Monday, April 19, 2010

Sical Logistic.....another Logistic Co with huge growth Potential......

I donno why people keeps on asking me about giving more and more stock to buy....I think I write new stocks at regular interval......Just I wrote about Rathi Steel and Power and am back today with a new stock here , named Sical Logistic Ltd , a A C Muthiah, Co, owner of SPIC , a bluechip co of yesteryears.....a fertilizer co....and after reading the below article I can say that A C Muthiah is keen to turnaround SPIC and that hence SPIC can be an excellent buy.....

Here is what I read in Livemints epaper:

Sical Logistics Ltd is selling its 27% stake in a new container handling facility at Chen- nai port to PSA International Pte Ltd, its dominant joint ven- ture partner, two people familiar with the matter said.

“Sical has applied to us for permission to sell its 27% stake in Chennai International Ter- minals Pvt. Ltd to PSA,“ said an official at Chennai port.
“We have referred the proposal to the legal department.“
Proceeds from the stake sale will be used by the parent AC Muthiah group to restructure its debt-ridden fertilizer firm Southern Petrochemical Indus- tries Corp. Ltd (Spic), the sec- ond person said. The two people did not want to be named.
L.R. Sridhar, managing di- rector of the Chennai-based Sical Logistics, said the “deal has not been done yet“.
A venture between PSA and Sical had invested around Rs600 crore to build the new facility, which it will operate for 30 years.
PSA, the world's second big- gest container port operator, is fully owned by Temasek Hold- ings Pte Ltd, the investment arm of the Singapore govern- ment. Chennai is India's sec- ond biggest container port af- ter Jawaharlal Nehru port near Mumbai.
But Sical wants to exit the venture as it does not forsee a meaningful role in its operation, management and maintenace because of the minority share- holding, the second person said.
The PSA-Sical facility, the sec- ond container handling termi- nal at Chennai port, is designed to handle 1.5 million standard containers a year.
Chennai International Termi- nals, the special purpose vehicle for implementing the project, was originally structured with PSA holding a 60% stake and Si- cal taking the balance. However, in 2008, because of the financial trouble facing the AC Muthiah group, Sical decided to settle for a 27% stake in the joint venture.
“Sical did not support PSA in raising debt for the project, which was totally done by the Singapore operator by leveraging its balance sheet,“ the second person said. “PSA is of the view that Sical was not giving any val- ue addition to the project.“
Sical was also facing problems in getting its port concessions assigned in favour of a subsidiary created in 2007 to house its ownership in concession-based, asset-intensive terminals in the inland and port infrastructure space.
These include Sical's 74% stake in a new iron ore-handling terminal at Ennore port and its 37.5% stake in a container-han- dling facility at Tuticorin port, both in Tamil Nadu. Sical is also setting up iron-ore handling fa- cilities at the Union govern- ment-owned New Mangalore port.
Other projects in this portfolio are Sical Distriparks Ltd, the firm's container logistics busi- ness, and Sical Multimodal and Rail Transport Ltd, its container train operating unit.
Sical Logistics also owns a 74% stake in subsidiary Sical In- fra Assets Ltd, with Old Lane Mauritius IV Ltd, a vehicle of Old Lane Opportunities Funds, holding the balance equity.

My Comments:
From the above article on Sical wanting to sell its stake in Chennai International Terminals Pvt. Ltd to PSA,as AC Muthiah wants to turnaround SPIC by infusing these money in SPIC....
what else one can see is the various stake Sical Logistic is having in different Companies...
Let us see what they are:
1)  Sical's 74% stake in a new iron ore-handling terminal at Ennore port .
2) 37.5% stake in a container-handling facility at Tuticorin port.
3) Sical is also setting up iron-ore handling fa- cilities at the Union government-owned New Mangalore port.

4) Sical Distriparks Ltd, the firm's container logistics business, and
5) Sical Multimodal and
6)Rail Transport Ltd, its container train operating unit.

 Now can any investor ignore such an excellent investment opportunity?
Mcap is at 381 cr while sales is at 473 cr last year which is less then Mcap and in all probability , sales should cross 550 cr this year.....
The value is still to be unlocked about all the above stake which I have mentioned here.....
I feel that Sical Logistic is a screaming buy at this rate......
I may be wrong in my analysis so Due Diligence is a must for each and everyone before buying or selling Sical Logistic.....


