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• EPL is India’s second-largest private port operator and the largest
captive port operator in terms of volume.
• We believe EPL is well-positioned to benefit from its planned
capacity expansion, which is also in line with the expansion plans of
its anchor customers (Essar Group companies). It has long-term
take-or-pay contracts with anchor customers, which provide
stability and visibility to its earnings.
• EPL is also looking to increase its higher margin third-party revenue
(the co. aims to increase the proportion of third-party sales to 25%
in the next three years; its current proportion is negligible).
• We forecast EPL’s volume to grow 37%/34% YoY in FY12/13 and
estimate YoY revenue growth of 63%/29% and earnings growth of
209%/109% in FY12/13.
• Shareholding: promoters – 84%
• Valuation: SOTP valuation (value each port separately using DCF).
Implied 1.7x FY13E P/BV and 10.7x FY13E EV/EBITDA. We do not
ascribe any value to the Hazira II, Paradip II and Salaya ports (as
regulatory clearance is pending). We think they could be worth
Rs41/share and offer potential upside to our valuation.
CLICK HERE TO RETURN TO LIST OF UBS TOP PICK
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
• EPL is India’s second-largest private port operator and the largest
captive port operator in terms of volume.
• We believe EPL is well-positioned to benefit from its planned
capacity expansion, which is also in line with the expansion plans of
its anchor customers (Essar Group companies). It has long-term
take-or-pay contracts with anchor customers, which provide
stability and visibility to its earnings.
• EPL is also looking to increase its higher margin third-party revenue
(the co. aims to increase the proportion of third-party sales to 25%
in the next three years; its current proportion is negligible).
• We forecast EPL’s volume to grow 37%/34% YoY in FY12/13 and
estimate YoY revenue growth of 63%/29% and earnings growth of
209%/109% in FY12/13.
• Shareholding: promoters – 84%
• Valuation: SOTP valuation (value each port separately using DCF).
Implied 1.7x FY13E P/BV and 10.7x FY13E EV/EBITDA. We do not
ascribe any value to the Hazira II, Paradip II and Salaya ports (as
regulatory clearance is pending). We think they could be worth
Rs41/share and offer potential upside to our valuation.
CLICK HERE TO RETURN TO LIST OF UBS TOP PICK
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