Result Update February 2, 2015

Rating matrix Rating : Buy Gateway Distriparks (GATDIS) | 383 Target : | 485 Target Period 12 months Potential Upside : 26% Strong volumes continue to drive growth… What’s changed? • Gateway Distriparks reported spirited Q3FY15 revenue growth of Target Changed from |330 to |485 10% YoY to | 273.7 crore vs. | 248.2 crore in Q3FY14. Rail segment EPS FY16E Changed from |19.9 to |20.7 revenues recorded healthy growth of 19.5% YoY to | 163 crore while EPS FY17E Changed from |24.3 to |24.6 Rating Unchanged CFS posted strong growth ~26% YoY to | 88.6 crore • EBITDA in the quarter was at | 86.4 crore growing strongly by 35% YoY whereas QoQ it remained mostly flattish. On the margin front, Quarterly performance EBITDA margin expanded ~582 bps YoY, 227 bps QoQ to 31.6% Q3FY15 Q3FY14 YoY (%) Q2FY15 QoQ (%) • PAT for the quarter stood at | 54.3 crore posting growth of ~61% Revenue 273.7 248.2 10.3 292.7 -6.5 YoY. On the volume front, CFS throughput for Q3FY15 stood at EBITDA 86.4 63.9 35.2 85.7 0.7 96,612 TEUs with rail/ICD at 63,952 TEUs, posting growth of 16% and EBITDA (%) 31.6 25.7 495 bps 29.3 581 bps 24%, respectively, YoY PAT 54.3 31.9 70.4 47.7 13.8 CFS volume grows strong at Vizag, ; volumes return Key financials GDL with ~5,50,000 TEUs annual capacity is one of the largest container | Crore FY14 FY15E FY16E FY17E freight station (CFS) operators in India. Throughput of GDL’s CFS Revenue 1012.8 1067.4 1157.6 1338.8 business grew at a modest CAGR of ~1% in FY11-13 to 342662 TEUs. EBITDA 257 334 365 425 However, with an improvement in the economy and maturity of new CFS Net Profit 136 201 225 268 EPS (|) 12.5 18.5 20.7 24.6 such as Kochi and Vizag, we expect CFS volumes to post a CAGR of 16% over FY14-17E. For Q3FY15, CFS volume at Mumbai grew ~11% YoY to Valuation summary 56,016 TEUs whereas other CFS at and Kochi posted strong FY14 FY15E FY16E FY17E growth of 29% and 364% YoY to 23,114 and 3907 TEUs, respectively. P/E 30.8 20.6 18.3 15.4 Going ahead, we expect volume growth to sustain as major port’s Target P/E (x) 38.8 26.3 23.4 19.7 container volume growth shows significant traction. EV/EBITDA (x) 15.4 12.0 10.8 9.2 P / BV (x) 5.0 4.4 3.9 3.4 Rail/ICD segment continue to grow strong catalysing growth for GDL RONW (%) 16.2 20.8 20.2 20.6 GDL with nearly 785,000 TEUs capacity in ICD segment and 21 rakes in ROCE (%) 18.2 22.9 22.2 22.6 Gateway Rail Freight (GRFL) is the second largest container train operator (CTO) in the country. Rail/ICD throughput for GDL grew at a CAGR of Stock data ~7% over FY12-14 to 205538 TEUs. Going ahead, it is expected to grow Particular Amount at ~13% CAGR over FY14-17E. The rakes ply mainly on the Exim route, Market Capitalization (| Crore) 4127 thereby reducing empty running and garnering higher margins. Operating Totak Debt (FY14) (| Crore) 276.1 Cash and Investment (FY14) (| Crore) 117.0 margins initially declined (100 bps YoY to 15% in FY13) in the rail EV (| Crore) 4,285.9 segment due to a hike in freight by Indian Railways. However, in FY14, 52 week H/L 458 / 122 GDL has been able to pass on those hikes (partially) and also enhanced its Equity Capital (| Crore) 108.6 operational efficiency with double stacking and closure of unprofitable Face Value (|) 10.0 routes, enabling the rail/ICD segment to report a 500 bps YoY improvement in the EBITDA margin. For the quarter, the margin for the rail segment improved 18.8% to 31.1% YoY. Further, with the Peer Comparison ICD becoming operational and expected to gain critical mass in the next 1M 3M 6M 12M Gati -1.6 21.3 120.9 319.5 two quarters, throughput of the rail/ICD segment is expected to improve 10.2 30.7 76.4 97.3 further. Going ahead, GDL is planning a capex of nearly | 75 crore in FY15 Concor 4.4 5.7 7.0 93.0 to develop another ICD near Ahmedabad, which is expected to be Gateway Distripark 9.6 42.1 61.6 205.9 operational in 18-24 months.

