Shares of logistics service provider Gateway Distriparks fell more than 6% in intraday trade on BSE on August 3, a day after the company posted its June quarter earnings.
However, the stock pared most losses and ended 1.87% lower at ₹70.70 on BSE.
The company's consolidated profit rose 34.04% year-on-year (YoY) to ₹58.44 crore in Q1FY23 against ₹43.60 crore in the same quarter last year. Total income rose 4.51% YoY to ₹347.22 crore from ₹332.25 in Q1FY22.
EBITDA, however, slipped 1.05% YoY to ₹90.86 crore while EBIDTA Margin also declined 1.47% YoY to 26.17% in Q1FY23.
“The first quarter has seen the company increase revenue, volumes and market share. The growth could have been higher but there was an impact from the lockdowns in China, disrupting the supply chain worldwide and affecting the trade. Our focus remains on improving our profitability by increasing volumes, improving operational efficiencies, and further reducing our debt and finance cost. The company is also looking actively to expand into more rail-linked ICDs in North India," said Prem Kishan Dass Gupta, Chairman & Managing Director of the company.
The stock opened lower in the next trading session on August 3 as investors reacted to the miss on BIDTA numbers.
Brokerages keep faith
The company faced challenges in Q1FY23 due to lower export volume and a shortage of containers amidst the ongoing Russia-Ukraine conflict.
However, some brokerages have faith in the company's growth outlook.
Brokerage firm Nirmal Bang has a buy call on the stock with a target price of ₹88.
"We are optimistic on Gateway Distriparks on the back of (1) further room for increasing sales volume from the Rail segment (about 20% growth is expected), driven by better turnaround time, while the operation of double stack trains on the Western DFC route will shift volume from road to rail over the next 2 years (2) the company expects to increase EBITDA/TEU volume from the current level of ₹4,891 to ₹5,300 in FY23 (3) comfortable debt position and further possibility of reduction in debt and interest expenses in FY23 as the company is making scheduled payments to its NCD holders and renegotiating reduction in interest rates with the lenders," said Nirmal Bang.
Brokerage firm Kotak Securities also has a buy call on the stock with a target price of ₹95 and said that the company reported an in-line EBITDA adjusted for one-off expense, kick-starting the first year where the company will be net cash.
Kotak highlighted that With owned land bank making, the company is capable of quadrupling volumes over time, and it is well-placed to benefit from the full commissioning of DFC.
"Gateway Distriparks shared the possibility of the same becoming high-teens to 20%+ growth quantum as customers start converting to a multimodal solution and the DFC gets connected to JNPT and Virangam terminals. On the value the proposition of DFC for customers, its shares transit times reducing to two-thirds already for Mundra and Pipavav and with much lower volatility versus earlier," Kotak said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking firms and not of MintGenie.
