Gateway Distriparks : Target 190 :: Angel Broking

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� �

Gateway Distriparks                                                                                               Price    152                                                   Target   190 

The Business

Gateway Distriparks is the only logistics facilitator in India, with three verticals which are synergistic and capable of being interlinked – container freight stations (CFS), inland container depots (ICD) with rail movement of containers to major maritime ports, and cold chain storage and logistics. GDL operates four container freight stations: two at Navi Mumbai, one at Chennai and one at Visakhapatanam with capacity of over 600,000 TEUs. A new CFS at Kochi will be operational by Q4 2011-12. These CFSs offer transportation and storage, general and bonded warehousing, empty handling and several value-added services. The CFS business brings in 40% of the turnover and 94% of profit.

GDL’s rail operations are handled by a subsidiary, Gateway Rail Freight, in which the Blackstone Group of the USA has invested private equity through Blackstone GPV Capital Partners (Mauritius) V-H. Gateway Rail operates rail-linked facilities at Garhi-Harsaru (Gurgaon, Haryana), Ludhiana (Punjab) and Kalamboli (Navi Mumbai). It owns and operates a fleet of 21 trains and more than 235 road trailers at its rail-linked terminals. Exim volumes are most contributors to the overall segment revenue. Exim volumes are also higher contribution to margins.

The third vertical consists of cold chain logistics solutions out of 19 locations in India through a subsidiary, Snowman Logistics, a leading logistics services provider and India’s first cold-supply-chain company with a nationwide network connecting more than 100 cities and over 4,400 outlets.

Investment Rationale

~All-India operations favor GDL in capturing the growing demand for container traffic

~Improved financial performance – Q3 results analysis

~Capex for expansion

~Growth drivers – Container freight stations & Rail business

~Consistent dividend player

Valuations

The company is currently trading close to it 5 year average PE. At CMP the stock trades at 12.2x and 10.7x for its FY12E and FY13E earnings. On better outlook, the demand from the industry and expansion plans on track the company has huge potential for growth going forward. We see a price target of Rs. 190 for next 15-18 months.