GEPL Capital is bullish on Gateway Distriparks and has recommended accumulate rating on the stock with a target of Rs 153 in its February 7, 2013 research report.
“Gateway Distriparks Ltd (GDL) reported a mixed quarter. Consolidated topline grew at 12% Yo- Y and 8% Q-o-Q to Rs2,350 mn. Revenues for Container Freight Station (CFS) segment degrew by 7% Y-o-Y whereas Rail business (GRFL) and Cold Storage business (Snowman) grew 33% Y-o-Y and 93% Y-o-Y respectively. Consolidated EBITDA declined 7% Y-o-Y wherein CFS declined 19% and GRFL and Snowman grew 5% and 61% respectively. EBITDA Margin took a hit from 33% in Q3FY12 to 25% in Q3FY13 due to a 28% Y-o-Y decline in EBITDA/TEU for JNPT and 25% decline for GRFL. A 22% Y-o-Y decline in Other Income, 17% Y-o-Y increase in Interest Outgo and 18% Y-o-Y increase in Depreciation eclipsed a 30% Y-o-Y dip in Tax Outgo. Consequently, Consolidated PAT de-grew 15% Y-o-Y along with 339 bps erosion in PAT Margins.”
“CFS segment reported a revenue decline of 7% due to 13% decline in JNPT sales. Volumes were flat at Chennai and increased 12% at Vizag. However, since volumes at JNPT comprise 62% of total CFS volumes, Realization (-5%) as well EBITDA (-19%) took a hit. The company has recently acquired a 10.5 acre land in Chennai for capacity expansion. Management expects complete volumes at Punjab Conware to kick in from FY14 onwards. Snowman reported a robust 93% growth in sales on the back of expansion in pallet capacity from 18,280 in FY12 end to 33,000 currently. The segment is in a high growth stage and its contribution to consolidated revenue has gone up from 8% in Q3FY12 to 13% in Q3FY13. Management has indicated capacity to expand to more than 46,000 by Q1FY14.”
“GDL is using the global slump period to boost capacity and is prudently carrying out capacity expansions. It is comfortably placed with respect to both cash as well as debt position thereby increasing our comfort about the future prospects of the company. At the CMP of Rs136, GDL is trading at 8.03x its FY14E earnings and 4.71x its FY14E EV/EBITDA multiple. We use an SOTP approach to arrive at a target price of Rs153, indicating an upside potential of 13%. We have an ACCUMULATE rating on the stock,” says GEPL Capital research report.
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