The shares of this microcap company jumped around 3 percent in Tuesday’s trading session after receiving an LoI from Adani Cement to establish its second depot in West Bengal.
Price Movement:
With a market capitalization of Rs. 199 crores, the shares of Kaushalya Logistics Ltd started Tuesday’s trading session on a higher note at Rs. 107 compared to its previous close of Rs. 104.25. During the trading session, the shares hit a high of Rs. 108.95, gaining around 3 percent and are currently trading at Rs. 107.20 apiece.
Is Kaushalya Logistics a buy or sell? What is its Fair Value? What are the company's health parameters? What are the positive and negative factors driving the company -- ProTips? Know all the answers on the company's overview page here.
What Happened:
Such a positive movement in the share price was observed after the company in an exchange filing announced that it had received a LOI from Adani Cement to establish its second depot for Adani Cement, in Binagudi, West Bengal.
The company will oversee rake operations, depot management, and secondary transportation at this new location. This new facility is expected to handle approximately 50,000 tons per Annum.
Previously, the company commenced operations at a new cement depot located in Ahmednagar, Maharashtra, starting on August 1, 2024.
The company will handle essential logistics services for Adani Cement, covering rake point operations, depot management, and secondary transportation. This new initiative will benefit both ACC (NS:ACC) and Ambuja Cement brands.
The Ahmednagar depot is expected to handle approximately 1,20,000 metric tons of cement annually. KLL will oversee the complete logistics chain at this facility, encompassing rail movement, depot operations, and cement transportation to secondary distribution points.
Additionally, the company is in advanced negotiations to establish additional depots with Adani Cement, JK Cement (NS:JKCE), and Dalmia Cement, reinforcing its reputation as a trusted logistics provider in the cement sector.
Financials:
Looking at the company’s financial performance, the revenue zoomed by 135 percent from Rs. 625 crores during FY22-23 to Rs. 1,466 crores in FY23-24. In addition, the net profits increased by around 29 percent from Rs. 7 crores to Rs. 9 crores during the same period.
Recent Development:
Earlier, the company announced its foray into the freight forwarding Load (FTL) services. This initiative is aimed at enhancing the company’s logistics capabilities and meeting the growing demand for efficient transportation solutions.
The new FTL vertical is designed to provide dedicated truckload services, allowing for more efficient and timely delivery of goods. This service is particularly beneficial for clients needing to transport large volumes of products, as it optimizes load capacities and reduces transit times.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 18.73 percent and a return on capital employed (RoCE) of 20.04 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 0.62 percent.
Company Profile:
Founded in 2007, Kaushalya Logistics Limited provides clearing and forwarding services to a leading cement company in India. The company provides a range of services including primary and secondary transportation, warehousing, and clearing and forwarding (C&F) services, primarily catering to the cement industry.
Written By Vaibhav Patil
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