  1. Since its about logistic, do you have any views on Aqua Logistics?

  2. Mitul,
    I do not track Aqua Logistic...

  3. Hi Rajiv Sir, wht is your view about the comments which Mr Shock presented about GMR Ferro in Cronimnet alloy call blog ?
    Please let me know your views, since I am holding big amount of GMR ferr0, and currently in RED.. rgds Om

  4. Omkar,
    First thing is at cmp, one can never be in a loss with my call on GMR as I recomended GMR at 34 and now the price is 43 means still up by rs 9 from my recomended price....
    Even after I wrote about GMR and buy back news came it was still at 38 or even on that rate one is still in the only way one can be in loss is if you have bought it LATE...if you do not buy when it needs to be bot then what I can do?
    Om, I can't do anything about it...I am sorry...

  5. This comment has been removed by the author.

  6. Dear Rajeevji ,

    What would you suggest , to buy SICAL or SPIC ??
    Regards ,


  7. This comment has been removed by the author.

  8. Dear Rajeev,

    Sical's debt equity ration is nearly 3.82. Considerable portion of their earnings go into interest payment. Do you still think they will overhaul the debt and give a healthy EPS given their capex needs and interest outflow? I want to know your thoughts on this.


  9. Sir Rajeev, Your command over Stock market is fantastic sir.. Rarely sees such personalities in stock market, many say they are good but in reality they are zero. Hats off to you sir..

  10. Murli,
    That is the problem with AC Muthia's gr Co.High debt.That happened with SPIC....and there get drowned in debt and a wonderful Co SPIC started making loss....but seems now the wants to clean up the mess and regain the lost reputation....with so much of stake in sevral Cos, this much of debt is supposed to be there...ofcourse it is on higher side but I think odds are in favour of Sical,Spic now...

  11. Rajiv ji
    in stock mkt above 90% so called analyst make fool to innocent public. they give buy call in blue channel magazine newspaper etc to distribute their holding which they buy at lower level.
    But when they follow people like you they make profit first time(on your recomandation)and exit when they see near 20-25% profit from their buy price. and according to human nature YE DIL MANGE MORE they want new recomandation from you because which scrip they sold not come near their buy price or quote above their sale price.
    so Rajiv ji excuse us when we demand new tip like free gift from you.
    Rajiv ji thanks very much for your regural reply.

  12. Hi Rajeev,
    Can you pls let me know your views on IKF tech. I searched your blog about it and u had mentioned that they are in biofuels and u r not much interested in biofuels. So can u pls give ur view regarding their software and BPO business. Recently they have collaborated with wapmerr ltd.
    Pls let me know ur views.

  13. Hi Rajeev ,
    Good Morning and nice article on Silcal and SPIC .Thanks lot for sharing your KNOWLEDGE with all.It is my habit or rather ADDCTED TO read your BEATING THE DALAL STREET ?I cant help .Keep in touch,with due regards and respect

    Vakharia M J

  14. Hi rajeev bhai I still want to ask which is a better buy among spic and sical,regards namit I ll like u to guide me on first leasing,,,,,,,,cheers

  15. namit
    spic and sical both are buy but if u want anyone to buy than sical is better choice in my view.
    but we both wait for captain(advice)

  16. namit,
    don't ask such questions......that is u to decide...

  17. Hi Rajeev,
    You never answer any of my query. I know you are busy with other work but u reply to others but I never get any reply. Can u pls spare some time and let me know ur views on IKF tech posted above.

  18. Share,
    IKF is a LT story....will take time for buy onlly for LT....

  19. Bought into Rathi steel and power, the company looks good. This one SICAL...I think a little bit of waiting is in order. One more quarter?

  20. Dear Rajeev, There is a company Sicagen that was sepearted from the Sical Logistic, the company loks attractive seeing their Mcap , BV and sales. What's your suggestion? Hold sicagen or not?

  21. hi pankum,
    Sicagen is definately a hold...looks attractive even at this rate.....I like Sicagen...I m tracking it since long....

  22. Comments search result:

    though i have been bullish in sical...some late news have been disturbing.

    sical planning to exit its stake in Chennai international container terminal.
    i`ve been bullish on sical because sical is operator of container freight with sical opting out and management coming out to say it was not core business of sical...i wonder that only bulk handling is its main operation.and over time i see less iron ore being exported out of India as resources deplete.

    hence sical moving out of cfs is a case for my exit from those that the very purpose of mine as investor in sical is diluted.hence exited....