Result Update | Ports | 24 October 2013

Aditya Birla Money Limited

Cello Triumph, Unit No. 502-503 & 505 | I. B. Patel Road | of f W.E. Highway | Goregaon (East) | Mumbai - 400063 | Tel: +91 22 61802800

Page No. 1

Result Anal ysis
Strong top-line growth; Container volumes rebound on back of festive season: GPPLs
top-line during 3QCY13 jumped by 36.4% YoY to `1,180mn. The Container volumes
segment positively surprised with 29.4% growth YoY and 14.0% QoQ to ~0.16mn teus; while
the bulk volumes increased by 31.5% YoY but dropped marginally by 3% QoQ to ~1mmt. On
the bulk front Coal volumes have started picking up, however, fertilizer volumes have not
picked up on account of delays in government tenders. On the container volume front
volumes rebounded strongly because of the upcoming festive season. We maintain our top-
line estimates for CY13 & CY14 at `5,007mn and `5,547mn respectively.
Operating margin rebounds. The Companys operating profit increased by 82.4% YoY and
12% QoQ to `614.4mn; while operating margin expanded by 1295bps YoY and 361bps QoQ
to 48.6% during 3QCY13. Operating margin has expanded on the back of strong volume
growth especially on the container front coupled with better realizations. On the back of
current commodity mix and volume we maintain our operating margin estimate for CY13 and
CY14 to 46.3% and 48.5% respectively.
Debt levels under control; likel y to increase marginall y as capex kicks in: The
companys debt to equity continues to be under ~0.4x and well under the comfort zone.
GPPL has also tied up for $152mn debt of which ~75% is likely to be dollar denominated;
however the capex and fund raising plans have been put on hold for the time-being as
the National Green Tribunal has raised some issues. The management expects further
clarity on the issue post its hearing with MOEF scheduled this month end.
Other Key Highlights:
GPPL revised its tariff structure upwards in August 2013 and the full benefit will come from
4QCY14 onwards.
During the quarter company witnessed 1 vessel being added which will take some time to
stabilize and has the potential to bring in volumes to the tune of 50,000-60,000 TEUs
annually.
Liquid volumes to pick up gradually from Q4CY13; however actual volume will start flowing in
from 2HCY14 onwards.
Outlook and Valuations:
GPPL is witnessing strong volume growth; however the mix is fluctuating on quarterly basis
between bulk and containers. We believe the fluctuations in the commodity mix will stabilize in
coming quarters and volume growth will catch up as the economy re-bounds. Realizations are
likely to improve as a) companys 70-75% of the revenues is in dollar terms and b) full impact of
upward revision in tariff comes in 4QCY13. EBITDA margin have rebounded strongly and are
likely to improve CY14 onwards as a) Container volumes pick up and b) Liquid volumes pick up
gradually by 2HCY14 onwards. The Companys profitability is likely to improve as volumes and
operating leverage improves. We maintain our top-line estimates and operating margin estimates
for CY13 and CY14 respectively, while factoring in higher other income and lower finance costs
we revise our PAT estimates upwards by 6.3% and 3.1% to `1,162 mn and `1,406mn for CY13
and CY14 respectively. We maintain our Buy rating on the stock with a target price of `58 giving
an upside of 15.3% from current levels. At the CMP of `50.2 the stock trades at a 1.7x CY14E P/B
and 10.7x its CY14E EV/EBITDA.

Rating
Closing
Price (`)
Target
Price (`)
Upside /
(Downside) %
Buy 50.2 58.0 15.3
Source: ABML Research

Company Data
BSE Code 533248
NSE Code GPPL
Equity Capital (` mn) 483.4
Face Value (`) 10
Market Cap (` mn) 24,269
Avg Daily Volume (Qtly) 2,45,800
52 week H/L (`) 54/41
Source: NSE, BSE


Holders Sep 13 June 13 Mar 13
Promoters 43.0 43.0 43.0
FIIs 33.5 34.3 33.0
MFs/Banks & FIs 12.9 11.7 12.1
Public & Others 10.6 11.0 11.9
Source: BSE


