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C a p a c i t y e n h a n c e m e n t t o d r i v e f u t u r e g r o w t h …
Essar Ports (EPL) was demerged from Essar Shipping and Ports Ltd
(ESPLL) in June 2011. The existing company operates only the port
business. For Q2FY12, EPL reported an impressive performance.
Revenues increased by 53% YoY to | 274 crore while net profit jumped
from | 5.3 crore to | 40.8 crore. EBITDA increased 69% on the back of
760 bps increase in EBITDA margin to 82.3%. Revenues and EBITDA have
seen a significant increase on account of increase in average realisation.
During Q2FY12, volumes handled on a YoY basis increased by only 1% to
9.73 million metric tonne (MMT). Average realisation increased to |
233/tonne from | 174/tonne in FY11. Volumes were subdued during the
quarter due to synchronised shutdown of the Vadinar Oil Terminal and
Essar oil refinery for 13 days during the quarter. In Q2FY12, Vadinar
handled 6.79 MMT cargo as against 7.49 MMT in Q2FY11 whereas Hazira
handled 2.94 MMT of cargo in Q2FY12 against 2.14 MMT in Q2FY11.
For H1FY12, total volume of cargo handled stood at 20.93 MMT vs. 19.46
MMT in H1FY11 with Vadinar handling 15.2 MMT in H1FY12 against 15.26
MMT in H1FY11 and the remaining volumes being contributed by Hazira
port. EPL’s capacity expansion, which has been aligned to anchor
customers growth plan, is slated to increase from 88 MMT at present to
158 MMT by Q4FY14 (earlier planned completion date was Q4FY13).
Paradip CQ3 berth with capacity of 16 MMT is expected to go on stream
by Q4FY12, which would boost cargo volumes, going ahead.
V a l u a t i o n
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. We have
revised our DCF assumptions to factor in higher risk free return and
market risk and have reduced the target price from | 139 to | 107.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
C a p a c i t y e n h a n c e m e n t t o d r i v e f u t u r e g r o w t h …
Essar Ports (EPL) was demerged from Essar Shipping and Ports Ltd
(ESPLL) in June 2011. The existing company operates only the port
business. For Q2FY12, EPL reported an impressive performance.
Revenues increased by 53% YoY to | 274 crore while net profit jumped
from | 5.3 crore to | 40.8 crore. EBITDA increased 69% on the back of
760 bps increase in EBITDA margin to 82.3%. Revenues and EBITDA have
seen a significant increase on account of increase in average realisation.
During Q2FY12, volumes handled on a YoY basis increased by only 1% to
9.73 million metric tonne (MMT). Average realisation increased to |
233/tonne from | 174/tonne in FY11. Volumes were subdued during the
quarter due to synchronised shutdown of the Vadinar Oil Terminal and
Essar oil refinery for 13 days during the quarter. In Q2FY12, Vadinar
handled 6.79 MMT cargo as against 7.49 MMT in Q2FY11 whereas Hazira
handled 2.94 MMT of cargo in Q2FY12 against 2.14 MMT in Q2FY11.
For H1FY12, total volume of cargo handled stood at 20.93 MMT vs. 19.46
MMT in H1FY11 with Vadinar handling 15.2 MMT in H1FY12 against 15.26
MMT in H1FY11 and the remaining volumes being contributed by Hazira
port. EPL’s capacity expansion, which has been aligned to anchor
customers growth plan, is slated to increase from 88 MMT at present to
158 MMT by Q4FY14 (earlier planned completion date was Q4FY13).
Paradip CQ3 berth with capacity of 16 MMT is expected to go on stream
by Q4FY12, which would boost cargo volumes, going ahead.
V a l u a t i o n
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. We have
revised our DCF assumptions to factor in higher risk free return and
market risk and have reduced the target price from | 139 to | 107.
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