Gateway Distriparks March quarter result analysis

MUMBAI: Gateway Distriparks' rail business continues to remain the key driver for the company as its remaining divisions are showing sluggish growth due to the economic slowdown.

In the quarter ending March 2013, revenues from Container Freight Stations ( CFS) segment grew by 9.2% y-o-y. However, increased competition at JNPT on the back of stagnant capacity led to a decline in realisation. Its net profits from this segment fell 30% to Rs 17 crore in March 2013 quarter.

The revenues from rail segment, which is the company's major operating segment, grew by 10% y-o-y on the back of lower empty running of rakes. In addition, its margins improved by 600 basis points on the back of operation of double stacking facilities. Going ahead, the company's rail segment would be key driver for company's growth. With the implementation of double stacking and hub and spoke model, the rail volumes and margins are expected to improve in future. Besides, its cold chain division, which is still at a nascent stage, will start contributing significantly in the long term. At present, cold chain division contributes just 12% to its total revenues. In this division, the company has a total capacity of 36,000 pallets until the end of FY13.

The management intends to add another 35,000 pallets by the end of FY14. With a debt-to-equity ratio of 0.2, the company will not have any trouble in meeting its capex requirements.