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Mundra Port & SEZ (MPSEZ) reported a Q2FY12 PAT of INR2.8bn - in line
with our estimates - led by a 34% surge in cargo volumes at 16.8 mt (our
estimate at 17 mt). While the capacity expansion continues on account of
recently acquired projects as well as the brownfield expansion, we see a
pick-up in utilisation levels. Rising yields will help expand RoE going
forward. We maintain ‘BUY’ with a target price of INR 168.
Volume growth remains strong
MPSEZ’s flagship, Mundra port reported a strong cargo volume growth of 34% YoY led
by an overall growth in dry cargo, bulk and liquid cargo at 46%, 41% and 33%
respectively during the quarter. Container cargo grew lower by 16% to 4.4 MMT.
Realisation surges, margin set to improve
The company reported a spurt in realisation to INR349/t, up 7.7% QoQ. We believe the
take or pay contract with Tata Power would have marginally contributed to the spike in
realisation. EBITDA margins were flat at 66.3% YoY (68.5% in Q1FY12). We expect the
incremental coal cargo at the mechanised coal terminal and crude volume at the SPM
terminal to help improve margins going forward.
Incorporating Abbot in valuations
We have incorporated Abbot Point terminal acquisition in both financials and
valuations. We are not factoring any income-tax benefits in the Australian port and
assumed expansion of 30 MMT to 80 MMT which is likely to be fully operational by
2017 at a cost of AUD600mn, contributing INR8/share to our SOTP.
Outlook and valuations: Momentum intact; maintain ‘BUY’
While the growth momentum at Mundra port would persist, performance of other
domestic and global projects - which it has acquired through bidding - will be key
monitorables going forward. The high visibility and scale up of cargo along with the derisked
revenue model should aid valuations. At CMP of INR150, the stock is trading at
consolidated FY12E and FY13E EV/EBITDA of 17.8 and 12.0 respectively. We maintain
BUY/SO with our revised SOTP of INR 168/share (INR 157 earlier).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Mundra Port & SEZ (MPSEZ) reported a Q2FY12 PAT of INR2.8bn - in line
with our estimates - led by a 34% surge in cargo volumes at 16.8 mt (our
estimate at 17 mt). While the capacity expansion continues on account of
recently acquired projects as well as the brownfield expansion, we see a
pick-up in utilisation levels. Rising yields will help expand RoE going
forward. We maintain ‘BUY’ with a target price of INR 168.
Volume growth remains strong
MPSEZ’s flagship, Mundra port reported a strong cargo volume growth of 34% YoY led
by an overall growth in dry cargo, bulk and liquid cargo at 46%, 41% and 33%
respectively during the quarter. Container cargo grew lower by 16% to 4.4 MMT.
Realisation surges, margin set to improve
The company reported a spurt in realisation to INR349/t, up 7.7% QoQ. We believe the
take or pay contract with Tata Power would have marginally contributed to the spike in
realisation. EBITDA margins were flat at 66.3% YoY (68.5% in Q1FY12). We expect the
incremental coal cargo at the mechanised coal terminal and crude volume at the SPM
terminal to help improve margins going forward.
Incorporating Abbot in valuations
We have incorporated Abbot Point terminal acquisition in both financials and
valuations. We are not factoring any income-tax benefits in the Australian port and
assumed expansion of 30 MMT to 80 MMT which is likely to be fully operational by
2017 at a cost of AUD600mn, contributing INR8/share to our SOTP.
Outlook and valuations: Momentum intact; maintain ‘BUY’
While the growth momentum at Mundra port would persist, performance of other
domestic and global projects - which it has acquired through bidding - will be key
monitorables going forward. The high visibility and scale up of cargo along with the derisked
revenue model should aid valuations. At CMP of INR150, the stock is trading at
consolidated FY12E and FY13E EV/EBITDA of 17.8 and 12.0 respectively. We maintain
BUY/SO with our revised SOTP of INR 168/share (INR 157 earlier).
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