Gateway Distriparks
BSE SENSEX
26,213
S&P CNX
8,033
27 December 2016
Update
| Sector:
Logistics
CMP: INR233
TP: INR313 (+35% )
Buy
Gateway Distriparks Limited (GDPL) is an integrated logistics player. Together with its
subsidiaries, it has a presence in key verticals like Rail, Container Freight Station (CFS),
and Cold Chain. Its subsidiary, Gateway Rail Freight (GRFL) is India’s largest private
sector Container Train Operator (CTO), with ~5% market share. GDPL is one of India’s
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
Financials Snapshot (INR b)
Y/E Mar
Net Sales
EBITDA
PAT
EPS (INR)
EPS (INR)*
EPS Gr. (%)*
RoE (%)
RoCE (%)
P/E (x)
P/E (x)*
EV/EBITDA
(x)*
2016 2017E 2018E 2019E
10.5 11.5 12.3 14.0
2.5
1.2
11.4
8.7
10.1
7.5
2.4
1.1
9.9
7.8
8.5
7.9
2.9
1.7
3.5
2.2
GDPL IN
108.7
24.1 / 0.4
360 / 206
7/-24/-29
50
74.8
largest CFS players, with significant market share in JNPT and Chennai port. Another
subsidiary, Snowman Logistics is the largest Cold Chain player in India, with a capacity
of 98,500 pallets.
RoCE to improve; Viramgam terminal margin-accretive
Valuations attractive; Buy
Rail segment RoCE to improve over FY17-19E
15.6 20.1
11.7 14.3
12.8 15.2
10.7 12.7
(31.3) (10.3) 49.8 22.5
Gateway Rail Freight’s (GRFL) RoCE is subdued at less than 10% due to
underutilization of new terminals and heavy capex associated with creation
of large ground handling capacity ahead of volumes.
RoCE should improve from ~8% in FY17 to 12% in FY19, as RoCE on additional
volumes is likely to be in excess of 35%. We expect 12% CAGR in rail volume
over FY17-19E.
Viramgam terminal to improve rail margins in FY18
20.5 23.6 14.9 11.6
26.9 30.0 20.0 16.3
15.3 16.0 12.9 10.5
* Adjusted for Blackstone’s stake
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Sep-16 Jun-16 Sep-15
25.2
26.2
39.5
9.1
25.2
27.6
38.7
8.6
32.9
25.4
31.4
10.4
With the commissioning of the Viramgam terminal, we expect the lead
distance of double stacking, particularly for containers transporting to JNPT,
to increase meaningfully, resulting in better margins.
Management expects haulage savings of 2-4% post stabilization of the
terminal.
We estimate ~460bp margin expansion over FY17-19 for the rail segment,
with stabilization of the Viramgam terminal in FY18.
Rail segment deserves to trade at premium to Concor
FII Includes depository receipts
Stock Performance (1-year)
380
330
280
230
180
Gateway Distr.
Sensex - Rebased
We believe GRFL should trade at premium valuations to market leader,
Concor due to (a) better sustainable RoCE / return ratios, (b) better margin
profile due to higher proportion of double-stacking and route optimization,
and (c) higher volume growth, led by ramp-up of new terminals
.
Valuations attractive; Buy
GDPL trades at 20x FY18E and 16.3x FY19E earnings (adjusted for
Blackstone’s 49% stake in GRFL), which we believe makes the stock
attractive, given ~460bp RoE improvement over FY16-19E.
We arrive at a TP of INR313 (upside of 35%), valuing CFS business at 12x
FY19E earnings, 40% stake in Snowman at 50% discount to market value, and
rail segment at 15x FY19E EV/EBITDA (premium to Concor).
Maintain Buy.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Abhishek Ghosh
(Abhishek.Ghosh@MotilalOswal.com); +91 22 3982 5436
Abhinil Dahiwale
(Abhinil.Dahiwale@motilaloswal.com); +91 22 3980 4309

