MUNDRA Port and Special Economic Zone’s (MPSEZ)

 

 

MPSEZ Trades At Nearly 41.7 Times On A Trailing Four-Quarter Basis

 

MUNDRA Port and Special Economic Zone's (MPSEZ) volume of cargo traffic handled grew by nearly a 10% Y-o-Y to 10.5 million tonne in the March '10 quarter, which was broadly lower than a 13.7% Y-o-Y growth in the company's cargo traffic during the first three quarters of FY10.

   Analysts point out to a low base effect in the first three quarters of FY09, due to the global economic crisis, which resulted in a stronger pick-up during the corresponding period in FY10.

   However, during the fourth quarter of FY10, the company benefited from a tight check on operational costs, and that helped its standalone operating profit margin improve by 170 basis points Y-o-Y to 59.9%. The company's total operational income in the quarter under review also grew by 47.8% Y-o-Y to Rs 420.5 crore.

   And despite the improved performance, the stock declined 1.85% to Rs 701.1 on Monday, given the broad selloff witnessed on the Street. However, over the past three months, the stock has gained 2.6%, broadly in tune with the rise in the Sensex.

   MPSEZ benefited from a broad revival in the domestic and external trade in the fourth quarter, with India's exports that improved 33.5% Y-o-Y in dollar terms, while imports surged 55.3%. As a result, the volume of minerals and allied products handled by MPSEZ amounted to 0.84 million tonne in the fourth quarter, a jump of 78.7% Yo-Y, coupled with a 29.6% rise in volume of vegetable oil and chemicals.

   An improved operational performance helped the company's profit after tax grow by 27.1% Y-o-Y to Rs 192.2 crore in the quarter under review. The company has announced a stock split and that should help improve liquidity in the stock, going forward.

   However, the underlying concern is the current crisis in the European region and its potential to adversely impact India's external trade over the next few quarters, which, in turn, could have an impact on the volume of traffic at Indian ports. MPSEZ trades at nearly 41.7 times on a consolidated basis on a trailing four-quarter basis and is expensive.