CFS volumes, higher rail segment margins continue to perk-up valuation

As container volumes at major ports like JNPT and Chennai post growth of 10% and 6% YoY, respectively, in YTD, we expect the CFS segment to Research Analysts post robust growth. Further, as diesel prices ease together with double Bharat Chhoda stacking and operationalisation of Faridabad ICD, we anticipate GDL [email protected] rail/ICD segment will also report significant growth. Finally, as the Soumojeet Banerjee associate cold chain segment continues to grow at a steady pace for GDL, [email protected] we value it with 20% holding company discount together with SOTP for

CFS and rail segment to arrive at a target price of | 485 with a BUY

recommendation.

ICICI Securities Ltd | Retail Equity Research

Variance analysis | Crore Q3FY15 Q3FY15E Q3FY14 YoY (%) Q2FY15 QoQ (%) Comments Revenue 273.7 258.7 248.2 10.3 292.7 -6.5 As JNPT and Chennai port volumes grew; CFS at these locations posted strong growth of 11% and 29%, respectively. Also, rail segment posted strong volumes

Employee Expenses 9.2 11.5 11.5 -20.3 11.0 -16.3 Road Transport 30.3 37.2 37.2 -18.7 43.0 -29.6 Rail Transport 103.2 87.5 85.4 20.9 101.2 2.0 Container Storage,Handling &Repairs 4.2 3.7 3.7 13.9 4.2 -0.5 Labour Contract charges & Fees 17.8 18.4 18.4 -3.5 20.6 -13.8 Other Expenditure 22.6 29.3 28.0 -19.3 26.9 -15.9 Total Expense 187.3 187.7 184.3 1.6 206.9 -9.5 EBITDA 86.4 71.0 63.9 35.2 85.7 0.7 EBITDA Margin (%) 31.6 27.5 25.7 582 bps 29.3 227 bps As high margin CFS business grows and there is significant margin improvement in rail segment; overall operating margin improves for GDL

Depreciation 20.0 24.7 20.3 -1.6 24.1 -17.0 Interest 4.3 7.0 7.5 -42.6 6.9 -37.0 Other Income 3.2 3.0 5.9 -46.3 2.9 7.5 PBT 65.2 42.3 41.9 55.6 57.8 13.0 Total Tax 12.6 6.3 8.6 9.9 Adj PAT (Incld Minority Int) 54.3 36.0 33.7 61.3 47.7 13.8

Key Metrics Q3FY15 Q3FY14 YoY (%) Q2FY15 QoQ (%) Comments CFS Volume (TEUs) 96,612 83,510 15.7 102,587 -5.8 Also, 11% and 29% volume growth in Mumbai and Chennai CFS, respectively, aids volume growth significantly for GDL. However, Vizag's volume declined nearly 4% YoY due to cyclone impact during the quarter

Rail Volume (TEUs) 63,952 51,581 24.0 67,706 -5.5 Rail volume posts significant growth of 24% YoY and 23% on YTD basis, thereby improving operating leverage of the segment Source: Company, ICICIdirect.com Research

Change in estimates FY16E FY17E (| Crore) Old New % Change Old New % Change Revenue 1,214.9 1,157.6 -4.7 1,403.8 1,338.8 -4.6 Revenue revised marginally downwards as growth in realisation in CFS & rail remains a challenge. EBITDA 349.5 365.4 4.6 416.1 425.4 2.2 EBITDA Margin (%) 28.8 31.6 280 bps 29.6 31.8 213 bps As volume improves in CFS & ICD Faridabad stabilises, EBITDA margins are expected to improve. Also, rail segment margin improves due to double stacking, thereby aiding margin PAT 215.9 225.2 4.3 263.8 267.5 1.4 EPS (|) 19.9 20.7 4.2 24.3 24.6 1.4

