About the Company

Gati Limited is engaged in providing distribution and supply chain solutions. to customers across
diverse industry verticals. Gati has a strong market presence in the Asia Pacific region and SAARC
countries. The Company has offices in China, Singapore, Hong Kong, Thailand, Nepal and is planning
to foray into other markets.

Current Market Price

Rs. 118.85 ( Feb 12, 2018 4:00 PM)

Balance Sheet (in Rs. Cr.)

Particulars March 2017 March 2016

Total Share Capital 17.64 17.55

Equity Share Capital 17.64 17.55

Share Application Money 0.00 0.00

Preference Share Capital 0.00 0.00

Reserves 610.88 545.97

Revaluation Reserves 0.00 0.00

Net worth 628.52 563.52

Secured Loans 117.21 107.41

Unsecured Loans 124.88 139.99

Total Debt 242.09 247.40

Total Liabilities 870.61 870.21

Gross Block 150.53 144.62

Less: Accum. Depreciation 21.29 16.67

Net Block 129.24 127.95

Capital Work in Progress 0.00 0.00

Investments 663.46 658.32

Inventories 1.47 1.31

Sundry Debtors 67.71 73.77

Cash and Bank Balance 35.03 20.44

Total Current Assets 104.21 95.52

Loans and Advances 129.67 163.96

Fixed Deposits 0.00 0.00

Total CA, Loans and Advances 233.88 259.48

Deferred Credit 0.00 0.00

Current Liabilities 100.48 117.36

Provisions 60.54 61.57

Total CL and Provisions 161.02 178.93

Net Current Assets 72.86 80.55

Miscellaneous Expenses 0.00 0.00

Total Assets 865.56 866.82

Contingent Liabilities 108.39 143.89

Book Value (Rs) 71.27 70.32

Valuation Analysis

Particulars FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Total Income from Operations 1,273.43 1,116.57 1,648.11 1,667.02 1,690.99

(Rs. Cr.)

Growth (%) – (12.32 %) 47.60 % 1.15 % 1.44 %

PAT (Rs. Cr.) 17.27 28.31 56.56 49.23 37.29

Growth (%) – 63.93 % 99.79 % (12.96 %) (24.25 %)

Earnings Per Share – Basic (Rs. ) 1.11 2.70 4.72 4.21 3.35

Earning Per Share – Diluted 1.11 2.00 3.48 3.11 2.49

(Rs. )

Price to Earnings 24.10 40.50 62.08 35.18 50.30

Sources of Funds / Liabilities used by GATI

Particulars FY 2013 FY 2014 FY 2015 FY 2016

Share Capital 17.32 17.45 17.50 17.55

Reserves & Surplus 769.69 755.39 531.19 545.97

Net worth (shareholders funds) 787.01 772.84 548.69 563.52

Minority Interest 115.42 117.32 80.38 88.74

Long term borrowings 237.81 267.17 270.94 290.31

Current liabilities 396.84 394.76 406.05 463.02

Other long term liabilities and provisions 12.60 19.18 30.44 44.78

Deferred Tax Liabilities 10.67 6.08 7.35 9.66

Total Liabilities 1,560.34 1,577.35 1,343.85 1,460.03

Application of Funds / Assets / Investment policy adopted by

GATI

Particulars FY 2013 FY 2014 FY 2015 FY 2016

Fixed Assets 411.61 418.10 296.48 312.37

Noncurrent Investments 20.21 54.78 64.71 64.71

Current assets 532.20 522.03 500.71 595.61

 Long term advances and other noncurrent 149.44 135.56 35.07 40.45
assets

Goodwill on consolidation (net) 446.88 446.89 446.88 446.88

Total assets 1,560.34 1,577.35 1,343.85 1,460.03

Additional Investment

 On august 25, 2007 GATI acquired 52.96% equity stake in ‘Kausar’ India Ltd, a Delhi-based
company.
 Without disclosing the sum, GATI on December 2, 2016 invested in cloud-based software
solutions company ‘Brown Tape’ to develop a unique single-window solution to customers
by integrating its established pan-India logistics network and Brown Tape’s multi-channel
order management platform.
 In 2012, GATI signed an agreement with Kintetsu World Express Inc.(KWE) to set up a joint
venture in which the Japanese company will invest Rs. 267.7 crore for a 30% stake.
 In 2013, GATI invested 250 crore for setting up 4 lakh sq ft warehouse space in India.

1. Return on equity
ROE or RONW indicates the amount of profit which the company generates on the capital invested
by the equity shareholders. When calculating the ROE on a consolidated basis, the numerator is
profit after tax and after minority interest and share of associates. The denominator is the net
worth (i.e. share capital + reserves & surplus). This is because net worth in the denominator
represents the capital employed ‘only by the shareholders’ of the company. ROCE measures the
overall profitability of the company’s operations while ROE draws attention to the return generated
by the owners (i.e shareholders) on their investment in the business. A company may operate with a
very healthy ROCE but it may not add much value to a shareholder if most of the income generated
is used up in servicing the company’s debt (i.e. interest charges).

ROE = PAT (profit after tax) / net worth (share capital+ R&S)

Ex:- for financial year 2015-16, net worth= 563.51 and PAT= 49.23

Therefore ROE= 49.23/563.51 = 0.087 i.e. 8.74%

Efficiency Analysis

Particulars FY 2013 FY FY 2015 FY 2016

2014

ROCE 7.37 7.27 15.47 13.88

ROE / RONW 1.22 3.03 7.51 8.74

 2. Earning per share
EPS is a measure of the profit available to the equity shareholders on a per share basis. It is
calculated by dividing the Profit / (Loss) after Tax, by the Number of Shares Outstanding.

A high EPS indicates high profitability. If the profitability goes down, so does the EPS. On the other
hand if the number of outstanding shares increases, it negatively impacts the EPS unless the
profitability rises proportionately. For this reason, companies carefully plan the issuance of fresh
equity.

EPS= PAT (profit of loss after tax) – Dp ( dividend paid to preference shareholder)/ no.
of equity shareholders.

As equity share capital is Rs.175500000 and face value of each share is 100, therefore

No. of equity shares = 175500000/100= 1755000 shares

EPS = 492300000/ 1755000 = Rs. 280.51 per share

3. Long term Debt to Equity Ratio

Companies operating with high long term debt to equity on their balance sheets are vulnerable to
economic cycles. In times of slowdown in economy, companies with high levels of debt find it
increasingly difficult to service the interest on their borrowings as profit margins decline. We believe
that long term debt to equity ratio higher than 0.6 – 0.8 could affect the business of a company and
its results of operations.

Gati’s average long term debt to equity ratio over the last 3 financial years has been 0.33 times
which indicates that the Company operates with close to zero debt.

Debt to equity ratio = total liabilities / total equity

= 1460.03 cr / 17.55 cr

= 83.19: 1

The ideal ratio is 1:1. It indicates long term liability payment capacity. Therefore Gati’s D/E ratio is
quite good.

4. Dividend History
The Company has maintained a dividend yield of 1.44 % over the last 5 financial years.

Dividend given = 1386000

No. of equity shares = 1755000 shares

Dividend per share= dividend given to equity shareholder / no. of equity shares

= 1386000 / 1755000

= 0.7897 rupees
Announcement Date Effective Date Dividend Type Dividend(%) Remarks

11/05/2017 21/07/2017 Final 40% Rs.0.8000 per share(40%)Dividend

27/04/2016 26/07/2016 Final 50% Rs.1.0000 per share(50%)Final Dividend

28/04/2015 21/07/2015 Final 40% Rs.0.8000 per share(40%)Final Dividend