Better infra will drive growth in FY14: Guj Pipavav

Moneycontrol Bureau

After a robust performance in the quarter gone by, port operator Gujarat Pipavav believes its strategic location along the west coast of India will drive growth even in future. The AP Moller-Maersk group company’s June quarter profit more than doubled to Rs 35.24 crore on higher container and bulk cargoes.

Inorder to ensure growth, the firm has upgraded infrastructure to carry double-stack high-cube containers. This step will help it reduce transportation cost and enhance operational capacity.

Better infrastructure is likely to benefit shippers, consigners, shipping lines and rail operators. Read This: Gujarat Pipavav standalone Jun '13 sales at Rs 121.99 crore

 “Our strategic location along the west coast of India and connectivity to key consumption markets of north are the key drivers of growth.” said Prakash Tulsiani, Managing Director, Gujarat Pipavav in an interview to moneycontrol.com.

Meanwhile, Gujarat Pipavav shares have declined around seven percent in the past one year. However, post Q1 numbers announcement brokerages are upbeat on company stock.

Prabhudas Lilladher has recommended ‘buy’ with a target of Rs 62  as it believes that company has now recovered most of the lost volumes by adding new services. Also EBITDA margins for the quarter were largely stable sequentially but witnesses around 400 bps growth Y-o-Y. 

As expected, Gujarat Pipavav has performed well in this quarter coupled with increase in market share by 6 percent. Business environment is not at all condusive, yet the firm has managed decent growth in volumes and profitability. The liquid logistics expansion is on schedule and volume is expected to start flowing from Q4CY13. Timely expansion of port capacities and logical diversification in liquid logistics business is expected to augur well for GPPL over a period of time, Said GEPL Capital in its post earnings note. After taking into account these factors, it has a ‘buy’ rating with a target of Rs 56.

shaheen.mansuri@network18online.com