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Gateway Distriparks
Synergies, capability of business segments to be interlinked and monopoly
in India as logistics facilitator provide Gateway with significant competitive
advantages over its peers. Expanding capacities and presence in new
locations will help the company further strengthen its position in India.
However, the adverse macro environment and deficiency of adequate
enabling railway infrastructure pose a threat for the company.
Company Background
Gateway Distriparks’ business is broadly divided into three business segments
namely (a) Container Freight Station (CFS) business (600,000 TEU capacity and
46% of FY11 revenues), (b) container rail (300,000 TEU capacity and 41% of FY11
revenues) and (c) cold chain storage and logistics (16,000 pallets capacity and
13% of FY11 revenues). Gateway through its subsidiaries Snowman Logistics and
Gateway Rail Freight Ltd provides cold chain logistics solutions and handles rail
operations respectively.
Recent Financial Performance
2QFY12 standalone revenues of `601mn saw a 43% YoY growth on account of
sharp increase in realisations in the CFS business which led to improvement in
EBITDA margins. On consolidated basis, the revenues increased by 37% YoY to
`1.9bn with maximum YoY growth witnessed in CFS segment inspite of 1% QoQ
decline. The rail segment showed an improved performance with PAT of `51 mn
and CFS business reported profit of `276mn registering 19% YoY growth.
Outlook
Having already incurred a consolidated capex of `400mn in 1HFY12, the company
further plans to spend `750mn in the rail business in 2HFY12. Apart from this it
plans to ramp up Snowman capacity to 29,000 pallets by 4QFY12. GDL is looking
to expand into new territories like Gujarat and Kolkata for setting up CFS. It is also
on the prowl to aggressively expand operations in Chennai. Any addition in CFS
capacity can act as a positive trigger alongside start of Kochi and Faridabad
facilities. However the adverse macro environment might pose a threat to the
growth.
Conference Meeting Notes
Gateway Distriparks Represented by Mr R Kumar, Deputy CEO
Analyst:
Nitin Bhasin, nitinbhasin@ambitcapital.com, Tel: +91 22 3043 3241
1. Faridabad expansions might delay but Kochi CFS as per schedule: The
company plans to increase terminal capacity from 500,000TEU to
600,000TEU by starting operations in Faridabad. However, holdup in
regulatory approvals and the setting up of a railway siding could delay this
until Jun-Jul 2012. Since the Kochi CFS does not require clearances from the
Land Acquisition Act (land was acquired earlier), operations are likely to start
in January 2012
2. More growth in Chennai CFS: Management expects Chennai to overtake
Mumbai in terms of CFS capacity. Ennore port has better depth compared
with Mumbai, hence making it accessible for the bigger ships. Whilst the
new CFS will take Chennai’s CFS capacity from 90,000 TEUs to
180,000TEUs, the set up period would be 12-18 months.
3. Share terminals and earn terminal income: Instead of increasing rakes,
the company plans to share terminals with private operators. Apart from
earning rail haulage income, by sharing terminals, the company would also
be earning terminal income and access charges. This reduces the risk and in
turn conforms to the company’s intention of improving productivity.
4. FDI in retail to drive growth: Whilst the management is not optimistic on
FDI in retail being passed, they believe that if it were to happen then their
cold storage, just-in-time delivery and retail inventory management services
would benefit from the increased demand coming in from the organized
retail channel.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Gateway Distriparks
Synergies, capability of business segments to be interlinked and monopoly
in India as logistics facilitator provide Gateway with significant competitive
advantages over its peers. Expanding capacities and presence in new
locations will help the company further strengthen its position in India.
However, the adverse macro environment and deficiency of adequate
enabling railway infrastructure pose a threat for the company.
Company Background
Gateway Distriparks’ business is broadly divided into three business segments
namely (a) Container Freight Station (CFS) business (600,000 TEU capacity and
46% of FY11 revenues), (b) container rail (300,000 TEU capacity and 41% of FY11
revenues) and (c) cold chain storage and logistics (16,000 pallets capacity and
13% of FY11 revenues). Gateway through its subsidiaries Snowman Logistics and
Gateway Rail Freight Ltd provides cold chain logistics solutions and handles rail
operations respectively.
Recent Financial Performance
2QFY12 standalone revenues of `601mn saw a 43% YoY growth on account of
sharp increase in realisations in the CFS business which led to improvement in
EBITDA margins. On consolidated basis, the revenues increased by 37% YoY to
`1.9bn with maximum YoY growth witnessed in CFS segment inspite of 1% QoQ
decline. The rail segment showed an improved performance with PAT of `51 mn
and CFS business reported profit of `276mn registering 19% YoY growth.
Outlook
Having already incurred a consolidated capex of `400mn in 1HFY12, the company
further plans to spend `750mn in the rail business in 2HFY12. Apart from this it
plans to ramp up Snowman capacity to 29,000 pallets by 4QFY12. GDL is looking
to expand into new territories like Gujarat and Kolkata for setting up CFS. It is also
on the prowl to aggressively expand operations in Chennai. Any addition in CFS
capacity can act as a positive trigger alongside start of Kochi and Faridabad
facilities. However the adverse macro environment might pose a threat to the
growth.
Conference Meeting Notes
Gateway Distriparks Represented by Mr R Kumar, Deputy CEO
Analyst:
Nitin Bhasin, nitinbhasin@ambitcapital.com, Tel: +91 22 3043 3241
1. Faridabad expansions might delay but Kochi CFS as per schedule: The
company plans to increase terminal capacity from 500,000TEU to
600,000TEU by starting operations in Faridabad. However, holdup in
regulatory approvals and the setting up of a railway siding could delay this
until Jun-Jul 2012. Since the Kochi CFS does not require clearances from the
Land Acquisition Act (land was acquired earlier), operations are likely to start
in January 2012
2. More growth in Chennai CFS: Management expects Chennai to overtake
Mumbai in terms of CFS capacity. Ennore port has better depth compared
with Mumbai, hence making it accessible for the bigger ships. Whilst the
new CFS will take Chennai’s CFS capacity from 90,000 TEUs to
180,000TEUs, the set up period would be 12-18 months.
3. Share terminals and earn terminal income: Instead of increasing rakes,
the company plans to share terminals with private operators. Apart from
earning rail haulage income, by sharing terminals, the company would also
be earning terminal income and access charges. This reduces the risk and in
turn conforms to the company’s intention of improving productivity.
4. FDI in retail to drive growth: Whilst the management is not optimistic on
FDI in retail being passed, they believe that if it were to happen then their
cold storage, just-in-time delivery and retail inventory management services
would benefit from the increased demand coming in from the organized
retail channel.
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