1. 4QFY2010 Result Update I Logistics
April 30, 2010
Gateway Distriparks BUY
CMP Rs123
Performance Highlights Target Price Rs150
Gateway Distriparks’ (GDL) 4QFY2010 results were marginally below our Investment Period 12 Months
estimates. Revenue growth was mainly driven by robust growth in the Rail
business, which grew 24.2% yoy and 16.1% qoq to Rs78cr. The company’s Stock Info
CFS Revenues fell 9.2% yoy on account of the fire break-out at its Punjab
Sector Logistics
Conware CFS at Navi Mumbai, which impacted volumes. However, falling
market share at its JNPT CFS in FY2010 by100bp to 5.3% remains a concern. Market Cap (Rs cr) 1,329
During the quarter, GDL claimed write back of tax and contingencies of
Beta 0.8
Rs5.3cr and Rs3.3cr, respectively. Consequently, PAT spiked 96.0% yoy to
Rs25.3cr. There has been slight delay in receipt of funds from Blackstone. 52 WK High / Low 148/64
However, management has indicated that funds will flow in 1QFY2011 which
will meet its capex requirements and expects the Rail Segment to break even Avg. Daily Volume 237,020
at the PAT level in FY2011E. We maintain a Buy on the stock. Face Value (Rs) 10
BSE Sensex 17,559
Write backs and Rail Segment drive Profitability: GDL reported 10.5% yoy
jump in Revenues to Rs135cr due to robust growth in the Rail business, which Nifty 5,278
grew 24.2% yoy to Rs78cr. Rail volumes were up 59.4% yoy and 10.4% qoq
to 31,668TEU driven by addition of new rakes and improving capacity Reuters Code GATE.BO
utilisation. The company’s CFS Revenues fell 9.2% yoy and 8.3% qoq to Bloomberg Code GDPL@IN
Rs48cr on account of the fire break-out at its Punjab Conware CFS at Navi
Mumbai, which impacted volumes in February 2010. EBIDTA Margin came in Shareholding Pattern (%)
line with our estimates at 26.4%. Margins of the Rail Segment increased by
Promoters 44.6
863bp yoy and182bp qoq to 14.4% due to the change in product mix of the
Rail Segment in favour of the high-Margin Exim Segment, which grew from MF/Banks/Indian FIs 16.3
30% in 2QFY2010 to 50% in 4QFY2010. During the quarter, GDL claimed
FII/NRIs/OCBs 27.4
MAT credit of Rs5.3cr and write back of contingencies of Rs 3.3cr, which is no
longer payable and lent a boost to Bottom-line. Thus, PAT spiked 96.0% yoy Indian Public 11.7
and 26.5% qoq to Rs25.3cr
Abs. (%) 3m 1yr 3yr
Outlook and Valuation: We expect GDL to emerge a key beneficiary of the Sensex 7.3 54.0 26.6
growing Container traffic in India on the back of its ongoing expansion plans
and on account of having a presence at strategic locations. At the CMP, GDL GDL (3.5) 89.6 (12.2)
trades at 10.2x FY2012E Earnings and 5.1x FY2012E EV/EBITDA. We have
assumed Blackstone's stake in GRFL at 37.3% and valued GDL's stake at 1.5x
FY2012E P/BV. Hence, GDL would fetch Rs35/share for its stake in GRFL. We
have valued GDL's CFS and Cold Chain businesses at 12x FY2012E EPS. We
maintain a Buy on the stock, with a Target Price of Rs150.
