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Research
Gateway Distriparks - Q1FY14 Result Update - Nirmal Bang
Posted On : 2013-08-18 19:47:08( TIMEZONE : IST )
GDL reported Q1FY14 results below our expectations. Consolidated revenues came in at Rs. 228 crore fell 1% YoY/14% QoQ on the back of lower volumes and realizations in CFS and Rail segments. EBIDTA margins fell by 117 bps YoY/grew 327 bps QoQ to 27.8%. Snowman business grew 58% YoY on the back of continued expansion. Company has announced to raise money in Snowman Logistics through an IPO to facilitate its future expansion. Though current economic condition remains under pressure, we expect GDL to overcome these with capacity additions and operating leverage. At CMP, the stock is trading at a P/E of 8.5x its FY14E earnings and is attractive. We recommend investors to BUY the stock as a value pick for long term returns.
CFS - Decrease in Volumes; however gain in Market share
Overall CFS volumes were lower by 7% QoQ due to overall lower economic slowdown; however realizations were up 2.3% QoQ with gain in market share in Mumbai. Mumbai volumes were down 20% YoY/8% QoQ due to lower port volumes. Chennai and Vizag volumes were up 12% and 16% YoY respectively. Kochi CFS reported flat volumes for the quarter. Management expects pressure on volumes to continue due to growing competition and subdued global economy. Faridabad ICD is expected to start operations in Q2 FY14.
Rail - Impacted by Subdued Economy
Rail volumes were down by 15 % YoY and QoQ since the company closed the loss making routes of Sanand/Ahmedabad/Jodhpur. Margins were up 100 bps QoQ at 17% on the back of increase in double stacking. Railway haulage fees increase was mainly passed on to the customers.
Snowman - Growth and Expansion going hand in hand
Revenues grew 58% YoY to Rs.35 crore. Margins remained improved 400 bps QoQ to 27%. PAT for the quarter was at Rs.3.7 crore with tax write back of Rs.3.1 crore (GoI has allowed 150% write back of investments in a particular year for the cold chain business). Current pallet size was of 53100 and this is expected to touch 70000 pallets by the end of FY14. Company has incurred Rs.30 crore of capex during Q1FY14 out of the total capex of Rs.150 crore for FY14E. Company is aggressively increasing the pallet size in this business and part of the expansion is expected to be funded through IPO which the company has lately announced.
