Edelweiss' research report on Gujarat Pipavav Port
Gujarat Pipavav Port’s (GPPL) Q3FY17 PAT of INR 645mn and EBITDA margin of 61.7% surpassed our and Street’s expectations, primarily due to cost control measures. Revenue, at INR 1.7bn, was slightly lower than our estimates due to the 29% QoQ drop in dry bulk volumes and weak container volumes (167k TEUs). However, this was partially offset by high margin RORO and liquid volumes, which spurted 25% and 195% QoQ respectively.
OutlookConsolidation among shipping lines may pose a challenge for GPPL. However, on account of being a net cash and dividend paying company, no capex guidance and sharpening focus by parent company on integrating businesses, we maintain ‘BUY’ with a target price of INR 175.
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