Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Promise of take or pay works. Essar Port’s reported revenue of Rs2.78bn
(up 61% YoY) was in-line with our est. (Rs2.72bn) calculated based on- (A)
T/P arrangement at Hazira (actual traffic of 2.8MMT was well below T/P
volume of 4.28MMT, and (B) assured storage revenue and variable liquid
cargo traffic based income at Vadinar. Jun-q results could mitigate investor
concerns on inter-group contracts as mentioned in our preview ahead of
results (see Analysis of Jun-q cargo volumes).
Jun-q EBITDA margin of 79.1% (up 630bps) came ahead of our
expectation (76%). EBITDA margins at Vadinar port (~82.5%) and Hazira
(70.9%) were healthy and were driven by- (1) Higher realizations as per
take or pay rates applicable for FY12; (2) Higher volumes at Vadinar
(8.4MMT vs. 7.7MMT in Jun-q last year); and (3) Lower lighterage
expenses at Hazira. Improving utilization levels of ports will drive margin
improvement and RoE increase in coming quarters.
Pipeline projects face risk of delays: Hazira expansion by 20MMT is
awaiting environmental clearance (expected over 6-9months as per
management), CoD may happen in Dec-12 (vs. Oct-12 expected earlier). As
per company presentation revised timeline for CoD of Salaya is 4QFY14
(vs. Mar-13 earlier) and Paradip-I in Mar-12 (vs. Oct-11) earlier. In an
extreme scenario where we attribute no value to these underconstruction
projects (Paradip-I is 59% complete and Salaya 36%) our
SOP of Rs135 will be lower by Rs54 (or Rs81, close to CMP of Rs79).
Maintain OW and Mar-12 DCF PT of Rs135. We have made
housekeeping changes to estimates (FY12 est. down by ~1%). The stock
has been trading at very low volumes (Average 3mnoth daily turnover of
just US$0.24mn). Improvement in investor perception of inter-group
take or pay arrangements may drive upside. Delay of under construction
projects is a key downside risk.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Promise of take or pay works. Essar Port’s reported revenue of Rs2.78bn
(up 61% YoY) was in-line with our est. (Rs2.72bn) calculated based on- (A)
T/P arrangement at Hazira (actual traffic of 2.8MMT was well below T/P
volume of 4.28MMT, and (B) assured storage revenue and variable liquid
cargo traffic based income at Vadinar. Jun-q results could mitigate investor
concerns on inter-group contracts as mentioned in our preview ahead of
results (see Analysis of Jun-q cargo volumes).
Jun-q EBITDA margin of 79.1% (up 630bps) came ahead of our
expectation (76%). EBITDA margins at Vadinar port (~82.5%) and Hazira
(70.9%) were healthy and were driven by- (1) Higher realizations as per
take or pay rates applicable for FY12; (2) Higher volumes at Vadinar
(8.4MMT vs. 7.7MMT in Jun-q last year); and (3) Lower lighterage
expenses at Hazira. Improving utilization levels of ports will drive margin
improvement and RoE increase in coming quarters.
Pipeline projects face risk of delays: Hazira expansion by 20MMT is
awaiting environmental clearance (expected over 6-9months as per
management), CoD may happen in Dec-12 (vs. Oct-12 expected earlier). As
per company presentation revised timeline for CoD of Salaya is 4QFY14
(vs. Mar-13 earlier) and Paradip-I in Mar-12 (vs. Oct-11) earlier. In an
extreme scenario where we attribute no value to these underconstruction
projects (Paradip-I is 59% complete and Salaya 36%) our
SOP of Rs135 will be lower by Rs54 (or Rs81, close to CMP of Rs79).
Maintain OW and Mar-12 DCF PT of Rs135. We have made
housekeeping changes to estimates (FY12 est. down by ~1%). The stock
has been trading at very low volumes (Average 3mnoth daily turnover of
just US$0.24mn). Improvement in investor perception of inter-group
take or pay arrangements may drive upside. Delay of under construction
projects is a key downside risk.
No comments:
Post a Comment