Gateway Distriparks
Rail segment RoCE to improve over FY17-19E
Major capex is over; incremental volumes to boost return ratios
Gateway Rail’s (GRFL) RoCE is subdued at less than 10% due to underutilization of new
terminals and heavy capex associated with creation of large ground handling capacity
ahead of volumes.
RoCE should improve from ~8% in FY17 to 12% in FY19, as RoCE on additional volumes
is likely to be in excess of 35%. We expect 12% CAGR in rail volume over FY17-19E.
RoCE profile improving
GRFL’s RoCE should see meaningful improvement from the current sub-10%
levels, as returns from incremental volumes are likely to be superior.
The associated capex requirement for incremental volumes is only towards rake
addition, which at present constitutes only 25% of overall capital employed.
Blended return ratio profile for the rail segment is likely to inch up from present
levels with addition of each rake.
Subdued return ratios due to high capex and underutilization of terminals
GRFL has incurred meaningful capex towards creation of ground handling
capacity near industrial areas in Ludhiana, Gurgaon and Faridabad. The
terminals are strategically located near the trunk railway line to provide access.
As the associated infra capex is quite high for creation of ground handling
capacity, the capex towards rake is only 25% of overall capital employed.
Return ratios for the segment are ~8% in FY17E due to underutilization of large
ground handling capacity created. However, the additional capex required for
incremental volumes is mainly towards rakes (only INR130m per rake). The rake
addition could also be done through the lease model, thus not hurting return
ratios. As the additional capex towards incremental volumes is quite low, return
ratios from incremental volumes are superior (over 30%), which improves the
blended ratio profile of the segment.
Exhibit 1: GRFL’s total current capital employed is INR11b; major capex is over
Capital employed
towards 21 rakes
25%
Capital employed
towards infra
75%
Source: Company, MOSL
27 December 2016
2

Gateway Distriparks
Incremental rake addition to improve return ratios
Our analysis suggests that for every additional rake of volume handled (4% of
volume), RoCE for the segment increases by ~40bp. For every five rakes
handled, the RoCE increases by over ~200bp.
Exhibit 2: Every rake addition to improve RoCE
Incremental volume ROCE profile
Present capital employed
Current ROCE
Current EBIT ~8% ROCE
Additional capex for additional rake
Incremental EBITDA from additional rake
Depreciation
Incremental EBIT from additional rake
Blended ROCE
Increase in RoCE (%)
For 1 rake
11,000
9.0%
990
130
65
6.5
58.5
9.42%
0.42%
For 5 rakes
11,000
9.0%
990
650
325
32.5
292.5
11.01%
2.01%
Source: Company, MOSL
We estimate 12% volume CAGR over FY17-19 due to ramp-up of Faridabad
terminal and pick-up in international trade. Accordingly, we expect RoCE to
improve from ~8% in FY17 to ~12% in FY19.
The current ground handling capacity of the segment is around 5m TEU. As
major portion of the capex is towards land acquisition; the additional ground
handling capacity of ~5m TEU would be done at much lower capex due to excess
land available.
Exhibit 3: Rail RoCE to improve from 7.5% in FY17 to 12.5% in FY19
RoCE
13.2%
12.5%
9.9%
7.6%
10.1%
10.0%
9.8%
7.0%
FY12
FY13
FY14
FY15
FY16
FY17E
FY18E
FY19E
Source: Company, MOSL
27 December 2016
3

Gateway Distriparks
Viramgam terminal to improve rail margins in FY18
Savings from double-stacking to start well ahead of DFC completion
With the commissioning of the Viramgam terminal, we expect the lead distance of
double stacking, particularly for containers transporting to JNPT, to increase
meaningfully, resulting in better margins.
Management expects haulage savings of 2-4% post stabilization of the terminal.
We estimate ~460bp margin expansion over FY17-19 for the rail segment, with
stabilization of the Viramgam terminal in FY18.
Strategically located
The Viramgam Terminal is located at the confluence of two double-stack routes
between ICD Gurgaon and two main ports on the West coast at Mundra and
Pipavav in Gujarat. The terminal will cater to the needs of the Ahmedabad,
Sanand, Mehsana and Becharaji EXIM markets by providing ICD services such as
customs clearance and storage of cargo.
It is spread across 35 acres of land, which will be the second hub for Gateway
Rail’s container train service. The railway terminal will be built over 25 acres and
will initially have a capacity to handle two trains simultaneously. The remaining
10 acres will be used to develop an ICD to cater to the needs of Gujarat trade.
It is expected to become operational by March 2017. Its completion will
increase double-stacking and result in ~4% saving in rail haulage charges, well
ahead of DFC completion (expected to complete by FY20).
Exhibit 4: Strategically located at the major EXIM market
Source: Company, MOSL
27 December 2016
4

