had read something on the Covid vaccine to be transported by Gateway ?, was it real news ?; will it be a big positive ?
more so Q121 was amazing on revenues even though economy was shut ?..anyone idea why?
So, Covid Vaccine would require a Huge support of cold chain logistics for transportation of covid vaccine.
Snowman will be getting a huge opportunity here for next 2 years.
Market is either unaware of this news or may be i am over judging the opportunity.
This would add to your convictions
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McKesson, a major drug distributor, won a major federal contract last month to help distribute a coronavirus vaccine. Much of the work, however, will fall to companies outside the medical and drug industries. The major U.S. logistics companies, including UPS and FedEx, already have networks of freezers that they use to ship perishable food and medical supplies.
Will need to watch who will get the contracts in India .
after some time when i revisit the screener for the data i catch some numbers in fixed asset and depreciation which is not encouraging to play in this company
also i found that
i may be wrong in my understanding please correct me if my understanding is wrong . THIS VEY STRONG RED FLAG for me
Disc; not invested this is not any buy sell recommendation , i am not sebi approved analyst or equity advisor
You are computing it in an incorrect manner sir.
To compute total depreciation which co. expensed in P&L, you should add up since 2009-2020 which will come to 316 Cr.
Accumulated depreciation depicts the TOTAL depreciation over the years on the TOTAL gross block. So, adding up accumulated depreciation over the years doesn’t denote anything
clarity on the volume and timelines
Temperature control
storage capacity.
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SNOWMAN LOGISTICS
Adani logistics and Adani port and special economic zone reduced the stake from 26% to 23.43% during 20-26 Nov 2020.
Snowman Logistics Limited (Snowman) and SpiceJet have signed a MOU for
jointly engaging in storage, transportation, and distribution of COVID-19 vaccines from various
manufacturers, across India and internationally, in the required temperature-controlled zones.
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SNOWMAN LOGISTICS
Adani logistics and Adani port and special economic zone reduced the stake to 18.39% during 8-10 Dec 2020.
https://www.bseindia.com/xml-data/corpfiling/AttachLive/5A08EA67_E858_4B7E_88BC_6CDC5DA7B2EE_094720.pdf
Cold storage, crucial to COVID-19 vaccine, has caught Wall Streetâs attention As countries prepare to distribute millions of COVID-19 vaccines â some of which require storage as cold as the South Pole in winter â the highly specialized operations are in heavy demand. Wall Street is rushing to grab a piece of the action…
Does it related to snowman also ???
It is not disclosed Who has bought when Adani sold
Detail post
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Competitors being covered in the media…
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Indian cold storage market is highly unorganized. Most of them cater to only rural areas where the ambient temperature is needed. These cold storages cater to single commodities like Apples, grapes etc. There are only a handful of players in the organized market like Snowman logistics, Coldex, Coldstar. Out of which only Snowman is a listed one.
Snowman Logistics:
Clients: GSK, Abbott, Bharat Biotech, Zydus, Novozymes as some big players.
Effectiveness: Have 31 warehouses with 300 trucks and 255 chambers. Each truck and warehouse can maintain a temperature between minus 2 and plus 8-degree centigrade.
Cons:
- The company is highly inefficient in the case of asset management.
- Due to the decline in its Revenue Company has delivered a poor ROCE of 2.67% over the past 3 years
- The company is majorly a loss-making company.
Pros:
- The company has been effectively managing its operating profit margins of 21.38% for the last 5 years.
- The company has low debt on its book.
Endnote: May gain short term momentum on account of transportation of COVID vaccines but not for long term investments due to the presence of various other players. It operates in a B2B business and hence attracts less profit margins
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All these news articles point to the fact that warehouses play a major role in the working of ecommerce(Amazon ,Flipkart,Meesho,Shopee etc )and quick commerce ( Dunzo, Instamart,Bigbasket ,Natures Basket ,Instacart etc) .Operating warehouses can be major revenue driver going forward for Snowman as they have temp controlled warehouses which is needed for many grocery items(frozen food, fruits,vegetables, ice cream etc) . Warehouses here can play the role of dark stores . Quick commerce is gearing up for an explosive growth in India
In my opinion as Snowman is one of the listed warehousing player in India it is set to grow exponentially.
Would like to see some counter arguments or opinions regarding this .
Regards George
(Disc-Not invested,Interested , The above inferences can be completely wrong)
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The company is now focusing on setting up warehouses for ecommerce .
From the article:
“We are going to invest around Rs 425 crores in the next three years. We have started hunting for land. We have shortlisted some land and may buy a couple of pieces this quarter. We expect to add another 15 percent capacity in the next 12-18 months in terms of pallet position, and we will also be adding two more eCommerce facilities in the next six months.”
The company expects to fund the expansion through debt and internal accruals.
The management seems very upbeat and confident of delivering 280 to 300 crore revenue in FY22 itself and once the additional warehouses come up the revenue could be much higher.(Source:Snowman Logistics Bets On Enhanced Operational Capacity; Eyes Rs 280-300 Crore Revenue In Fy22)
(Disc: Was tracking from last year ,recently invested . This is not a buy recommendation do your own research before buying this stock)
Internal accruals constitute only 25 per cent in their CapEx and debt is getting added to books at a rapid pace. Margins have been hovering in the range of 20-25 per cent. Revenue growth alone will not make much difference. They should be able to show consistancy in margin expansion. High inflation may hamper such expansion.
Invested
1 Like
Any thoughts on the sister company Gateway Distriparks Ltd