 "Cargo containers are seen stacked outside the container terminal of Jawaharlal Nehru Port Trust (JNPT) in Mumbai")
Gujarat Pipavav Port (GPPV) dipped 6% to Rs 139 on BSE, trading close to its 52-week low of Rs 137 touched on December 30, 2015.
Since November 3, post July – September 2016 (Q2FY17) results, the stock underperformed the market by falling 18% as compared to 3.7% decline in the S&P BSE Sensex.
The company had reported 32% year on year dropped in net profit at Rs 59.4 crore in Q2FY17 against Rs 87.5 crore in Q2FY16. Total income from operation grew 16% at Rs 172 crore on YoY basis.
EBITDA ((earnings before interest, taxes, depreciation, and amortization) up 29% YoY at Rs 100 crore, below analyst estimate on weaker than expected container volume growth.
On sequential basis, EBITDA margin declined to 57.3% in Q2FY17 from 59.9% in Q1FY17. Lower reefer volumes and higher bulk volumes at lower margins led to decline in EBITDA margins.
“The subdued volume growth was due to lower than expected reefer volumes and loss of 3.3k TEUs on account of closure of Hanjin operations. The management said the loss of volumes from its two key customers– Hanjin (filed for bankruptcy) and Hyundai (discontinued operations), will result in an annual loss of 80-90k TEUs (10-13% of volumes),” IIFL Institutional Equities said in result update.
Although the near term volume growth remains subdued given weak trade activity and loss of business; we remain positive on GPPV given its strategic location, adequate capacity and seamless access to rail line which should place it favourably during an up-cycle, added report.
Analysts at Elara Capital cut FY17-19E container volume estimates by 8-9%.
“We believe that focus will remain on GPPV’s ability to drive volumes in a weak EXIM trade environment, competition from peers such as Mundra and Hazira Port and upcoming capacity at JNPT Port (PSA BPCT terminal),” the brokerage firm said in quarterly results update.
Since November 3, post July – September 2016 (Q2FY17) results, the stock underperformed the market by falling 18% as compared to 3.7% decline in the S&P BSE Sensex.
The company had reported 32% year on year dropped in net profit at Rs 59.4 crore in Q2FY17 against Rs 87.5 crore in Q2FY16. Total income from operation grew 16% at Rs 172 crore on YoY basis.
EBITDA ((earnings before interest, taxes, depreciation, and amortization) up 29% YoY at Rs 100 crore, below analyst estimate on weaker than expected container volume growth.
On sequential basis, EBITDA margin declined to 57.3% in Q2FY17 from 59.9% in Q1FY17. Lower reefer volumes and higher bulk volumes at lower margins led to decline in EBITDA margins.
“The subdued volume growth was due to lower than expected reefer volumes and loss of 3.3k TEUs on account of closure of Hanjin operations. The management said the loss of volumes from its two key customers– Hanjin (filed for bankruptcy) and Hyundai (discontinued operations), will result in an annual loss of 80-90k TEUs (10-13% of volumes),” IIFL Institutional Equities said in result update.
Although the near term volume growth remains subdued given weak trade activity and loss of business; we remain positive on GPPV given its strategic location, adequate capacity and seamless access to rail line which should place it favourably during an up-cycle, added report.
Analysts at Elara Capital cut FY17-19E container volume estimates by 8-9%.
“We believe that focus will remain on GPPV’s ability to drive volumes in a weak EXIM trade environment, competition from peers such as Mundra and Hazira Port and upcoming capacity at JNPT Port (PSA BPCT terminal),” the brokerage firm said in quarterly results update.
