Gujarat Pipavav Ports ranking – Purchase: Decline in container volumes took its toll
Nonetheless, we mirror the tariff improve of about 5- 6% for containers, which greater than offsets the decrease container estimates.
GPPV’s Q2FY21 EBITDA was Rs 1,029 m, down 13% y-o-y, and Ebitda margin contracted 5.7ppt y-o-y to 56.3%. The decline in Ebitda was pushed by a 25% y-o-y decline in container volumes, worse than the 16% y-o-y decline in Q1FY21. The liquid bulk quantity decline worsened to -37% in Q2FY21 vs +6% in Q1FY21. These had been offset to some extent by a 35% y-o-y improve in bulk volumes (doubling q-o-q) on increased fertiliser volumes, although margins had been comparatively decrease in comparison with container EXIM cargoes. Recurring income had been down 27% y-o-y to Rs 497 m. The corporate introduced an interim dividend of Rs 2.10 per share, implying annualised yield of 4.7%.
Q3FY21 wanting higher: Administration mentioned that container volumes sequentially improved in July and August, however suffered a setback in September. Nonetheless, GPPV mentioned that issues improved in October and volumes look set to enhance additional in November and December. Certainly, GPPV has carried out tariff will increase for container cargoes of about 5-6%, efficient from 1 October 2020.
We elevate FY21-23e Ebitda by 8-14% and recurring revenue by 8-18%: We now forecast container port throughput to say no by 10% in FY21e (from -7.5% beforehand) to mirror the weaker Q2, however implying sequential restoration in H2FY21e. Nonetheless, we mirror the tariff improve of about 5- 6% for containers, which greater than offsets the decrease container estimates. We additionally elevate our bulk throughput forecasts. We now anticipate bulk throughput to develop 18.5% in FY21 (vs -10% beforehand).
Reiterate Purchase; elevate DCF-based TP to Rs 110 (from Rs 90): Whereas the COVID-19 headwinds will seemingly depress container commerce and income in FY21e, we argue that GPPV is best positioned vs previous down cycles and its friends, with minimal capex necessities, a web money place, guardian group assist (40-45% of container throughput), and enticing forecast dividend yield (5.3% in FY21e).
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