Gateway Distriparks Ltd. share price target

EBITDA/PAT below estimates; volumes appear bottoming out; awaiting EXIM revival Gateway Distriparks' (GDPL) reported EBITDA* (RAIL + CFS) of INR555m came in below our estimate of INR600m (-20% YoY, -2% QoQ), primarily due to lower-than-estimated EBITDA in the rail division. PAT (before associate/minority interests) of INR225m (+13% YoY, -7% QoQ) missed our estimate of INR274m. Difference at the PAT level increased due to higherthan-estimated tax rate of 35.6% (due to one-off). Rail volumes subdued, profitability impacted by continued EXIM imbalance Rail division reported EBITDA of INR323m (est. of INR358m; -19% YoY, -8% QoQ). Container volumes stood at 52,024TEU (est. of 52,300TEU; -5% YoY, +3% QoQ)....

GDLs strategies to enhance its reach and capacity through organic and inorganic expansion would trigger growth: GDL is consolidating its existing positions at various CFSs (Container Freight Stations) and ICDs (Inland Container Depots). Its expanding by setting up/acquiring new CFSs at major upcoming modern ports and ICDs at various industrial areas, connected through rail and roads.

Results below estimates; macro revival key to volume uptick; Completion of Viramgam terminal to boost Rail division's margin GDPL's reported adjusted EBITDA came in at INR569m (vs. our estimate of INR617m; -38%...

Strong growth with margin improvement in rail logistics: The rail logistics business of the company has witnessed strong growth of 22% in FY15 with margins improving by over 600 bps on back of tariff hikes in Dec-14 and Mar-15. It has also resorted to double stacking of containers to reduce haulage charges. Though volume growth is likely to remain muted in H1FY16 due to increase in tariffs, it is expected to pick up H2FY16. However, with double stacking and higher proportion of imports handle margins are likely to be sustained. Further, government initiatives to set up Dedicated Freight Corridors (DFC) will aid to...