Axis securities's research report on Gujarat PipavavContainer volume was down 9% YoY(178 KTEU) and bulk cargo was down 48% YoY (0.63 MT). As a result, overall volumes were down ~21% YoY. While performance is an improvement over Q2, it is because ~25 KTEU cargo was lost in Q2 due to a cyclone.EBITDA was boosted by one-off factors like write-back of volume incentives (Rs 40 mn) and reversal of dredging cost (Rs 10 mn). Treating these as exceptional items, Sales/ EBITDA de-grew of 13%/ 5% YoY. We have been bearish on GPPV for a long time as we believed earnings momentum would run out of steam due to (a) tariffs at GPPV already at par with Mundra, (b) heightened competition,(c) tepid cargo growth expected on West coast and (d)exalted valuations of GPPV. While the stock has corrected ~40% from peak, we believe more downside is likely.We marginally revise our estimates to factor in actuals of 9MFY16. Maintain SELL 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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