Terminals and its was commissionedduring July of the year 2004. During the year 2004-05, the company had commissioned fourRubber Tyred Gantry Cranes (RTGs), two at ICD/Dadri and other two at ICD/ Dandharikalan(Ludhiana). Gateway Terminal India (Pvt) Ltd, a joint venture company of Maersk and thecompany formed an arm for the construction of 3rd container terminal at JN Port, it wascommenced construction work during the year 2005-06.
  21. 21. CONCOR & GDL had collectively signed agreement during the year 2005 for providingtrain services to transport EXIM container traffic. The Company had inked a MoU with BaxiGroup in the year 2006. During October of the year 2007, CONCOR develop an inland containerdepot (ICD) at Baddi in Himachal Pradesh to facilitate the exporters of the Baddi-Barotiwala-Nalagarh region. It will help industrialists of the region in saving the freight charges.The Company has diversified into back-end retail in January of the year 2008 and is inclose final negotiation with Bharti-Wal-Mart to procure and supply fruit to the retailer.CONCOR will add eight new rail-linked inland container depots (ICDs) with an investment ofRs 3.2 billion by the end of next fiscal. The Company will have 65 depots, up from 57 at present.The new depots were announced at Railway Budget 2008. The Company is expandingthe presence of the company in all the segments of the transport value chain in the Exim as wellas Domestic segment. Possibilities are to be explored for strategic alliances, both for optimalutilization of infrastructure as well as expansion into other segments of the value chain.
  22. 22. 1.1.1 Reserve and Surplus Container Corporation of IndiaParticulars 2008 2009 2010 2011 2012Reserves 3118.93 3632.23 4206.42 4847.83 5476.45Table No 4.1.1Reserve and Surplus Container Corporation of IndiaChar No 4.1.1 Reserve and Surplus Container Corporation of IndiaInferenceThe above diagram explains about the general reserves of Container Corporation of Indiawhere as in the FY 2008 had Rs 3118.93Crs it was increased to Rs3632.23Crs in FY 2009. In theFY11 the company has Rs 4847.83Crs it was increased from15.25% in previous year. Finally inFY12 the company records 12.97% increased to Rs 5476.45Crs. Its shows that company havegood performance over the past five years. As an investor point of view, its performance is highcompare to other companies in this industry.2008 2009 2010 2011 20120.001000.002000.003000.004000.005000.006000.003118.933632.234206.424847.835476.45
  23. 23. 1.1.2 Net Block of Container Corporation of IndiaParticulars 2008 2009 2010 2011 2012Net Block 1665.15 1925.59 2140.48 2306.98 2393.75Table No 4.1.2 Net Block of Container Corporation of IndiaChart No 4.1.2 Net Block of Container Corporation of IndiaInferenceThe above diagram denotes that net block of the company in which the company’s netblock continually increased over the past five years. In the FY12 the value of net block increasedto 76% to Rs 2393.75cr from Rs 1665.15Cr in FY08. They increase their containers, software,leased lands its covers vast area of operation allover the India.2008 2009 2010 2011 20120.00500.001000.001500.002000.002500.001665.151925.592140.482306.98 2393.75
  24. 24. 1.1.3 Net Sales of Container Corporation of IndiaParticulars 2008 2009 2010 2011 2012Net Sales 3347.30 3417.16 3705.68 3828.12 4060.95Table No 4.1.3 Net Sales of Container Corporation of IndiaChart No 4.1.3 Net Sales of Container Corporation of IndiaInferenceThe above diagram explains about the net sales of the company it indicate the goodperformance over the years. In the FY08 sales stood at Rs3347.30Crs it was increased to 2% inFY09. In the FY11, net sales were Rs3828.12Crs it was increased from 3.30% in previous year2010. The company improves its operation its shows increased in sales to Rs 4060.95Crs i.e 6%increased.2008 2009 2010 2011 20120.00500.001000.001500.002000.002500.003000.003500.004000.004500.003347.3 3417.163705.683828.124060.95
  25. 25. 1.1.4 Net Profit of Container Corporation of IndiaParticulars 2008 2009 2010 2011 2012Net Profit 752.21 791.20 786.69 875.95 877.88Table No 4.1.4 Net Profit Of Container Corporation of IndiaChart No 4.1.4 Net Profit Of Container Corporation of IndiaInferenceThe above diagram explains net profit increased over the years. In theFY2008 the company records Rs 752.21Crs. it was increased Rs 38.99Crs to stood at Rs791.20Crs in FR09. In the FY10 the Net Profit available for appropriations stands at786.69 Cr, which is marginally -0.57% below last years level. This marginal decline inProfit After Tax (PAT) is essentially due to slightly more than proportional increase inthe operating expenditure. In 2011 Net Profit available for appropriations stands at Rs875.95 Cr, which is 11.35% higher than FY2010. This increase in Profit After Tax (PAT)is essentially due to strict expenditure control and innovative practices adopted by theCompany. In FY12 net profit shoot at Rs 877.88Crs, which was 0.22% higher than FY11.2008 2009 2010 2011 2012752.21791.2 786.69 875.95 877.88
  26. 26. 1.1.5 Earnings Per Share of Container Corporation of IndiaParticulars 2008 2009 2010 2011 2012Earnings Per Share 115.74 60.87 60.52 67.39 67.54Table No 4.1.5Earnings Per Share of Container Corporation of IndiaChart No 4.1.5Earnings Per Share of Container Corporation of IndiaInferenceThe above table explains that EPS records of past five years in the year 2008 the EPS stood atRs 115.74. but in the year 2009 the company issue bonus share to its shareholders so the equitymight be increased so that reasons the Earning Per Share to decline Rs 60.87. in the FY12 thecompany’s EPS was Rs 67.54
  27. 27. 1.1.6 Current Ratio of Container Corporation of IndiaParticulars 2008 2009 2010 2011 2012Earnings Per Share 115.74 60.87 60.52 67.39 67.54Table No 4.1.6 Current Ratio of Container Corporation of IndiaChart No 4.1.6 Current Ratio of Container Corporation of IndiaInferenceCurrent Ratio provides a margin of safety to the creditors. In a sound business, a currentratio of 2:1 is considered an ideal one. But in this case, the current ratio explains that in the FY08& FY09 constant relation between current assets and current liability but in the FY10 increasedto 3.03:1 it indicate well liquidly position. Later in FY12 the level of inventories would beincreased it stood at 4.15:1 is an ideal one.
  28. 28. 4.1.7 Financial Highlights of Container Corporation of India• In the FY09 the company issue 1:1 bonus share to its shareholders. 6,49,91,397 equityshares issued as fully paid up Bonus Shares by Capitalizing General Reserves. The totalshare capital stood at Rs.129.98Crs in 2009. Then it was remain same up to currentfinancial year.• The company had strong resources and surplus because this is has more operationcompare to other companies it generate more revenue in past five years. The companyhad Rs.3118.93Crs in 2008 it was increased to Rs.3632.23Crs in 2009. Finally in theFY12 its was increased to 75% stood at Rs.5476.45Crs• The net worth of the CONCOR could be increased past five years. Now it stands at Rs5606.43Crs. it was increased 12.6% in previous year• Net Block of the company continuously increased due to the company had moreleased land, purchase more plant and machinery now stood at Rs.2177Crs, they spentRs33.16Crs for buying containers now the value of the container stood at Rs124.55Crs• The company’s investment could be increased over the years because in the FY12 thecompany invest about Rs.50Crs IRFC Secured, Tax Free, Redeemable, Non-convertible,Non-Cumulative Railway Bonds in the nature of promissory notes-79th Series of1,00,000/- each now the total investment amount stood at Rs 293Crs in FY12• The company follows just in time inventory. Stores and spare parts are valued at cost onweighted average basis so the value of the inventory now stands at Rs 8Crs in FY12• The sundry debtors were slightly increased over the years. In FY08 it was Rs 13.73Crswhich increased to Rs 19.59Crs in FY12• CONCORE Bank Deposits with maturity upto 12 months Rs 2540.82Crs in FY12 so thatreasons the company’s current ratio was increased• The sales of the company was increased over the years due to company covers vast areafor its operations in FY12 the company records Rs 4060Cr it was higher in these industry• The company earns more other income by way of getting more interest and dividendfor its investments. In FY12 the company get Rs 316Cr as additional income which washigher than Rs 143Crs in previous year.• Hence the total income of the company could be increased in FY12 to stood at Rs4377.49Crs• Operating profit of FY2008 was Rs890.73Crs it was increased to Rs 1002.69Cr in FY’11.In FY12 the operating profit stood at Rs 1023.73Cr• The company records Rs 1181.78Crs of Profit Before Tax (PBT) which was 13% higherthan FY08.• The book value of share now stood at Rs 431.32 the original face value is Rs 10.• The company recommended 165% of dividend in FY12. In the FY08 provide 260% ofdividend due to increase in equity share capital.
