Networth Stock Broking neutral on Gujarat Pipavav

“APM Terminals is the largest container shipping line and second largest terminal operators in the world. It has 61 ports and terminals in 33 countries on five continents. It also has 16 new terminal development or expansion projects underway. With a presence in every major market, APM Terminals serves all major trade lanes providing its customers with the most advanced terminal technology, equipment and operations in the industry. GPPL is not only poised to benefit from its strong parentage but also in terms of additional business as it APM Terminals is a global leader in shipping lines. The container traffic in India has been growing at 15% YoY. At this rate, container traffic estimated to reach 21 mn by 2015 whereas Indian ports (major ports) have failed to expand their capacity to match the growth momentum which has resulted into capacity constraints. India’s total container capacity is just 9.1 mn. As a result the existing ports are unable to manage incremental traffic effectively. The JN Port is currently operating at 113% capacity utilization level. Thus proximity of Pipavav port near JN Port poses an opportunity to handle the incremental traffic.”