Gateway Distriparks
Viramgam to further boost return ratios
The terminal would increase double-stacking lead distance for the rail segment,
as container volumes transported to JNPT would be partially double-stacked as
against no double-stacking at present.
It would also improve frequency levels and subsequently reduce empty running
charges for the segment. The management expects 2-4% reduction in haulage
charges once the terminal stabilizes.
The terminal is likely to generate RoCE of 15-35%, with 2-4% savings on haulage
charges. The RoCE of the terminal is extremely sensitive to haulage savings.
Exhibit 5: Savings from haulage charges to boost return ratios
Viramgam Terminal
Viramgam Capex
Savings in haulage charges (%)
Savings in haulage charges
Depreciation
EBIT
ROCE (%)
600
2%
120
30
90
15%
600
3%
180
30
150
25%
600
4%
240
30
210
35%
Source: Company, MOSL
27 December 2016
5

Gateway Distriparks
Rail segment deserves to trade at premium to CONCOR
GRFL deserves a premium to market leader CONCOR
GRFL’s return ratios to be sustainably higher than CONCOR in the medium term led by
better profitability of additional volumes and efficient capital allocation.
Margin profile for GRFL to be better than CONCOR due to higher proportion of double
stacking of volumes and route optimization.
GRFL is expected to witness higher volume growth, led by ramp-up of new terminals.
Superior return ratios
GRFL’s return ratio profile is estimated to be much better than Concor’s, as
returns from GRFL’s additional volumes are expected to generate much better
yield, thus improving blended returns for the segment.
Additionally, Concor is expected to continue investing in logistics park, which is
likely to result in sub-optimal returns in the medium term.
Exhibit 6: GRFL’s RoCE to increase beyond the market leader’s
15.7%
CCRI
15.0%
13.8%
13.9%
10.1%
8.4%
7.6%
FY15
FY16
FY17E
FY18E
FY19E
10.1%
10.4%
GRFL
12.5%
9.8%
9.9%
13.2%
10.0%
9.8%
7.0%
FY12
FY13
FY14
Source: Company, MOSL
Better margin profile
We expect GRFL to continue reporting better margins than Concor, led by
concentrated presence in profitable route for rail movement, which is West
coast to North hinterland. Movement of containers is typically profitable for
lead distance higher than 400-500km.
Nearly all of GRFL’s volumes are on the North hinterland to West coast route.
For Concor, this route accounts for ~50% of volumes (FY16), which lowers its
overall margins.
Additionally, double-stacked movement of containers is only possible for
Mundra and Pipavav ports, which constitute ~67% of GRFL’s volumes and ~45%
of Concor’s volumes. With higher proportion of double-stacking, GRFL’s margins
are superior.
27 December 2016
6

Gateway Distriparks
Exhibit 7: GRFL has exposure to North-West trade corridor (higher lead distance)
Source: Company, MOSL
Exhibit 8: Concor has only ~56% of its total container traffic in North-West corridor
North Western
Region , 11%
South Central
Region , 6%
Western Region ,
13%
Eastern Region ,
7%
Southern
Region , 14%
Northern
Region , 33%
North Central
Region , 12%
Source: Company, MOSL
Central
Region , 6%
We expect EBITDA to improve from ~INR6,300/TEU in FY17 to ~INR7,950/TEU by
FY19, and EBITDA margin to improve from 18.3% in FY17 to 23% in FY19.
27 December 2016
7

Gateway Distriparks
Exhibit 9: GDPL’s rail EBITDA/TEU is to be higher compared to CONCOR due its presence in
the north-western trade corridor
CCRI
GDL
FY12
FY13
FY14
FY15
FY16
FY17E
FY18E
FY19E
Source: Company, MOSL
Volume growth led by ramp up of new terminals
Strategic ICD locations to ensure volume growth:
GDPL’s presence in the key
North-West corridor gives it an edge over the market leader Concor and other
road operators. GDPL’s Gurgaon ICD is well placed to benefit from the volume
growth in the NCR, given the limited competition in the area and the capacity
constraint for Concor’s Tughlakabad ICD.
Volume growth is likely to be driven by ramp-up of the Faridabad terminal and
commissioning of Viramgam terminal, resulting in market share gains.
Exhibit 10: GDPL’s ICD facilities are present across the North-West trade corridor
Location
ICD Garhi Harsaru (Near Gurgaon)
ICD Sanehwal (Near Ludhiana)
ICD Asaoti (Faridabad)
ICD Kalamboli terminal (Navi Mumbai)
ICD Viramgam terminal (Near Ahmedabad)
Ownership
Freehold
Freehold
Freehold
Alliance
Freehold
Area
(Acres)
90
60
66
17
33
Developed Area (Sq. Mt)
Yard
250,000
220,000
240,000
20,000
NA
Warehouse
15,000
4,000
5,000
1,000
NA
Current
Capacity (TEUs)
200,000
300,000
50,000
75,000
NA
Source: Company, MOSL
ICD Faridabad
Established in 2012, GRFL’s Faridabad ICD spreads across 66 acres and is
equipped with a capacity of 50,000 TEU. It is strategically located near NH-2 to
serve the industrial hubs of Faridabad, Ballabgarh, Palwal and Noida. It is
connected to the Kundli-Manesar-Palwal Expressway and Faridabad-Ghaziabad-
Noida corridor.
The management expects volume growth for rail operations to come through
the ramp-up of the Faridabad terminal. It is currently doing 1,700 TEU per
month, which should ramp up to 2,000 TEU per month by March 2017.
All areas in the catchment of Faridabad are much closer to GRFL’s Faridabad ICD
as compared to Concor’s Tughlakabad ICD.
The Faridabad terminal is likely to benefit from the capacity constraint at
Concor’s Tughlakabad ICD (lead distance of ~22km).
27 December 2016
8

