IndiaNivesh Research Report:
We initiate coverage on Gujarat Pipavav Port Ltd. (GPPL) with BUY rating and Price Target of Rs 75. Our rationale for BUY is on the back of (1) Scale-up in Container volumes (from 570,500 TEUs in CY12 to 715,200 TEUs in CY14E) to lead to 25.3% revenue CAGR during CY12-14E, (2) likely pick-up in exports-imports cycle, (3) continued growth trends from PRCL, and (3) unlevered Balance Sheet with 69.9% earnings CAGR during CY12-14E.
IDFC Research Report:
We continue to like GPPL for its strong parentage, geographical advantage and scalability potential. We estimate 26% earnings CAGR over CY13-15E led by continued cargo growth and operating leverage. Stock trades at 12.3x CY15E earnings and 1.8x P/B. Maintain Outperformer with a price target of Rs80.
Kotak Securities Research Report:
GPPL is now adding capacity in its container segment from current 0.85 mn TEUs to 1.5 mn TEUs by CY15E.The company has tied up ECB finance (low average cost) for this capex at the port. Overall we estimate container volumes for the port to grow by ~15% to 0.76 mn TEUs in CY14E and by ~11% to 0.85 mn TEUs in CY15E. High margin liquid may start contributing to the volume from the current year. Pipavav Rail Corporation has also started contributing to the profitability. Recommend Accumulate with an increased TP of Rs 80 (earlier Rs 70) on (1) strong growth (2) healthy operations, (3) regular client addition and, (4) improved rail operations. High dependence on container segment and increasing port competition in Gujarat are two key risks to investment in the stock.
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