We maintain ‘buy’ rating on Gujarat Pipavav Port (GPPL) and December 2015 target price of R180 per share. We value GPPL on FCFe basis, and tweak our CY14/15/16e to reflect Q3CY14 performance and also include consistent dividend from Pipavav Railway Corporation (PRCL) in our forecast. We value PRCL at 8x FY16 EPS and therefore assign R300 crore value (R6 per share) towards GPPL’s stake in PRCL.
GPPL reported strong container volumes, up 19% y-o-y, on the back of two new services/upsizing of existing services. GPPL reported record revenue of R170 crore on higher volume growth and record blended realisation on product mix. GPPL received dividend of R19.2 crore from PRCL, up from R3.8 crore in CY13. Adjusted for the one-time operating costs, net profit increased to R92 crore.
Despite higher operating costs due to revision of trailer hire contract, GPPL reported strong ebitda margins. Adjusted for one-time operating costs, the company reported record ebitda margins of 57.9% on favourable cargo mix. Adjusted ebitda stood at R0.99 billion.
Bulk volume grew 2.7% y-o-y on account of higher coal and fertiliser volumes.
By JM Financial