I have been tracking this company since few days and it seems interesting to me and the sector also looks at a turnaround.Could not find a post hence starting a new post.
Jet Freight Logistics Ltd (JFLL) is engaged in logistics business having branches located in various cities in India. Company is registered with International air transport association (IATA) agent for Air cargo. JFLL is providing services for Perishable cargo, Time sensitive cargo and also provide Shipment of Hazardous cargo, ODC consignments, pharmaceutical cargo, temperature controlled and general cargo. Its main segment is transport of perishable cargo which includes handling frozen and chilled meat, seafood, vegetables, fruits, cut flowers and pharmaceutical products.
The company has tie ups with various airlines in the world in order to provide tailor made solutions based on customer needs. It offers the best rates along with the best airline options. JFLL has also tied up with various agents across the world who provide services of making the goods reach from international Airport to the respective destinations depending upon the client needs. The company as a freight forwarder take full responsibilities of shipment from the point of receipt to the point of destination .Pricing is based on nature of goods, location, type of service and facility given to the customer. However sector at which the goods are been sent plays a very crucial role in deciding the price of the goods.
Currently Major part of the company’s revenue comes from Air freight and the company does not have its exposure in regards to ocean freight, in the near future it is planning to increase its business verticals and also start operations with regards to ocean freight. The company is also planning for expansion of its branches in tier II and tier III cities as there is increase in flight connectivity in these cities and there is more scope of business operations.
The demand for air freight is limited by cost, typically priced 4–5 times more that of road transport and 12–16 times high that of sea transport. These values differ from country to country, season to season and from product to product and for different volumes also. Cargo shipped by air thus have high values per unit or are very time-sensitive, such as documents, pharmaceuticals, fashion garments, production samples, electronics consumer goods, and perishable agricultural and seafood products. They also include some inputs to meet just-in-time production and emergency shipments of spare parts.
It is listed under NSE SME segment and hence has a minimum lot size is 2000qty.
2012 2013 2014 2015 2016 2017
Sales 28.64 123.44 118.68 142.80 206.57 216.72
Net Profit 0.22 0.18 0.53 0.73 0.96 3.89
- Promoter has 73.3% stake.
- Company is growing at around 50% cagr from 5 years.
- Companies pat is being grown at 75%+ from 5 years.
- Has good ROE @ 37.89.
- Company currently operates under niche segment i.e-providing services for Perishable cargo, Time sensitive cargo and also provide Shipment of Hazardous cargo.
- Currently Indian logistic market has market of $115Bn (which is 2.8% of the market share of the company) and is estimated to grow to $360Bn in 2032(at 8.5Cagr). Industry growth estimate Link Below-
- Company has received awards one of them was for being No. 1 agent for 10 consecutive years, from various airlines like Air India, Cathay Pacific, Saudia Airlines, Gulf Air, Emirates etc.(This means their quality of work is above average for such a small company).
- Company will benefit from eCommerce sector going forward, hence want to step in general logistic segment so as to grab the opportunity and increase sales.
- USP- Company is operating in this segment from 30 years and claims that it has very strong long lasting relationships with the airways, customers etc which is very important so as to negotiate terms well.
- There is working capital issue with the company and they are being working on the same and trying to keep their model asset light, have to explore more on this front and on execution capabilities of the management.
- Company is trying to get orders from general cargo segment(not niche) so as to boost revenue and at the same time can sacrifice on margins, need to explore more on this front.
- Has a Debt/equity ratio of 1.27(though co has decreased debt from 3.26 in 2013)
- Remuneration of the chairman is high- 1Cr(for such a micro cap, which is above industry standards I think)
- Company is affected by currency fluctuation(USDINR) as it earns in dollars
- High competition in the segment as this sector is highly fragmented and highly unorganized. Need to explore this front so as to how company could grab the market share from unorganized sector.
Overall I find the company interesting with interesting growth prospects, but need to explore more on some of the concerns as listed by me above. I know we all at valuepicker are very good at finding the toughest of the questions, hence will be waiting for the contribution from all.
This is my first post as a topic initiator, so apologies if some point is wrong/missing/misunderstood by me
Stock currently trading at Rs-98
Discl- Not invested, only tracking the stock as minimum buying qty is 2000qty
and need more clarifications.