Add Gateway Distriparks, target price Rs 332: ICICI Securities

ICICI Securities has add call on Gateway Distriparks with a target price of Rs 332. The current market price of Gateway Distriparks is Rs 289.95. Time period given by analyst is one year when Gateway Distriparks Ltd. price can reach defined target.

Gateway Distriparks Ltd., incorporated in the year 1994, is a Small Cap company (having a market cap of Rs 3901.12 Crore) operating in Logistics sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 332.25 Crore, down -5.91 % from last quarter Total Income of Rs 353.11 Crore and up 30.64 % from last year same quarter Total Income of Rs 254.33 Crore. Company reported net profit after tax of Rs 43.33 Crore in latest quarter.


Investment Rationale
GDL remains a direct play on: i) rail freight progressively gaining share over road, accentuated by DFC, ii) cold chain logistics opportunity in India augmented by increased focus on pharma vertical, given its 40% controlling stake in Snowman Logistics. Net debt has reversed up in the quarter, up by Rs270mn QoQ to Rs4.5bn (reported). Net debt at ~ 13% of market cap, majority of the deleveraging benefit is behind us. Also, there is not much debt repayment scheduled for in FY22E. Even with higher EBITDA assumptions for Rail and CFS as well as higher attributed multiple for the rail business, our target price justifies an ADD, leading to the downgrade in recommendation.

Promoter/FII Holdings
Promoters held 32.1 per cent stake in the company as of June 30, 2021, while FIIs held 25.3 per cent, DIIs 26.1 per cent and public and others 16.5 per cent.