>PORTS & LOGISTICS: Stock Performance of Gateway Distriparks, All Cargo Logsitics, Container Corporation, Essar Ports, Mundra Port & Gujarat Pipavav Port

SLOWING DOWN


■  November Major port volumes decline 8.3% YoY: Major port volumes declined 8.3% YoY to 45.7 mt, however on a MoM basis volumes were flat (+1%). As a result YTD (Apr-Nov) growth in volumes has been extremely tepid at ~1.3% on a low base of 0.8% YTD growth last year. A declining trend in volumes of major commodities like iron ore and fertilizers in FY12 has resulted in this weak trend.


■ Iron volumes decline sharply on extension of export restrictions to Orissa ports: Iron volumes have been on a downtrend since the Karnataka mining ban to rein in illegal mining in the state, was imposed by the SC in Aug 2011. November witnessed a particularly sharp fall, clocking a decline of 36% YoY and ~20% MoM, as export ban restrictions were extended to ports in Orissa. Volumes at Orissa ports, Paradip and Vishakapatnam, have plummeted 74% and 47% respectively on a MoM basis.


■ Container volumes exhibit divergent trends at JNPT and Chennai: Overall major port container volumes exhibited a flattish trend, rising +2% YoY but down 4% MoM. The trend is similar on a YTD (Apr-Nov) basis as volumes are up by ~4%. An overall slowdown in trade seems to have impacted JNPT container volumes where we are seeing a 5% YoY and 9% sequential decline in container volumes for the month of November. However, individual ports are seeing divergent trends. Chennai volumes rose 21% YoY and 15% MoM after a lacklustre three months (Aug-Oct). A temporary solution to the access road problem at the port has likely resulted in a spurt in volumes.


■ Impact: A slowdown in volumes at JNPT is likely to increase the competitive intensity at CFS s operating near the port, adversely impacting companies like Gateway Distriparks. Although a slowdown in trade has impacted container volumes at major ports, our interaction with private port players suggest a minimal impact of the same, mainly on account of market share gains for these players at the expense of JNPT. However, growth has moderated to an extent, and we are expecting a flattish trend in container volumes for ports like Gujarat Pipavav on a sequential basis. Going forward a continued slowdown in trade can impact the growth trajectory at minor ports like Mundra and Gujarat Pipavav port


To read the full report: PORTS & LOGISTICS
RISH TRADER