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Logistic Sector Update – November 2010
Container volumes stabilising at higher levels
As per the Indian Port Association (IPA) data for November 2010, container volumes at 12
major ports registered growth of 12.6% yoy but declined 3.0% on mom basis. The JNPT
port, which handles ~61% of the country’s container volumes, witnessed an increase of
9.4% yoy, while posting a 1.6% decline on mom basis. The Chennai port, which handles
~16% of the country’s container volumes, witnessed an increase of 21.3% yoy, but mom
decline of 14.3%. Container data for FY2011 this far indicates that volumes have stabilised
at higher levels albeit on a low base. During April–November 2010, the major ports
handled 5.0mn TEUs v/s 4.4mn TEUs during the corresponding period of last year, i.e. yoy
growth of 12.3%.
Going ahead, we expect the ports to sustain the monthly run-rate and
surpass the 7.0mn TEU mark set for FY2011. Company wise, we estimate Concor to post
10.0% growth in exim volumes in FY2011 as against management’s guidance of 12%.
We prefer companies that provide a decent blend of growth opportunities and are quoting
at attractive valuations. Accordingly, we maintain Reduce on Concor as the company is
losing its pricing power in the high-margin exim segment and is trading at expensive
valuations.
We maintain Buy on GDL and expect the company to register a 14.1% CAGR
in EPS over FY2010–12 on account of being present at strategic locations, its ongoing
expansion plans and breakeven in the rail business at the PAT level. We maintain Buy on
AGL owing to reasonable valuations and improved performance by ECU Line over the last
few quarters.
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