The medium term outlook for ALLCARGO GATI LTD Ltd.
ALLCARGO GATI is expanding its infrastructure with seven super-hubs, including upcoming locations in Hyderabad, Ahmedabad, Pune, and Kolkata, aimed at enhancing efficiency and reducing turnaround times. The management remains confident about the surface transport sector, driven by strong demand, improved rural consumption, and better road infrastructure. They anticipate a 15% year-on-year volume growth for FY25 and FY26, with margins expected to improve due to cost rationalization and operating leverage. The contract logistics business is projected to grow at a 30% CAGR, with margins of 10-12% following a merger by FY26. The company plans to reduce its dependence on major enterprise clients and increase its focus on the MSME segment. With a robust cash position and strategic investments in technology, such as the GATE tracking system, ACLGATI is well-positioned for market share growth and long-term success. It shows strong potential and could be worth tracking over the next few quarters.
Technical Analysis -
The stock began its downtrend in September last year and has been in a consolidation phase since May 2024, lasting around 4-5 months. During the initial upside of this consolidation, the stock lacked strong volumes, making the move to resistance unsustainable, leading to a drop below the 92-95 support range. On the second attempt to bounce back from the support, there was strong momentum initially with good volumes. However, as the stock approached the resistance at 115, buyers were unable to push it further, and it fell sharply from that level.
In recent weeks, when the stock attempted a third pullback, volume increased, but before reaching the resistance, it retraced slightly, allowing new buyers to step in. This influx of new buyers helped drive the stock back to the resistance level. The increased volume and renewed buying interest after the retracement suggest a possible shift in sentiment. If the stock breaks above the 115 level and sustains this move, it could unlock further upside potential, with price targets of 133 and 144.
It's important to view this analysis as a case study rather than a recommendation for taking a position. Always conduct your own due diligence before making any trading decisions.
Technical Analysis -
The stock began its downtrend in September last year and has been in a consolidation phase since May 2024, lasting around 4-5 months. During the initial upside of this consolidation, the stock lacked strong volumes, making the move to resistance unsustainable, leading to a drop below the 92-95 support range. On the second attempt to bounce back from the support, there was strong momentum initially with good volumes. However, as the stock approached the resistance at 115, buyers were unable to push it further, and it fell sharply from that level.
In recent weeks, when the stock attempted a third pullback, volume increased, but before reaching the resistance, it retraced slightly, allowing new buyers to step in. This influx of new buyers helped drive the stock back to the resistance level. The increased volume and renewed buying interest after the retracement suggest a possible shift in sentiment. If the stock breaks above the 115 level and sustains this move, it could unlock further upside potential, with price targets of 133 and 144.
It's important to view this analysis as a case study rather than a recommendation for taking a position. Always conduct your own due diligence before making any trading decisions.
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