MOSL: GATEWAY DISTRIPARKS (Buy)-Rail margin revives sharply on cost efficiencies
​Gateway Distriparks: Rail margin revives sharply on cost efficiencies
(GDPL IN, Mkt Cap USD0.4b, CMP INR236, TP INR282, 19% Upside, Buy)
- GDPL reported EBITDA (RAIL + CFS) of INR587m (est. of INR513m; 1% YoY, 31% QoQ). PAT (before associate/minority interests) of INR290m (+15% YoY, 61% QoQ) was higher than our estimate of INR214m due to a higher margin in the rail segment and a lower tax rate.
Rail margin revives led by commissioning of Viramgam
- Rail reported EBITDA of INR375m (est. of INR303m; +10% YoY, +49% QoQ), led by 11.5% YoY growth in container volumes to 61,254 TEU. Rail volume growth was driven by a market share gain of 180bp in the NCR region and spillover of volumes from 1QFY18 (when volumes had declined 2% YoY).
- Rail realization stood at INR33,430/TEU (+1% YoY, +2% QoQ). EBITDA/TEU declined 1% YoY, but increased 24% QoQ due to normalization of operations on the Ajmer route, resulting in better mobility. Additionally, commencement of the Viramgam terminal since mid-July has led to haulage savings for cargo transported to JNPT.
- Gateway rail has increased tariff on import side from 21 October, which should bode well for margins in 2HFY18. Additionally, with the ramp-up of the Viramgam terminal in 2HFY18, margins are likely to be firm.
Gateway Distriparks Limited is an integrated logistics facilitator. The Company's principal business activities include storage and warehousing, which includes general merchandise warehouses and warehousing of furniture, automobiles, gas and oil, chemicals and textiles. It also includes storage of goods in foreign trade zones. Its segments include Container Freight Station, which includes common user facilities located at various sea ports in India, offering services for handling (including related transport), temporary storage of import/export laden and empty containers, and cargo carried under customs control, and Rail Logistics, which includes transportation by rail, storage, handling of the containers and related transportation by road. It is also engaged in business of container-related logistics. Its primary business is to operate Container Freight Stations, which are facilities set up for the purpose of in-transit container handling, examination and assessment of cargo.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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