Retail investors are always on the hunt to purchase hot stocks which can deliver strong returns in the short span of time. This is the reason this category of investors continue to track news and updates regarding various industries.
Now, what sort of industry is in demand? What problems are being solved by this industry? Any guesses? Well, we believe logistics drone industry continues to see global attention. If you ask any retail investor, they will agree about the growth prospects presented by this industry. Thus, logistic drone stock for investors discussed in this article has seen strong momentum in just a couple of months.
We know that our readers are keener on understanding the growth enablers of this stock and whether or not this growth momentum will continue.
Why Investors Should Invest in Logistic Drone Stock?
Experts believe that Global Drone Logistics and Transportation market should be able to rise at a significant rate between 2024 and 2031. In 2021, this market grew at a steady pace and, with higher adoption of strategies by some of the renowned players, this should rise over projected horizon even at a faster pace.
If we talk about numbers, drone logistics and transportation market size has been pegged at US$ 9.52 billion in 2022, this should touch US$ 54.71 billion by the year 2032. Therefore, the industry should be able to compound at ~19.7% between 2023 – 2032. Therefore, this logistic drone stock for investors has seen strong attention over past couple months.
There are number of reasons which support this tremendous outlook. With rapid development of technology, such drones continue to be used at the time of managing logistics and transporting them to their respective destinations. Significant number of companies globally initiated utilising drones for their supply chain management systems.
It will surprise investors that drones have uses across different sectors like warehousing, manufacturing, distribution facilities, etc. Food delivery and logistics companies continue to research and develop strong technologies which should efficiently use drones in delivery services. This factor should significantly support growth of drone logistics and transportation market.
With this in mind, let us now see this logistic drone stock for investors which has significant growth potential.
Magellanic Cloud Ltd: Best Logistic Drone Stock for Investors
The company is a holding company which has interests in entities offering cloud solutions, IT services, and advanced drone technology. Over the past several years, it has seen strong growth through leveraging its cutting-edge data technologies to make helpful business decisions.
Company Financials
It has released its financial results for 3Q ended 31st December 2023. EBITDA went up by 48.96% from INR 344.82 million in 3Q23 to INR 513.64 million in 3Q24. Much of this growth was attributed to higher deliverables with its clients in all segments. PAT increased to INR 225.61 million in 3Q24 from INR 173.54 million in 3Q23.
iVIS, which is a subsidiary of Magellanic Cloud, is now enlisted by leading bank in public sector and leading bank in private sector so that it can deliver e-surveillance services for branches. This should deliver impact on its revenues in upcoming quarter.
Revenue Forecast FY24
Magellanic Cloud placed an ambitious goal to rise revenue target for FY24 by ~25% in comparison to FY23, which seems positive for the company. This exhibits the company’s confidence in business model, its strategic direction, and ability to execute growth plans.
The company continues to leverage technology to improve production efficiency and decrease costs. This should enhance competitive edge. Certain alliances with prominent entities such as 2 national banks for AI-powered solutions further strengthens its commitment to deliver security solutions and support industry-wide advancements.
Acquisition strategy of the company is strong as it expects to acquire 2-3 companies annually. Through expansion in new markets and scaling up its drone division, it should be able to capitalize on strong potential of emerging technologies.
This strategic approach will help it to remain agile and adaptable to ever-changing market dynamics.
Sister Company
Scandron Pvt. Ltd., subsidiary of Magellanic Cloud Limited, designs and develops drones of a range of categories, such as logistics drones, Agri Spraying Drones and Custom drones.
Scandron has been categorised as the first company in India to get DGCA Type Certification for Logistics Drone, the CargoMax 500HE. This uniquely positions the company to revolutionize logistics and supply chain management. This also enables efficient and accurate delivery for companies adopting drones in supply chain.
Achievements
This certification marks a significant achievement for Indian logistics. Thus, the company is now uniquely positioned to revolutionize logistics and SCM, and enable efficient delivery for companies hunting for drone delivery services.
Magellanic Cloud continues to seek opportunities in IT, e-surveillance, and drones. The company also targets an entry into Middle East and the US geographies.
The company’s stock has surged significantly over past couple of years as a result of domestic and export sales from its IT division.
Significant surge of local and export sales from the company’s IT/ITES division and e-surveillance segment through acquisition resulted in strong increase in consolidated revenue from operation to INR 427.47 crore in FY23 against INR 252.68 in FY22. Given its solid order book in both IT and e-surveillance segments, the company expects revenue jump to INR 650 crore and PAT to be maintained at 15%-20% in FY24.
Stock price of the company saw a significant increase of ~65.04% in just 6 months. This growth was led by recent certification, positive sectoral mechanics and strong growth expectations for next few years.
Conclusion
This logistic drone stock for investors is expected to see strong growth given its market positioning, favourable industry dynamics, increased government support, healthy balance sheet position, etc.
In warehousing facilities, drones are used to monitor inventory and it is also used to transport small items which reduces use of forklifts and conveyor systems, making work efficient. In military sector, drone technology is being widely utilised to develop combat drones which can be used in military operations.