  29. 29. 4.1.8 SWOT ANALYSIS OF CONTAINER CORPORATION OF INDIA(CONCOR)Strengthv Market leader in logistics sector in Indiav 20 years of presence in rail movement ofcontainers/terminal management/operationof ICDsv Government undertaking companyv High level of resources and surplusv They currently hold 10988 wagonsv The Company has constituted a CoreRisk management Committee (RMC)for managing the integrated risks of thecompanyv The company has Strong financials andhighly committed team of experienced andskilled manpower with in-depth knowledgeof multi modal logistics business.Weaknessv This focus only railways, containersoperationsv Follow old information technology,equipmentsv It handle bulk quantities onlyv The company utilize its equity fundsOpportunitiesv Customer delights by way ofefficient response and integratedmulti modal services.v Increase in revenue bydiversification and productdifferentiation.v Management of costs bytechnological innovationThreatsv High cost of operationsv Government polices over import andexport in Indiav Lack of infrastructurev 100% FDI in IndiaTable No 4.1.8 SWOT analysis of CONCORE
  30. 30. 4.2 Allcargo LogisticsAllcargo Global Logistics Ltd is also known as Allcargo Logistics Ltd the leading LCL(Less than Container Load) consolidator in India offering direct outbound and inbound LCLgroupage services to and from major cargo destinations worldwide. Their present operations arein seven key areas of the logistics business. They are Multi-modal Transport Operations,Container Freight Stations, Project and ODC Cargo Handling, Airfreight, Transport Logistics,Equipment Hiring and Oil Rig & Supply Vessels Management.The company was incorporated on August 18, 1993 as a private limited company in thename Allcargo Movers (India) Pvt Ltd. The company commenced their operations as a shippingagency and also provided freight forwarding services. In the year 1995, they formed associationwith Ecu Line NV, Belgium to serve as their agents in Mumbai and New Delhi. From June 1998,they became a Multimodal Transport Operator by obtaining the licence from the Ministry ofShipping, Government of India.v In the year 2001, the company made strategic investments in Ecu Line Mauritius and EcuLine Middle East (Dubai). They acquired 50% stake in ACM Lines (Pty) Ltd in the year2002. In the year 2003, they entered into a JV with Transworld Logistics & ShippingServices Inc.v In the year 2003, they commissioned Container Freight Stations at Koproli in Maharashtra.In the next year, they commissioned the second phasse and in the year 2005, theycommissioned the third phase.v On December 8, 2005 the company name was changed into Allcargo Global Logistics PvtLtd. They company became a public limited company in the year 2006.v In January 2007, the company acquired Hindustan Cargo Ltd from Thomas Cook India Ltdand thus they became the subsidiary of the company.v On April 24, 2007 the company commenced their commercial operations in the ContainerFreight Stations at Chennai in Tamil Nadu and Mudra in Gujarat.v The company acquired the Project and Equipment Division of Transindia Freight ServicesPvt Ltd on May 2008.
  31. 31. 4.2.1 ALLCARGO LOGISTICS LTD- FINANCIAL PERFORMANCE1.1.2 NET WORTH OF ALLCARGO LOGISTICS LTDParticulars 2008 2009 2010 2011 2012Net worth 385.51 496.87 791.79 979.01 1140.14Table No. 4.2.2 net worth of Allcargo LogisticsChart No. 4.2.2 net worth of Allcargo LogisticsINTERPRETATIONThe net worth of Allcargo Logistics has continuously increased compare to pastfinancial years. It retains abundance of reserves and surplus. 14% to be increased its value overthe previous year. In FY2008 the company had Rs 385.51Cr. But in FY10 the company spiltshare capital so the value stood at Rs 791.79crs. The company records good sales records overthe years this one of the reasons increased in General reserve so the net worth was increased inFY12Dec 07 Dec 08 Dec 09 Dec 10 Mar 120.00200.00400.00600.00800.001000.001200.001400.00385.51496.87791.79979.011140.14
  32. 32. 1.1.3 GENERAL RESERVE OF ALLCARGO LOGISTICS LTDParticulars 2008 2009 2010 2011 2012Reserves 361.65 443.53 765.18 951.68 1113.16Table No 4.2.3 General reserve of Allcargo LogisticsChart No 4.2.3 General reserve of Allcargo LogisticsINTERPRETATIONThe diagram explain about the level of reserve is increased Up to 14% thecompany has spent more money for acquisition of firms it shows that increase in value of sharein future. Even the company has the high level of reserve and surplus in expect more return inthe future. The company records high level of sales compare to past years this is one of thereasons increase in General Reserves.2008 2009 2010 2011 20120.00200.00400.00600.00800.001000.001200.001400.00ReservesSeries 2
  33. 33. 1.1.4 NET BLOCK OF ALLCARGO LOGISTICS LTDParticulars 2008 2009 2010 2011 2012Net Block 210.08 315.16 410.25 642.07 981.21Table No 4.2.4 Net Block Of Allcargo Logistics LtdChart No 4.2.4 Net Block Of Allcargo Logistics LtdINTERPRETATIONThe company is net block that is the asset of the company increased 39% due toacquired more asset over the years. In the year 2012 the company purchases heavy EquipmentsRs.0.35Crs.The Company also brought additional vehicles for their operation about Rs 1.17Crs.They also spent funds for buying more assets like freehold land, plant Equipments, furniture&Fixtures in FY12.2008 2009 2010 2011 20120.00200.00400.00600.00800.001000.001200.00210.08315.16410.25642.07981.21
  34. 34. 1.1.5 BOOK VALUE OF ALLCARGO LOGISTICS LTDParticulars 2008 2009 2010 2011 2012Book Value (Rs) 188.54 208.33 63.31 74.92 87.27Table No 4.2.6 Book Value of Allcargo LogisticsChart No 4.2.6BookValue ofAllcargoLogisticsINTERPRETATIONThe company had face value of Rs 10 in 2008 & 2009. Later it reduces theirface value from Rs10 to Rs2. So the book value of share is now stood at Rs 87.27In the FY2010, the value of book value stood at Rs 63.31 it was increased pastthree years now the company records book value of a share is Rs87.272008 2009 2010 2011 20120.0050.00100.00150.00200.00250.00188.54208.3363.3174.9287.27
  35. 35. 1.1.6 SALES TURN OVER OF ALLCARGO LOGISTICS LTDParticulars 2008 2009 2010 2011 2012Sales Turnover 361.25 516.79 516.76 699.84 1079.43Table No 4.2.6 SALES TURN OVER OF ALLCARGO LOGISTICSChart No 4.2.6 SALES TURN OVER OF ALLCARGO LOGISTICSINTERPRETATIONThe above diagram explains about the Net sale of the company. it has increasedfrom Rs. 516.76 Cr for the FY-2009-10 to Rs.699.84 for the FY-2010-11 indicating increase of26% further, as per audited financial for the year 2011-12, the company achieved sale of Rs.1079.43Cr Indicating an increase of 35%2008 2009 2010 2011 201202004006008001,0001,200361.25516.79 516.76699.841079.43
  36. 36. 1.1.7 PROFIT BEFORE DEPRECIATION INTEREST& TAXES (PBDIT)Particulars 2008 2009 2010 2011 2012PBDIT 83.74 152.69 160.03 225.37 360.08Table No 4.2.7 PROFIT BEFORE DEPRECIATION INTEREST& TAXESChart No PROFIT BEFORE DEPRECIATION INTEREST& TAXESINTERPRETATIONThe profit Before Depreciation Interest & Taxes of Allcaro logistics shows thatin the year 2011 PBDIT was Rs 225.37Cr. In the FY-2012 increased by Rs.134.71Cr reach atRs.360.08Cr the company earn good efficiency of performance in other words there is a upwardsmovement in the PBDIT Over the past financial years the company face the boom position dueto that have various net work all over the world.The company operates its operation all over the world wide. That one of thereason they get more profit compare to its competitors.
