February 5, 2023

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Gateway Distriparks Q3 Results Review

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Gateway Distriparks Ltd.’s Q3 FY23 performance was 6% below our expectations mainly due to lower volumes. Key takeaways:

  1. throughput dropped for both rail and container freight station/inland container depots segments owing to decline in export volumes (down 15-20% YoY) and slower running of trains in Dec-22;

  2. Ebitda/twenty-foot equivalent unit improved by 4.4% YoY (3% QoQ) to Rs 5,398 due to higher blended realisations; and

  3. ‘net debt / Ebitda’ rose to 0.86 times (Q2 FY23: 0.67 times) owing to completion of the Kashipur ICD acquisition.

Going ahead, Gateway Distriparks’ management expects growth in the rail business though CFS segment is likely to remain stagnant. Besides, the guidance of 18% YoY growth in rail business for FY24E might be toned down slightly (in the course of Q4).

Taking cognisance of the withdrawn discount on empty containers by Indian railways and slightly lower volumes, we lower our FY23E/FY24E Ebitda by 3%/5%, but retain our valuation multiple of 10 times FY24E Ebitda owing to the increase in market share at key terminals.

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ICICI Securities
2023-01-25 04:38:15

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