Q3FY21 Company Update - Gujarat Pipavav Port - ICICI Direct

Gujarat Pipavav (GPPL) reported a strong QoQ recovery in volumes and revenues (but YoY down 14% and flattish, respectively), in spite of the continued macro disruption in container repositioning. While container volumes de-grew 14% (transhipment volumes contracted the most, leading to a favourable container mix), bulk volumes, on the other hand, saw 6% growth (mainly due to higher support from fertiliser volumes). EBITDA margins contracted 400 bps mainly due to a one-time bonus payment of US$1000 per employee and a maintenance dredging expense. Adjusting for the expense, margins remained flat.

Valuation & Outlook

GPPL expects two to three years head start in DFC from ports like JNPT and Hazira. Multiple lines of connectivity from the Pipavav port to DFC and Pipavav already high rail coefficient, provide a strong case to garner new clients and also shift existing clients from road to rail. Post DFC, incremental FCF could be further utilised for port expansion (mostly greenfield expansion). We revise our target price to Rs. 120 (earlier target: Rs. 110). We maintain BUY rating.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GujaratPipavav_CoUpdate_Feb21.pdf

Shares of GUJARAT PIPAVAV PORT LTD. was last trading in BSE at Rs.93.9 as compared to the previous close of Rs. 94.75. The total number of shares traded during the day was 22284 in over 323 trades.

The stock hit an intraday high of Rs. 97 and intraday low of 93.9. The net turnover during the day was Rs. 2119747.

Source : Equity Bulls

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