  37. 37. 1.1.8 NET PROFIT OF ALLCARGO LOGISTICS LTDParticulars 2008 2009 2010 2011 2012Reported Net Profit 59.78 92.67 97.81 121.13 184.07Table No. 4.2.8 NET PROFIT OF ALLCARGO LOGISTICSChart No 4.2.8 NET PROFIT OF ALLCARGO LOGISTICSINTERPRETATIONThe net profit of the company had a very good performance over past fiveyears. The company achieved Rs.184.07Cr Net Profit in FY-12 it was increased from 34% inprevious years. in the year 2008 the company records Rs 59.78Cr but in next year the companyrecords Rs 93.67Cr.59.7892.67 97.81121.13184.0720082009201020112012
  38. 38. 1.1.9 EARNINGS PER SHARE (RS) OF ALLCARGO LOGISTICS LTDParticulars 2008 2009 2010 2011 2012Earning Per Share(Rs) 29.51 41.44 7.84 9.28 14.1Table No 4.2.9 EARNINGS PER SHARE (RS) OF ALLCARGO LOGISTICSChart No EARNINGS PER SHARE (RS) OF ALLCARGO LOGISTICSINTERPRETATIONThe above diagram explain about the EPS of Allcargo Logistics Ltd .Thecompany had face value of Rs 10 in 2008 & 2009. Later it reduces their face value from Rs10 toRs2. So that reason in FY12 stood at Rs14.12008 2009 2010 2011 201229.5141.447.84 9.2814.1Earning Per Share (Rs)
  39. 39. 1.1.10 DEBT – EQUITY RATIO OF ALLCARGO LOGISTICS LTDParticulars 2008 2009 2010 2011 2012Debt Equity Ratio 0.06 0.44 0.14 0.25 0.49Table No 4.2.10 Debt – Equity Ratio Of Allcargo LogisticsChart No 4.2.10 Debt – Equity Ratio Of Allcargo LogisticsINTERPRETATIONThe above chart explains that the debt- equity ratio of the Allcargo Logistics Ltd in the FY2008they have only 0.06. It was increased to 0.44 in the year 2009 due to company brows morefunds from external sources. But in FY2010 it was reduced because the company refunds theirborrowing later it was increased to 0.49 in the FY12 due to increase their operation towardsworldwide.2008 2009 2010 2011 201200.10.20.30.40.50.60.060.440.140.250.49
  40. 40. 1.1.11 Current Ratio Allcargo Logistics LtdParticulars 2008 2009 2010 2011 2012Current Ratio 1.55 3.33 2.98 2.65 2.08Table No 4.2.11 Current Ratio Allcargo LogisticsTable No 4.2.11 Current Ratio Allcargo LogisticsINTERPRETATIONThe current ratio’s normal range between .05 to 2.0 is acceptable but the above diagram denotesthat continuously decrease over four years but ratio cloud be remain same position that is safeliquidity. The company spent more resource for expands its operation over the upcoming years.2008 2009 2010 2011 201200.511.522.533.541.553.332.982.652.08Current Ratio
  41. 41. 4.2.12 RATIO ANALYSIS OF ALLCARGO LOGISTICS LTDParticulars 2008 2009 2010 2011 2012Operating Profit Margin(%) 22.07 25.66 28 26.06 28.62Gross Profit Margin(%) 18.13 20.73 20.71 20.31 20.37Net Profit Margin(%) 16.48 17.76 18.5 16.79 16.28Return On Capital Employed(%) 16.33 15.93 13.17 13.34 15.95Return On Net Worth(%) 15.65 19.89 12.37 12.38 16.15Table No 4.2.12 Ratio Analysis Of Allcargo LogisticsChart No4.2.12RatioAnalysisOfAllcargoLogisticsINTERPRETATIONThe above diagram denotes that operating profit margin was increased over the years. The GrossProfit Margin was no changes over the years. Net Profit Margin is no change in last two years.Return on capital employed indicates that in FY08 was 16% due to increase the employer levelso that reasons it was decreased to 15.95% in FY12. The rate of return on net worth in FY08 was2008 2009 2010 2011 201205101520253035Operating ProfitMargin(%)Gross Profit Margin(%)Net Profit Margin(%)Return On CapitalEmployed(%)Return On NetWorth(%)
  42. 42. 15.65% but it increased to 19.89% in FY09 finally in FY12 rate of return stood at16.15%4.2.13 LIQUIDITY AND SOLVENCY RATIOSParticulars 2008 2009 2010 2011 2012Quick Ratio 1.75 3.31 2.94 2.61 2.04Debt Equity Ratio 0.06 0.44 0.14 0.25 0.49Long Term Debt Equity Ratio 0.05 0.44 0.14 0.25 0.49Debtors Turnover Ratio 10 8.84 7.17 8.41 9.69Asset Turnover Ratio 1.46 1.37 0.64 0.66 0.69Table No 4.2.13 Liquidity And Solvency RatiosChart No 4.2.13 Liquidity And Solvency RatiosINTERPRETATIONThe above diagram explains that ratio of Allcargo Logistics Ltd. whereas quick ratio indicatesthat the firm has good financial position over the past five years. The company use external useof funds over the years in FY12 Company 49% of shareholders’ funds. Long term debt equityratio was stood at 0.49. A debtor turnover ratio explains that extends level of credit sales over2008 2009 2010 2011 2012024681012Quick RatioDebt Equity RatioLong Term DebtEquity RatioDebtors TurnoverAsset Turnover Ratio
  43. 43. the years here the company in FY12 was 9.69times. Asset turnover ratio indicates that companyutilizes the assets use effectively over the years.4.2.14 SWOT Analysis of Allcargo Logistics LtdStrength• MTO business showed growth of 13%• 2nd rank in the industry in India.• Scale of operation across 62 countriesand over 4000 ports.• LCL consolidation market with astrong network across 62 countries and142 own offices covering over 4,000port pairs with nearly 200 agents andfranchisees• Robust distribution network• Superior performance and innovativeideasWeakness• Strong dependency on weak infrastructure• Taxes policies in India• lack of adoption of new technology compareto foreign companiesOpportunities• Diversify new product portfolio to enter into new service provided• Company utilizes their fund for furtherexpansion.• To start 3PL it will give more strong to thecompany• CFS/ICDs that run their own containerterminal, freight forwarder or shipping lineare likely to gain from the surge in oceanfreightThreats• Competitor like DHL, TNT,UPS, Blue Dart• Government rules and regulations• India have poor infrastructure facilities likeroad, port, information technology• Restriction on import and export procedure.Table No 4.2.14 SWOT Analysis Of Allcargo Logistics Ltd
  44. 44. 4.3 AQUA LOGISTICS LIMITEDAqua Logistics Limited is Indias foremost global logistics and supply chain partner,delivering excellence across industries, through an integration of empowered people, processesand technology. The Company is a full-scope 3 PL (third-party logistics service provider),delivering end-to-end solutions in the logistics and supply chain domain to customers.The company capabilities include supply chain consulting, logistics execution and projectlogistics. The company operations and consulting teams, deliver logistics solutions, to clients byaligning the strategic and the operational perspectives.The company is global supply chain management involves planning, implementing andcontrolling a series of complex tasks performed by persons of different nationalities and culturesand with varying language capabilities. The company integrates these multinational capabilitiesby combining years of expertise with the latest in technology.The companys operations in consulting, and client development teams deliver logistics,operations strategy, sourcing and procurement planning, fulfillment operations, customer serviceand after sales support.The company was established in 1999 and headquartered in Mumbai and has presence inmajor locations such as New Delhi, Chennai, Bangalore, Ludhiana, Baroda, Cochin and Pune. In1999, the company started as freight forwarding and consistently increased capabilities andscope of services. As an external service provider ambit of services covers critical serviceswhich are required to execute end-to- end logistic needs.These include Multimodal Transportation, Contract Logistics, Regulatory Compliance,Warehousing, Value Added Services and Project Logistics. The company international logisticsoperations are supported by a network of 3PL partners and vendors that enables us to serviceclient requirements across India and abroad as well. The company delivers international logisticservices by using air, sea and surface, as modes of transportation.The company regulatory compliance services include customs and industry-specificregulations. The company had a Multi-Modal Transport Operators License, an IATAAccreditation and a Custom House Agents License for servicing customers requirements
