Incorporated in 2006, Future Supply Chain Solutions Ltd (FSCSL) is one of the
largest third-party logistics service providers in India. FSCSL offers services in three
key areas i.e. (1) Contract Logistics (warehousing, distribution and value-added
service), (2) Express Logistics (point-to-point, less-than truck-load, time definite
transportation services), and (3) Temperature Controlled Logistics (cold-chain
warehousing, transportation solutions and distribution of perishable products).

Outlook & Valuation: In terms of valuations, the pre-issue P/E works out to 39.9x its
1HFY2018 annualized earnings (at the upper end of the issue price band), which is
lower compared to its peers like Mahindra Logistics. However, Mahindra Logistics
has lower promoter group business (internal business), which is ~54% v/s. ~70%
of FSCSL. Further, Mahindra Logistics had reported non-promoter revenue CAGR
of ~46% v/s. de-growth of FSCSL over FY15-17.
Despite the above favorable factors and lower valuations compared to Mahindra
Logistics, we however, believe that all the positives are fully factored in the
company’s current valuations, which does not provide any further upside for
investors. Hence, we recommend Neutral rating on the issue.

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