Accumulate Gateway Distripark; target of Rs 162: PLilladher

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Accumulate Gateway Distripark; target of Rs 162: PLilladher

Prabhudas Lilladher is bullish on Gateway Distripark and has recommended accumulate rating on the stock with a target of Rs 162 in its October 14, 2011 research report.

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Prabhudas Lilladher is bullish on Gateway Distriparks and has recommended accumulate rating on the stock with a target of Rs 162 in its October 14, 2011 research report.

"Gateway Distriparks' (GDL's) standalone revenues stood at Rs601m, a growth of 43% YoY; however, flat (-1%) QoQ. Volumes were flat sequentially; however, higher realisations (+3% QoQ) led to better-than-expected top-line performance. Though dwell time decreased from 12.5 days in Q1FY12 to 11 days, new services and a change in container mix (container weights) led to increased realisations. Strong top-line growth led to continued good performance on the margin front, reported at 56.8% for Q2FY12. On account of the company coming under full tax this year, PAT growth stood subdued at 11% YoY and 1% QoQ at Rs226m."

"In Q1FY12, Chennai operated at abnormally high utilizations exceeding 100%, thereby, leading to certain inefficiencies. This was corrected during this quarter, which led to Chennai's volumes reducing by 17% QoQ. Overall volumes remained flat sequentially; however, grew 13% YoY. Rail business continued to do well in Q2FY12 on the back of a continuous improvement in volumes and increase in contribution from EXIM cargo, resulting in better efficiencies. Rail volumes grew 36% YoY and 10% QoQ to 43,057 TEUs, translating into a 29% YoY increase in revenues in Q2FY12. As a result, Rail EBITDA grew 74% YoY to Rs164.5m, translating into a profit of Rs51.3m for the quarter as against a loss of Rs33.5m in Q2FY11. The company's focus continues on the Exim side and expects to increase the share of Exim cargo in their volume mix to 80%+ from the current 76%."

"We are valuing CFS and the cold chain business at PER of 13x FY13 which gives us a value of Rs132/share. Further, we are valuing the rail business at P/B of 1.25, with a 10% holding company discount. This translates into Rs29/share, assuming Blackstone's stake at a midpoint of 43.5%, thereby, GDL's stake at 56.5%. The SOTP value works out to Rs 162. We maintain 'Accumulate'," says Prabhudas Lilladher research report.

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To read the full report click on the attachment