Key Financials
Y/E March (Rs cr) FY2009 FY2010E FY2011E FY2012E
Net Sales 451 522 677 853
% chg 66.2 15.8 29.6 25.9
Net Profit 79.6 79.0 98.2 130.0
% chg 8.2 (0.7) 24.2 32.4
FDEPS (Rs) 7.4 7.3 9.1 12.1
EBITDA Margin (%) 32.4 26.4 26.2 28.8
Param Desai
P/E (x) 16.6 16.8 13.5 10.2
Tel: 022 – 4040 3800 Ext: 310
RoE (%) 12.5 12.1 13.6 16.1
E-mail: paramv.desai@angeltrade.com
RoCE (%) 12.1 10.5 11.8 13.7
P/BV (x) 2.6 2.3 2.0 1.7
Mihir Salot
EV/Sales (x) 3.3 2.8 1.8 1.5
Tel: 022 – 4040 3800 Ext: 307
EV/EBITDA (x) 10.1 10.5 6.9 5.1
E-mail: mihirr.salot@angeltrade.com
Source: Company, Angel Research
1
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539

2. Gateway Distriparks I 4QFY2010 Result Update
Exhibit 1: 4QFY2010 Quarterly Performance
Y/E March (Rs cr) 3QFY10 4QFY2009 4QFY2010 %yoy %qoq
Net Sales 129 123 135 10.5 5.2
Total expenditure 95 89 100 12.1 4.8
Operating Profit 34 34 36 6.1 6.1
OPM (%) 26.1 27.4 26.4 (108bp) 23bp
Reported PAT 20 13 25 96.0 26.5
PAT margin (%) 15.5 10.5 18.7 816bp 315bp
EPS (Rs) 1.9 1.2 2.3 96.0 26.5
Source: Company, Angel Research
Exhibit 2: 4QFY2010 Segment-wise Performance
(Rs cr) 3QFY10 4QFY09 4QFY10 % yoy % qoq
Revenues 129 123 135 10.5 5.2
Mumbai CFS 43 42 40 (6.4) (8.8)
Other CFS 9 11 9 (19.9) (6.7)
Rail Freight 67 63 78 24.2 16.1
Cold chain 9 8 9 12.8 3.9
EBIDTA 34 34 32 (3.9) (3.9)
Mumbai CFS 23 25 21 (16.2) (9.7)
Other CFS 3 5 3 (51.8) (12.5)
Rail Freight 8 4 11 211.0 32.9
Cold chain 2 (0) 1 (1,171.6) (49.2)
OPM (%) 26.1 27.1 23.9 (323bp) (225bp)
Mumbai CFS 52.9 58.4 52.3 (609bp) (50bp)
Other CFS 32.0 49.9 30.0 (1,985bp) (198bp)
Rail Freight 12.6 5.7 14.4 863bp 182bp
Cold chain 25.6 (1.3) 12.5 (1,308bp)
Net Profit 20.0 13.0 25.3 94.1 26.5
Mumbai CFS 20.2 18.3 21.7 18.4 7.3
Other CFS 2.8 4.3 4.0 (7.6) 42.5
Rail Freight (3.5) (8.6) (1.2) (86.0) (65.2)
Cold chain 0.5 (1.0) 0.8 (186.7) 82.8
NPM (%) 15.5 10.5 18.7 818bp 316bp
Mumbai CFS 46.5 43.3 54.8 1,148bp 824bp
Other CFS 30.0 39.7 45.8 611bp 1,580bp
Rail Freight (5.2) (13.8) (1.5) 1,224bp 362bp
Cold chain 5.1 (11.6) 8.9 386bp
Volumes (TEUs) 105,989 89,872 105,452 17.3 (0.5)
CFS 77,302 70,004 73,784 5.4 (4.6)
Rail Freight 28,687 19,868 31,668 59.4 10.4
Realisation 11,287 12,873 11,943 (7.2) 5.8
CFS 6,821 7,595 6,544 (13.8) (4.1)
Rail Freight 23,321 31,468 24,522 (22.1) 5.1
Source: Company, Angel Research
April 30, 2010 2

3. Gateway Distriparks I 4QFY2010 Result Update
Falling market share at JNPT CFS remains a concern
GDL reported 13.0% decline at JNPT CFS volumes in FY2010 in spite of the 2.7%
yoy growth registered in container volumes at JNPT. The company’s witnessed
100bp erosion in market share to 5.3% at the JNPT CFS in FY2010 on the back of
increasing competition and oversupply of CFS at JNPT. We believe that GDL will
continue to face near-term pressures at the JNPT CFS as no additional capacity is
coming up in FY2011E. We expect additional capacity of 0.8mn TEU to come up at
JNPT’s third container terminal only by end FY2011E, which will improve capacity
utilisation of the CFS players.
Exhibit 3: Declining Market Share
6,000 7
6.5
5,000 6.2 6.3
6
5.3 5.8
4,000
5.2 5.3
('000 TEUs)
5
3,000
(%)
4
2,000
3
1,000
0 2
FY2006 FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
Container Volumes at JNPT (LHS) GDL's Market Share at JNPT (RHS)
Source: IPA, Angel Research
Outlook and Valuation
With Exim volumes showing signs of improvement, we expect GDL’s Revenue mix to
change in favour of Exim in the Rail business, which will in turn improve its Margins
going forward. It will also result in better performance of the CFS Segment, which
has registered lacklustre performance this far. We remain bullish on the long-term
prospects of the Container Sector, which is the core driver of growth for GDL’s
business. We believe that GDL's presence at strategic locations and its ongoing
expansion plans will make it a key beneficiary of the growing Container traffic in
India. At the CMP, GDL is trading at 10.2x FY2012E Earnings and 5.1x FY2012E
EV/EBITDA. We have assumed Blackstone's stake in GRFL at 37.3% and valued
GDL's stake at 1.5x FY2012E P/BV. Hence, GDL would fetch Rs35/share for its stake
in GRFL. We have valued GDL's CFS and Cold Chain businesses at 12x FY2012E
EPS. We maintain a Buy on the stock, with a Target Price of Rs150.
