Committed Cargo Care Limited IPO

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i. Committed Cargo Care provides integrated logistics services such as cargo management solutions, order management, international freight management, customs and cross-border movement, heavy and over-dimensional cargo movement etc. They are well-established network and tracking software enables to provide fast and reliable information to the client. Thus, capable of handling – packaging, warehousing, freight forwarding, custom clearance of export and import cargo of commercial consignments, diplomatic and non-diplomatic consignments, special services and forwarding of cargos, with an objective to provide the most convenient and cost-effective transportation method by air, courier, sea and road any time & anywhere around the globe

ii. Their customers operate in various sectors across India, including automotive and heavy engineering, telecom, food and agro, fastmoving consumer goods (“FMCG”), paint, handicrafts, ecommerce products, garments, pharma and dairy. The company believe that business model enables them to provide solutions that enable the customers to leverage the distribution network which optimizes the performance, cost and efficiency of their supply chains, shortening their lead-time to market resulting in lower inventory costs to the customer.

iii. The Promoters have a combined experience of more than 25 years in logistics industry. Driven by the passion for building an integrated logistics company, backed by their experience, their Promoters have been the pillars of the Company’s growth and have built a strong value system for the Company. With their enriching experience and progressive thinking, they aim to continue to grow in logistics industry.

Competitive Strengths

i. Smooth flow of operations
ii. Experienced Promoters and Management Team
iii. Existing Supplier Relationship

Objects of the Committed Cargo Care Limited IPO:

The Company proposes to utilize the Net Proceeds from the issue towards the following objects: i. Meeting working capital requirements ii. General corporate purposes
DRHP of Committed Cargo Care Limited IPO
RHP of Committed Cargo Care Limited IPO

Committed Cargo Care Limited IPO Details:

Open Date: Oct 06 2023
Close Date: Oct 10 2023
Total Shares: 3,244,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue IPO
Issue Size: 24.98 Cr.
Lot Size: 1600 Shares
Issue Price: ₹ 77 Per Equity Share
Listing At: NSE Emerge
Listing Date: Oct 18 2023

Promoters And Management:

RAJEEV SHARMA aged 55 years is the Managing Director of the Company. He is one of the promoters of the Company. He has been associated with the Company since its incorporation as a Director and Promoter. He is an arts graduate from Delhi University and has an experience of more than 2 decades in Logistics sector. He mainly handles Import customs and is the in charge of the Import division, custom brokerage, forwarding activities, administration and is also responsible for liaison with Custom officials. NITIN BHARAL aged 50 years is the founder and the Whole Time Director of the Company. He holds a bachelor’s of commerce degree from Delhi University in the year 1993. He holds experience of around two decades in Supply Chain – Sales, Operations (Airfreight & Sea freight), Contract Logistics, Cross Country business, Custom Brokerage, Warehousing, Procurement/Sourcing & Trading activities. YASH PAL ARORA aged 55 years is the founder of the Company and is currently the Whole Time Director of the Company and handles the Import Operations of the Company. He has more than 20 years of experience of dealing in Operations (Airfreight & Sea freight), Custom Brokerage.

Financials of Committed Cargo Care Limited IPO:

Particulars ( In Lakhs )
2021
2022
2023
Revenue from Operations 11,377 14,597 12,222
Other Income 8 15 21
Total Revenue 11,386 14,612 12,243
Direct Expense for operation 10,038 12,860 10,461
Employee benefits expenses 720 689 749
Other Expenses 272 608 278
EBITDA 356 455 754
Depreciation & Amortisation 20 25 23
Finance Cost 21 11 10
EBIT 336 430 731
OPM (%) 3.13% 3.11% 6.16%
PBT 315 418 721
Tax 83 110 188
PAT 232 309 533
NPM (%) 2.04% 2.11% 4.35%
No.of Shares 108.13 108.13 108.13
EPS 2.14 2.85 4.93
 

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Committed Cargo Care Limited 122 5 4.93 15.6 77 83
Jet Freight Logistics Limited 417 0 0.01 N/A 10 46
Total Transport Systems Limited 590 5 3.25 73.3 132 213
Tiger Logistics (India) Ltd 433 23 21.95 21 407 430
* All the data is as per FY23.

