ICICI Direct recommended hold rating on Gujarat Pipavav Port with a target price of Rs 110 in its research report dated November 05, 2018.
ICICI Direct's research report on Gujarat Pipavav Port
Revenues grew 13% YoY to Rs 171 crore (I-direct estimate: Rs 163 crore). Container volumes grew 49% YoY to 238000 TEUs (I-direct estimate: 179200 TEUs). Growth was mainly due to higher transhipment volumes. Bulk volumes grew 3% YoY to 0.53 MT (vs. 0.62 MT in Q1FY19). Liquid volumes declined 67% YoY to 0.09 MT (vs. 0.16 MT in Q1FY19). Volumes from Ro-Ro activity grew 16% YoY to 22000 cars (vs. 16000 cars in Q1FY19) EBITDA margins increased 240 bps YoY to 57% (I-direct estimate: 56%), mainly due to lower other expenses to sales ratio (13.9% vs. 16.4% in Q2FY18). Subsequently, absolute EBITDA grew 18% YoY to Rs 98 crore (I-direct estimate: Rs 91 crore) Reported PAT grew 25% to Rs 55 crore (I-direct estimate: Rs 48 crore) mainly due to the better than expected operational performance.
Any unfavourable outcome on the same could impact our valuations. However, following the change in volume and realisation estimates we revise our target price of Rs 110 (at FY20E P/E multiple of 20), maintaining HOLD on the stock.
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