I'm lazy to write investing threads. Hell, I'm lazy to read long investing threads too. So I'll try to write short 5 point thesis threads for companies I hold or am tracking, starting today 😀
Here's the first one on an iconic logistics giant which is turning around: Gati Ltd
Here's the first one on an iconic logistics giant which is turning around: Gati Ltd
1. Gati was acquired by Allcargo two years back. They benefit Allcargo's multimodal network and customer base. They have hived off most non-core operations and now operate majorly in Express Logistics: fastest growing part of the logistics industry (CAGR of 15%+)
2. Allcargo hired Pirojshaw (Phil) Sarkari as Gati's CEO - he is an Indian logistics legend and arguably one of the most celebrated, experienced and successful Indian logistics leaders. He set up UPS India and was also CEO of Mahindra Logistics through their rapid growth phase.
3. Gati already has one of India's largest distribution network: they reach 99% of Indian pin codes. They are now focusing on tech upgrades and fixing their operations. They are back to profitability in the last two quarters and are sitting on massive potential operating leverage
4. CEO says their margins will be 9% by Q4 and double digit in FY24. They were 4.5% last quarter, 3% aggregate over 12 months. Topline to double in 3-4 years to 3000cr. Gati trades at 1.25 times sales. TCI Express trades at over 6 times sales, at 16% margins. Gati can get there!
Summary:
- Great starting valuations
- Strong leadership and parentage
- Rapid and secular industry growth
- Industry consolidation underway: national players gain efficiency with scale and drive put regional players
- Expanding margins
- Huge runway
Pls RT if useful 😀
- Great starting valuations
- Strong leadership and parentage
- Rapid and secular industry growth
- Industry consolidation underway: national players gain efficiency with scale and drive put regional players
- Expanding margins
- Huge runway
Pls RT if useful 😀
Why not buy Allcargo instead? Because Allcargo will grow much slower. It is more international facing and we have a global slowdown comjng. Also Allcargo sales likely to go down with falling ocean freight rates.
Gati is purely domestic logistics: cleaner play on domestic demand
Gati is purely domestic logistics: cleaner play on domestic demand
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