Multi Baggers

Gateway Distriparks

Gateway Distriparks Ltd is a Container logistics company with Pan-India presence. Gateway Distriparks’s CFS at Mumbai, ICD at Garhi, CFS at Vizag and the CFS at Chennai operate as the four hubs for company that caters to the demand of traffic in western, northern, eastern and southern regions of India respectively.

The company has incurred capex of Rs 156 crores during the financial year ended March 11. In CFS business it is Rs 41 crores, in rail business it is Rs 92 crores and in the snowman business it is Rs 23 crores.

The company has registered strong numbers for the quarter ending March 2011. A decent increase of about 39.87% in the sales to Rs 553.82 millions was observed for the quarter ended March 2011. The sales figure stood at Rs 395.95 million during the year ago period. The company has registered profit of Rs 267.03 million for the quarter ended March 2011, a growth of 23.10% over Rs 216.92 million achieved in the corresponding quarter of last year. Operating profit surged to Rs 319.95 million from the corresponding quarter previous year of Rs 207.27 million. Better capacity utilization and higher volumes has helped GDL to post such growth.

On a consolidated basis, GDL’s CFS business has posted a growth of about 40% at Rs 717.19 million, Rail business at 9% on Rs 849.29 million revenues and Cold chain business grew sharply by 23% to Rs 143.95 million revenues translating in profits of Rs 306.59 million, Rs 38.06 million and Rs 5.36 million respectively.

Valuation

Presently, Gateway Distriparks is trading at Rs 126.75 which is at a consolidated PE of 13.6x and 12.2x to its FY12E and FY13E EPS of Rs 9.32 and Rs 10.39 respectively. Since the stock offers good investment opportunity, we initiate a ‘BUY’ signal on the stock with a target price of Rs 170 expecting an appreciation of about 34% from the current level with the medium to long term investment horizon.

Disclaimer:

This document is prepared on the basis of publicly available information and other sources believed to be reliable. Whilst we are not soliciting any action based on this information, all care has been taken to ensure that the facts are accurate and opinions given fair and reasonable. This information is not intended as an offer or solicitation for the purchase or sell of any financial instrument. Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited and any of its employees shall not be responsible for the content. The companies and its affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities there of, company (ies) mentioned here in and the same have acted upon or used the information prior to, or immediately following the publication.