Shreyas Shipping & Logistics posted turn around results for the quarter ended March 2009 on the back of foreign exchange gain of Rs.15.70 crore.

This small-cap stock underperformed the market over the past one month. The company's current equity is Rs.21.96 crore and face value per share is Rs.10. The book value of the shares of the company is Rs.70.16; EPS is whopping Rs.6.83; dividend given was 20%; P/E is 4.96 and it has market cap of only Rs.74.33 Cr against, Net Sales of Rs.283.90 Cr in FY09. Doesn't it look attractive...??!!

It is to be noted that Shreyas Shipping & Logistics' net sales declined marginally by 2.1% to Rs.283.90 crore in the year ended March 2009 over the year ended March 2008. However, the performance was robust on a standalone basis. The net profit surged 78.9% to Rs.14.99 crore on 14% fall in net sales to Rs.145.82 crore in the year ended March 2009 over the year ended March 2008. The company posted turn around results for the quarter ended March 2009 on the back of foreign exchange gain of Rs.15.70 crore. The company reported net profit of Rs.13.47 crore in Q4 March 2009 as compared to net loss of Rs.7.36 crore in Q4 March 2008. The company's net sales declined 50.8% to Rs.23.28 crore in Q4 March 2009 over Q4 March 2008.

Shreyas Shipping & Logistics' provides shipping and logistics services. The shipping segment provides charter and feeding services. The logistics segment comprises of shipping part of domestic and liner business.

India has a limited number of coastal container ship operators: these include Shreyas Shipping and Logistics Ltd, Shipping Corporation of India Ltd, Seaways Shipping Ltd, Jindal Waterways Ltd, etc. Many freight forwarders and logistics firms who have committed volumes, however little they may be, are now dependent on these few firms to move the cargo.

The catch point here, apart from the Railway budget is that, Coastal ships are given a concession of as much as 40% on vessel-related charges, or port calling costs such as port dues, berth hire and pilotage, compared with similar charges for other ships. In September last year, India’s maritime regulator, the Directorate General of Shipping, eased staffing requirements for vessels operating along the country’s coast. The regulator has separately flagged off a plan to exempt certain classes of ships used only in coastal trade from some of the stringent provisions of the Merchant Shipping Act to promote the sector. It has prepared a draft of the proposed conditions, called the Indian Coastal Ship Safety Code, that such vessels will have to comply with in order to avail of the exemption. The new code is awaiting notification.

The Indian government is charging a concessional tariff for coastal ships calling at its 12 ports. Coastal ships are given a concession of as much as 40% on vessel-related charges, or port calling costs such as port dues, berth hire and pilotage, compared with similar charges for other ships.

Besides, a discount of 40% is also extended to coastal cargo and container-related charges such as ship-shore transfer and transfer from berth to storage yard and vice versa.

The shipping ministry is also lobbying for a Rs.500 crore corpus from the government to develop coastal shipping. The arrival of many private container train operators is another big facilitator for coastal shipping. With global recession slowing demand for goods and consequent fall in ship values and rentals, there are plenty of idle container ships in the global market that can be bought or hired at dirt cheap rates to ply along India’s coast. According to one industry estimate, cost of transporting goods from north to south India and vice versa can be reduced by about 50% with a combination of rail and sea.

It was not surprising because coastal shipping accounts for a low share of India’s total domestic cargo moved by different modes of transport. In comparison, developed nations rely heavily on coastal shipping, considered to be eco-friendly, cost-effective and fuel-efficient.

In India, coastal shipping moves just 7% of the local freight despite a coastline of 7, 517km dotted with 12 state-owned ports and around 200 smaller harbours. The share is low compared with the European Union, where coastal shipping has a 43% share of the cargo traffic. In the US, it has a 15% share.

HENCE A HUGE CHANCE OF GROWTH IN THIS SECTOR---Shreyas Shipping and Logistics Ltd would be key beneficiary......

Shreyas Shipping & Logistics Limited was incorporated as Private Limited Company in the year 1988, primarily to own and operate vessels for feedering of containers between Indian Ports and Internationally renowned container transshipment ports. It is a part of Transworld Group of Companies, which is promoted by Late R. Sivaswamy and family. The Group has a total of 25 years experience in the shipping industry.

Shreyas Shipping & Logistics Ltd became first Indian Private sector container feeder operator and first Indian shipping company to get ISO 9002 for container ship and feeder service management. The first and only operator on the containersed coastal shipping trade.

The service activity of Shreyas Shipping & Logistics consists of following:

• Common Feeder Carrier
• Domestic Logistic Service by Sea Mode
• Regional Services
• Chartering