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Mundra Port and SEZ (MSEZ)
Infrastructure
Strong results led by volume growth across the board. MPSEZ reported strong
2QFY12 revenues of Rs6.2 bn, up 50% yoy primarily on strong volume growth (up
33.5% yoy). Net PAT of Rs2.7 bn was up 29% yoy, 14% ahead of estimates. Volume
growth was led by (1) coal, up 70.4%, (2) crude oil, up 63.3% and (3) container, up
16%. The port continued to outperform the sector – its ranking jumping to #4 (from #7
in FY2011) among major ports in terms of volumes handled. Retain BUY.
Strong results driven by volume growth – ahead of estimates
Revenues up 50% yoy led by strong volumes. MPSEZ reported 2QFY12 standalone revenues
of Rs6.2 bn, recording strong 50% yoy growth, significantly (about 21%) ahead of our
estimates. The strong revenue growth was primarily led by higher volumes - up 34% yoy.
EBITDA margin at 66.3%; below estimates. EBITDA margin remained relatively flat on a yoy
basis at 66.3%, about 200 bps below our estimate of 68.5%. Margins declined by about 220
bps sequentially on higher operating and employee expenses as a percentage of sales.
Net PAT at Rs2.7 bn, up 29% yoy, 14% ahead of estimates. MPSEZ reported a net PAT of
Rs2.7 bn in 2QFY12, up 29% yoy – about 14% ahead of our estimate of Rs2.4 bn.
Strong volume growth led by coal, liquid and container volumes
Mundra port’s volumes recorded a strong 33.5% yoy growth to 16.8 MMT in 2QFY12 (volumes
up 26.5% yoy in 1HFY12 to 31.9 MMT). The strong volume growth was led by:
Coal cargo growth. Recorded strong 36% yoy growth, led by strong coal volumes (up 70.4%)
likely on increased coal requirement for power plants in the vicinity.
Crude oil. Recorded 63.3% yoy growth, partly led by low base impact (volumes had declined
28% yoy in 2QFY11 on closure of Panipat refinery for expansion works)
Container volumes. Also recorded strong growth of 16% yoy
Outperformed sector in terms of volume growth. The port has outperformed the sector in
terms of volume growth (major port volumes remained flat in 2QFY12). It now ranks #4 among
major ports in terms of total cargo – a jump of three positions (versus #7 in FY2011).
Revise estimates (related to tax and other income), retain TP of Rs175; retain BUY
We revise our estimates to Rs5.8 and Rs9.3 from Rs6.9 and Rs10.3 for FY2012E and FY2013E
based on changes to other income and deferred tax. Retain BUY (TP of Rs175 Dec’12 DCF vs.
Sep’12 DCF earlier) on (1) strong core asset driving profitability and cash flows and (2) low interest
and cyclical sensitivity. Key risk is cash flow utilization if incremental assets do not earn threshold
returns.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Mundra Port and SEZ (MSEZ)
Infrastructure
Strong results led by volume growth across the board. MPSEZ reported strong
2QFY12 revenues of Rs6.2 bn, up 50% yoy primarily on strong volume growth (up
33.5% yoy). Net PAT of Rs2.7 bn was up 29% yoy, 14% ahead of estimates. Volume
growth was led by (1) coal, up 70.4%, (2) crude oil, up 63.3% and (3) container, up
16%. The port continued to outperform the sector – its ranking jumping to #4 (from #7
in FY2011) among major ports in terms of volumes handled. Retain BUY.
Strong results driven by volume growth – ahead of estimates
Revenues up 50% yoy led by strong volumes. MPSEZ reported 2QFY12 standalone revenues
of Rs6.2 bn, recording strong 50% yoy growth, significantly (about 21%) ahead of our
estimates. The strong revenue growth was primarily led by higher volumes - up 34% yoy.
EBITDA margin at 66.3%; below estimates. EBITDA margin remained relatively flat on a yoy
basis at 66.3%, about 200 bps below our estimate of 68.5%. Margins declined by about 220
bps sequentially on higher operating and employee expenses as a percentage of sales.
Net PAT at Rs2.7 bn, up 29% yoy, 14% ahead of estimates. MPSEZ reported a net PAT of
Rs2.7 bn in 2QFY12, up 29% yoy – about 14% ahead of our estimate of Rs2.4 bn.
Strong volume growth led by coal, liquid and container volumes
Mundra port’s volumes recorded a strong 33.5% yoy growth to 16.8 MMT in 2QFY12 (volumes
up 26.5% yoy in 1HFY12 to 31.9 MMT). The strong volume growth was led by:
Coal cargo growth. Recorded strong 36% yoy growth, led by strong coal volumes (up 70.4%)
likely on increased coal requirement for power plants in the vicinity.
Crude oil. Recorded 63.3% yoy growth, partly led by low base impact (volumes had declined
28% yoy in 2QFY11 on closure of Panipat refinery for expansion works)
Container volumes. Also recorded strong growth of 16% yoy
Outperformed sector in terms of volume growth. The port has outperformed the sector in
terms of volume growth (major port volumes remained flat in 2QFY12). It now ranks #4 among
major ports in terms of total cargo – a jump of three positions (versus #7 in FY2011).
Revise estimates (related to tax and other income), retain TP of Rs175; retain BUY
We revise our estimates to Rs5.8 and Rs9.3 from Rs6.9 and Rs10.3 for FY2012E and FY2013E
based on changes to other income and deferred tax. Retain BUY (TP of Rs175 Dec’12 DCF vs.
Sep’12 DCF earlier) on (1) strong core asset driving profitability and cash flows and (2) low interest
and cyclical sensitivity. Key risk is cash flow utilization if incremental assets do not earn threshold
returns.
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