  45. 45. 4.3.1 RESERVES & SURPLUS OF AQUA LOGISTICS LIMITEDParticulars 2008 2009 2010 2011 2012Reserves & Surplus 28.48 44.52 206.47 493.61 491.56Table No 4.3.1 Reserves & Surplus Of Aqua LogisticsChart No 4.3.1 Reserves & Surplus Of Aqua LogisticsInference:During the year, company reduction in operation so that reason the level ofreserve and surplus Rs. 2.05Cr could be reduced. But past four years they retain so manyreserves and surplus. In the FY2011 they retain 139% in profit. Now the company reserveincreased up to 1625% in past financial five years.2008 2009 2010 2011 201228.48 44.52206.47493.61 491.56
  46. 46. 4.3.2 NET BLOCK/NET ASSETS OF AQUA LOGISTICS LIMITEDParticulars 2008 2009 2010 2011 2012Net Block 9.13 12.75 43.09 44.36 44.93Table No 4.3.2 Net Block/Net Assets Of Aqua LogisticsChart No 4.3.2 Net Block/Net Assets Of Aqua LogisticsInferenceIn the FY2010 the company brought Plant & machinery about Rs 31Cr. So the value ofasset could be increased over the years. Later the value of net block could be increased. In theYear 2012 the value of assets shows that Rs44.93Cr. the followings are explains about the thecompany brought asset over the FY2010• Plant & Machinery-Rs 31.2Cr• Computer & Software- Rs 0.08Cr• Furniture & Fixtures-Rs 0.22Cr• Vehicles-Rs 0.22Cr
  47. 47. Therefore, the company spent their resources for buying new vehicles currently thecompany buy the worth of Rs4.46Cr4.3.3 NET SALES OF AQUA LOGISTICS LIMITEDParticulars 2008 2009 2010 2011 2012Net Sales 108.99 213.4 322.01 380.88 310.35Table No 4.3.3 Net Sales Of Aqua LogisticsChart No 4.3.3 Net Sales Of Aqua LogisticsInferenceThe company records the continuous improvement in the year between FY2008 toFY2011. But in the year 2012 the sales could be down up to 18.52% the level of sales stand at Rs310.35Cr in FY12.eventhouh the sales growth for past five years is 184%2008 2009 2010 2011 2012108.99213.4322.01380.88310.35Net Sales (Cr)
  48. 48. 4.3.4 NET PROFIT OF AQUA LOGISTICS LIMITEDParticulars 2008 2009 2010 2011 2012Net Profit 5.61 11.15 20.54 22.39 1.15Table No 4.3.4 Net Profit Of Aqua LogisticsChart No 4.3.4 Net Profit Of Aqua LogisticsInferenceThe diagram explains about the net profit of the company could reduced due to payment of moreinterest and taxes in FY12. In the FY10 the company recorded Rs 22.39Crs which was 1.85Crsincreased from previous years.
  49. 49. 4.3.5 DEBT-EQUITY RATIO OF AQUA LOGISTICS LIMITEDParticulars 2008 2009 2010 2011 2012Debt – Equity ratio 0.20 0.69 0.13 0.13 0.16Table No 4.3.5 Debt-Equity Ratio of Aqua LogisticsChart No 4.3.5 Debt-Equity Ratio of Aqua LogisticsInferenceThe Debt- Equity ratio explains about the business concern is done by owner’s equity aswell as outside debts. In other words, the relationship between borrowed funds and owner’scapital it used for measure the long – term solvency of a firm. Aqua logistics shows that in theFY2009 could be increased from 0.20times to 0.69 times later it reduced to 0.13 times but in theaudited FY12 the company borrowings more short term loans so that reason the level could beincreased over the year. Now it stands at 0.16 times.
  50. 50. 4.3.6 Profitability Ratios analysis of Aqua LogisticsParticulares 2008 2009 2010 2011 2012Operating Profit Margin(%) 11.7 10.47 10.21 9.38 5.08Gross Profit Margin(%) 11.19 9.93 9.75 8.36 3.83Net Profit Margin(%) 5.14 5.22 6.37 5.85 0.36Return On Capital Employed(%) 25.66 21.98 12.38 5.58 2.4Return On Net Worth(%) 14.05 19.89 9.2 4.3 0.22Table No 4.3.6 Profitability Ratios analysis of Aqua LogisticsChart No 4.3.6 Profitability Ratios analysis of Aqua LogisticsINFERENCEThe diagram explains that Gross profit margin ratio explains that in FY08 records that 11.19%due to decreased in sales now 3.83% in FY12. Net profit margin indicates that diminishing overthe years reasons was reduced in sales over the years.2008 2009 2010 2011 20120102030405060708090Operating ProfitMargin(%)Gross Profit Margin(%)Net Profit Margin(%)Return On CapitalEmployed(%)Return On NetWorth(%)
  51. 51. Financial Highlightsv Face Value of the Equity Share of the Company was splitted from 2010 to Rs.1.00 WithRespect of 4th October, 2010v During the year, the Company allotted 4.1Cr Global Depository Receipt (GDR) (on pari-passu basis) representing 9.46 Equity Shares of Re.1/- each with each GDR representing23 Equity Shares at US$ 15.17 per GDR on February 10, 2011v In order to conserve the profit of the business of the company, to meet the growingfunding requirements, it has not recommended any dividend for the last 5 years.v The Value of the Net Assets of the company has increased in past 5 years it shows that itbrought many assets by way of utilizing the reserves & surplus of the company.v It provide services, so it need not maintain any inventoriesv The company spent more funds on its subsidiaries so the level of investment could beincreased in past few yearsv The value of Debtors collection could be decreased. Up to 5.6% has been reduced.v The performance of the current assets shows very good financial results up to 53%increased its helps to investors can invest their fund in this company share for short termperiod.v Aqua Logistics company barrows fund from external sources in the previous year Rs65.35Cr it’s increased to 329% stood at Rs 280.62Cr in FY12.v Face Value of the Equity Share of the Company was splitted from 2010 to Rs.1.00 dueto that reason the book value of share was FY11 stood at Rs 17.45 in FY12 profit levelcould be turn down so the book value per share is Rs.17.39v During the year the company has registered income from operation of Rs. 331.93 Cr. ascompared to Rs. 381.73Cr in the previous year.v Profit before Depreciation Interest and Tax (PBDIT) has decreased from Rs 17.36Cr. Forthe year ended March 31, 2011 to Rs.36.61 Cr. showing the decrease of 52.6 %. DuringFY2012, the company has recorded PBDIT of 5.55% of the income from operation asagainst 9.58% during FY2011. The reduction in operation in operating margin is due todecrease in income from operation.
