But some businesses are not complaining.
Two stocks — Tiger Logistics (India) and Lancer Containers Lines, which provide container services to traders — have been seeing a lot of investor interest on the bourses and rallied more than 100 per cent in the last one month.
Lancer Containers, valued at Rs 290 crore, is up 104 per cent in this period. The stock has seen a gradual appreciation in share price, climbing 2,300 per cent in the last five years. Tiger Logistics, valued at Rs 129 crore, has come into limelight only recently.
There is hardly any analyst coverage on the two stocks, as they seem to be too tiny to grab attention. Daily trading volume also remains low, going into a few thousand shares daily on BSE.
Lancer Containers claims to serve locations in 27 countries. On a consolidated basis, its revenue has grown at a CAGR of 42 per cent, Ebitda at 33 per cent and net profit at 55 per cent, the annual report of the company said.
ETMarkets.comThe management said it has brought its net debt down to just Rs 3.4 crore. The cash on hand as on March 31, 2020-21, stood at an all-time high of Rs 18.8 crore.
“Our strong balance sheet now gives us sufficient flexibility to optimise growth going forward. With the global economies opening up and demand for containers remaining strong, we are now putting in place aggressive growth plans to add owned and leased containers,” said Abdul Khalik Chataiwala, Chairman & Managing Director, Lancer Containers, in its annual report released last week.
Most of its publicly available shares are held by individual shareholders. The company had no institutional investors as per June quarter data, while promoters held 74.44 per cent.
Tiger Logistics’ business had suffered due to the pandemic-induced restrictions, but it seems to have recovered subsequently. The company reported Rs 4 crore profit for June quarter on a revenue of Rs 82 crore, which was highest in the last five quarters. The company has a track record of delivering consistent profit to shareholders, data on BSE shows.
The company sees growth opportunities ahead. “The demand for transport and logistics should continue to grow, as the Indian economy remains on a high growth trajectory. The domestic market is unsaturated and the country needs investment in transport infrastructure,” the management said in its latest annual report.
Almost all the publicly available shares are owned by individual investors. Nearly 86 per cent of its shareholders hold shares up to 500 each. The company had no institutional investors as per June quarter data, while promoters held 73.71 per cent.
Why are these stocks surging?
The latest demand for the shares could be due to a sharp rise in freight charges. A recent ET report said charges for carrying a container from or onwards to India are now going at $7,000-10,000, up from $3,000-4,000 six to eight months ago.
The prices have run up due to a severe container shortage, triggered by massive congestion at Chinese ports that are either closed or operating at much lower capacity due to Covid-19 restrictions, along with a huge demand for containers in the US and Europe.
Shareholders would hope the jump in the charges will likely bring more revenue to the two companies. Shares of the logistics companies have been in the limelight in the past couple of years, especially because of the e-commerce boom. India’s increasing exports also bode well for the industry, market commentators say.
