Buy Arshiya International Ltd.; target of `258 - Latin Manharlal Securities

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COMPANY PROFILE

Arshiya International Ltd (AIL), a flagship company of the Arshiya Group is an Integrated Supply Chain and Logistics Infrastructure Solutions provider. The company has multinational operations in the logistics and supply chain management space and is currently involved in the phased investment of ~ US$ 1.5 bn towards creating pioneering logistics infrastructure in India.

INVESTMENT POSITIVES

→      Only Player in India operating Free Trade Warehousing Zones (FTWZ):

→      Regular source of Income – Rental Income + Value Added Service charges:

→      Rail Infrastructure – expansion largely on track:

→      Road transportation business – the missing link in the supply chain now on cards

→      Plans 6^th FTWZ at Mundra SEZ

OUTLOOK AND VALUATION

The future prospect of the logistics sector seems to be bright and is sure to witness exponential growth in the coming years. AIL is well placed in the logistic infrastructure domain to reap the benefits of the likely investment in this sector. At the CMP of `213, the stock is trading at 15x and 12x its FY11E and FY12E EPS of `13.88 and `18.41 respectively. We recommend BUY on the stock with a price target of `258 providing an upside of 21% from the current levels.