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Recommendations India

Gateway Distriparks Q4FY14 results update

May 8, 2014, Thursday, 12:26 GMT | 07:26 EST | 15:56 IST | 18:26 SGT
Contributed by Nirmal Bang

GDL reported Q4FY14 results in line with our expectations. Consolidated revenues came in at Rs. 265.4 crore up 7.5% QoQ/flat YoY on the back of better volumes in the Rail segment. EBIDTA margins fell by 180 bps QoQ to 26.4% on the back of sharp fall in CFS margins. Snowman business grew 30% YoY on the back of continued expansion. The current Quarter results saw good performance in the Rail segment which has offset slowdown in the CFS segment. At CMP, the stock is trading at a P/E of 11.9/10x its FY15E/ FY16E earnings. We had recommended the stock at Rs.140 in Sep 2012 and our target has got achieved. GDL is listing its cold chain subsidiary Snowman Logistics which we believe might unlock some value for investors. Also, improving global and domestic economic conditions can be positive for the company. We recommend investors to Hold the stock.

CFS – good Volumes; hit on Realizations

CFS volumes grew 5.5% QoQ however realizations fell by 2.6% QoQ which we believe was to retain market share. Overall EBIDTA margins in the CFS business have fallen by 10.7% to 33.6% QoQ basis.

Mumbai volumes were down 3.1% YoY/grew 9.3% YoY. Chennai and Vizag volumes fell by 6% and 13% QoQ respectively. Kochi CFS reported significant rise in volumes by 322% QoQ. It has also shown breakeven in Q4FY14.

Rail – Improvement in margins

Rail volumes saw significant growth in volumes of 13% on QoQ. However, margins continued to grow during the quarter on the back of better realizations due to increase in double stacking. Margins grew by 310 bps QoQ to 21.7%.

Snowman – Growth and Expansion going hand in hand

Revenues grew 30% YoY to Rs.44 crore. Margins of this business remained flat YoY at 23.5%. The company has filed for DRHP with Sebi and is expected to come with an IPO in CY2014.

FY14 Highlights

Revenues for FY14 grew by 6%, CFS de-grew by 3%; Rail grew by 5.2% and Snowman by 35%. CFS margins fell 550 bps for the year while Rail and Snowman grew by 430bps and 320 bps respectively.