Source: Company, ICICIdirect.com Research

Assumptions Current Earlier Comments Unit FY14 FY16E FY17E FY16E FY17E CFS Throughput TEUs 340,004 468,472 533,683 468,472 533,683 CFS volume expected to grow at ~16% CAGR over FY14-17 as economy revives together with CFS in Kochi & Vizag gaining stability ICD/Rail Throughput TEUs 212,317 280,258 308,284 273,252 300,577 Rail/ICD volume expected to grow at 13% CAGR in FY14-17 as ICD Faridabad volume improves due to hub & spoke model

CFS Realization |/TEUs 8,625 9,371 9,840 9,371 9,840 Realisation to improve marginally as economy improves and price hikes are easier to pass on (kept largely unchanged over previous estimates) ICD/Rail Realization |/TEUs 26,710 25,448 26,212 28,199 29,045 Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 2

Company Analysis CFS segment volume revives as major port volume revives Previously, container volumes at JNPT port de-grew ~1% in FY12-14 but port volumes have show significant traction with volume growing ~10% YoY for YTD. Similarly, Chennai port volumes also posted a recovery (9.6% YoY for YTD) leading GDL’s CFS at Chennai to post volume growth of 28.6% YoY. Also, CFS volumes at Vizag and Kochi continue to improve showing a strong recovery, thereby posting growth of 16% and 338% YoY on a YTD basis, respectively. However, the EBITDA margin for the segment contracted from 55% in FY12 to 42% in FY14 and remained at ~41% for nine months of FY15 (for Q3FY15 CFS margin stood at 39%). Further, the CFS segment RoCE declined from 12% in FY12 to 8% in FY14. Going ahead, as the economy shows signs of a revival, the CFS at Vizag and Kochi are expected to gain momentum and ramp up volumes. Also, value-added services together with sustained growth are expected to improve margins for the segment.

Exhibit 1: JNPT port volume

JNPT port volumes declined in FY14 to 4161,000 TEUs 9500 ~4% YoY, thereby putting pressure on CFS volume of 8500 GDL. Going ahead, with anticipated increase in capacity 7500 at JNPT together with revival in port volumes due to 6500 4321 improvement in economy, we expect CFS volume to 4259 4161 5500 increase significantly. 3346 4500 000 TEUs 3500 1088 1076 1127 2500 1015 1095 982 1113 1500 1073 1065 1015 1132 500 1083 1085 1037 1101 FY12 FY13 FY14 FY15 (YTD)

Q1 Q2 Q3 Q4 Total

Source: Company, ICICIdirect.com Research

Exhibit 2: Segmental revenue Exhibit 3: Segmental EBITDA margin

600 60 55 535.8 563.4 50 500 454.3 50

400 40 42 313.3 300.3

300 292.7 % 30 24 21

| Crore 26 200 20 20 153.4 113.7 16 15 100 62.8 10

0 0 FY12 FY13 FY14 FY12 FY13 FY14

CFS Rail Cold chain CFS Rail Cold Chain

Source: Company, ICICIdirect.com Research Source: Company, ICICIdirect.com Research

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Rail/ICD segment improvement continues to provide respite Throughput for rail/ICD segment posted a CAGR of ~6% over FY12-14 to 212317 TEUs. With the Faridabad ICD (150,000 TEUs capacity) becoming operational and Exim gaining steam, we expect throughput for rail/ICD segment to post a CAGR of 13% over FY14-17E. The rail/ICD segment continues to be the largest contributor to revenue with ~55% coming from it. On the EBITDA margin front, margins improved from 16% in FY12 and 20% in FY14 to 31% in Q3FY15. The decline in margin was largely due to freight hike by Indian Railways, which was mitigated through pruning of loss making routes and carrying mostly export cargo. Going ahead, we expect the segment to perk up with operational enhancement by introducing the hub and spoke model and double stacking from its ICDs along with setting up of an ICD at Ahmedabad leading to higher volume growth and better operating margin in the range of 26-27% over FY15 and FY17.

