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Gujarat Pipavav: YoY normalisation of operations

News: Gujarat Pipavav's Q2 revenues grew 7% YoY to Rs.195 crore, as 7% decline in container volumes (~70% of revenues) was countered by 53% growth in bulk volumes. However, in spite of the unfavourable product mix, EBITDA margins contracted mere 30 bps to 56% (gross margins expanded 110 bps to 78.7%), leading to 6% growth in the absolute EBITDA to Rs.109 crore. However, PAT de-grew 8% to Rs.46 crore as strong operational performance was negated by an exceptional expense of Rs.9 crore related to property and plant damage by cyclone in Q1.

Views: Although container volumes continue to remain under stress due to higher ocean freight charges, unavailability of containers etc, healthy uptick in bulk volumes has supported revenues. The management commentary regarding the extension of the concession term with GMB remains a key trigger to watch, along with anticipated normalisation of container freight market.