Hold Gateway Distriparks; target of Rs 315: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on Gateway Distriparks For Q4FY2016, Gateway Distriparks Ltd (GDL)’s consolidated adjusted earnings after minority interest and associate income declined by 45.7% YoY to Rs26.5 crore. The consolidated revenues were affected by lower volumes in container freight station (CFS; down 6.6% YoY) and rail (down 14.6% YoY) divisions. The volume off-take was primarily affected by lower and imbalanced export-import trade, loss in volumes at Punjab conware and Chandra facilities, rise in competitive intensity at Vizag and no major benefit from double stack cost savings. Subsequently, the company witnessed over 700-BPS erosion in operating profit margin (OPM) for both CFS and rail divisions. Consequently, the operating profit for the quarter declined by 37.0% YoY to Rs49.0 crore.We believe, the headwinds in the company’s CFS and rail divisions are expected to continue in the near term, affecting its financials. The improvement in trade environment and revival in operating profit margin (OPM) in its businesses will be the key monitorable going ahead. Although the structural growth story over the long term remains intact for GDL (owing to a range of services, leadership position in the CFS and rail businesses, and a healthy balance sheet), the near-term uncertainties is likely to weigh heavy on valuation. Consequently, we have downgraded the stock to Hold with a revised price target of Rs315.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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