Exhibit 4: Segmental throughput trend

400000 333422 334088 342662 340004 300000 233566 212317 180473 200000 131337 TEUs 100000

0 FY11 FY12 FY13 FY14

CFS Rail

Source: Company, ICICIdirect.com Research

Cold chain segment; EPS accretive in near term GDL with 40.4% stake in Snowman Logistics is its largest shareholder. Snowman’s capacity grew at a CAGR of ~75% over FY12-14 with increasing demand for integrated cold chain solutions. Currently, the total capacity stands at 79500 pallets by the end of Dec 2014 and is expected to add another 5000 pallets in Chennai and Mumbai warehouses by the end of the current fiscal. With blended utilisation of ~78% and operating margin of 22.3%, Snowman reported a net PAT of | 5.8 crore in Q3FY15. Going ahead, as there is significant growth in the segment, the capacity is expected to expand to 1,15,000 pallets in FY17 coupled with stabilisation of warehouses leading to better utilisation and margins.

Exhibit 5: Cold chain growth

60000 50000 40000

30000 55000 20000 46000 10000 18000 0 FY12 FY13 FY14

No of Pallets

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 4

Outlook and Valuation In FY09, the CFS segment profit (| 106 crore) compensated for the loss in the rail and cold chain segment. However, over the period, higher CFS capacity at JNPT and Chennai ports together with declining port volume led to contraction in the margins as well as profit for the CFS segment. Hence, at | 73 crore in FY14, CFS forms ~54% of net profit for GDL. Also, the CFS segmental EBITDA margin shrunk from 57% in FY09 to 42% in FY14. Apart from this, the rail segment turned EPS accretive from FY12 with PAT posting a CAGR of 32% over FY12-14 to | 51.3 crore and EBITDA margin improving from 16% to 20% over the same period. Further, cold chain segment also posted strong growth with PAT posting a CAGR of 52% over FY12-14 with a stable margin of 25% over the period. Consequently, overall revenue and PAT for GDL posted a CAGR of ~7% and ~3%, respectively, over FY12-14. Going ahead, we expect revenue and PAT to grow at a CAGR of ~10% over FY14-17E driven by growth in CFS throughput along with rail/ICD. To analyse GDL’s growth over the next couple of years, we segregate each business segment of GDL. We expect CFS revenue to post CAGR of 20% over FY14-17E aided by volume throughput CAGR of 16% over the same period. As volumes recover at major ports, we believe there will be a ramp up in volume for GDL’s CFS. Finally, earning for the CFS segment is expected to grow at 19% CAGR to | 123 crore in FY17E. Further, for the rail segment, with commissioning of the Faridabad ICD we expect throughput CAGR to be 13% in FY14-17E. With an economic recovery, Exim and domestic cargo is anticipated to post significant volume growth leading to revenue CAGR of 12% for the segment. Further, with measures such as double stacking and hub and spoke model, EBITDA margin for the rail/ICD segment is anticipated to improve 250 bps over FY14-17E resulting in EBITDA CAGR of 23%. Consequently, PAT for the segment is also expected to grow strong with 37% CAGR to | 132 crore in FY17E.

Based on our SOTP valuation we arrive at target market cap (FY17E) of | 1846 crore and | 2906 crore for CFS and rail/ICD segment, respectively. Also, with 40.4% share of associate company and 20% discount to holding company market cap for Snowman Logistics, we arrive at a consolidated target market cap of | 5269.5 crore entailing a target price of | 485 and continue with our BUY recommendation on the stock.

