Strong set of numbers for Q2FY15 -- Gateway Distriparks :: Kotak Securities

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GDL		11-3-2014
Recommendation: BUY ( + )   \ Target Price: Rs. 325

Strong set of numbers for Q2FY15

Gateway Distriparks reported strong numbers for Q2 with PAT of Rs 480 mn

(versus our expectation of Rs 380 mn). Sales have increased to Rs 2.93 bn

(+5% QoQ and +9% YoY). Surprisingly, after gap of 6 quarters volumes have

improved for the CFS segment by 22% YoY at ~103,000 TEUs, while it has

improved for the container rail segment at 68,000 TEUs (+33% YoY) which is

very healthy for the company. Highlight of the quarter is the improvement

in margins primarily due to better realisations, cost rationalization and

operating leverage. Snowman Logistics (41% subsidiary) has reported weak

numbers with sales falling by 3% QoQ at Rs 482 mn and with weak margins

of 20.6% falling 300 bps QoQ

Recommend BUY with an increase target price of Rs 325 (earlier Rs 275). We

value each of the segments separately. We value the CFS segment at 20x

FY16E at Rs 165 per share, the rail segment again at 20x FY16E (20%

discount to Concor) at Rs 110/ per share and cold chain segment at Rs 50 per

share. The stock would trade at 17x PE at the TP.

LINK

http://www.kotaksecurities.com/pdf/pdfs/FUNDGDL03112014103446.pdf