Recommendation on Committed Cargo Care Limited IPO:

Review and Recommendation of Committed Cargo Care Limited by IZ team is 2/10 Committed Group stands as a paragon of operational excellence in the logistics industry with its ISO 9001:2015 certification and global reach. Strategically located across key Indian cities and harboring a reliable network of associate offices worldwide, the company sets a high standard in import and export cargo management. Committed Cargo operates in a capacity akin to a commission agent, specializing in facilitating the import and export of goods for its clients. While it does not own any transportation assets, the company boasts a robust network that allows it to coordinate and execute cargo movements via multiple modes of transport including road, sea, and air. By leveraging this network, Committed Cargo is able to offer its clients comprehensive logistics solutions while earning commissions for its services. The logistics sector in which Committed Cargo operates is intensely competitive, characterized by thinning margins. The reason for this is the presence of numerous players vying for a share of the market. Given the intense competition, the company faces constant pressure on pricing, making it a challenging environment to maintain high profit margins With accreditations from industry-standard bodies like FIATA, ACAAI, and IATA, it offers a wide array of services encompassing cargo management, international freight, customs clearance, and specialized freight forwarding. The service offerings don't just end here; they extend to specialized areas such as pet relocation, life sciences logistics, and hazardous goods handling. This demonstrates the company's commitment to being a comprehensive logistics service provider. Despite the general compliance, the report notes that there are arrears—unpaid or overdue amounts—for certain statutory dues. Specifically, there are outstanding dues related to Income Tax and TDS (Tax Deducted at Source) amounting to Rs. 18.78 Lacs and Rs. 0.20 Lacs, respectively. These are overdue for a period of more than six months from the date they were due. The company has shown timid financial performance, growing its revenue from Rs. 113 Crore in FY21 to Rs. 122 Crore in FY23. So, in the last 3 years, the CAGR growth is jus 2%. However, its EBITDA and PAT have more than doubled in the same period which shows operational optimisation before IPO. The EPS of 4.93, a market capitalization of 83 Crore, and a P/E ratio of 15.6X as of FY23 are indicative fully priced in valuation.

Lead Manager of Committed Cargo Care Limited IPO:

  1. Fedex Securities Limited

Registrar of Committed Cargo Care Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Committed Cargo Care Limited Khasra No. 406, Ground Floor, A - Block, Gali No. – 8 Mahipalpur Extn., New Delhi– 110037 Phone: 011-46151111 Email: hr@committedgroup.com Website: http://www.committedgroup.com/

Discussion on Committed Cargo Care Limited IPO:

1 Comment

    Reasons to Avoid Investing in Committed Cargo

    1. Intense Sector Competition

    The logistics sector is highly competitive with a multitude of players providing cargo services. The sheer volume of competitors puts constant downward pressure on pricing and profit margins, making it challenging for any single company to achieve significant growth or pricing power.

    2. Potential for Internal Conflict

    Committed Cargo has a group company, NEDLLOYD LOGISTICS INDIA PRIVATE LIMITED, that operates in the same line of business. This presents a potential for conflict of interest, especially in terms of client acquisition and resource allocation, which could adversely affect the company’s operations in the long run.

    3. Stagnant Revenue Growth

    The company has demonstrated minimal revenue growth, a concerning sign for potential investors looking for a growing enterprise. Stagnant revenues could indicate a lack of market penetration, operational inefficiencies, or both.

    4. Financial Management Concerns

    The company has had issues related to delayed payments of Income Tax and TDS, along with pending Service Tax cases. These financial irregularities raise concerns about the company’s ability to manage its working capital requirements efficiently. Such financial mismanagement could impact the company’s credibility and operational stability.

    5. Fully Priced-In IPO

    The upcoming IPO is set at a P/E ratio of 15x, which suggests that the stock is fully priced in. This leaves limited room for upside potential, making it a less attractive investment option at the given valuation.

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