Gati Surges 14 Percent: Strong Q2FY24 Performance and Bullish Outlook

Gati Surges 14 Percent: Strong Q2FY24 Performance and Bullish Outlook

VoM News Desk | October 16, 2023 | 02:02 PM IST | Breaking News | Follow on Google News

Gati Surges 14 Percent: Strong Q2FY24 Performance and Bullish Outlook

Gati Surges 14 Percent: Strong Q2FY24 Performance and Bullish Outlook

Shares of Gati witnessed a significant surge of 14 percent on Monday, driven by the company’s robust business updates for the September quarter (Q2FY24). The positive momentum was further bolstered by bullish comments from brokerage house Nuvama.

During the announcement, Gati revealed its impressive Q2FY24 performance, attributing it to strong pre-festive orders. The company reported a Q2FY24 volume of 333kt, marking an 18 percent YoY increase. Additionally, in September 2023, Gati’s total volume, including surface and air express, reached 109kt, indicating an 8 percent growth compared to September 2022. However, it was down by 3 percent in comparison to August 2023.

Positive Momentum Continues

Remarkably, the growth momentum persisted despite a high base in the same month last year, and Gati anticipates this trend to continue into the current month. Nuvama initiated coverage on the stock with a ‘buy’ recommendation and set a target price of ₹234, signaling an upside potential of almost 59 percent. Nuvama’s optimism for Gati’s long-term growth story is based on various factors, including capacity expansion, enhanced efficiency, robust profitability, a strengthened balance sheet, and favorable industry dynamics.

Stock Price Performance and Overview

The stock price soared to ₹168.10, marking a 14 percent increase. It now stands less than 9 percent away from its 52-week high of ₹184.45, achieved on October 27 last year. In contrast, the stock has risen over 72 percent from its 52-week low of ₹97.65, recorded on March 27, 2023. While it experienced a 15 percent loss in the past year, it has rebounded this year, surging over 16 percent in 2023 YTD. The stock has gained 8.5 percent in October, extending its gains for the 5th consecutive month since June.

Gati’s Transformation and Future Projections

Nuvama highlighted Gati’s transformation journey, which included efforts to enhance service quality, streamline business operations, and address competition-related challenges. Allcargo Logistics acquired a majority stake in FY21, leading to significant improvements in Gati’s management and business operations. These changes, coupled with a focus on the core express business, have led to positive results and are expected to drive further growth in the coming years. Nuvama projects a substantial increase in EBITDA and revenue, further solidifying Gati’s position in the market.

VoM News Desk

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