Gateway Distriparks
Exhibit 11: Proximity to catchment market of Faridabad
Source: Company, MOSL
Exhibit 12: Key markets are closer to GRFL’s Faridabad ICD than to Tughlakabad ICD
Market
Ballabgarh
Prithala
Dudhola
Sohna
Palwal
Hodal
Kosi Kalan
Aligarh
Mathura
Agra
Firozabad
Distance from (Kms)
ICD Faridabad
ICD Tughlakabad
11
25
9
34
12
37
35
45
19
44
50
75
62
89
100
134
107
132
173
206
200
233
Source: Company, MOSL
ICD Gurgaon – Garhi Harsaru
GRFL’s Gurgaon ICD is strategically located to cover the key industrial hubs in
the NCR (Gurgaon, Manesar, Faridabad, Ghaziabad), Haryana (Hissar, Panipat,
Sonepat) and Rajasthan (Bhiwadi, Rewari, Dharuhera, Neemrana).
Most of the areas in the catchment of Gurgaon are much closer to GRFL’s
Gurgaon ICD than to Concor’s Tughlakabad ICD.
27 December 2016
9

Gateway Distriparks
Exhibit 13: Proximity to catchment market of Gurgaon
Source: Company, MOSL
Exhibit 14: GDPL’s Gurgaon ICD is closer to most of the key markets
Market
Manesar
Bhiwadi
Rewari
Bawal
Sonepat
Bhiwani
Panipat
Hisar
Karnal
Jaipur
Distance from (Kms)
ICD Gurgaon, Garhi
ICD Tughlakabad
9
33
45
67
49
87
67
97
82
73
117
141
147
113
165
189
182
147
233
263
Source: Company, MOSL
ICD Ludhiana - Sahnewal
GRFL’s Ludhiana ICD at Sahnewal is the first private rail-linked ICD / logistics
park in the state of Punjab. It is spread across 60 acres and has capacity of
300,000 TEU.
It is strategically located, with excellent connectivity to NH-1. The Ludhiana
terminal caters to Punjab, Himachal Pradesh, Chandigarh, Jammu & Kashmir and
northern Haryana.
27 December 2016
10

Gateway Distriparks
Container Freight Stations – A cash cow business
It is likely to generate over INR2b of free cash over FY16-19
One of India’s largest CFS operators:
Gateway Distriparks (GDPL) is one of the
largest container freight station (CFS) operators in India, with a capacity to
handle 624,000 TEU annually. It has its facilities at four major ports – JNPT,
Chennai, Vizag and Kochi. It is also adding CFS capacity (beginning with 50,000
TEU) in Krishnapatnam.
Profitability impacted due to weak international trade:
Profitability of the CFS
segment has declined ~50% over FY12-16 due to weak EXIM trade and
increasing competition. Competitive intensity is particularly high for JNPT,
where port volumes have been flat for 4-5 years but the number of CFS players
has consistently increased. Kochi CFS volumes have been sluggish due to higher
proportion of direct clearance at the port level.
JNPT’s 4
th
terminal key trigger for volume growth:
The JNPT CFS has been
under severe pressure both on volume and profitability. It is likely to benefit
from the upcoming 4
th
terminal, which would double capacity. The terminal
would not only bring in extra volumes for the CFS, but would also result in
higher congestion at the port. This would increase the dwell time at the CFS and
improve profitability. GDPL has ~11% market share in JNPT and is likely to be the
key beneficiary of the expansion of the terminal.
CFS business a cash cow:
The CFS business is a cash cow for GDPL and is likely to
generate over INR2b of free cash over FY16-19.
Exhibit 15: GDPL’s CFS facilities are present across India
Location
Navi Mumbai (Near JNPT/Uran)
Punjab Conware (Near JNPT)
Chennai (Near Ennore/Kattupalli)
Vizag
Kochi (Vallarpadam)
Kochi (Kalamasserry)
Krishnapatnam (Andhra Pradesh)
Ownership
60-year Lease
15-year O & M w.e.f 1-Feb-07
Freehold
30-year Lease
30-year Lease
Freehold
Freehold
Area (Acres)
35
27
20
10.5
20
6.5
20
48
Developed Area (Sq. Mt)
Yard
100,000
65,000
70,000
36,000
75,000
24,000
NA
Warehouse
40,000
50,000
7,000
4,000
3,000
1,000
Land Bank
Current Capacity
(TEUs)
366,000
140,000
70,000
48,000
50,000
Source: Company, MOSL
Chennai (Beween Chennai and Ennore) Freehold
27 December 2016
11

