January 03, 2017 / 17:30 IST
Motilal Oswal's research report on Gateway Distriparks
Gateway Distriparks Limited (GDPL) is an integrated logistics player. Together with its subsidiaries, it has a presence in key verticals like Rail, Container Freight Station (CFS), and Cold Chain. Its subsidiary, Gateway Rail Freight (GRFL) is India’s largest private sector Container Train Operator (CTO), with 5% market share. GDPL is one of India’s largest CFS players, with significant market share in JNPT and Chennai port. Another subsidiary, Snowman Logistics is the largest Cold Chain player in India, with a capacity of 98,500 pallets.
Outlook
GDPL trades at 20x FY18E and 16.3x FY19E earnings (adjusted for Blackstone’s 49% stake in GRFL), which we believe makes the stock attractive, given 460bp RoE improvement over FY16-19E. We arrive at a TP of INR 313 (upside of 35%), valuing CFS business at 12x FY19E earnings, 40% stake in Snowman at 50% discount to market value, and rail segment at 15x FY19E EV/EBITDA (premium to Concor). Maintain Buy.
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