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S t r o n g o p e r a t i on a l p e r f o r m a n c e …
Essar Ports (EPL) was demerged from Essar Shipping and Ports Ltd
(ESPLL) in June 2011. The existing company operates only the port
business. For Q1FY12, EPL reported an impressive performance.
Revenues increased by 61% YoY to | 278.5 crore while net profit jumped
tenfold from | 3.5 crore to | 39.6 crore. EBITDA increased by 74% on the
back of a 630 bps increase in EBITDA margin to 79.1%. Revenues and
EBITDA saw a significant increase on account of an increase in volumes
handled and average realisation. During Q1FY12, volumes handled on a
YoY basis increased by 14% to 11.2 million metric tonne (MMT). Average
realisation increased to | 220/tonne from | 173/tonne in FY11.
EPL has already commissioned 88 MT of port capacity (58 MT at Vadinar
and 30 MT at Hazira) in the last few years. In the next two years, the port
capacity would be further increased to 158 MT with the commissioning of
Hazira II, Salaya, Paradip CQ3 and coal berth.
Gaining scale
Essar Ports commissioned 12 MMTPA expansion at Vadinar in April 2011,
taking the overall capacity to 88 MMTPA. The company is expanding its
capacity by further 70 MMTPA over the next two years, which would
catapult EPL to the position of second largest port operator in India after
Mundra Port.
V a l u a t i o n
We have valued each of the ports/terminals on a DCF basis to arrive at a
price target of | 139 for EPL. The company enjoys significant revenue
visibility on account of long-term take or pay agreements with its anchor
clients. The recent upward revision of handling charges structure and
higher capacity utilisation levels provide comfort about future growth in
revenue and profitability. We expect significant value creation as new
capacities get commissioned and cargo traffic gains traction over the next
couple of years.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S t r o n g o p e r a t i on a l p e r f o r m a n c e …
Essar Ports (EPL) was demerged from Essar Shipping and Ports Ltd
(ESPLL) in June 2011. The existing company operates only the port
business. For Q1FY12, EPL reported an impressive performance.
Revenues increased by 61% YoY to | 278.5 crore while net profit jumped
tenfold from | 3.5 crore to | 39.6 crore. EBITDA increased by 74% on the
back of a 630 bps increase in EBITDA margin to 79.1%. Revenues and
EBITDA saw a significant increase on account of an increase in volumes
handled and average realisation. During Q1FY12, volumes handled on a
YoY basis increased by 14% to 11.2 million metric tonne (MMT). Average
realisation increased to | 220/tonne from | 173/tonne in FY11.
EPL has already commissioned 88 MT of port capacity (58 MT at Vadinar
and 30 MT at Hazira) in the last few years. In the next two years, the port
capacity would be further increased to 158 MT with the commissioning of
Hazira II, Salaya, Paradip CQ3 and coal berth.
Gaining scale
Essar Ports commissioned 12 MMTPA expansion at Vadinar in April 2011,
taking the overall capacity to 88 MMTPA. The company is expanding its
capacity by further 70 MMTPA over the next two years, which would
catapult EPL to the position of second largest port operator in India after
Mundra Port.
V a l u a t i o n
We have valued each of the ports/terminals on a DCF basis to arrive at a
price target of | 139 for EPL. The company enjoys significant revenue
visibility on account of long-term take or pay agreements with its anchor
clients. The recent upward revision of handling charges structure and
higher capacity utilisation levels provide comfort about future growth in
revenue and profitability. We expect significant value creation as new
capacities get commissioned and cargo traffic gains traction over the next
couple of years.
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