ICICIdirect has recommended 'Buy' on Gujarat Pipavav Port with target price of Rs 221 as against current market price (CMP) of Rs 175 in its report.
 
Commenting on the investment rationale, the stock broker said, "Gujarat Pipavav Port (GPPL) has entered into an arrangement with NYK Auto Logistics (India) (NYK) where NYK has sub-leased land for developing a dedicated common user integrated roll-in roll-out (RO-RO) yard at Pipavav Port. The RO-RO yard has annual designed capacity to handle 250,000 vehicles and is expected to be operational in the first quarter of CY15. This is another effort on part of GPPL to diversify its cargo base, thereby insulating itself from a downturn in any particular segment.

Earlier this year, GPPL commenced its new business line of handling liquid cargo (handled nearly 96,695 MT in Q3CY14). This is further expected to ramp up as new capacity gets added and the existing stabilises.

The container volume for GPPL has shown strong growth of 25% YoY due to addition of new services over the years and up-gradation of existing clients; also, going ahead we anticipate container volume to post CAGR of 17% over CY13-16E.  However, any new line of business is expected to smoothen out the volatility of revenue growth."

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