Gujarat Pipavav (GPPL) outperforms market
Disclaimer: Information presented on this site is a guide only. It may not necessarily be correct and is not intended to be taken as financial advice nor has it been prepared with regard to the individual investment needs and objectives or financial situation of any particular person. Stock quotes are believed to be accurate and correctly dated, but www.stockmarketindian.com does not warrant or guarantee their accuracy or date.
www.stockmarketindian.com takes no responsibility for any investment decisions based on recommendations provided on website.
Financial contents like Technical charts, historical charts and quotes are taken from NSE and Yahoo sites.
Note - All quotes are delayed by 15 minutes and unless specified.
Google Adsense Ads are posted on every page of the website so visitors clicking on Ads and going to those links and carrying any financial deal is not at all related to www.stockmarketindian.com and any financial deal should be done on their own sole responsibility.
Please read at www.stockmarketindian.com/disclaimer.php before using any material or advice given at www.stockmarketindian.com
6 April 2016
Welcome to Financial House......your place to Learn and Earn
While the equity markets have been dull in the past three months, Gujarat Pipavav Port Limited (GPPL), a subsidiary of international container terminals and port company APM Terminals, has gained eight per cent. This is despite the fact that the company reported weak results in the December 2015 quarter with total volumes falling 18 per cent to 3.3 million tonnes, revenues dropping 10 per cent to Rs 165 crore and higher deferred taxes pulling down profits by 40 per cent to Rs 53 crore, on a year-on-year (y-o-y) basis.
While the third quarter of FY16 was disappointing, there are positives for GPPL.
First, despite decline in volumes, operating margins rose 50 basis points y-o-y to 60.5 per cent, helped partly by its recent tariff hike of five per cent (in dollar terms). Also, GPPL has managed to rationalise its costs to a large extent and its impact was felt in the December 2015 quarter where operations costs were down 37 per cent y-o-y.
Volumes dropped mainly due to an important far West Asia shipment shifting from GPPL to Mundra Port. However, the new coastal service added recently along with other expansions should help push volumes.
Second, unlike most ports in the western region where coal is an important shipment, GPPL derives only 30 per cent of its volumes from coal. Nearly 60 per cent of its business is from container handling and 10 per cent is from liquid terminals. GPPL’s container-handling capacity of 0.85 million twenty foot equivalent units (TEUs) will also increase to 1.35 million TEUs this month. The capex is completely funded from internal accruals, which would help maintain its debt-free status.
With global trade remaining on a weak footing, there are near-term demand challenges.
However, analysts say sizable growth options, good quality management and high dividend possibility are the key reasons why the they recommends ‘buy’ on GPPL.