Company Overview:
- Premier Roadlines Ltd (PRL) is established in 2008 and PRL is an IBA approved & ISO Certified surface logistics service provider of dry cargo ranging from 1MT to 250 MT.
- Services rendered through third-party operators with Trucks, Trailers, Hydraulic Axles, etc.
- Well established PAN India network, along with growing presence in Nepal and Bhutan.
- Market cap is 314 crores as on 24-Aug-2024.
Operational Updates:
- PRL is headquartered in Delhi and has 28 branches in Ahmedabad, Bengaluru, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Nashik, Pune, etc. On December 31, 2023, company had 204 permanent full-time employees.
- PRL collaborates with third-party providers, including small fleet owners and agents, who supply transportation equipment such as container trucks, trailers, hydraulic axles, etc., for their transportation services.
- PRL had not owned any fleet till last year. They have bought two pullers Eicher 8055 models(18 axles) and eight low-bed trailers recently.
- Company provides four services, which are project logistics, over-dimensional, overweight, contracted integrated logistics and general logistics.
Clients:
The company serves clients across various sectors including infrastructure, energy, electricity, oil and gas, mechanical engineering, construction, metallurgy, renewable energies, etc. Some notable clients include KEC International Limited, ThyssenKrupp Industrial Solutions (India) Private Limited, Tata Project Limited, G R Infraprojects Ltd, Tata Power Solar Systems Limited, Sterlite Power Transmission Limited, etc.
Financial Highlights (FY 2024):
- The company achieved total income of Rs 229 Crores, marking a 19% year-over-year increase, with an EBITDA of Rs 21 Crores (a 61% YoY increase) and a profit after tax of Rs 13 Crores (a 75% YoY increase).
- Margins expansion of 250 bps YOY to 9.3% due to focus on higher-margin project logistics and over-dimensional cargo services.
- Last three-years CAGR for revenue is at 34% and PAT is at 101%.
- ROE is 38% and ROCE is 27% in FY 2024
Future Outlook:
- Revenue target is 30% annually for FY25 and FY26 .
- Planning to purchase own vehicles to increase goods transportation network.
- Extending services to additional industrial sectors along with expanding customer base in existing industrial sectors.
- Company is also planning to expand its tech activities to further streamline large scale activities.
Industry Overview and Tailwind:
- The Indian logistics sector, valued at USD $354 billion and contributing 18.4% to GDP, is set to reach $450 billion by 2026-2027, driven by easing FDI norms, GST implementation, globalization, e-commerce growth, and government initiatives like “Sagarmala,” “Make in India,” and “Gati Shakti.” Despite a World Bank ranking of 38th in 2023-2024, the industry’s logistics cost is dominated by the unorganized sector, which accounts for 99% of the USD $150 billion total. Reducing logistics costs from 14% to 9% of GDP could save USD $50 billion, enhancing global competitiveness and potentially boosting exports and job creation.
- India’s rapidly growing economy and infrastructure development have led to a significant increase in the demand for project logistics services, particularly for the transportation of overweight and oversized cargo as the country embarks on ambitious projects in sectors such as construction, energy, and manufacturing, the logistics industry faces the challenge of safely and efficiently moving heavy and bulky cargo across the country’s vast and diverse terrain.
Risks
- The performance of companies in the transportation industry is highly sensitive to fluctuations in company earnings and the price of transportation services. Main factors affecting company earnings include fuel costs, labor costs, demand for services, geopolitical events and government regulation.
- Oil prices are a key factor for transportation, as the commodity’s price generally has an influence on transportation expenses. Gas and fuel prices that rise will increase costs for a trucking company, eating into their profit.
Share Holding as on 16-May- 2024
Disc: invested
