September 06, 2016

RESULT UPDATE - Q1FY17

Navkar Corporation
Sensex: 28978

CMP: INR 192

Target: INR 261

Logistics

Navkar Corp reported good set of results largely in-line with estimates, with top-line/bottom-line growing by 9.1% /26.4%
YoY. Operating margins improved by 169 bps YoY to 40.1% on account of lower other expenses (down 3.7% YoY). Continuous
gain in market share at JNPT (volume growth 1.7% YoY) enabled company to grow volumes by 13%. Given clarity on DFCs
plans from Indian Railways, Vapi ICD is expected to get commissioned by Sept 17. We continue to maintain our BUY rating
on the stock with a target price of INR 261.
Total Volume up 13%
Navkar reported 13.0% YoY growth in volume to 81866 TEUs, despite
JNPT reported flat container growth of 1.7% YoY. This is due to a)
continuous gain in market share at JNPT, b) steady import volumes
and c) balanced EXIM mix. Bulk of the volumes were handled by
Panvel CFS as Vapi CFS has commenced operation from February
2016. Import and export volume mix stood at 57:43, as imports
and exports has grown by 19% and 11% YoY respectively. Empty
containers handled during the quarter stood at 5300 TEUs (6.5%
of volumes) against 3500 TEUs (4.3% of volumes) handled in
Q4FY16 which reduced realizations. Navkar operated 165 rakes
in Q1FY17 (vs. 144 rakes in Q1FY16), handling ~20% of its aggregate
volumes through rail.

The management expects to meet its capex requirement through

internal accruals. The company has gross debt of INR 4.5 bn,
while cash in hand stood at INR 2.2 bn, translating to net debt
equity of 0.2x.
Vapi to start contributing from FY17 onwards
Navkar has commenced operation at its Vapi-ICD from Feb'16
and handled 325 TEUs in 1QFY17. The company has received all
the requisite approvals for setting up its PFT terminal and expects
it to commence operation by Sept'17. With regards to logistic
park, the company has completed ~45% of the construction
activity and incurred a capex of INR 1.2 bn till date against
planned capex of INR 2.7bn. Management expects to commence
commercial operation at this facility by March'17 with a pending
capex of INR 1.5bn.

Operating Margin expanded by 169 bps in Q1

Navkar reported operating profit of INR 359 mn, up 13.9% YoY
whereas operating margin stood at 40.1%, up 169 bps YoY. Employee
cost, as a % of sales, increased by 109 bps to 7.6%. Other expenses,
as a % of sales, decline by 277 bps to 52.3%.

Outlook & Valuation

With expanded capacity, Navkar is likely to continue to gain
market share in JN Port region on the back of execution of higher
cargo orders and entry into new sectors. FY18 is likely to be a
transformational year for Navkar Corp and it is likely to move to
higher earning trajectory as it would be the first full year of
commercial operations of new capacities. We expect container
volumes, revenue and PAT to clock CAGR of 19.8%, 47.4% and
47.4% respectively between FY16E-18E. We maintain our BUY
rating on the stock with a target price of INR 261 based on 18x
FY18E earnings.

Capex
Navkar has incurred a capex of INR 4 bn in FY16, of which INR
2700 mn and INR 600 mn has been incurred for Vapi ICD and
Panvel expansion respectively. The company plans to incur INR 3
bn capex in FY17. This includes capacity expansion at Vapi logistic
park (INR 1.5 bn), rail linked PFT terminal at Vapi ICD (INR 920
mn), installation of RTGCs at Somathane CFS (INR 380 mn) and
development of the non-notified area at Panvel (INR 220 mn).
Shareholding (%)

Jun-16

Promoters

72.86

FIIs

7.76

DIIs

15.1

Others

4.28

Key Data
BSE Code

539332

NSE Code

NAVKARCORP

Bloomberg Code

NACO IN

Reuters Code

Relative Price Performance

Shares Outstanding (mn)

140

Face Value

130
120

10

Mcap (INR bn)

110
100

52 Week H/L

142.61

27.35
223.65/151.00

90

2W Avg. Qty.NSE

Navkar

Rohit Agarwal
rohit.agarwal@spagroupindia.com
Ph. No. 91 33 40114800/ 839

Sensex

Sep-16

Aug-16

Jul-16

Jun-16

Apr-16

May-16

Mar-16

Jan-16

Feb-16

Dec-15

Oct-15

Nov-15

Sep-15

80

198635

(INR mn)