Gateway Distriparks
Exhibit 16: CFS contributed ~30% of revenue in FY16
Gateway
Rail
30%
Exhibit 17: Major capacity is at JNPT
366,000
Capcity (TEUs)
140,000
CFS
70%
JNPT
Source: Company, MOSL
Chennai
70,000
48,000
Kochi
Vizag
Source: Company, MOSL
Exhibit 18: JNPT and Chennai ports have handled +70% of
EXIM traffic at major ports in FY16
Others,
29%
JNPT, 46%
Exhibit 19: GDPL had significant market share at both the
major ports in FY16
FY16
11%
7%
Chennai,
24%
Source: Company, MOSL
JNPT
Chennai
Source: Company, MOSL
Exhibit 20: EBITDA margin for CFS business to improve by ~140bp by FY19
EBITDA/TEUs (INR)
53.3
46.3
39.5
41.5
31.4
27.5
28.8
30.0
EBITDA Margin (%)
FY12
FY13
FY14
FY15
FY16
FY17E
FY18E
FY19E
Source: MOSL, Company
27 December 2016
12

Gateway Distriparks
Snowman Logistics – play on cold-chain logistics
GDPL owns 40% stake in Snowman Logistics
Snowman Logistics is the largest integrated cold chain service provider in India,
offering warehousing, transport and other value-added services. It operates 30
temperature-controlled warehouses across India, with a capacity of 98,500
pallets.
It operates 400+ reefer vehicles with a nationwide network, connecting more
than 500 cities and towns. It also provides value-added services (VAS) such as
inventory management, reverse logistics, labeling, sorting, repacking and blast
freezing.
It was listed on the exchanges in September 2014. GDPL now has 40% stake in
Snowman Logistics.
Exhibit 21: Snowman Logistics has a pan India presence
Exhibit 22: Well diversified revenue mix
Health care
& Pharmacy Others
RTC
1%
3%
4%
FSD
Meat
6%
18%
Ice cream
8%
Confectionery
10%
QSR
10%
Industrial
Products
4%
Agro Food
13%
Dairy
Products
10%
Sea Food
13%
Source: Company, MOSL
27 December 2016
13

Gateway Distriparks
Attractive valuations
Our SOTP-based target price works out to INR313, implying 35% upside
Over the last decade, GDPL has invested heavily in land and associated
infrastructure, creating a large ground handling capacity for containers in key
strategic locations. As most of these capacities are operating at sub-optimal
levels, the current operating metrics do not reflect the business’ true potential.
Its large terminals, particularly for the rail segment, act as huge entry barriers,
giving GDPL a competitive edge.
We expect GDPL to witness strong RoE/RoCE improvement over FY17-19 on
account of (1) better utilization of underutilized terminals, (2) margin expansion,
with pick-up in trade, resulting in lower empty running, and (3) higher
proportion of double-stacking.
The stock trades at 14.9x FY18E and 11.6x FY19E earnings, not adjusting for
Blackstone’s 49% stake in the rail business. It trades at 20x FY18E and 16.3x
FY19E adjusted earnings. We believe valuations are attractive, given 460pp RoE
improvement over FY16-19E. The RoE improvement to ~15% in FY19 would be
largely driven by 380bp expansion in net profit margin.
GDPL has consistently paid dividend of INR7/share, which translates into a
dividend yield of ~3%.
We value GDPL on SOTP basis, in which we value individual segments as follows:
CFS – We value CFS business at 12x FY19E earnings.
Rail – We value the rail business at 15x FY19E EV/EBITDA, at a premium to
CONCOR due to better return ratios and higher volume growth.
Snowman – We value GDPL’s stake in snowman business at 50% discount to
market value.
Our SOTP-based target price works out to INR313, implying 35% upside.
Exhibit 23: Our SOTP fair value stands at INR313, implying 35% upside (INR m)
SOTP Valuation
CFS-12x FY19E earnings
Rail- FY19E 15 x EV/EBITDA
Snowman's stake valued at 50% discount
Total value of GDPL
Less debt to buy out Blackstone's stake
Market value of GDPL ( Net debt is negligible)
Target price (per share)
% from CMP
9,569
32,803
1,700
44,072
10,000
34,072
313
35%
9,569
32,803
1,700
44,072
12,000
32,072
295
27%
9,569
32,803
1,700
44,072
14,000
30,072
277
19%
Source: Company, MOSL
27 December 2016
14