  52. 52. vDuring the year, Profit after tax (PAT) has decreased from Rs.21.24Cr. for theFY2011 to Rs.1.15Cr. in FY2012 due to decrease in income from operation.v The company pays more funds for interest payment due to that reason the level of profitcould be decreased over the year. Interest has increased from Rs. 4.53Cr. for the FY2011to Rs.11.78Cr. in FY2012v The gross Profit Margin reflects the efficiency with which Management Produceseach unit of product. This ratio indicates the average spread between the cost of goodssold and the sales revenues. A high gross profit margin shows that a sign of goodmanagement and vice. Versa in Aqua Logistics company past five year gross profitmargin continuously inability to purchase raw material at favorable terms. It result indecreased from 9.38% to 5.08% in FY2012.v Net Profit Margin ratio establishes a relationship between net profit and sales andindicates management’s efficiency in manufacturing, administration and selling theproducts/service. While in this case the company performance shows that fluctuation inpast five years. In FY2008 5.14% but the company effort of the could be abridged nowthe ratio shows that 0.36% the economic condition also one of the reasons for slope in netprofit margin ratio.v There is no constant changes in the ROE it indicate that the relationship between the NetProfit to Net worth of the company but the company shows up-down movement in pastperformance like in FY2011 the ROE was 4.3% it reduced to 0.22% in FY2012.v Current Ratio provides a margin of safety to the creditors. In a sound business, a currentratio of 2:1 is considered an ideal one. But in this case, the current ratio explains that inthe FY08 & FY09 constant relation between current assets and current liability but in theFY10 increased in sundry creditors for supplier upto Rs. 2.29 Cr. later in FY12 the levelof short term borrowings would be increased it stood at 3.26:1 is an ideal one.v The working capital cycle level could be increased continuously over the past five years.In FY12 the Number of Days in Working Capital was 1.5yrs.
  53. 53. 4.3.7 SWOT ANALYSIS OF AQUA LOGISTICS LIMITEDStrengthØ Good quality and reliabilityØ Robust distribution networkØ Superior performance and innovativeidea to implementWeaknessØPoor infrastructure in India sothat reasons could not able toearn profit effeictivelyØGovernment rules andregulationsØLack of financial position incompaniesOpportunitiesØReduction in warehousing spacerequirementØImprovement in efficiency due tobetter inventory managementØ Reduction in transportation cost due tohigher capacity utilizationThreatsØ Low margin businessØ International competitorsØAcquisitions of other businessunitTable No 4.3.7 SWOT Analysis Of Aqua Logistics Limited
  54. 54. 4.4 Arshiya InternationalArshiya International Ltd is a fast emerging end-to-end service and solution provider inlogistics and supply chain management. The company is an amalgamation of several strategicverticals such as Free Trade Warehousing Zones, Rail, 3PL, 4PL, Trucking, Warehousing & ITenabling unparalleled operational expertise & solution capability across the entire supply chainspectrum. Arshiya is rapidly expanding their business capabilities through continuous internaldevelopment and aggressive acquisitions in complimentary space.The headquarter is at Mumbai with offices spanning across India, Singapore, Australia,Dubai, Qatar, Oman and USA. Arshiya International Ltd was incorporated in the year 1981 asIID Forgings Ltd.Ø In the year 2006, the company name was changed into Arshhiya TechnologiesInternational Ltd and the name was further changed into Arshiya International Ltd witheffect from September 28, 2007.Ø In April 2006, the company acquired 100% of the share in two companies namelyCyberlog Technologies Pte Ltd, Singapore, a company engaged in the business ofdevelopment and marketing of software products and Park Investments Ltd, Hongkong, acompany engaged in the business of supply chain logistics.Ø In January 2006, BDP (India) Pvt Ltd was amalgamated with the company. In october2006, the company had a joint venture agreement with the BDP International Inc USAand Genco I Inc USA for foray into retail distribution activities.During the year 2007-08, the company incorporated Arshiya Logistics Infrastructure Ltd,Arshiya Western Logistic Infrastructure Ltd, Arshiya Distripark Ltd and Flat World ProcessesLtd. Thus, they became the subsidiary of the company. The company is in the process of settingup a Free Trade Warehousing Zone, a special category SEZ at Sai Village in Raigad,Maharashtra with a project outlay of Rs 1200 crores.The company has made substantial acquistion of land for the Free Trade WarehousingZone proposed at Uttar Pradesh and Nagpur at an estimated cost of Rs 1100 crore and Rs 900crore respectively. The company incorporated a subsidiary namely Arshiya Rail InfrastructureLtd for containerised rail operations services to the customer for both domestic and exim cargomovement across the the country.The company estimated the project outlay of Rs 1600 crore for the acquisition of 75Rakes, break vans, building of rail siding and other necessary infrastructure across the country.
  55. 55. 4.4.1 GENERAL RESERVES OF ARSHIYA INTERNATIONAL LTDParticulars 2008 2009 2010 2011 2012Reserves 445.23 475.36 483.91 502.62 540.81Table No 4.4.1 General Reserves of Arshiya InternationalChart No 4.4.1 General Reserves of Arshiya InternationalInferenceThe above diagram explains that General Reserve of Arshiya International where as thecompany earn more profit in FY12 due to company earn more profit. They allocate Rs 540.81Cras general Reserves. It was increased from 7% in previous Year. The growth of the company ismoderately increased. So it indicates that definite growth in future because 100% FDI is allowedin India. The company was an amalgamation of several strategic vertical such as Free TradeWarehousing Zones, Rail, 3PL, 4PL, Trucking, IT in future.2008 2009 2010 2011 2012445.23475.36 483.91502.62540.81
  56. 56. 4.4. 2 NET BLOCK OF ARSHIYA INTERNATIONAL LTDParticulars 2008 2009 2010 2011 2012Net Block 3.41 9.65 17.59 330.86 602.35Table no 4.4. 2 net block of arshiya internationalChart no 4.4. 2 net block of arshiya internationalInferenceThe above diagram explains about the Net block of the Arshiya International Ltd whereas in the FY2008 the company has Rs3.41Crs. but it was increased to Rs 9.65Crs they browssome plant and machineries. In FY11 in company’s net block abnormal increased toRs330.86Crs company additionally purchase freehold lands, buildings, computers and otherequipments. In the financial year 2012 the company shows Rs 602.35Crs reasons, thecompany purchase additional assets in the years details are,1. Freehold land-Rs 120Cr2. Buildings – Rs 134Cr3. Plant and machinery- Rs 3Crs4. Equipment –Rs 16Crs2008 2009 2010 2011 201201002003004005006007003.41 9.65 17.59330.86602.35
  57. 57. These items are additionally purchased in FY12 this is major reasons for improvement in netblock of the company.4.4.3 NET SALES OF ARSHIYA INTERNATIONAL LTDParticulars 2008 2009 2010 2011 2012Net Sales 201.91 256.39 273.61 453.01 592.63Table No 4.4.3 Net Sales Of Arshiya InternationalChart No 4.4.3 Net Sales Of Arshiya InternationalInferenceThe above diagram explains that Net profit of the company in which the companyrecords Rs 201Cr in FY20008. It was increased 21% to stand at Rs 256.39Crs in FY09. In theFY10 the company records Rs 453Crs as net profit due to the company amalgamate moreseveral strategic vertical such as Free Trade Warehousing Zones, Rail, 3PL, 4PL, Trucking, ITthis is one of the reason improvement in profit. Finally company records Rs592.6Cr in FY2012.
