Snowman Logistics

Q1FY23 Concall Notes

  • Primary Businesses: Warehousing (Cold + Dry WH) + Transportation business (incl. Snowlink)
  • Pallets: 130k (Utilisation=89%): so pallets used = 115.7
  • Net debt: 90cr
  • Capex plans:
    - 75-100cr (internal + loan both)
  • Kolkata cold WH:
    - land approval done
    - awaiting buildiong plan aproval from government
    - Phase I: 5k pallets
    - Phase II: 4k pallets
  • New plant: Siliguri- current utilisation at 35% expects to touch 75% by october
  • Growth in the current quarter YoY
    • Warehousing : +15%; (Margins: 35%)
    • Transportation: + 61%; (Margins: 4%)
    • ASP: +6%
    • Overall Margins: 24%
  • QSR Sector has shown a growth of 30-35%

  • Warehousing
    • Change of strategy
      • increased demand for Dry warehousing (currently 15% of revenue) from food and pharma; growing fast and is a customer pull product
      • hence, added 7-8k pallets in dry warehousing via leasing hence asset light
      • Cold WH: Kolkata WH plans on full swing
    • Offer end-to-end solution
      • except manufacturing and selling everything managed by Snowman
      • ie become like a national distributor for them
  • Transportation Business
    • Reefer Vehicles: 249
      • 82 dedicated vehicles
      • 150 available on need basis
    • the latter two are availble via snowlink
      • asset light
      • as do not have to manage drivers, maintainence, fuel etc
      • hence margins are largely protected
    • so total 480 available
    • Snowlink Revenue:
      • 16 cr (last year 6cr); huge potential to grow
      • An aggregator service for cold chain vehicles
  • Snowserve (Dedicated WH)
    • Amazon and Fraazo currently
    • Contracts: 3-9 years
    • 4 cities:
      • Delhi, Mumbai, Ahemdabad, Pune
    • this business can grow 25% yoy


Asset heavy business in a largely unorganised sector.
Trying to improve business economics by multiple initiatives eg growing dry WH business on a lease basis thereby decreasing capes requirements, not expanding fleet rather decreasing it and going asset light by creating an aggregator platform. Also, can be a beneficiary of grocery deliveries by e-commerce players. Execution risks, macro risks and risk from competition/startup space present

Discl: Small Position; tracking


In addition to this they will be adding Dry Warehouses on leases and continue its asset-light approach.

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PFB recent research report on SNLL. The company is well poised in most of the aspects. However, the upcoming economic slowdown will definitely impact growth aspects.

Based on their financial statements, I see some pros and cons (not repeating things in research reports):


  • Their debt is manageable at DE ratio of 0.3
  • Operating profit margin is constant at 24% (can see pressures going forward).
  • The net profit margin (which is close to zero now) has the potential of reverting to pre-2017 levels of above 9%.
  • Have taken steps to scale business in asset light model.
  • Could greatly benefit from infra investment by govt.


  • Very capital intensive business. This will have an impact when liquidity becomes tight.
  • Their equity part in balance sheet did not grow since 2015. In fact, if we look at inflation adjusted growth, it is actually negative. This is a bit of concern. Got to dig into the cash flows to understand what is happening there.

This would turn out to be a great sectoral play if the management has good capital allocation skills. For now, the results are shown only in revenue growth. Yet to see improvements on other aspects.

My expectation is that the stock will be under selling pressure till we see bottomline improvements. Both PE and PB are not moving as of now.

Disc: Have a monthly SIP on this to accumulate slowly.


In Venky’s AR, they mention about need for cold storage facilities. A good case for Snowman and the market opportunity that is still untapped.

Disc: Invested

I now see good scope of snowman…
Logic - Promoter increaaing stake… And retailers decreasing… Results are also coming good…

Disclosure - 5% pf position…


Promoters still buying.
With RoE = 2.6 and PE > 75 now, I think the stock is highly overvalued…
The Div Payout is expected - but why does this stock have so much of run off ?

Discl - invested and enjoying the ride, with a worry of price running ahead of valuations …

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Promoters constantly buying. Confused about the valuations since promoters know the actual value of the business. Since they’re buying constantly at upper and at every fall (as noticed).

What does that mean? Are they too optismitic of the business? Confidence or over confidence?
Can they also participate in selling once stock become highly over valued.

Confused in forming an opinion.

Disc - Tracking and holding Gateway Distripark.

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In the last concall (Q3), mgmt has given a guidance of 1k Cr sales by FY 26, which means the EPS can be alteast expected to be doubled … I believe this will be the bookish case of PE contraction where by the Sales / EPS Growth will rise however the price will stay in this range …

My biggest worry is ROE in this company & the dividend payout ratio… the company is paying out all it’s profits and not re-investing and mgmt has somewhere in the past also affirmed that they will continue with the dividend policy which “might” be one of the reasons for promoters buying …
The continued payout increases the PE ratio, promoters buying sustains the price level and ROE struggles as EPS doesn’t grow as the earnings are not ploughed back into the business for growth…


Exited the stock. stocks with good earnings and fair valuations will survive through the upcoming events.