Gateway Distriparks
Company background
Gateway Distriparks (GDPL) offers container (rail and CFS/ICDs) and cold chain
logistics services across India. The GDPL group consists of:
Gateway Rail:
Largest private sector container train operator (CTO) in India
GDPL:
A listed company offering container freight station (CFS) services
Snowman:
India’s largest cold chain operator
Gateway Rail
Gateway Rail is India’s largest private sector container train operator, with an
expanding network of inland container depots (ICD) and a wide inter-modal
logistics network in India.
Exhibit 24: Gateway Rail provides multi-modal logistics services through its rail-linked ICDs
Source: Company, MOSL
It operates three ICDs located at Gurgaon (Garhi-Harsaru), Ludhiana (Punjab)
and Faridabad (Asaoti, Haryana). It also has one private freight terminal at
Kalamboli (Navi Mumbai).
These ICDs are linked through rail network to western India ports of Mumbai in
Maharashtra, and Mundra and Pipavav in Gujarat. Gateway Rail owns 21 rakes
and 235+ road trailers for the last mile connectivity.
27 December 2016
15

Gateway Distriparks
Exhibit 25: Gateway Rail connects Mumbai and Gujarat ports to the hinterlands in North
India with its ICDs at Gurgaon, Ludhiana and Faridabad
Source: Company, MOSL
All the three ICDs are strategically located at the key demand centers for
imports in India and export hubs – Gurgaon, Ludhiana and Faridabad.
Western corridor (Mumbai/Gujarat to Delhi) accounts for the highest share of
India’s container traffic and Gateway Rail is well poised to benefit from growth
in this region.
The company plans to add new ICD locations at Ahmedabad (acquired land),
Jaipur and Nagpur (central location in India).
27 December 2016
16

Gateway Distriparks
Story in charts
Exhibit 26: Upcoming dedicated freight corridors (DFC) in
railways to significantly multiply freight train capacity
Exhibit 27: DFC features to significantly boost container
train operators’ (CTO) efficiencies
Source: PTI, PMO, MOSL
Source: DFCCIL, MOSL
Exhibit 28: GDPL’s strategically-located inland container
depots (ICDs) to benefit from Western DFC
Exhibit 29: GDPL’s CFS are located at Mumbai, Chennai,
Vizag and Kochi
Source: Company, MOSL
Source: Company, MOSL
27 December 2016
17

Gateway Distriparks
Story in charts
Exhibit 30: Model 11% Rail volume CAGR through FY19E, led
by Faridabad ramp-up and expansion at Garhi and Ludhiana
Rail throughput ('000 TEUs)
234
180
112
131
248
212
203
220
238
3,971
4,819
3,510
275
6,840
7,363
6,340
Exhibit 31: Expect 14% Rail EBITDA CAGR through FY18E, led
by volume growth and likely improvement in profitability
Rail EBITDA (INRm)
EBITDA (INR/teu)
7,450
7,950
2,687
302
3,333
438
717
820 1,023 1,699 1,494 1,392 1,770 2,187
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Source: Company, MOSL
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Source: Company, MOSL
Exhibit 32: Model consolidated CFS volume CAGR at 8%
through FY19E, helped by JNPT port capacity expansion
In '000 TEU
Mumbai
Chennai
Vizag
Kochi
426
Total
456
18
64
99
Exhibit 33: Expect 8% CFS EBITDA CAGR through FY19E, led
by volume growth
CFS EBITDA (INRm)
4,949
4,120
3,273 3,408
1,654
275
995 1,136
1,412
3,436 3,674
2,911
2,932
2,549 2,743
CFS EBITDA (INR/teu)
304
-
24
64
215
333
29-
74
230
334
37-
78
343
431
76
340
6
51
74
209
387 365 397
17
14 62
16
16 62
60
58
91
87
88
78
223
213
234
219
223
256
1,168
1,422
1,336
1,062 1,011 1,167
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Source: Company, MOSL
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Source: Company, MOSL
Exhibit 34: GDPL’s market share in container rail business
has more than doubled in the last few years (%)
Exhibit 35: Expect GDPL’s RoE and RoCE to improve (%)
RoE
16.0
11.7
10.7
13.0
11.9
10.7
12.3
12.9
10.8
7.5
FY11
FY12
FY13
FY14
FY15
10.1
8.5
7.9
Source: Company, MOSL
12.8
12.7
10.7
RoCE
15.2
11.6
FY16 FY17E FY18E FY19E
Source: Company, MOSL
27 December 2016
18

