Arshiya International - Lesser Known Logistics Stock To Buy

Arshiya International Limited is a supply chain and logistics infrastructure company. It offers end-to-end logistical support with total integration for global shipping services. It also develops five free trade warehousing zones (FTWZ).

During the fiscal year ended March 31, 2009, the Company’s business segments comprise: logistics operations and related services, container freight station (CFS)/ free trade warehousing (FTW) operations and related services, rail transport operations and others. Its subsidiaries include Arshiya Distripark Ltd, Arshiya Logistics Infrastructure Ltd, Arshiya Rail Infrastructure Ltd, Arshiya Supply Chain Management Private Limited and Arshiya International Singapore Pte Ltd.

The company has around six rail rigs operational at present and it should increase to around 10-12 over the next three-six months. The second story is free trade warehousing story in Mumbai. It should be operational over the next one-two months. They have recently approved of setting up another one in Nagpur, which is over 42-43 hectare and the one in Delhi should start become operational in the Q2 of 2010-11.

The only problem, which the company faces, is strain on its balance sheet. The company has got lot of capex plans. They have so far handled the financials pretty well but there is going to be strain on the balance sheet. That’s the only negative. The positive is that the company is out to redefine logistics and they have taken a step forward.

Arshiya should be reporting a net profit of around Rs 110 crore. For 2010-11, on an equity of 11 crore, face value of 2, the earnings per share works out to around Rs 20 and free trade warehousing zones is a big trigger for this company. If all goes well and if the company does implementation well, as so far it has done well, handles its finances well, then the strain on the balance sheet is taken care of.

The biggest positive as far as Arshiya goes is whenever I talk to investors, clients of us, about Arshiya, not many of them are still aware of the existence of this company in the logistics space. That very well shows that as far as our shareholding goes not many people are aware. It’s not very broadly based right now. Maybe over the next six-nine months we will be talking about Arshiya possibly as a different company.
Ref: Excerpts of discussion of Mehraboon Irani on Moneycontrol. (He is from Centrum Stock Trading Brokers)

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