Exhibit 6: PE trend

Valuation matrix 500 Segment Market Cap (| Crs) 450 400 CFS 1846 350 Gateway Rail 2906 300 Snowman 517 250 200 Target Market Cap 5269 150 Target Price per share (|) 485 100 50 0 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

Close -Unit Curr 8.0 X 10.0 X 15.0 X 18.0 X 20.0 X

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 5

Company snapshot

500 Target Price |485 450

400

350

300

250

200

150

100

50

0 Jul-15 Jul-14 Jul-13 Jul-12 Jul-11 Jul-10 Oct-15 Oct-14 Oct-13 Oct-12 Oct-11 Oct-10 Apr-15 Apr-14 Apr-13 Apr-12 Apr-11 Apr-10 Jan-15 Jan-14 Jan-13 Jan-12 Jan-11 Jan-10

Source: Bloomberg, Company, ICICIdirect.com Research

Key events Date Event Jul-08 GDL announces buyback of shares at a price | 110 for an aggregate amount of | 64 crore Dec-08 GDL annouces 50 acre Rail linked logistics terminal at Sahnewal Mar-09 Allcargo picks up 6% stake in GDL; pushes stock up by 2.56% Dec-09 GDL gains 4.72% post announcement by International Finanace Corporation to invest | 24.9 crore in Snowman Frozen Food Feb-10 GDL stock gains 2.4% post foreign fund buys 0.59% stake in the firm; GDL mulls setting up rail terminals at Gujarat and Tamil Nadu Aug-10 GDL rises 2.5% as it raises | 300 crore via issue of compulsory convertible preference shares to Blackstone GPV Capital Apr-11 Higher container volume boosts Q4FY11 result for GDL as profit rises 38% YoY Jul-11 GDL net profit rises 46.6% YoY in June 2011; stock hits 52-week high Aug-12 Profit declines 19.6% YoY in June 2012 quarter to | 17.9 crore Feb-13 GDL acquired 100% stake in Chandra CFS and terminal operators at Chennai for a consideration of | 26.5 crore Feb-13 GDL begins full scale operations at its container CFS in Kochi Jun-13 Norwest Venture to invest | 60 crore in Snowman Logistics Ltd, cold chain subsidiary of GDL Oct-13 GDL net profit declines 19.3% in September 2013 quarter

Source: Company, ICICIdirect.com Research

Top 10 Shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S Position (m) Change (m) (in %) Dec-14 Sep-14 Jun-14 Mar-14 Dec-13 1 Prism International Pvt. Ltd. 30-Sep-14 22.26 24.2 0.0 Promoter 32.9 36.7 37.8 40.9 41.0 2 ICICI Prudential Asset Management Co. Ltd. 31-Dec-14 7.83 8.5 -0.1 FII 29.5 22.1 25.2 25.8 26.0 3 FIL Investment Management (Hong Kong) Limited 31-Dec-14 5.60 6.1 0.0 DII 25.7 25.3 20.6 16.4 17.4 4 Windmill International Pte. Ltd. 30-Sep-14 3.93 4.3 -1.2 Others 12.0 16.0 16.4 16.9 15.6 5 Mirae Asset Global Investments (India) Pvt. Ltd. 31-Dec-14 3.80 4.1 -0.9 6 Life Insurance Corporation of India 22-Oct-14 3.36 3.7 -0.3 7 Khattar (Sat Pal) 30-Sep-14 3.04 3.3 0.0 8 L&T Investment Management Limited 30-Sep-14 2.76 3.0 1.2 9 Gupta (Prem Kishan) 30-Sep-14 2.53 2.8 0.0 10 Franklin Templeton Asset Management (India) Pvt. Ltd. 30-Sep-14 2.51 2.7 1.1

Source: Reuters, ICICIdirect.com Research

Recent Activity Buys Sells Investor name Value Shares Investor name Value Shares FIL Investment Management (Singapore) Ltd. 6.67m 2.42m KSP Logistics, Ltd. -20.52m -3.68m L&T Investment Management Limited 4.93m 1.19m Parameswara Holdings, Ltd. -8.24m -2.98m Franklin Templeton Asset Management (India) Pvt. Ltd. 4.60m 1.11m Windmill International Pte. Ltd. -5.03m -1.20m BNP Paribas Investment Partners Asia Ltd. 2.73m 0.66m Mirae Asset Global Investments (India) Pvt. Ltd. -4.97m -0.90m Schroder Investment Management (Singapore) Ltd. 2.36m 0.57m Fidelity Management & Research Company -0.97m -0.58m