Gateway Distriparks
Financials and valuations
Consolidated - Income Statement
Y/E March
Income from Operations
Less: Excise Duty
Total Income from Operations
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
EO Items
PBT
Income tax
Tax Rate (%)
Add: Profit in Associate Company
Less: Minority (excl. Blackstone)
PAT
Adjusted PAT
Change (%)
Margin (%)
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Preference Capital
Total Reserves
Net Worth
Minority Interest
Deferred Liabilities
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Deferred Tax assets
Misc Expenditure
Appl. of Funds
E: MOSL Estimates
FY12
8,215
0
8,215
36.3
2,498
30.4
628
1,870
149
144
0
1,865
508
27.3
0.0
36
1,320
1,320
36.5
16.1
FY13
9,541
0
9,541
16.1
2,464
25.8
699
1,766
187
155
0
1,734
373
21.5
0.0
93
1,267
1,267
-4.0
13.3
FY14
10,128
0
10,128
6.2
2,587
25.5
801
1,786
294
171
0
1,662
190
11.4
0.0
114
1,358
1,358
7.2
13.4
FY15
11,113
0
11,113
9.7
3,281
29.5
889
2,392
254
128
0
2,266
441
19.4
89
37
1,878
1,878
38.2
16.9
FY16
10,470
0
10,470
-5.8
2,518
24.1
805
1,714
184
165
0
1,695
671
39.6
83
10
1,097
1,237
-34.1
11.8
FY17E
11,493
0
11,493
9.8
2,394
20.8
808
1,587
334
285
0
1,537
488
31.7
30
7
1,073
1,073
-13.3
9.3
(INR Million)
FY18E
FY19E
12,293
13,994
0
0
12,293
13,994
7.0
13.8
2,937
3,523
23.9
25.2
861
914
2,076
2,609
282
282
302
386
0
0
2,096
2,712
478
621
22.8
22.9
90
104
10
14
1,699
2,180
1,699
2,180
58.3
28.3
13.8
15.6
(INR Million)
FY18E
FY19E
1,087
1,087
2,958
2,958
9,719
10,910
13,764
14,955
259
259
290
290
3,320
3,320
17,633
18,825
17,629
18,784
6,584
7,498
11,045
11,286
317
317
567
512
3,023
3,023
3,971
5,120
0
0
1,207
1,374
1,974
2,846
790
899
1,430
1,574
455
510
487
555
488
510
2,541
3,546
140
140
0
0
17,633
18,824
FY12
1,083
2,958
6,395
10,436
663
602
1,270
12,971
11,993
2,703
9,290
310
565
0
3,320
1
664
1,600
1,056
976
244
274
458
2,344
462
0
12,971
FY13
1,085
2,958
6,802
10,845
806
1,012
2,520
15,183
14,585
3,391
11,194
511
565
1
2,852
0
964
927
961
863
274
505
84
1,989
924
0
15,183
FY14
1,086
2,958
7,280
11,324
1,257
1,016
3,241
16,839
16,033
4,005
12,028
553
760
340
3,481
0
1,136
1,149
1,196
1,300
339
494
467
2,181
976
0
16,839
FY15
1,087
2,958
8,146
12,191
259
290
1,820
14,560
13,757
4,110
9,647
317
299
2,253
3,077
0
1,064
744
1,270
1,173
349
346
478
1,904
140
0
14,560
FY16
1,087
2,958
8,346
12,391
259
290
2,820
15,761
15,494
4,915
10,579
317
452
3,023
2,506
0
1,028
805
673
1,257
387
415
455
1,250
140
0
15,760
FY17E
1,087
2,958
8,786
12,831
259
290
3,320
16,700
16,529
5,723
10,806
317
567
3,023
3,215
0
1,129
1,348
738
1,368
443
455
470
1,847
140
0
16,700
27 December 2016
19

