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Summary
of Contents
STOCK
UPDATE
Gateway Distriparks
Cluster:
Cannonball
Recommendation: Buy
Price target: Rs250
Current
market price: Rs160
Gateway forms a 51:49 JV with Concor
Key points
-
Gateway Distriparks Ltd (GDL) through its
subsidiary Gateway Rail has formed a 51:49 joint venture with
Container Corporation of India (Concor) to construct and operate a
rail-linked double-stack container terminal at Garhi-Harsaru, 7
kilometre from Gurgaon in Haryana.
-
The rail-linked inland container depot (ICD)
currently operated by GDL will be transferred to the joint
venture. The excess land (approximately 70 acre) owned by GDL will
also be transferred to the joint venture and GDL will earn lease
rentals on the same.
-
The total cost of setting up the joint venture
will be Rs70 crore which will be funded in the debt/equity ratio
of 2:1.
-
The revenues (handling charges and ground rent)
arising from the joint venture will be shared in the ratio of the
stakes held by the two companies.
-
The profits from the rail operations for the
movement of container rakes from the Garhi ICD to the ports will
be equally shared between GDL and Concor.
-
We maintain our bullish stance on the company
as it will be the direct beneficiary of the growth in container
traffic, which currently accounts for just 10% of the total cargo.
-
The stock has significantly underperformed the
Sensex in the last three months, declining by 21% over the period.
So we believe this to be a good buying opportunity for the
investors and thus maintain our Buy recommendation with a price
target of Rs250.
VIEWPOINT
Glenmark
Pharmaceuticals
An all-round growth
The recent
developments on Glenmark are indicative of the management's
aggressiveness in growing the company. The management has been
undertaking an all-round effort to grow in all the different
segments of the business, whether it is expanding its product basket
in the USA and Latin America, entering new markets like Europe or
creation and unlocking value from assets created out of its research
and development (R&D) assets. Through selection of niche,
difficult to manufacture products with limited competition for the
US market, Glenmark has been able to capitalise on each of its
products and grow its US business by leaps and bounds. The recent
disclosure of its Para IV ANDA filing for generic Ezetimibe (for
which it is the only ANDA filer till date) is reflective of the
strong product selection strategy of the company. Further, Glenmark
has positioned itself as a truly innovative, research-driven company
by the successful creation and unlocking of value of its IP
assets.
Glenmark is upbeat about its growth prospects
for the next two years, with its US and Latin American business
being the major growth engines. As per the company's projections, it
is planning to grow at a CAGR of 52% over FY2006-08E to $379
million, with the profits growing at a CAGR of over 137% over the
same period to $115 million. The company has given earnings per
share (EPS) guidance of Rs23.6 per share in FY2007E and Rs43.8 per
share in FY2008E. The projected EPS however includes the anticipated
milestone payments of $31 million in FY2007 and $69 million in
FY2008. On excluding the impact of the uncertain milestone payments,
the EPS would reduce by 50%.
MONSOON
WATCH
Indian monsoon outlook
gets a fillip
In our Special Market Outlook issue "Setting sights
on 16000" dated January 02, 2007, we had mentioned about certain
risks among which El Nino and its impact on the Indian monsoon were
important ones. We had also mentioned that we needed to follow the
development of the El Nino pattern. In this write-up we have
revisited the latest developments surrounding the El Nino weather
pattern . |
