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UBS Investment Research
Mundra Port and SEZ
Q2FY11: Impacted by one-off expenses
PAT up 21% YoY; margins impacted by one-off expense of Rs300m
Q2 revenues were Rs4.1bn (+26% y/y, UBS-e Rs4.5bn), operating profit Rs2.7bn
(+17% y/y, UBS-e Rs3.2bn) and PAT Rs2.1bn (+21% y/y, UBS-e Rs2.2bn).
Interest/depreciation costs were lower and other income was higher than our
estimates. Also, results were impacted by one-off item of Rs300m (included in
opex), pertaining to additional handling expenses on a new fertilizer-handling
facility that was constructed last quarter. Adjusting for that, EBITDA margins
would be 73% (+200bps y/y, UBS-e 71%) and PAT would be Rs2.4bn (+38% y/y).
Contract income of ~Rs50m and SEZ upfront lease income of ~Rs6m
There were no new SEZ transactions during Q2 and this income pertains to renegotiation
of an existing contract. Revenue/EBITDA per ton has increased to
Rs321/219 in H1FY11 from Rs305/206 in FY10, primarily due to higher
proportion of container handling at CT-2 (now at about similar volumes as CT-1).
MPSEZ handled 12.6mt in Q2FY11 (+24% y/y), led by container tonnage (+39%
y/y- 3.8mt from 2.7mt), coal (+54% y/y to 3mt from 2mt) and fertilizer (+102%
y/y- 1.3mt from 0.6mt). Volumes across categories witnessed strong growth.
Crude volumes declined 28% y/y, due to pipeline works for the expansion project
at IOC’s Panipat refinery. H1FY11 volumes were up 26% y/y at 25.2mt, led by
coal (+52% y/y, 6.5mt) and container tonnage (+34% y/y, 7.2mt).
Valuation: Neutral rating
Our SOTP valuation comprises Rs132 for port, Rs15 for SEZ and Rs8 for
investments.
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