Reduce Gujarat Pipavav Port; target of Rs 80: Dolat Capital

Dolat Capital's research report on Gujarat Pipavav Port

The company reported sales/EBITDA/adj PAT decline of-11%/-7%/-18% YoY, due to weak volume growth in bulk and container. This volume decline was offset by 5% YoY realization gain arising from exchange rate. PAT came higher at Rs 464mn. Management highlighted (1) $97mn capex announcement subjected to concession extension beyond 2028 by Gujarat Maritime (2) Annual salary increment taken (3) No congestion at port and rail linkage benefitted in Q1 (4) Maintains the view of U share recovery Port was open during pandemic, and improvement on EXIM & labor shortage will drive the growth. Thus impact will not be substantial.

Outlook

We increase estimates by 7%/6% for FY21e/FY22e. We maintain our Reduce rating, with a DCF-based price target of Rs 80.

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