April 30, 2010 3

4. Gateway Distriparks I 4QFY2010 Result Update
Profit & Loss Statement (Consolidated) (Rs cr)
Y/E March FY2007 FY2008 FY2009 FY2010E FY2011E FY2012E
Gross sales 161 271 451 522 677 853
Less: Excise duty - - - - - -
Net Sales 161 271 451 522 677 853
Other operating income - - - - - -
Total operating income 161 271 451 522 677 853
% chg 16.2 68.6 66.2 15.8 29.6 25.9
Total Expenditure 80 169 305 384 500 607
Transportation 29.7 73.3 184.0 164.9 216.8 266.0
Labour Charges 6.4 11.5 12.0 12.5 15.5 18.2
Personnel 9.1 16.3 19.8 18.3 23.5 30.4
Other 34.5 67.9 89.1 188.7 243.8 292.7
EBITDA 81 102 146 138 178 245
% chg (2.9) 26.1 42.6 (5.6) 28.7 38.3
(% of Net Sales) 50.5 37.7 32.4 26.4 26.2 28.8
Depreciation& Amortisation 14 29 44 50 53 64
EBIT 67 73 102 88 125 182
% chg (7.8) 8.7 38.8 (13.4) 41.8 45.7
(% of Net Sales) 41.8 27.0 22.5 16.8 18.4 21.3
Interest & other Charges 1 2 20 20 21 22
Other Income 25 14 12 6 14 13
(% of PBT) 27 17 13 8 12 7
Recurring PBT 91.0 85.6 93.4 74.0 117.3 172.5
% chg 11.6 (5.8) 9.0 (20.8) 58.5 47.1
Extraordinary Expense/(Inc.) - - - - - -
PBT (reported) 91.0 85.6 93.4 74.0 117.3 172.5
Tax 13.9 13.6 15.9 (2.8) 15.1 34.5
(% of PBT) 15.3 15.9 17.0 (3.8) 12.9 20.0
PAT (reported) 77.1 72.0 77.5 76.8 102.2 138.0
Less: Minority interest (MI) (0.7) (1.5) (2.1) (2.3) 4.0 8.0
Prior period items - - - - - -
PAT after MI (reported) 77.8 73.6 79.6 79.0 98.2 130.0
ADJ. PAT 77.1 72.0 77.5 76.8 102.2 138.0
% chg 6.8 (6.6) 7.6 (0.9) 33.1 35.1
(% of Net Sales) 47.9 26.5 17.2 14.7 15.1 16.2
Basic EPS (Rs) 8.4 6.4 7.4 7.3 9.1 12.1
Fully Diluted EPS (Rs) 8.4 6.4 7.4 7.3 9.1 12.1
% chg 7.5 (24.5) 16.1 (0.7) 24.2 32.4
April 30, 2010 4

5. Gateway Distriparks I 4QFY2010 Result Update
Balance Sheet (Consolidated) (Rs cr)
Y/E March FY2007 FY2008 FY2009 FY2010E FY2011E FY2012E
SOURCES OF FUNDS
Equity Share Capital 92 116 108 108 108 108
Preference Capital - - - - - -
Reserves& Surplus 526 531 516 576 649 754
Shareholders Funds 619 647 624 684 757 862
Minority Interest 48 64 61 58 62 70
Total Loans 7 18 204 213 213 213
Deferred Tax Liability 15 17 18 18 18 18
Total Liabilities 690 745 907 973 1,050 1,163
APPLICATION OF FUNDS
Gross Block 408 595 800 860 1,060 1,260
Less: Acc. Depreciation 67 87 117 163 212 272
Net Block 341 507 683 697 848 988
Capital Work-in-Progress 106 47 21 30 30 30
Goodwill 25 111 110 106 102 98
Investments 0 0 23 23 23 23
Current Assets 236 147 140 186 430 418
Cash 207 96 59 90 316 280
Loans & Advances 8 16 25 29 33 38
Other 21 35 55 67 80 101
Current Liab. & Prov. 23 68 69 69 383* 395
Net Current Assets 213 79 70 117 47 23
Misc. Exp. not written off 5 1 1 1 1 1
Total Assets 690 745 907 973 1,050 1,163
Note: *includes Convertible Preference Shares to Blackstone
Cash Flow Statement (Consolidated) (Rs cr)
Y/E March FY2007 FY2008 FY2009 FY2010E FY2011E FY2012E
Profit before tax 91 86 93 74 117 172
Depreciation 14 29 44 50 53 64
Change in Working Capital 45 (8) (29) 9 297 (13)
Less: Other Adjustments (20) (5) 21 - - -
Direct taxes paid (8) (11) (19) 3 (15) (34)
Cash Flow from Operations 122 90 111 136 451 189
(Inc.)/ Dec. in Fixed Assets (256) (223) (193) (69) (200) (200)
(Inc)./ Dec. in Investments 19 1 (22) - - -
