MOSL: GATEWAY DISTRIPARKS (Buy)-IR capacity augmentation program impacts rail productivity
Gateway Distriparks: IR capacity augmentation program impacts rail productivity
(GDPL IN, Mkt Cap USD0.3b, CMP INR197, TP INR237, 21% Upside, Buy)
GDPL reported EBITDA (Rail + CFS) of INR569m (est. of INR621m; -3% YoY, -3% QoQ) in 3QFY18. PAT (before associate/minority interests) of INR258m (flat YoY, -11% QoQ) was lower than our estimate of INR320m due to lower margins in the Rail segment on account of lower productivity.
Rail margins impacted
- Rail reported EBITDA of INR349m (est. of INR386m; +2% YoY, -7% QoQ), led by 8% YoY growth (-4% QoQ) in container volumes to 58,720 TEUs. Rail volumes were impacted due to shift of traffic on account of increase in turn around times of trains due to capacity enhancement program by Indian railways in North west routes.
- Rail realization declined to INR32,936/TEU (-4% YoY, -1% QoQ) due to increase in discounts led by heightened competition. Hence EBITDA/TEU declined 5% YoY (-3% QoQ) to INR5940. Higher proportion of double stacking due to ramp up of Viramgam terminal partly negated the impact of higher turn around times.
- Productivity of rail segment will continue to be impacted in 4QFY18 due to higher turnaround times.
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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