Source: Reuters, ICICIdirect.com Research

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Financial summary

Profit and loss statement | Crore Cash flow statement | Crore

(Year-end March) FY14 FY15E FY16E FY17E (Year-end March) FY14P FY15E FY16E FY17E Revenue 1,012.8 1,067.4 1,157.6 1,338.8 Profit after Tax 135.8 195.6 214.1 251.4 Growth (%) 6.2 5.4 8.5 15.7 Add: Depreciation 80.1 91.1 97.5 109.0 Transportation Cost 502.8 557.1 631.2 715.1 Cash Profit 216.0 286.7 311.7 360.4 Manpower Cost 83.4 90.7 104.2 120.5 Increase/(Decrease) in CL 88.9 50.4 5.5 1.1 Fees for Punjab conware's 16.2 17.4 18.7 20.1 (Increase)/Decrease in CA -42.6 85.5 -54.0 -49.4 Subcontract/Auction charges 25.8 32.0 31.6 36.6 CF from Operating Activities 262.2 422.7 263.2 312.1 Other Expenditure 127.5 142.4 160.9 186.9 Purchase of Fixed Assets -120.5 -120.5 -100.5 -100.5 Op. Expenditure 755.6 733.3 792.2 913.4 (Inc)/Dec in Investments -31.3 -95.0 -8.2 -9.9 EBITDA 257.2 334.1 365.4 425.4 Others -118.0 -85.5 0.0 -75.8 Growth (%) 4.4 29.9 9.4 16.4 CF from Investing Activities -269.8 -300.9 -108.7 -186.2

Depreciation 80.1 91.1 97.5 109.0 Inc/(Dec) in Loan Funds 26.9 -47.1 25.0 35.0 EBIT 177.0 243.0 267.9 316.4 Inc/(Dec) in Sh. Cap. & Res. 4.8 0.0 0.0 0.0 Interest 27.9 24.5 22.0 25.9 CF from financing activities 31.8 -126.6 -66.1 -33.9 Other Income 17.1 14.5 15.3 16.0 Net cash/cashflow 24.1 -4.8 88.4 92.0 PBT 166.2 233.0 261.2 306.6 Cl. Cash and cash Eq. 117.0 112.2 200.6 292.6

Growth (%) -4.1 40.2 12.1 17.4 Tax 19.0 35.0 47.0 55.2 Minority Interest 11.4 2.4 0.0 0.0 Share of Associate company 0.0 5.0 11.1 16.2 Adjusted PAT 135.8 200.6 225.2 267.5 Source: Company, ICICIdirect.com Research Growth (%) 7.1 47.7 12.2 18.8

Source: Company, ICICIdirect.com Research

Balance sheet | Crore Key ratios

(Year-end March) FY14P FY15E FY16E FY17E (Year-end March) FY14P FY15E FY16E FY17E Source of Funds Per share data (|) Equity Capital 108.6 108.6 108.6 108.6 Book Value 77.0 86.5 97.8 112.4 CCPS in GRFL 295.8 295.8 295.8 295.8 Cash per share 10.8 10.3 18.5 26.9 Reserves & Surplus 728.0 830.9 953.1 1,112.2 EPS 12.5 18.5 20.7 24.6 Shareholder's Fund 836.6 939.5 1,061.7 1,220.8 Cash EPS 19.9 26.4 28.7 33.2 Loan Funds 232.5 186.1 211.8 247.5 DPS 7.3 7.7 8.1 8.5 Minority Interest 125.7 69.6 69.6 69.6 Profitability & Operating Ratios Source of Funds 1490.7 1490.9 1638.9 1833.8 EBITDA Margin (%) 25.4 31.3 31.6 31.8 PAT Margin (%) 13.4 18.8 19.5 20.0 Application of Funds Fixed Asset Turnover (x) 0.8 0.8 0.9 1.0

