Avoid Aqua Logistics: Seshadri Bharatan

Do you have a word on Aqua Logistics?

The issue is fairly overpriced in the sense valuations are pretty stretched. Valuations are more than 25 times multiple one year forward earning and the business focus on top five clients. So that is a risk for the company. Also, most of the business comes from freight forwarding which is very low margin business for the company.

So overall, the sense is that issue was fairly overpriced and that is a reason why institutional investors stayed away from this issue.

Aqua Logistics, Rs 10 to Rs 11 or probably even Rs 12 for FY10 at 225. What do you do with this counter?

I will avoid this stock because even if you look at logistics companies, most of them trade at PE of anywhere 10 to 15 times. So the PE valuations are very rich around 25 times valuation. It is better to avoid this stock at this point of time and if you at all want to buy it, then you need to buy into some of these companies which have a listed pedigree of more than one to two years time.