Gateway Distriparks
Financials and valuations
Ratios
Y/E March
FY12
Basic (INR)
EPS
12.2
EPS (excl. 49% Rail JV share)
11.2
Cash EPS
18.0
BV/Share
96.4
DPS
6.0
Payout (%)
57.2
Valuation (x)
P/E
P/E (excl. 49% Rail JV share)
Cash P/E
P/BV
EV/EBITDA
Adj. EV/EBITDA
Dividend Yield (%)
2.6
Return Ratios (%)
RoE
13.0
RoCE
11.6
RoIC
12.8
Working Capital Ratios
Asset Turnover (x)
0.6
Working Cap. Turnover (Days)
33
Leverage Ratio (x)
Net Debt/Equity
0.0
* Rail JV share post CCPS conversion can be between 37% to 49%
Consolidated - Cash Flow Statement
Y/E March
FY12
OP/(Loss) before Tax
1,865
Depreciation
628
Interest & Finance Charges
29
Direct Taxes Paid
-436
(Inc)/Dec in WC
-84
CF from Operations
2,001
Others
71
CF from Operating incl EO
2,073
(inc)/dec in FA
-1,116
Free Cash Flow
957
(Pur)/Sale of Investments
147
Others
60
CF from Investments
-909
Issue of Shares
28
(Inc)/Dec in Debt
-79
Interest Paid
-135
Dividend Paid
-648
Others
-107
CF from Fin. Activity
-940
Inc/Dec of Cash
223
Opening Balance
1,377
Closing Balance
1,600
E: MOSL Estimates
FY13
11.7
10.4
18.1
100.0
7.0
69.6
FY14
12.5
10.1
19.9
104.3
7.0
65.5
18.7
23.1
11.7
2.2
10.6
13.2
3.0
12.3
10.8
11.2
0.6
37
0.3
FY15
17.3
12.6
25.4
112.1
7.0
47.9
13.5
18.5
9.2
2.1
8.1
10.8
3.0
16.0
12.9
14.9
0.8
38
0.1
FY16
11.4
8.7
18.8
114.0
7.0
81.7
20.5
26.9
12.4
2.0
10.9
15.3
3.0
10.1
7.5
9.1
0.7
15
0.2
FY17E
9.9
7.8
17.3
118.0
4.9
59.0
23.6
30.0
13.5
2.0
11.4
16.0
2.1
8.5
7.9
9.3
0.7
16
0.2
FY18E
15.6
11.7
23.5
126.6
6.0
45.1
14.9
20.0
9.9
1.8
9.1
12.9
2.6
12.8
10.7
13.5
0.7
17
0.1
FY19E
20.1
14.3
28.5
137.5
7.7
45.4
11.6
16.3
8.2
1.7
7.3
10.5
3.3
15.2
12.7
16.4
0.7
18
0.0
3.0
11.9
10.7
11.3
0.6
41
0.2
FY13
1,734
699
46
-285
-264
1,930
3
1,933
-2,383
-450
0
-77
-2,460
22
1,240
-148
-1,084
-176
-146
-673
1,600
927
FY14
1,662
801
179
-405
-133
2,105
-7
2,098
-1,964
134
-340
519
-1,785
10
675
-269
-434
-74
-92
222
927
1,149
FY15
2,266
889
190
-615
-304
2,427
-52
2,375
-1,554
820
-437
-89
-2,080
12
428
-238
-761
-141
-700
-405
1,149
744
FY16
1,695
805
19
-671
716
2,564
0
2,564
-1,890
674
-770
165
-2,495
0
1,000
-184
-896
73
-8
62
744
805
FY17E
1,537
808
49
-488
-55
1,852
0
1,852
-1,150
702
0
285
-865
0
500
-334
-633
23
-444
543
805
1,348
(INR Million)
FY18E
FY19E
2,096
2,712
861
914
-20
-104
-478
-621
-68
-133
2,392
2,769
0
0
2,392
2,769
-1,100
-1,100
1,292
1,669
0
0
302
386
-798
-714
0
0
0
0
-282
-282
-766
-989
80
89
-968
-1,182
626
872
1,348
1,974
1,974
2,846
27 December 2016
20

Gateway Distriparks
NOTES
27 December 2016
21

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27 December 2016
22