Buy Gateway Distriparks; target of Rs 280: Axis Direct
Axis Direct’s research report on Gateway Distriparks
Gateway Distriparks’ (GDPL) Q2 witnessed strong rebound in rail performance: (a) volume up 20% QoQ/ 12% YoY on improved market share in NCR and uptick in import volume and (b) synergies from Viramgam terminal (hub terminal now, operational from Aug’17), resulting in higher double stacking and savings in haulage cost outgo. Rail EBITDA bounced back 20% QoQ (down 2% YoY) at Rs 6,500/teu.
CFS volume improved 6.5% QoQ (flattish YoY) on higher share from Krishnapatnam CFS (JNPT volume flattish QoQ), which in turn led to ~7% QoQ dip in realization as well. Operating margin (Rs/teu) was flat QoQ, as there was no further adverse impact from DPD#. As we expect macro recovery to drive operating leverage benefits across rail and CFS (given under-utilized terminal capacity), we maintain BUY with TP of Rs 280 (Rs 85 for CFS, Rs 165 for rail, Rs 30 for Snowman Logistics).
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