Gross Block 1,704.7 1,825.2 1,925.7 2,026.2 Inventory Turnover (Days) 0.1 0.1 0.1 0.1 Less: Acc. Depreciation 429.1 520.2 617.7 726.7 Debtor (Days) 37.0 25.0 30.0 35.0 Net Block 1,275.6 1,305.0 1,308.0 1,355.1 Current Liabilities (Days) 81.3 94.4 88.7 77.0 Capital WIP 0.0 0.0 0.0 0.0 Return Ratios (%) Total Fixed Assets 1,275.6 1,305.0 1,308.0 1,355.1 RoE 16.2 20.8 20.2 20.6 Non-current investments 96.2 58.5 71.1 86.3 RoCE 18.2 22.9 22.2 22.6 Goodwill consolidation 56.3 56.3 56.3 56.3 RoIC 18.6 24.0 25.0 26.9 Investments 34.0 5.8 9.5 11.0 Valuation Ratios (x) Inventories 0.0 0.2 0.3 0.3 PE 30.8 20.6 18.3 15.4 Debtor 113.6 73.1 95.1 128.4 Price to Book Value 5.0 4.4 3.9 3.4 Cash 117.0 112.2 200.6 292.6 EV/EBITDA 15.4 12.0 10.8 9.2 Loan & Advance, Other CA 22.9 19.0 42.8 49.5 EV/Sales 4.2 3.9 3.6 3.0 Total Current assets 287.5 210.4 348.3 481.8 Leverage & Solvency Ratios Current Liabilities 131.3 166.7 164.9 154.1 Debt to equity (x) 0.3 0.2 0.2 0.2 Provisions 40.3 52.6 57.1 66.0 Interest Coverage (x) 7.0 10.5 12.9 12.9 Total CL and Provisions 225.5 275.9 281.4 282.5 Debt to EBITDA (x) 0.9 0.6 0.6 0.6 Net Working Capital 81.4 62.0 -65.5 66.9 Current Ratio 1.7 1.0 1.6 2.2 Application of Funds 1,490.7 1,491.0 1,638.9 1,833.8 Quick ratio 1.3 0.8 1.2 1.7

Source: Company, ICICIdirect.com Research Source: Company, ICICIdirect.com Research

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ICICIdirect.com coverage universe (Logistics)

CMP M Cap EPS (|) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) Sector / Company (|) TP(|) Rating (| Cr) FY14P FY15E FY16E FY14P FY15E FY16E FY14P FY15E FY16E FY14P FY15E FY16E FY14P FY15E FY16E Container Corporation (CONCOR) 1,405 1,670 BUY 25,541 48.7 55.9 65.5 23.3 20.3 17.4 18.1 14.9 12.4 12.8 14.0 14.9 13.8 14.2 14.9 Gateway Distriparks (GATDIS) 384 485 BUY 2,606 12.5 14.9 20.2 18.8 15.8 11.6 9.7 8.0 6.2 18.2 20.8 23.9 16.2 17.9 21.6 BlueDart (BLUDAR) 6,800 6,310 HOLD 9,504 51.6 68.1 94.0 62.5 47.3 34.3 43.4 31.1 23.2 22.5 25.0 32.6 19.1 25.0 32.6 Gujarat Pipavav Port (GUJPPL)# 212 221 BUY 8,460 4.0 6.6 8.8 44.1 26.4 19.8 33.5 21.9 16.8 9.5 17.9 17.4 13.7 18.6 19.8 Source: Company, ICICIdirect.com Research # Follow calendar year * Post bonus issue

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RATING RATIONALE ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock.

Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more;

Pankaj Pandey Head – Research [email protected]

ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected]

ANALYST CERTIFICATION

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ANALYST CERTIFICATION We /I, Bharat Chhoda, MBA and Soumojeet Kr Banerjee, MBA, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India’s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of which are available on www.icicibank.com.

ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.

The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances.

This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice.

ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months.

ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction.

ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months.

ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts have any material conflict of interest at the time of publication of this report.

It is confirmed that Bharat Chhoda, MBA and Soumojeet Kr Banerjee, MBA, Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months.

Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.

ICICI Securities or its subsidiaries collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report.

Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report.

It is confirmed that Bharat Chhoda, MBA and Soumojeet Kr Banerjee, MBA, Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report.

ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.

Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.

We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

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