Jun 04, 2012, 03.31 PM | Source: Moneycontrol.com

Buy Gateway Distriparks; target of Rs 224: SPA Research

SPA Research is bullish on Gateway Distriparks and has recommended buy rating on the stock with a target of Rs 224 in its May 30, 2012 research report.

SPA Research is bullish on Gateway Distriparks and has recommended buy rating on the stock with a target of Rs 224 in its May 30, 2012 research report.

“Gateway Distriparks Ltd. (GDL) reported consolidated revenues at INR 2,565mn, a YoY growth of 52%, in Q4FY12 backed by higher realizations in all segments and good volume growth in rail freight & cold logistics division. EBIDTA margin, however, was down by 650bps to 25% due to higher operating cost and change in reporting style for the rail division. PAT at INR 320mn was down by 8.49% YoY. For the full year FY12, consolidated revenue and PAT grew by 38.76% and 35.38% respectively. EBIDTA margin at 30.37% was up by 277bps YoY on back of higher realizations. Going ahead, we expect revenue and PAT CAGR of 20.53% & 14.89% over FY12-14. We introduce FY14 estimates and revise our target price (18 months) upwards to INR 224 (previously INR 188).”

“CFS business reported YoY revenue growth of 1.18% to INR 715mn in Q4FY12 on the back of strong growth in realization. Total throughput declined by 12% YoY and 3% QoQ due to lower volumes at Mumbai CFS (~65% of total CFS throughput) which were impacted by lower port volumes at JNPT and increasing competition. Volume at Chennai CFS also declined by 8.7% YoY due to infra constraints. However, lower growth in volumes was made up by strong growth in realization/TEU which grew by 15% YoY. For the full year CFS revenue grew by 30%, despite flattish volumes, on the back of increase in realization. Going ahead, we expect volumes to pick up with Kochi already started its operations and availability of larger area at Punjab Conware CFS by Q3FY13E.”

“GDL continued to show impressive growth in revenues on back of higher realization in CFS and volume growth in rail freight and cold logistic division. Going forward, we expect momentum in rail freight and cold logistics business to continue on the back of capacity expansion plans. Throughput in CFS business is expected to improve with commencement of operations at Kochi CFS and at the re-instated area of Punjab Conware CFS. We rollover our earnings multiple (14x) to FY14E EPS and arrive at 18 months target price of INR 224. We maintain BUY,” says SPA Research report. 

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