Overview of Western Career India Limited’s Business Model:-
Western Career India Limited which works in logistics and supply chain industries and their client list includes Ta Steel, Jess, Dub Steel, Jindal Steel, Vedanta Hindustan Zinc and many other companies like BPCL and currently Western Career India Limited itself. Has been present with the IPO, hence I am Gaurav Nandi.
The business of Western Careers India is a bit unique but just like the name, their business is similar. The company provides transportation and logistics service. It transports the raw material or finished goods of big companies from one place to another and even delivers to the end customer and this company provides 4 PL logistics solution which includes road, railway and air.
The advantage of this is that transportation is included, their customers get every type of logistics solution at one place and their focus is on end to end supply chain management, which includes wire housing, transportation, distribution or even custom clearance.
Market Presence and Share:-
And as per the latest data, they have a market share of 6% in the domestic market and a market share of 2% in the export market and their core market is in the major industrial and commercial areas of India like Mumbai, Kolkata, Delhi and Bangalore.
Apart from this, they have more than 50 branch offices and 16 warehouses which they have taken on lease in such cities and the company uses many advanced technologies in its logistics solutions which include GPS enabled vehicles and real time tracking, which On the go, the customer knows where is the live status of their shipment or logistics and as per the latest data, this company has a total of 400 GPS enabled heavy commercial containers, apart from this, more than 400 shipping containers and 13 light commercial containers.
Diverse Client Base and Industry Reach:-
Apart from this, one more interesting thing is that one of the majority money company spends on buying these Wickles and Western Career India has more than 1647 satisfied clients belonging to different industries. Such as Pharmacy, Tikal, FMCG, Chemical, Oil and Gas, Textile Power, apart from this, there are many other different industries too and if we look at the latest data, the company generates maximum revenue from metal segment at 53.26% and revenue at 19.46%.
The revenue comes from the FMCG segment, 7.04 percent of the revenue comes from the pharmaceutical and chemical sector, 4.76 percent of the revenue comes from Oil and Gas and the remaining 15.4 percent of the revenue comes from Utilities and other segments. Along with this, the financial performance of the company is also quite impressive in the last 3 years.
Financial Performance:-
Since last year, all the three asset revenue profits of the company have been continuously increasing as well as currently the return on equity of the company is 22.4%, return on capital employed is 29.2% which is very impressive, apart from this the debt to equity ratio of the company is 0.67. As a logistics company, the company is also an operation. Dead to equity ratio is good.
Weston Carrier India tries to run its business on satellite model, but still there is a lot of expense in their business.
Profit Margin Concerns:-
Their business operation is heavy, due to which Their profit margin declines a lot, yes maybe their profit margin has increased year on year but still at present their profit margin is only 4.77% which I personally feel is very low.
The profit margin in the business should be at least 10%. India’s logistics market is growing very rapidly, in which the trend of digitalization and multimodal logistics solution is more. Currently, the growth rate of India’s logistics industry is between 10 to 12%. Some major competitors of this company are Container Corporation of India.
Valuation and Competitors:-
Now if we compare them with the help of valuation, the PE ratio of Western Career India comes out to be 16.8 which is less as compared to other peer companies or computer companies, but it is cheaper. The biggest negative side I felt in this company is that the profit margin of this company is 4.77. It is very difficult to make money in business with such a low profit margin.
Operation heavy business. Profit margin is low and limited growth opportunity. I feel that in the long run We may not get that good performance from this company. On the other hand, whether it is the business model of the company or the valuation, both are quite attractive and quite good. So what is your opinion regarding long term investment? Do tell us in the comments below.
IPO Details and Recommendations:-
There is no recommendation of any kind of direct buy sale for coal study purpose, investment trading at any place or any IP, before applying or not applying, definitely study, research, analyze if you want.
The share price will be between ₹ 163 to ₹ 172. With the minimum lot size of 87 shares and the company wants to raise a total of Rs 492 crore 88 lakh from the market with the help of IPO, out of which the maximum part is Rs 00 crore for fresh shoes which is going to be taken to make the loan payment.
Apart from this the company wants to raise some vehicles. etc. want to buy with IO’s money, come to the other side, miner’s lot is 92.8 crores, offer for sale, wherever some exist, there is no demand for PO, hence, I do not think that we can get a good listing gun from this IPO. But if you are very interested in this IPO then you should wait till the
last day of IO i.e. on 18th September around 12:00 noon.
It is not a recommendation of any kind of direct buy sale, investment trading at any place or applying for any aa. First or before applying, do some study, research, analyze.