  58. 58. 4.4.4 NET PROFIT OF ARSHIYA INTERNATIONAL LTDParticulars 2008 2009 2010 2011 2012Net Profit 12.36 18.49 15.4 24.93 47.51Table No 4.4.4 Net Profit Of Arshiya InternationalChart No 4.4.4 Net Profit Of Arshiya InternationalInferenceThe above diagram denotes that Net profit of the company records in past five years. InFY08 company perform Rs12.36Crs as net profit. In the FY09 the company increased theiroperations so that reasons the firm earns Rs 18.49Crs. but in FY10 the company’s profit declinedRs 3Crs to shows Rs 15.4Crs because of increase in depreciation, payment of more taxes. InFY12 the company records Rs 47.51Crs as net profit because of increased in operations it reflectimprovement in net profit of Arshiya International. Its increased 23.5% from in previous year.But in FY12 the company pays more financial interest to its borrowings.
  59. 59. 4.4.5 EARNINGS PER SHARE OF ARSHIYA INTERNATIONAL LTDParticulars 2008 2009 2010 2011 2012Earnings Per Share 2.17 3.15 2.62 4.24 8.08Table No 4.4.5 Earnings Per Share Of Arshiya InternationalChart No 4.4.5 Earnings Per Share Of Arshiya InternationalInferenceThe above diagram explains about the Earnings per share of the company in which in theFY08 the value of EPS was Rs 2.17 they recommend Rs0.80 as dividend in the year. In FY2010EPS could be decreased EPS as Rs 2.62 because of decline in income of the company but thecompany declare Rs 1.00 as dividend. In FY12 EPS stood at Rs 8.08 the company declare Rs1.40 as dividend to its share holders.2008 2009 2010 2011 20120123456789102.173.152.624.248.08
  60. 60. 4.4.6 DEBT EQUITY RATIO OF ARSHIYA INTERNATIONAL LTDParticulars 2008 2009 2010 2011 2012Debt Equity Ratio 0.78 0.16 0.73 1.32 2.06Table No 4.4.6 Debt Equity Ratio Of Arshiya InternationalChart No 4.4.6 Debt Equity Ratio Of Arshiya InternationalInferenceThe above chart denotes that Debt Equity of Arshiya International in the Year 2008 the DebtEquity Ratio was 0.78X. A less than 1 ratio indicates that the portion of assets provided bystockholders is greater than the portion of assets provided by creditors and a greater than 1 ratioindicates that the portion of assets provided by creditors is greater than the portion of assetsprovided by stockholders. In FY2012 the level of debt Equity ratio stands at 2.06X times2008 2009 2010 2011 201200.511.522.50.780.160.731.322.06
  61. 61. 4.4.7 CURRENT RATIO OF ARSHIYA INTERNATIONAL LTDParticulars 2008 2009 2010 2011 2012Current Ratio 6.46 0.75 1.3 1.27 2.02Table No 4.4.7 Current Ratio Of Arshiya InternationalChart No 4.4.7 Current Ratio Of Arshiya InternationalInferenceThe above digram explains that current ratio of Arshiy International where as in FY08 shows6.46 because of the company do not borrow any term loans. But in FY09 advances received fromits subsidiary companies so that reasons the current ratio comes down in the year. In FY12 theratio indicate good financial positions over working capital the ratio of 2.02:1 whereas companyprovide Rs 600Crs as loans and advances to its subsidiaries.2008 2009 2010 2011 20120123456786.460.751.3 1.272.02
  62. 62. 4.4.8 PROFITABILITY RATIOS ANALYSIS OF ARSHIYAINTERNATIONALParticulars 2008 2009 2010 2011 2012Operating Profit Margin(%) 6.95 8.07 8.09 11.72 86.97Gross Profit Margin(%) 6.63 7.46 7.44 10.19 84.2Net Profit Margin(%) 5.94 7 5.45 5.25 7.54Return On CapitalEmployed(%) 4.22 4.68 3.36 5.67 31.7Return On Net Worth(%) 2.7 3.79 3.1 5.1 8.59Table No 4.4.8 Profitability Ratios Analysis Of ArshiyaChart No4.4.8 Profitability Ratios Analysis Of ArshiyaINFERENCEThe above diagram explains about the Gross Profit Margin highly increased over the yearswhereas in 6.63% in FY08 but in 84% in FY12. Operating Profit Margins also increased due to2008 2009 2010 2011 20120102030405060708090100Operating ProfitMargin(%)Gross Profit Margin(%)Net Profit Margin(%)Return On CapitalEmployed(%)Return On NetWorth(%)
  63. 63. increased in sales in FY12. The level of net profit was increased in FY12 so the margin level wasincreased in FY12 stood at 7.54 it was 5.25% in FY11. The value of return on net worth could beincreased in past five years in FY12 Stood at 31.7%. the value of return on net worth wasincreased 8.59% in FY12. Hence the performance of the company has been very good positionin the matket.4.4.9 LIQUIDITY AND SOLVENCY RATIOS ANALYSISParticulars 2008 2009 2010 2011 2012Current Ratio 6.46 0.75 1.3 1.27 2.02Quick Ratio 6.45 2.67 1.57 1.84 2.02Debt Equity Ratio 0.15 0.16 0.73 1.32 2.06Debtors Turnover Ratio 7.56 5.62 3.67 4.86 5.48Table No 4.4.9 Liquidity And Solvency Ratios AnalysisChart No 4.4.9 Liquidity And Solvency Ratios AnalysisINFERENCEThe above diagram explains that current ratio of the company in which FY08 the level of currentratio was 6.46 because of the company brows Rs 22.25Crs of loans and advances. But it wasincreased to Rs 121Cr in FY12 so that reasons the level could be decreased to 2.02 in FY12. The
  64. 64. Quick ratio also decreased same reasons. Debtors turnover ratio denotes that 7.56times in FY08but it was increased to 5.58times due to the level of sundry debtors level has been increased inFY12.4.4.10 FINANCIAL HIGHLIGHTS OF ARSHIYA INTERNATIONAL LTDv In the FY2011 the company increases their capital by way of issued as bonus share to itsshare holders.v The reserve of the company shows that continuously increased over the past five years. Inthe FY12 company retains their funds to 7.06% in the previous year Rs 502.62Crs. so itsvalue of the company could be increase in upcoming years hence an investor can investtheir money in this company stronglyv The net worth of the company also increased due to wide area of operation could becarried over the world wide. Now the company has worth of Rs553Crs.v During the year the company borrows short term funds from banks for the purposeof increase their working capital position of the firm. In FY12 company borrowsRs.1006Crs. against of FY11 Rs 655.65Crsv In the FY2011 company brought freehold land, vehicles, plant and equipments withworth of Rs 330Crs. It is increased to Rs602 Cr in the financial years. From this denotesthat the company have good value in marketv The company does not maintain any inventories over the last financial yearsv The level of sundry debtors could be increased over the years in the FY12 recordsRs 121 Cr in the previous year Rs 95Crsv The company also lends loan and advances for its subsidiaries for the purpose of expandits operationsv The net current asset of the company increase over the past financial years currently thecompany hold the worth of the Rs 400Crv The company records a best sales performance over the past financial years. in theFY2008 the sales level was Rs201.Crs on the other hand the level of sales could beincreased up to 21% it reach at Rs. 256Crs in the FY2009. Even though the companyhave good sales in the FY2012 it records Rs592Crs due to expand their business over the
