Accumulate Gateway Distriparks; target Rs 158: PLilladher

“Gateway Distriparks, on a standalone basis, revenues declined 13% YoY to Rs487.3m; however, witnessed a marginal sequential increase of 3% on a weak base. Volumes at Mumbai declined 6% YoY & 9% QoQ to 47.7K TEUs. However, on account of a tariff revision, realizations improved to by 14% sequentially. Besides stagnation of port volumes, closure of one terminal at JNPT in the month of December, along with evacuation issues at the GTI terminal, resulted in weak volumes at Mumbai.”

“Consol. revenues witnessed a growth of 12% YoY & 8% QoQ on account of a pick-up in rail volumes to 59.6K TEUs; a growth of 40% YoY and 15% QoQ. Margins continued to languish at 24.6% as against 29.4% in Q3FY12 and 26.8% in Q2FY13 on account of weak margins in the CFS business at Mumbai and Chennai on account of a decline in dwell time. Chennai’s dwell time reduced <10 days from the previous average of 15 days. Margins for the rail division also declined on account of a one-time hit from a penalty to be paid to a shipping line. However, the increase in rail freight that took effect in December has been passed on. PAT declined by 15% YoY & 6% QoQ to Rs280.4m.”

“We are valuing the CFS and the cold chain business at PER of10x FY15 which gives us a value of Rs129/share. Further, we are valuing the rail business at P/B of 1.25, with a 10% holding company discount. Our SOTP-based target price works out to Rs158. We maintain ‘accumulate’ on the stock,” says prabhudas Lilladher research report.

Non-Institutions holding more than 90% in Indian cos

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