Gujarat Pipavav Port Ltd - Scaled down expansion Plan - Emkay

Reco: HOLD
CMP: Rs 87
Target Price: Rs 75

- Scaled down expansion plan for the container division to 1.35mnteu from 0.85 mnteu versus earlier plan of 1.5mnteu , has revised its capex plan to Rs4.6bn from Rs11bn

- Management stated that the main rationale for this revision is lack of visibility on bulk volumes

- The bulk capacity will remain at 4-5 mt versus earlier plant to expand to 10 MT, plans to strengthen the existing berth 3 and replace its cranes with three new post-panamax cranes, thus improving its productivity

- We have revised our capex for next two years from Rs9 bn to RsRs5.5 bn/also adjusted capacity. The stock trades at 14x CY14E and 12x CY15E EV/EBITDA. Maintain Hold with a Target price of Rs75/share

Source : Equity Bulls

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