INSUBCONTINENT EXCLUSIVE:
Citi has a buy call on Gateway Distriparks with a target price of Rs 298.
The current market price of Gateway Distriparks is Rs 177.95.
Time
period given by the brokerage is one year when Gateway Distriparks price can reach the defined target
Rail freight volume at 60,088 TEUs grew 18 per cent YoY/2 per cent QoQ
Rail business EBITDA at Rs651mn (including Rs320mn SEIS income) grew 158 per cent YoY/flat QoQ (4QFY18 also had similar SEIS income)
CFS volume at 111,999 TEUs grew 16 per cent YoY/nearly 6 per cent QoQ; CFS business EBITDA at Rs220mn grew 12 per cent YoY/3 per cent
Consolidated EBITDA margin (which primarily reflects CFS business) at 21.3 per cent increased 145bps YoY.
Due to headwind of DPD, CFS
is adapting well to Direct Port Delivery (DPD) challenge in CFS business
DPD numbers are increasing and revenue/TEU on DPD containers is lower than normal TEUs but GDL has managed to stabilize the business
CFS volume recovery was fairly broad based across ports except at Vizag terminal
underscored by the fact that GDL has leased new rakes for rest of FY19
Rail business has maintained profitability in terms of EBITDA/unit despite competition
GDL undertook a price increase for rail business in May 2018 (nearly Rs1000/TEU in import direction, out of this nearly Rs230/TEU has flown
in demand with its very efficient operations, healthy balance sheet and competitive position in rail business
Acquisition of remaining stake in rail business from private equity investors at reasonable valuations is positive
