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Results disappoint on lower volumes, SEZ saves the day: Mundra reported
lower-than-expected revenues during the quarter on account of flat sequential
volumes. Higher realization per tonne (+5% QoQ) on account of higher
proportion of fertilizer volumes, led to port revenues increasing 4% QoQ in a
amid flat volumes (-1%) in Q3 FY12. Aided by contribution from the SEZ side,
where a new lease (~30 acres with Anupam MHI) was signed during the quarter,
revenues increased 11% QoQ and 53% YoY to Rs6.91bn in Q3FY12.
EBITDA margins for the quarter were slightly higher-than-expected at ~69.7%,
an improvement of 340bps QoQ and ~100bps YoY. However, interest cost was
sharply (+70%) higher QoQ at Rs783m on account of a loss of ~Rs483m on
derivative contracts (owing to the sharp depreciation in the rupee) during the
quarter compared to a loss of ~Rs14 cr in Q2 FY12. Consequently, PAT stood at
Rs3.1 bn, a growth of 36% YoY and 14% QoQ.
Lower coal, crude volumes lead to flat volumes QoQ: The disappointment on
the volumes front emanated from the coal and crude segments where volumes
declined by 12% and 31%, respectively, on a sequential basis. Q3 witnessed a fall
in volumes due to delay in commencement of HMEL refinery volumes which
witnessed trial runs last quarter. Higher imported coal prices, coupled with a
depreciating rupee, led to lower coal imports during the quarter. However, a
strong pickup in fertilizer volumes (+47% QoQ) along with a continued growth in
the container volumes (+7% QoQ) made up for the fall in the coal and crude
segments, resulting in an overall flat throughput (-1% QoQ) at ~16.6mt for
Q3FY12. Going forward, management expects coal volumes to start inching up
again with a rebound in demand from Adani Power.
Valuations: We have moderated our volume assumptions, going forward, to
factor in a slower pickup in coal volumes at Adani and Mundra UMPP. We
continue to value MPSEZ on a DCF basis, whereby, our SOTP value now stands at
Rs161/ share. Our estimate of a 21% CAGR in volumes over FY12-14, coupled
with an expectation of strong free cash flow generation, going forward, leads us
to retain our positive stance on the stock. We maintain ‘Accumulate
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Results disappoint on lower volumes, SEZ saves the day: Mundra reported
lower-than-expected revenues during the quarter on account of flat sequential
volumes. Higher realization per tonne (+5% QoQ) on account of higher
proportion of fertilizer volumes, led to port revenues increasing 4% QoQ in a
amid flat volumes (-1%) in Q3 FY12. Aided by contribution from the SEZ side,
where a new lease (~30 acres with Anupam MHI) was signed during the quarter,
revenues increased 11% QoQ and 53% YoY to Rs6.91bn in Q3FY12.
EBITDA margins for the quarter were slightly higher-than-expected at ~69.7%,
an improvement of 340bps QoQ and ~100bps YoY. However, interest cost was
sharply (+70%) higher QoQ at Rs783m on account of a loss of ~Rs483m on
derivative contracts (owing to the sharp depreciation in the rupee) during the
quarter compared to a loss of ~Rs14 cr in Q2 FY12. Consequently, PAT stood at
Rs3.1 bn, a growth of 36% YoY and 14% QoQ.
Lower coal, crude volumes lead to flat volumes QoQ: The disappointment on
the volumes front emanated from the coal and crude segments where volumes
declined by 12% and 31%, respectively, on a sequential basis. Q3 witnessed a fall
in volumes due to delay in commencement of HMEL refinery volumes which
witnessed trial runs last quarter. Higher imported coal prices, coupled with a
depreciating rupee, led to lower coal imports during the quarter. However, a
strong pickup in fertilizer volumes (+47% QoQ) along with a continued growth in
the container volumes (+7% QoQ) made up for the fall in the coal and crude
segments, resulting in an overall flat throughput (-1% QoQ) at ~16.6mt for
Q3FY12. Going forward, management expects coal volumes to start inching up
again with a rebound in demand from Adani Power.
Valuations: We have moderated our volume assumptions, going forward, to
factor in a slower pickup in coal volumes at Adani and Mundra UMPP. We
continue to value MPSEZ on a DCF basis, whereby, our SOTP value now stands at
Rs161/ share. Our estimate of a 21% CAGR in volumes over FY12-14, coupled
with an expectation of strong free cash flow generation, going forward, leads us
to retain our positive stance on the stock. We maintain ‘Accumulate
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