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GCPL Return Sensex Return

Source: Capitaline

Shreyans Mehta
022-61802829
shreyans.mehta@adityabirla.com


In ` mn Sales
YoY
(%) EBITDA
YoY
(%)
Net
Profit
YoY
(%)
EPS
(`)
YoY
(%)
EBITDA
%
RoE
(%)
RoCE
(%)
P/E
(x)
P/BV
(x)
CY12 4,160 4.9 1,819 (0.5) 740 7.9 1.5 7.9 43.7 6.1 9.3 32.8 2.0
CY13E 5,007 20.4 2,318 27.5 1,162 57.1 2.4 57.1 46.3 8.7 10.9 20.9 1.8
CY14E 5,547 10.8 2,690 16.0 1,406 21.0 2.9 21.0 48.5 9.6 10.8 17.3 1.7
Source: Company, ABML Research
Financial Snapshot
Analyst Details
Chart: GPPL vs. Sensex
Shareholding (%)
Gujarat Pipavav Port Ltd (GPPL) Operationall y strong quarter

Result Update | Ports | 24 October 2013


Aditya Birla Money Limited
Cello Triumph, Unit No. 502-503 & 505 | I. B. Patel Road | of f W.E. Highway | Goregaon (East) | Mumbai - 400063 | Tel: +91 22 61802800

Page No. 2

Particulars (in ` mn) 3Q CY13 3Q CY12 YoY (%) 2Q CY13 QoQ (%)
Net sales 1,180 865 36.4% 1,131 4%
Other Operating Income 83 79 5% 89 (7.6%)
Total Income 1,262 943 33.8% 1,220 3%
Total expenses 648 607 6.9% 670 (3.3%)
EBIDTA 614 337 82.4% 549 12%
EBIDTA (%) 48.6% 35.7% 1,295 bps 45.0% 361 bps
Depreciation 149 137.0 8.8% 151 (1.1%)
EBIT 465 200 132.9% 399 17%
Non-operating income 74 59 25.6% 49 50.8%
Interest 98 177 (44.7%) 95 3.0%
PBT 441 82 439.5% 353 25%
(-) Tax 0 0 0.0% 0 0.0%
Tax/ PBT (%) 0.0% 0.0% - 0.0% -
PAT 441 82 439.5% 353 25%
Extraordinary Income/Losses 0 0 0.0% 0 0.0%
Adjusted PAT 441 82 439.5% 353 25%
Particulars 3Q CY13 3Q CY12 YoY (%) 2Q CY13 QoQ (%)
Container Volume (TEU's) 1,63,000 1,25,945 29.4 1,43,000 14.0
Bulk Volume (MMT) 1.0 0.8 31.5 1.0 (3.1)
Source: Company data, ABML Research



Date Reports Rating
Last
Closing Price (`)
Target
Price (`)
Upside /
(Downside) %
13/05/13 Initiating Coverage Buy 48.0 58.0 20.9
31/07/13 2QCY13 Result Update Buy 48.0 58.0 25.3
24/10/13 3QCY13 Result Update Buy 50.2 58.0 15.3
Source: ABML Research
Recommendation summary
Financial Results (3Q CY13) GPPL

Result Update | Ports | 24 October 2013


Aditya Birla Money Limited
Cello Triumph, Unit No. 502-503 & 505 | I. B. Patel Road | of f W.E. Highway | Goregaon (East) | Mumbai - 400063 | Tel: +91 22 61802800

Page No. 3

Profit & Loss Balance Sheet

In ` mn
CY11 CY12 CY13E CY14E
In ` mn
CY11 CY12 CY13E CY14E
Net sales 3,968 4,160 5,007 5,547

Equity capital 4,236 4,834 4,834 4,834
YoY (%) 4.9 20.4 10.8

Reserves 3,694 7,283 8,445 9,851
Total expenses 2,140 2,342 2,689 2,857

Net worth 7,930 12,117 13,279 14,686
Operating and other exp 1,798 1,981 2,203 2,330 Preference capital
Employee Cost 341 361 486 527 Total borrowings 6,797 3,145 4,337 5,937
EBIDTA 1,828 1,819 2,318 2,690

Deferred tax 0 0 0 0
YoY (%) 0.6 (0.5) 27.5 16.0

Total liabilities 14,727 15,262 17,617 20,623
EBIDTA (%) 46.1 43.7 46.3 48.5


Depreciation (558) (549) (598) (655)

Asset Block 12,698 12,462 12,171 11,841
Non-operating income 153 154 197 195

Capital WIP 90 1,577 2,716 6,449
EBIT 1,423 1,424 1,918 2,231

Investments 830 830 830 830
Interest (852) (684) (465) (473)


Extraordinary income/(expenses) 0 0 0 0

Current assets 2,224 1,765 3,546 3,326
PBT 571 740 1,452 1,758

Inventories 57 115 82 91
(-) Tax 114 0 290 352

Debtors 324 418 439 532
Current Tax 114 0 290 352 Cash 705 511 1,859 1,381
Deferred Tax 0 0 0 0 Loans and advances 530 550 892 988
Tax/ PBT (%) 20.0 0.0 20.0 20.0