  65. 65. years.v The net income of the company also increased over the past financial years in the FY12the current net income is stood at Rs630Crsv In this accounting period the company borrows more funds from outsider it results inpayment of the more interest to creditors. In the financial years the company pay Rs80Crs but in the previous year Rs 31Crsv The above balance sheet explains about the tax could be paid by the company is highcompare to previous years. In the FY12 the company pay Rs. 21 Cr. as tax to Indian govtv The Earning Per Share of the company increases over the financial years in year 2010EPS was Rs2.64 but the next financial year 2011 the EPS could be increased to Rs 4.42finally the value of EPS in the FY12 reach at Rs 8.08 because of the the company hasmore retains their earningsv In the year 2012 the company declares the 70% as dividend for the equity shareholders.But in FY08 they declared 40% only the face value of Rs 2 per share.v The book value of the share shows that continuous improvement over the years now thecompany’s book value is Rs 93 the original value of share’s face value is Rs 2 onlyv During the year under report / review, seven step down subsidiaries of the Company, viz.Arshiya Southern Domestic Distripark Ltd., Arshiya Eastern Domestic Distripark Ltd.,Arshiya Western Domestic Distripark Ltd., Arshiya Central Domestic Distripark Ltd.,Arshiya Exim Trading Ltd., Arshiya Eastern FTWZ Ltd., Arshiya Western FTWZ Ltd.have ceased to be step down subsidiaries of this Company.Further, another step-downsubsidiary of your Company, Cyberlog Technologies Inc., USA has been dissolved.v The face value of the company share is Rs 2.00 there is no change in capital structure inpast five yearsv The company declared Rs 0.80 in FY2008. It was increased in FY12. The companyrecommended Rs1.40 in FY12v Operating profit was continuously improved over the year. In FY12 the company had87% contribute as operating profit.v Gross profit margin level has been increased due to company operate wide area in India itresults in increase in gross profit level, in FY12 the company’s Gross profit margin stoodat 84.4%
  66. 66. v The net profit margin represents that relationship between net profit and total net saleswhere as the company’s net profit margin in FY2010 5.5% it was increased to 7.54% inFY12 because of increased in sales of the company4.1.11 SWOT ANALYSIS- ARSHIYA INTERNATIONAL LTDStrengthü India’s first Free Trade andWarehousing Zone (FTWZ)ü The FTWZ is a deemed foreign territorywith tax exemptionsü state-of-the-art equipment state-of-theartequipment along with convenient sidingand customized wagonsü information technology is a completely-integrated systemü have more subsidiary companiesWeaknessühigh cost of operation it result indecreased in net profitüFace heavy competition with itscompetitors like CONCORE, DHL, TNTetc.ü Fluctuation in foreign exchange rate.ü Government influence on import andexport policies.Opportunitiesü The transportation sector in India isstill dominated by the road segmentwhich accounts for 65% of the totalfreight traffic followed by railway whichaccounts for about 30%. Due to higherdependence on roadways, logisticsindustry efficiency gets affected due totraffic bottlenecks; delay in clearing oftrucks, etc. Thus dependency on roadmakes hinterland cargo movement moreexpensive and inefficient. India burnsnearlyUS$2.5 billion worth of fuel onaccount of trucks standing idle on statecheckpostsThreatsü Poor infrastructure like road, rail road,ITü 100% FDI allowed its leads entrance offoreign player in india
  67. 67. Table No 4.4.10 SWOT Analysis- Arshiya International4.5 Aegis Logistics LtdAegis Logistics Ltd is a leader in Oil, Gas and Chemical Logistics. The company isengaged in providing logistic solutions for Oil, Gas, Chemicals and Petrochemical Industries.With their strategic locations and indispensable services, Aegis is a key supplier for total supplychain management services to major customers including Oil PSUs. The company presently hasthree operating port terminals, two in Mumbai and one in Kochi, as well as two state of the artgas terminals at Mumbai & Pipavav through which they handle annually over 2 million MT ofOil, Gas and Petroleum products as well as around 400,000 MT of LPG and Propane gas.Aegis Logistics Ltd was incorporated on June 30, 1956 as a private limited companywith the name Atul Drug House Ltd. In the year 1962, the company installed their first plant forthe manufacture of formaldehyde and hexamine at Kandla. In the year 1967, they installedanother plant at Capi near Bulsar in Gujarat State for the manufacture of 14,400 tonnes offormaldehyde and 540 tonnes of hexamine per annum.In the year 1970, the company installed at Vapi a plant for the manufacture ofPentaerythritol formaldehyde with a capacity of 1,200 tonnes per annum with the technical know-how supplied by Joset Meissner of W.Germany. In September 14, 1976, the name of thecompany was changed to Atul Chemical Industries Ltd. Also, they became a public limitedcompany. The name of the company was again changed from Atul Chemical Industries Ltd toAegis Logistics Ltd.In the year 1999, the Petrochemicals Division was hived off to Perstorp Aegis ChemicalsLtd, (PACL) a joint venture company between the company and Perstorp AB, Netherlands.During the year 2007-08, as per the scheme of arrangement (SoA), Throughput ActivityUndertaking of Hindustan Aegis LPG Ltd was de-merged and transferred to the company witheffect from the appointed date, April 01, 2007.
  68. 68. During the year 2008-09, Tapi Finvest India Pvt Ltd was amalgamated with thecompany. During the year 2009-10, the company entered into a strategic alliance with Essar OilLtd which entails a reciprocal arrangement wherein both the companies would sell each otherfuels through their retail outlets. In April 1, 2010, the company acquired 100% shareholding inShell Gas (LPG) India Pvt Ltd. Consequently, SGLIPL became wholly owned subsidiary witheffect from April 1, 2010. Also, the name of SCLIPL was changed to Aegis Gas (LPG) Pvt Ltd(AGPL).During the year 2010-11, the company was awarded the Operations & Maintenance(O&M) contract for the product storage and dispatch operations of Bharat Oman Refinery Ltd(BORL) at Bina in Madhya Pradesh signifying the Aegis expertise of the company in LiquidLogistic and Operations & Maintenance. Also, Aegis Gas (LPG) Pvt Ltd (AGPL), the whollyowned subsidiary of the company acquired 100% equity shares of Hindustan Aegis LPG Ltd(HAL PG), from its erstwhile shareholders. Consequently, HAL PG ceased to be an associateand became a wholly owned subsidiary of AGPL.In November 2010, the company entered into a major deal with APM Terminals Pipavavto avail on sub-lease close to 100 acres of land for building a global oil and petrochemicalsstorage complex. The company will invest up to Rs 400 crore ($90m) in building a 600,000 KLoil terminal complex in Port Pipavav. With the announcement of this project, the companysliquids capacity will rise from 300,000 KL to over 1 million KL.The companys strategy of building a necklace of port terminals around Indias coastlinefrom Pipavav to Haldia to Kochi, inland oil terminals to service the national oil companies anddeveloping a retail distribution network for the LPG business is proceeding at a steady pace.
  69. 69. 4.5.1 General Reserves of Aegis Logistics LtdParticulars 2008 2009 2010 2011 2012Reserves (In Cr) 137.64 154.91 167.47 230.93 264.23Table No. 4.5.1 General Reserves of Aegis Logistics LtdChart No. 4.5.1 General Reserves of Aegis LogisticsInterpretationThe above diagram explains about the reserves and surplus of Aegis logistics Ltdhave Rs 137.64 Cr in the FY08 it was increased by 17.15Cr in the FY09. In FY12 thecompany records the 12.60% growth than the value of the reserves is Rs 264.23 Cr.Over the years the company have retain more sources so that reasons the investor canmake invest in this company strongly because the company growth in upcoming years2008 2009 2010 2011 20120.0050.00100.00150.00200.00250.00300.00137.64154.91167.47230.93264.23
  70. 70. should be increase due to the Indian government give more importance for exports &imports.The company also utilize the fund for further expansion their business over theworld wide from which they attain competitive position in the field.4.5.2 Net worth of Aegis Logistics LtdParticulars 2008 2009 2010 2011 2012Networth (In Crs) 157.55 174.70 186.24 264.33 297.63Table No. 4.5.2 Net worth of Aegis LogisticsChart No. 4.5.2 Net worth of Aegis LogisticsInterpretationThe above diagram explains about the net worth of Aegis Company in which thecompany performs over the year shows good results.
