Company Update: Gujarat Pipavav Port Ltd - BUY - TP Rs.180 - Kotak

Weak container shipping market, realignment of services by container majors which lead to market share loss for GPPL and appreciating rupee impacted the performance of the company in FY17. However, improving container volumes on the west coast, potential from the project cargo division, diversification to crude and car segment should yield results for the company over FY17 to FY19E. With the high operating leveraging nature of the business and with an expected container volume CAGR of 7.5 % over FY17-19E for GPPL, we expect EBITDA margins to remain at healthy levels of 60% resulting in improvement in return ratios. We also expect the company to benefit from the upcoming Dedicated Freight Corridor (DFC) with Pipavav Rail Corporation preparing to connect the port with the DFC. We expect the next few years to be the turn-around years for the company. Maintain BUY with an unchanged TP of Rs 180

Shares of GUJARAT PIPAVAV PORT LTD. was last trading in BSE at Rs.151.3 as compared to the previous close of Rs. 150. The total number of shares traded during the day was 58091 in over 788 trades.

The stock hit an intraday high of Rs. 153.8 and intraday low of 150.7. The net turnover during the day was Rs. 8824577.

Source : Equity Bulls

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