Shares of this logistic solution provider can double your money in one year from current levels. Shares of Gati have largely remained dormant and gave a negative return of around 10% in the past one year. Across the time frames of one month, three months and six months, it declined over 9%, more than 12% and around 21% respectively. However, brokerage house ICICI Securities believes the stock can outperform going forward.
As per the brokerage, the logistics player stock can gain around 110% from Wednesday’s intraday price of Rs 133.45 per share.
The brokerage’s optimism lies in commissioning of Farukh Nagar sorting centre in Haryana, a 113,000 square feet facility located inside Allcargo Logistics Park. As per ICICI Securities, this facility has helped the logistic provider improve service parameters for Gati. It said the management believes that the current infrastructure is adequate to meet Gati’s NCR infrastructure needs for the next 10 years.
Besides, the management focus on enhancing MSME mix is another positive for the stock. “The path to gaining traction from the existing 3,000+ MSME customer set (many inactive) is through sales relationship and management doesn’t feel particularly threatened from the incremental competitive intensity either from new entrants or incumbents,” it underlines.
Saying execution underlines strengthened guidance, ICICI Securities maintained a buy call on Gati with a target price of Rs 288 per share in one year. The upside translates into around 110% on Tuesday’s closing price of Rs 133 a share.
“We see the potential of a sharp improvement in return ratios for Gati as revenue and margin reach their potential. Currently, goodwill in Gati (from past) is ~Rs4.3bn and the assets held for sale stand at ~Rs1.8bn,” the brokerage said.
Shares of Gati closed almost flat at Rs 134 per share on the BSE on Wednesday.
Earlier, Gati reported a 7.3% decline in net Sales at Rs 376.73 crore in the quarter ending March 2022 from Rs 406.64 crore in March 2021. Quarterly Net Loss came at Rs. 22.38 crore in March 2022, up 86.38% from Rs. 164.36 crore in March 2021.