Mundra Port & SEZ’s profit up 40%, stock down by 0.6%

Mundra Port & Special Economic Zone had a good quarter in December 2010. The company owns and manages a port and related infrastructure in Mundra, Gujarat, including a multi-product special economic zone. In end-December, it commissioned a 60 million tonne coal receiving terminal, which will contribute to revenues in forthcoming quarters. Some of its significant subsidiaries are Adani Logistics Ltd and Adani Petronet (Dahej) Port Pvt Ltd, whose results do not reflect here, as it has reported standalone results for the quarter.

Revenues rose by 33% to Rs 451 crore in the December 2010 quarter, compared to the same period a year ago, and by 9% on a sequential basis.

But operating expenses jumped by 34.5% to Rs 141 crore, causing a small 30 basis point fall in its operating profit margin, compared to the year ago period. But OPM was higher compared to the preceding quarter, by nearly 2.5 percentage points.

On a larger base of revenues, even a small dip in margins was not enough to dampen growth. Thus, despite depreciation rising by 22%, net and interest cost by 65% (negligible impact in absolute terms), the company’s net profit rose by 40% to Rs 228 crore.

Mundra’s annualised earnings per share works out to about Rs 4, which discounts its current price of Rs 301 by about 34 times. The valuation already reflects its high growth rates and the slight fall in its share price, by about 0.6%, at the time of posting could indicate nervousness on whether it will be able to keep up this growth rate. That is essential for these valuations to be sustained.

Download the financial results table from the BSE here.

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