Gateway Distrparks reports 5% year-on-year growth in net profits

MUMBAI: A robust growth in Cold chain and rail business helped Gateway Distriparks to offset the effect of lower volumes in its Container Freight Stations (CFS) segment in the quarter ending June 2012. As a result, the company even in the bleak macro-environment reported a 5% y-o-y growth in net profits.

In June 2012 quarter, the revenues from CFS segment fell 5% due to flat volumes. CFS is the major business segment of the company that contributed 46% to total revenues in FY12.

However, its rail business showed an impressive 56% growth in revenues due to addition of new routes. In addition, capacity addition in its cold chain division led to a 64% y-o-y growth in revenues in June 2012 quarter.

Going ahead, the company's CFS volumes are likely to be under pressure due to a slowdown in the economy. Although its rail and cold chain business may show a decent growth, the company may not be able to report a substantial growth in net profits.

The company has planned a capex of Rs 100 crore in its CFS business. This will help the company in its growth in CFS business during a pick up in the economy.

At current market price of Rs 134, the stock is trading at a P/E of Rs 11. The present stock price reflects the lower sentiment due to a slowing economy.