Feb 09, 2013, 04.38 PM | Source: Moneycontrol.com
SPA Research is bullish on Gateway Distriparks (GDL) and has recommended buy rating on the stock with a target price of Rs 223 in its February 08, 2013 research report.
, SPA Research |
"Gateway Distriparks (GDL) reported disappointing set of numbers in Q3FY13. Company registered revenue and PAT lower than our expectations on the back of falling throughput in Mumbai CFS and continuous pressure on margins in CFS and rail business. Consolidated revenues at INR 2,384mn grew by 22% YoY while PAT registered a de-growth of 15% YoY to INR 280mn. EBIDTA margin declined by 744bps YoY to 24.40% due to heightened competition at Mumbai CFS, reduction in dwell time and EXIM mismatch in rail segment. Steep haulage hikes by railways, intensifying competition and slower progress on expansion in port facilities are some of the headwinds faced by the company. However, expected improvement in economic scenario along with capacity additions by GDL in FY14 would aid revenue growth and margins going ahead.
Cold logistics division of the company, Snowman logistics, registered revenue and PAT of INR 321mn (up 97% YoY) and INR 25mn ( up 132% YoY) on the back of YTD expansion in capacity by ~80% to 33,000 pallets. Company is on track to increase its capacity to ~46,000 pallets by the end of FY13 and ~80,000 pallets by the end of FY15.
Outlook & Valuation: Although GDL’s revenues and margins would increase going ahead with 1) commencement of operation at re-instated area of Punjab Conware and CFS at Kochi 2) ICD at Faridabad and 3) Increase in double stack rail operations going ahead but steep hikes in haulage charges by railways and increasing competition at Mumbai CFS amid stagnant port volumes present some concerns. We have accounted for the same in our projections and adjusted FY13 and FY14 numbers accordingly. We continue to recommend BUY with 9months target price of INR 223 (14x FY14E EPS)," says SPA Research report.
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