Other Current Assets 608 172 274 334
PAT 685 740 1,162 1,406

Current liabilities & Provn (1,115) (1,372) (1,646) (1,824)
YoY (%) 7.9 57.1 21.0




Net current assets 1,109 393 1,900 1,502


Miscellaneous expenses 0 0 0 0


Total assets 14,727 15,262 17,617 20,623



Key Ratios

Cash Flow
CY11 CY12 CY13E CY14E

In ` mn CY11 CY12 CY13E CY14E
EPS (`) 1.6 1.5 2.4 2.9

PBT 571 740 1,452 1,758
Adjusted EPS (`) 1.4 1.5 2.4 2.9 Depn and w/o 558 549 598 655
CEPS (`) 2.9 2.7 3.6 4.3

Interest Exp 852 684 465 473
Book value (`) 18.7 25.1 27.5 30.4

Change in working cap (1,201) 849 (159) (80)
Dividend per share (`) 0.0 0.0 0.0 0.0

Others (172) (201) (290) (352)
Debt-equity (x) 0.9 0.3 0.3 0.4

Operating cash flow 608 2,621 2,067 2,454
ROCE 9.7 9.3 10.9 10.8


ROE 8.6 6.1 8.7 9.6

Capex (525) (1,751) (1,446) (4,059)
Investments 406 37 0 0
Valuations

Others 108 86 0 0
PE (x) 31.0 32.8 20.9 17.3

Investing cash flow (10) (1,628) (1,446) (4,059)
Cash PE (x) 17.1 18.8 13.8 11.8




Dividend 0 0 0 0
Price/book value (x) 2.7 2.0 1.8 1.7 Equity 0 3,500 0 0
Dividend yield (%) 0.0 0.0 0.0 0.0 Debt (1,215) (4,735) 1,193 1,600


Others (926) 347 (465) (473)
EV/sales (x) 7.7 6.5 5.3 5.2

Financing cash flow (2,141) (888) 727 1,127
EV/EBITDA (x) 16.6 14.8 11.5 10.7




Net change in cash (1,544) 105 1,348 (478)


Opening cash 1,949 405 511 1,859


Closing cash 405 511 1,859 1,381
Source: ABML Research, company data
Financials Snapshot

Result Update | Ports | 24 October 2013


Aditya Birla Money Limited
Cello Triumph, Unit No. 502-503 & 505 | I. B. Patel Road | of f W.E. Highway | Goregaon (East) | Mumbai - 400063 | Tel: +91 22 61802800

Page No. 4

Research Team
Vivek Mahajan Hemant Thukral
Head of Research Head Derivatives Desk
022-61802820 022-61802870
vivek.mahajan@adityabirla.com hemant.thukral@adityabirla.com

Fundamental Team
Akhil Jain Metals & Mining/Mid Caps 022-61802827 akhil.jain@adityabirla.com
Sunny Agrawal FMCG/Cement/Mid Caps 022-61802831 sunny.agrawal@adityabirla.com
Sumit Jatia Banking & Finance 022-61802833 sumit.jatia@adityabirla.com
Shreyans Mehta Construction/Real Estate 022-61802829 shreyans.m@adityabirla.com
Dinesh Kumar Information Technology/Auto 022-61802834 dinesh.kumar.k@adityabirla.com
Pradeep Parkar Database Analyst 022-61802839 pradeep.parkar@adityabirla.com

Quantitative Team
Jyoti Nangrani Sr. Technical Analyst 022-61802838 jyoti.nangrani@adityabirla.com
Sudeep Shah Technical Analyst 022-61802837 sudeep.shah@adityabirla.com

Advisory Support
Indranil Dutta Advisory Desk HNI 022-61802824 indranil.dutta@adityabirla.com
Suresh Gardas Advisory Desk 022-61802835 suresh.gardas@adityabirla.com
Sandeep Pandey Advisory Desk 022-61802832 sandeep.pandey@adityabirla.com

ABML research is also accessible in Bloomberg at ABMR


Result Update | Ports | 24 October 2013


Aditya Birla Money Limited
Cello Triumph, Unit No. 502-503 & 505 | I. B. Patel Road | of f W.E. Highway | Goregaon (East) | Mumbai - 400063 | Tel: +91 22 61802800

Page No. 5

Our Rating Methodology
Stock Ratings Absolute Returns (R)
Buy R > 15%
Accumulate 5% < R 15%
Neutral -5% < R 5%
Reduce -10% < R 5%
Sell R -10%





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