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Container volumes outshine
Volumes at India’s 12 major ports remained lacklustre
with a marginal increase of 1.3% YoY and a decline of
10.2% MoM to 46.4mn tonnes during February 2011. This
was primarily on the back of a decline in POL (Petroleum,
oil & lubricants) and iron ore throughput which offset the
gains recorded by containers. POL volumes declined 5.9%
YoY to 13.6mn tonnes and iron ore traffic declined 6.8%
YoY to 9.2mn tonnes. Container traffic grew 13.6% YoY to
9.5mn tonnes and coal volume grew 5.2% YoY to 5.5mn
tonnes.
�� Container volumes outperform: Containerised traffic
increased 13.6% YoY (in tonnage terms to 9.5mn tonnes)
and 10.8% YoY (in TEUs to 0.61mn TEUs). Volumes at
JNPT, India’s largest container port, grew 2.1% YoY to
0.33mn TEUs. Chennai port container traffic jumped
31.4% YoY to 0.13mn TEUs, but remained flat MoM, in
line with overall container traffic growth.
�� Dry bulk throughput decline MoM: While iron-ore
traffic declined both YoY and sequentially, coal throughput
improved YoY, but declined MoM during February on
the back of continued lower demand and lower mining
activity in key states of Karnataka and Orissa. The Baltic
Dry Index (BDI), an indicator of global demand for dry
bulk commodities was down 56% YoY and 17% MoM in
February to close at 1,254.
�� Container volumes to remain steady; Buy Allcargo:
We expect container volumes to remain steady in FY11
and estimate a 7.3% volume growth (in TEU terms) to
7.4mn TEUs for FY11E on the back of improved economy
and healthy EXIM trade. We prefer Allcargo as our top
pick in the container logistics space and maintain Buy
with a target price of Rs217 (CMP: Rs155, 40% upside). We
also maintain Buy on GDL with a target price Rs133 and
Hold on Concor with a target price Rs1,290.
Valuations and outlook
Buy Allcargo with a target price of Rs217
We expect container volumes to remain steady in FY12 and estimate 8.2% volume growth (in TEU
terms) to 8.1mn TEUs for FY12E on the back of improved performance during FY11 (YTD growth of
10.6%). We believe that container based logistics operators will be major beneficiaries of this
increase in container volumes. We maintain a Buy rating on Allcargo Global Logistics, Gateway
Distriparks (GDL) and Hold on Container Corporation (Concor).
We prefer Allcargo as our top pick in the container logistics space due to its diversified revenue
streams, strong performance by its European subsidiary ECU Line and attractive valuations. We
maintain Buy on the stock with a target price of Rs217 (CMP: Rs155, 40.0% upside), valuing it at
12x CY12E earnings.
We also maintain our Buy on GDL with a target price Rs133 valuing the company at 14x Mid- FY13
earnings (CMP: Rs107; 24.3% upside). We believe that post the fund infusion by Blackstone, the
company’s capex in rail business is on track and will help achieve break-even in FY12. Further, the
expansion planned in the CFS segment will improve profitability margins going ahead.
Concor appears to be trading at fair valuations of 16.0x one-year rolling forward P/E, given that the
stock’s 5-year average 1-year forward P/E is 15x. Further we expect the RoE to remain flat at 17.7%
in FY13 from 18.6% expected at the end of FY11. We maintain Hold on Concor with a target price
Rs1,290 valuing the company at 16x FY13 earnings (CMP: Rs1,200; 7.5% upside).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Container volumes outshine
Volumes at India’s 12 major ports remained lacklustre
with a marginal increase of 1.3% YoY and a decline of
10.2% MoM to 46.4mn tonnes during February 2011. This
was primarily on the back of a decline in POL (Petroleum,
oil & lubricants) and iron ore throughput which offset the
gains recorded by containers. POL volumes declined 5.9%
YoY to 13.6mn tonnes and iron ore traffic declined 6.8%
YoY to 9.2mn tonnes. Container traffic grew 13.6% YoY to
9.5mn tonnes and coal volume grew 5.2% YoY to 5.5mn
tonnes.
�� Container volumes outperform: Containerised traffic
increased 13.6% YoY (in tonnage terms to 9.5mn tonnes)
and 10.8% YoY (in TEUs to 0.61mn TEUs). Volumes at
JNPT, India’s largest container port, grew 2.1% YoY to
0.33mn TEUs. Chennai port container traffic jumped
31.4% YoY to 0.13mn TEUs, but remained flat MoM, in
line with overall container traffic growth.
�� Dry bulk throughput decline MoM: While iron-ore
traffic declined both YoY and sequentially, coal throughput
improved YoY, but declined MoM during February on
the back of continued lower demand and lower mining
activity in key states of Karnataka and Orissa. The Baltic
Dry Index (BDI), an indicator of global demand for dry
bulk commodities was down 56% YoY and 17% MoM in
February to close at 1,254.
�� Container volumes to remain steady; Buy Allcargo:
We expect container volumes to remain steady in FY11
and estimate a 7.3% volume growth (in TEU terms) to
7.4mn TEUs for FY11E on the back of improved economy
and healthy EXIM trade. We prefer Allcargo as our top
pick in the container logistics space and maintain Buy
with a target price of Rs217 (CMP: Rs155, 40% upside). We
also maintain Buy on GDL with a target price Rs133 and
Hold on Concor with a target price Rs1,290.
Valuations and outlook
Buy Allcargo with a target price of Rs217
We expect container volumes to remain steady in FY12 and estimate 8.2% volume growth (in TEU
terms) to 8.1mn TEUs for FY12E on the back of improved performance during FY11 (YTD growth of
10.6%). We believe that container based logistics operators will be major beneficiaries of this
increase in container volumes. We maintain a Buy rating on Allcargo Global Logistics, Gateway
Distriparks (GDL) and Hold on Container Corporation (Concor).
We prefer Allcargo as our top pick in the container logistics space due to its diversified revenue
streams, strong performance by its European subsidiary ECU Line and attractive valuations. We
maintain Buy on the stock with a target price of Rs217 (CMP: Rs155, 40.0% upside), valuing it at
12x CY12E earnings.
We also maintain our Buy on GDL with a target price Rs133 valuing the company at 14x Mid- FY13
earnings (CMP: Rs107; 24.3% upside). We believe that post the fund infusion by Blackstone, the
company’s capex in rail business is on track and will help achieve break-even in FY12. Further, the
expansion planned in the CFS segment will improve profitability margins going ahead.
Concor appears to be trading at fair valuations of 16.0x one-year rolling forward P/E, given that the
stock’s 5-year average 1-year forward P/E is 15x. Further we expect the RoE to remain flat at 17.7%
in FY13 from 18.6% expected at the end of FY11. We maintain Hold on Concor with a target price
Rs1,290 valuing the company at 16x FY13 earnings (CMP: Rs1,200; 7.5% upside).
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