  71. 71. Net worth includes share capital and reserve of the company. The company hasgood net worth in over the years. In the year 2010 the value of net worth was Rs186.24Cr high in FY2011 up to Rs. 264.33Cr with 42%12.6% could be increased from in the year 2011 it stood at Rs 297.63CrIt is clear that investors can invest their fund in this company so that way it will grow infuture.4.5.3 Net sales of Aegis Logistics LtdParticulars 2008 2009 2010 2011 2012Net Sales 373.88 368.33 284.67 258.14 283.5Table No. 4.5.3 Net sales of Aegis LogisticsChart No 4.5.3 Net sales of Aegis LogisticsInterpretation2008 2009 2010 2011 2012050100150200250300350400373.88 368.33284.67258.14283.5
  72. 72. The above diagram explains about the net sales of the Aegis Company inFY2008 it was records Rs. 373.88Crs. But in the FY2009 it comes down to Rs 368.33Crs.In the financial year 2010 the net sale was again reduced 83%. Later the companyrecord good results in the FY12 is Rs 283.5 Cr in previous year was Rs 258.14crMeanwhile the company have face lot of challenges because of change ingovernment policies in supply chain and the company target only gas and oil so thatreason the sales could be variation over the past financial fiscals4.5.4 Profit analysis of Aegis Logistics LtdParticulars 2008 2009 2010 2011 2012PBDIT 63.19 52.23 67.14 65.24 70.19PBDT 59.07 46.05 59.1 55.09 59.88Profit Before Tax 50.11 36.88 49.43 44.35 47.95Net Profit 39.09 30.37 38.94 31.22 41.06Table No. 4.5.4 Profit analysis of Aegis LogisticsChart No 4.5.4 Profit analysis of Aegis LogisticsInterpretation
  73. 73. The above diagram explains about the profit of the Aegis Company Ltd in thePBDIT, PBDT, PBT, Net Profit indicates some variation in the last five years. It explainsabout the poor efficiency of the firm because the company does not adopt constantstrategy.As a researcher point of view, the company should be clearly defined its path inorder to achieve the better performance.4.5.5 Earning per Share of Aegis Logistics LtdParticulars 2008 2009 2010 2011 2012Earning Per Share (Rs) 19.61 18.43 20.71 9.35 12.29Table No. 4.5.5 Earning per Share of Aegis LogisticsChart No. 4.5.5 Earning per Share of Aegis LogisticsInterpretation2008 2009 2010 2011 2012051015202519.6118.4320.719.3512.29 Earning Per Share(Rs)
  74. 74. The above diagram explains about the EPS of the Aegis Logistics Ltd in year2008 it have Rs 19.61 it plunged to 20.71 in FY2010. Due to variation in the sale, reflectin the EPS of the company could be down to Rs 9.35. currently the company has the EPSof Rs 12.29.Hence the upcoming years the company has to plan to expands their business allover the nation so value of the company will be increased in future4.5.6 Book value (In Rs) of Aegis Logistics LtdParticulars 2008 2009 2010 2011 2012Book Value (Rs) 79.01 103.99 99.05 79.14 89.11Table No. 4.5.6 Book value (In Rs) of Aegis LogisticsChart No. 4.5.6 Book value (In Rs) of Aegis LogisticsInterpretation
  75. 75. The book value of the company share in FY12 stood at Rs. 89.11. But in FY2009the company had Rs 104 because of they have more reserves later the company utilize its fundfor expand their operation so that reason the book value could be down in the year 2010 and2011.4.5.8 PROFITABILITY RATIOSParticulars 2008 2009 2010 2011 2012Operating Profit Margin(%) 16.38 12.78 20.49 22.2 21.99Gross Profit Margin(%) 13.98 10.29 17.09 18.04 17.99Net Profit Margin(%) 10.39 8.09 13.38 11.73 13.96Return On CapitalEmployed(%) 27.7 21.94 20.88 16.58 16.15Return On Net Worth(%) 24.81 17.72 20.9 11.8 13.79Return on Long Term Funds(%) 27.7 22.31 22.14 17.29 18.06Table No 4.5.8 Profitability Ratios
  76. 76. Chart No 4.5.8 Profitability RatiosINFERENCEThe operating profit margin of the aegis logistics continuously increased over the past five yearscurrently the company records 21.99%. Gross Profit Margin increased due to increase in totalsales. Net Profit Margin was stood at 13.96% it was increased from 11.73% in previous year.4.5.9 Liquidity And Solvency RatiosParticulars 2008 2009 2010 2011 2012Current Ratio 1.66 1.3 1.59 1.81 1.21Quick Ratio 1.5 1.22 2.18 2.41 2.28Debt Equity Ratio 0.25 0.17 0.41 0.24 0.27Long Term Debt Equity Ratio 0.25 0.17 0.33 0.19 0.13Table No 4.5.9 Liquidity And Solvency Ratios2008 2009 2010 2011 2012051015202530Operating ProfitMargin(%)Gross Profit Margin(%)Net Profit Margin(%)Return On CapitalEmployed(%)Return On NetWorth(%)Return on Long TermFunds(%)
  77. 77. Chart No4.5.9 Liquidity And Solvency RatiosINFERENCEThe above diagram explains about the Liquidity ratio and solvency ratio of Aegis Logistics Ltdwhere as there is slight variation on current ratio over five years. Quick ratio increased overthe years but in FY12 the company has 2.28:1 of quick ratio. Debt Equity Ratio denotes thecompany use only owner’s funds over the years. Long term debt Equity ratio was 0.13X in 2012.It was in 0.13 times in 20114.5.10 Financial highlights of Aegis Logistics Ltd• In the FY2009, the company had buy back total of 10,20,473 equity shares at price notexceeding Rs.143 per share through open market transactions for an aggregate amountof Rs. 3.47Cr consequently the issue and paid up equity shares capital of the companystands reduced to Rs. 16.44Cr.• In the FY2010, the company had issued and allotted 12506710 equity shares at Rs.10 pershare as bonus share in the proportions of two share for every existing 3 fully paid up2008 2009 2010 2011 201200.511.522.53Series 1Series 2Current RatioQuick Ratio
  78. 78. shares so that reasons the company shares value stood at Rs.33.40 till current financialyear 2012.• The reserves and surplus of the company shows that an excellent performance over thepast five years. In the FY2011 shows that abnormal growth up to 37.89% increased, inFY2012 the reserves and surplus could be stood at 14% in past five years the companyshows 91% they retain their earnings for future expansions.• The company spent their resources for buying more plant & equipments in FY12 spentup to Rs.464Crs and vehicles brought about 45.43Crs. But also intangible assets likecomputer software it acquires up to Rs. 81Crs. From this point of view, the companyadopts new technologies• Aegis logistics ltd’s investment parameters shows that there is an up down movements inFY2011 Rs 94.53Cr its was increased from 122% in the previous year. But in FY2012,the level could be increased up to 27% about Rs27.23Crs• Inventories are valued at cost or net realizable Value whichever is less. Cost isdetermined by using the first in first out formula. Cost comprises all costs of purchase,cost of conversion and cost incurred to bring inventories to their present location andcondition other than those subsequently recoverable by company form tax authorities.• The level of sundry debtors value could be increased over the past five years in FY12 isshows that Rs.31.41Crs• Aegis company adopts just in time inventory concept in which they would not focuson inventories because all material in movements. So the inventory level continuouslydecreased.• Aegis Company they deposit level could be increased over the past performance in thisway the firm deposit their amount in banks for increase the current ratio position in themarkets.• The firm lends loans and advances to their subsidiaries and other government deposit inFY12 they provide Rs.81.14Crs.• Meanwhile the total current asset could be increased up to Rs 30.63crs. Due to increasedinterest accrued on fixed deposits, unamortized interest on buyers’ credit & premium onOption contracts, unamortized premium on share and Debentures increased to Rs 5crs.• The company short term borrowings could be increased still it stood at Rs.12.99Crs

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