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Higher realizations drive performance: Gujarat Pipavav (GPPV) declared results
above ours as well as consensus estimates. Owing to 1>higher proportion of
reefer cargo, plus 2>increased marine charges aided by currency depreciation,
coupled with 3> certain volume (year-end adjustments based on committed and
actual volumes) and demurrage write-backs, the quarter saw a sharp 18%
sequential increase in revenues. Revenues grew 33% YoY and 18% QoQ to
Rs1,159m.
Higher revenues led to margin expansion continuing in Q4CY11, as EBITDA
margins (adjusted for volume and demurrage write-backs) improved ~200 bps
QoQ to 48%. Reported EBITDA margins stood at 50.9% compared to 43.9% in
Q4CY10. Also, other income at Rs48m was higher in Q4CY11on Rs21m of sundry
write-backs. As a result, PAT stood at Rs270m, a growth of 142% YoY and 104%
QoQ.
Container volume growth slows down: Container volumes remained stable
QoQ, clocking 170,380 TEUs, while bulk volumes increased ~15% QoQ to 0.9mt,
aided by higher fertilizer volumes during the quarter. A general slowdown in the
west coast container market (8-9% growth) has resulted in a slower ~20% YoY
growth in Q4CY11 container volumes at GPPV (compared to a 31% full year
growth). Also, as GPPV’s exclusivity agreement with Maersk line ends in March
2012, Maersk has decided to start a new service calling at Mundra port which
could affect container volume growth at the port. However, the management is
currently negotiating longer term (1 year+) contracts, with shipping lines to
garner higher volume commitments in order to enhance volume growth
visibility at GPPV.
Capex update: Container yard capacity expansion to ~850k TEUs has been
completed during the quarter. The company is planning to spend ~Rs10bn in
CY12 for a> three Rail Mounted Gantry Cranes for ~Rs500m to handle increased
rail container traffic, expected to be commissioned by Q4 CY12 and b> ~Rs500m
on fertilizer shed expected to be completed by Q3CY12.
Maintain ‘Accumulate’: We reiterate our positive stance on the stock, given the
favourable long-term volume growth prospects, and resultant margin expansion
expectations. Based on our DCF-based approach, our SOTP-based target price
stands at Rs66/share. We maintain ‘Accumulate’ on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Higher realizations drive performance: Gujarat Pipavav (GPPV) declared results
above ours as well as consensus estimates. Owing to 1>higher proportion of
reefer cargo, plus 2>increased marine charges aided by currency depreciation,
coupled with 3> certain volume (year-end adjustments based on committed and
actual volumes) and demurrage write-backs, the quarter saw a sharp 18%
sequential increase in revenues. Revenues grew 33% YoY and 18% QoQ to
Rs1,159m.
Higher revenues led to margin expansion continuing in Q4CY11, as EBITDA
margins (adjusted for volume and demurrage write-backs) improved ~200 bps
QoQ to 48%. Reported EBITDA margins stood at 50.9% compared to 43.9% in
Q4CY10. Also, other income at Rs48m was higher in Q4CY11on Rs21m of sundry
write-backs. As a result, PAT stood at Rs270m, a growth of 142% YoY and 104%
QoQ.
Container volume growth slows down: Container volumes remained stable
QoQ, clocking 170,380 TEUs, while bulk volumes increased ~15% QoQ to 0.9mt,
aided by higher fertilizer volumes during the quarter. A general slowdown in the
west coast container market (8-9% growth) has resulted in a slower ~20% YoY
growth in Q4CY11 container volumes at GPPV (compared to a 31% full year
growth). Also, as GPPV’s exclusivity agreement with Maersk line ends in March
2012, Maersk has decided to start a new service calling at Mundra port which
could affect container volume growth at the port. However, the management is
currently negotiating longer term (1 year+) contracts, with shipping lines to
garner higher volume commitments in order to enhance volume growth
visibility at GPPV.
Capex update: Container yard capacity expansion to ~850k TEUs has been
completed during the quarter. The company is planning to spend ~Rs10bn in
CY12 for a> three Rail Mounted Gantry Cranes for ~Rs500m to handle increased
rail container traffic, expected to be commissioned by Q4 CY12 and b> ~Rs500m
on fertilizer shed expected to be completed by Q3CY12.
Maintain ‘Accumulate’: We reiterate our positive stance on the stock, given the
favourable long-term volume growth prospects, and resultant margin expansion
expectations. Based on our DCF-based approach, our SOTP-based target price
stands at Rs66/share. We maintain ‘Accumulate’ on the stock.
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