Gujarat Pipavav Port’s (GPPL) Q4FY21 recurring PAT at ₹57.20 crore (up 19.5 per cent y-o-y) trailed estimate due to lower realisation/margins. Reported PAT including prior period tax write-back stood at ₹65.20 crore. Revenue grew by 19.4 per cent y-o-y to ₹190 crore and EBITDA grew 15.1 per cent y-o-y to ₹116 crore.
EBITDA margin declined 1.7 per cent y-o-y to ₹302/MT due to adverse cargo mix and maintenance dredging expenses. The strength in bulk cargo volumes is likely to continue with addition of new cargo streams. Container cargo is likely to improve due to new service additions and DFC commissioning by end-2021.
Meanwhile, backed by strength in container shipping rates GPPL has raised tariffs by 6-7 per cent with effect from October 2020 followed by about 4 per cent from May 2021.
GPPL offers strong credentials and robust balance-sheet and cash flows. Valuations are inexpensive at 9x/7.2x FY22/FY23 EBITDA and have potential to re-rate on improvement in growth visibility and clarity on concession extension.
We expect robust 33 per cent EPS CAGR over FY21-23. Maintain ‘Buy’ with a revised price target of ₹128.
Source : The Hindu Businessline
