Reiterate ?outperformer? on Gujarat Pipavav Port with a target price of R80 per share. We estimate 26% earnings CAGR over CY13-15e led by continued cargo growth and operating leverage. The stock trades at 12.3x CY15e earnings and 1.8x P/B.
GPPL reported a stellar performance in Q4CY13 led by strong growth in container cargo, superior cargo mix and higher tariffs.
Container volumes grew 23.8% y-o-y to 1.94 lakh twenty-foot equivalent units (TEUs), led by vessel additions/upsizing. Bulk volumes declined 29% y-o-y to 5.38 lakh tonnes and remained impacted by an unfavorable rail freight structure. For CY13, container cargo 15.8% to 6.60 lakh TEUs and bulk cargo grew 3.3% to 31 lakh tonnes.
Average realizations grew 15% y-o-y to R506 per tonne led by superior mix (higher containers ? esp reefer containers) and higher tariffs post 7% hike in August 13. Ebitda per tonne grew 38% y-o-y to R291 per tonne with benefits of operating leverage kicking in. Revenues grew 22% y-o-y to R145 crore, ebitda grew 47% y-o-y to R83,500 crore and ebitda margin grew to 57.5% from 47.8% in Q4CY12.
ICD volumes grew 20.3% y-o-y to 1.19 lakh TEUs with its share in total container cargo at 61.4% from 63.2% last year. The surge in container cargo was led by addition of a new service ? NMG?India-ME ? which has potential to add 50,000-60,000 TEUs pa of cargo on sustainable basis. Service was added from September 19. The service is operated by Express Feeders, OEL and Simatech lines.