(Inc)./ Dec. in loans and advances 35 - 7 - - -
Other income 11 30 5 - - -
Cash Flow from Investing (191) (192) (204) (69) (200) (200)
Issue of Equity 2 2 (64) - - -
Inc./(Dec). in loans (26) 12 167 8 - -
Dividend Paid (Incl. Tax) (52) (21) (46) (44) (25) (25)
Others - - - - - -
Cash Flow from Financing (76) (7) 56 (36) (25) (25)
Inc./(Dec.) in Cash (146) (109) (36) 31 226 (36)
Opening Cash balances 353 207 96 59 90 316
Closing Cash balances 207 98 59 90 316 280
April 30, 2010 5

6. Gateway Distriparks I 4QFY2010 Result Update
Key Ratios
Y/E March FY2007 FY2008 FY2009 FY2010E FY2011E FY2012E
Valuation Ratio (x)
P/E (on FDEPS) 14.6 19.3 16.6 16.8 13.5 10.2
P/CEPS 12.4 13.8 10.7 10.3 8.8 6.8
P/BV 1.9 2.7 2.6 2.3 2.0 1.7
Dividend yield (%) 2.8 2.8 2.9 1.2 1.6 1.6
EV/Sales 7.6 4.6 3.3 2.8 1.8 1.5
EV/EBITDA 15.1 12.2 10.1 10.5 6.9 5.1
EV / Total Assets 1.8 1.7 1.7 1.5 1.2 1.1
Per Share Data (Rs)
EPS (Basic) 8.4 6.4 7.4 7.3 9.1 12.1
EPS (fully diluted) 8.4 6.4 7.4 7.3 9.1 2.1
Cash EPS 9.9 8.9 11.5 12.0 14.0 18.0
DPS 3.5 3.5 3.5 1.5 2.0 2.0
Book Value 64.3 46.2 47.7 53.6 60.7 70.8
Dupont Analysis
EBIT margin 41.8 27.0 22.5 16.8 18.4 21.3
Tax retention ratio 0.8 0.8 0.8 1.0 0.9 0.8
Asset turnover (x) 0.4 0.5 0.6 0.6 0.9 1.1
ROIC (Post-tax) 15.8 11.2 11.6 10.8 13.8 18.4
Cost of Debt (Post Tax) 5.9 13.3 15.0 10.0 8.6 8.3
Leverage (x) (0.4) (0.2) 0.1 0.2 0.0 (0.1)
Operating ROE 11.6 11.7 11.4 11.0 13.8 7.4
Returns (%)
ROCE (Pre-tax) 10.5 10.5 12.6 9.6 12.6 16.7
Angel ROIC (Pre-tax) 23.8 16.4 15.3 11.2 17.2 25.0
ROE 13.0 11.6 12.5 12.1 13.6 16.1
Turnover ratios (x)
Asset Turnover (Gross Block) 0.5 0.5 0.6 0.6 0.7 0.7
Inventory / Sales (days) - - - - - -
Receivables (days) 29 34 34 41 38 38
Payables (days) 59.5 54.4 37.3 40.0 45.0 45.0
WC cycle (ex-cash) (days) 49.8 (6.9) (2.3) 13.2 (65.5) (112.7)
Solvency ratios (x)
Net debt to equity (0.3) (0.1) 0.2 0.2 (0.1) (0.1)
Net debt to EBITDA (2.5) (0.8) 1.0 0.9 (0.6) (0.3)
Interest Coverage (EBIT / Int.) 49.3 36.6 5.0 4.4 5.9 8.3
April 30, 2010 6

7. Gateway Distriparks I 4QFY2010 Result Update
Research Team Tel: 022-4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
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Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section).
Disclosure of Interest Statement Gateway Distriparks
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies’ Directors ownership of the stock No
4. Broking relationship with company covered No
Note: We have not considered any Exposure below Rs 1 lakh for Angel and its Group companies.
Address: Acme Plaza, ‘A’ Wing, 3rd Floor, M.V. Road, Opp. Sangam Cinema, Andheri (E), Mumbai - 400 059.
Tel : (022) 3952 4568 / 4040 3800
Angel Broking Ltd: BSE Sebi Regn No : INB 010996539 / CDSL Regn No: IN - DP - CDSL - 234 - 2004 / PMS Regn Code: PM/INP000001546 Angel Securities Ltd:BSE: INB010994639/INF010994639 NSE:
INB230994635/INF230994635 Membership numbers: BSE 028/NSE:09946
Angel Capital & Debt Market Ltd: INB 231279838 / NSE FNO: INF 231279838 / NSE Member code -12798 Angel Commodities Broking (P) Ltd: MCX Member ID: 12685 / FMC Regn No: MCX / TCM /
CORP / 0037 NCDEX : Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302
April 30, 2010 7