FY15

FY16

FY17E

FY18E

Net Sales

3288

3473

5212

7541

Growth

-5.89%

5.62%

50.10%

44.68%

EBIDTAM

36.38%

38.45%

39.54%

43.68%

Adj. PAT

785

951

1199

2066

Growth

-12.83%

21.10%

35.29%

72.28%

Adj. EPS (INR)

7.16

6.67

8.41

14.49

P/E (x)

0.00

26.70

21.17

12.29

EV/EBIDTA

0.00

20.95

14.68

8.69

Net Debt/Equity

0.75

0.20

0.33

0.19

Free Float (INR Bn)

7.42

RoCE

9.62%

7.21%

9.12%

14.56%

Beta

0.58

RoNW

13.34%

9.21%

8.62%

13.20%

Logistics

Quarterly standalone financials

Particulars (INR Mn)

Q1FY17

Q1FY16

Net Sales

896

821

9.14%

914

-1.93%

856

882

Total Expenditure

537

506

6.15%

541

-0.68%

555

534

68

53

27.34%

64

6.08%

61

69

Other Expenses

469

453

3.65%

477

-1.59%

494

465

EBIDT

359

315

13.93%

373

-3.73%

301

348

EBIDTM

40.07%

38.38%

169 bps

40.82%

(75 bps)

35.20%

Interest

83

72

15.62%

57

44.68%

51

51

Other Income

67

43

56.47%

90

-26.19%

55

127

343

286

19.83%

406

-15.55%

305

424

49

48

1.67%

48

1.25%

49

49

PBT

294

238

23.49%

358

-17.81%

256

375

Tax

32

30

3.62%

74

-57.14%

28

60

262

208

26.40%

284

-7.64%

229

314

29.29%

25.29%

400 bps

31.10%

1.84

1.46

26.40%

1.99

-7.64%

1.60

2.20

1426

1426

1426

1426

1426

Volume

81866

72421

13.04%

81183

0.84%

74074

80815

Realisation/ut

10945

11336

-3.46%

11254

-2.75%

11555

10915

Employee Expenses

EBDT
Depreciation

APAT
APATM
EPS
Equity

YoY Chg

Q4FY16

QoQ Chg

(181 bps)

Q2FY16

26.73%

Q3FY16

39.50%

35.64%

Operational Performance

Logistics

Financials
Income Statement
Year End March (INR mn)
Net Sales
Growth
Operational Expenses
Employees Cost
Other Expenses
Total Expenditure
EBIDTA (without OI)
Growth
EBITDA Margin
Depreciation/Amortization
EBIT
EBIT Margin
Interest Expense
Other Income
PBT
Tax Expenses
PAT
Exceptionals
APAT
Growth
APAT Margin

Balance Sheet
FY15
3288
-5.89%
795
222
1074
2092
1196
-3.62%
36.38%
152
1,044
31.75%
264
63
843
70
773
(13)
785
-12.83%
23.88%

FY16
3425
4.19%
817
250
1089
2156
1269
6.13%
37.06%
200
1,069
31.21%
254
299
1,114
228
886
0.00
886
12.90%
25.88%

FY17E
5212
52.17%
1575
392
1184
3152
2061
62.33%
39.54%
297
1,764
33.84%
285
64
1,543
343
1,199
0.00
1,199
35.29%
23.01%

FY18E
7541
44.68%
2266
534
1447
4247
3294
59.86%
43.68%
366
2,928
38.82%
236
70
2,761
695
2,066
0.00
2,066
72.28%
27.40%

Year End March (INR mn)

FY16

FY17E

FY18E

Sources of funds
Share capital

1120

1449

1449

1449

Reserves & Surplus

6318

11998

13178

15224

Total Networth

7438

13447

14627

16673

Total Debt

5552

5902

5352

3552

10

10

10

10

13001

19359

19989

20236

10735

10635

17177

16910

274

2318

30

30

50

1200

1200

1200

1278

5434

2089

2547

246

242

356

526

Net Current Assets

1031

5192

1733

2021

Net Deferred Tax

(319)

(324)

(666)

(671)

Other Assets

1230

339

515

746

13001

19359

19989

20236

FY15

FY16

FY17E

FY18E

843

1114

1543

2761

Minority Interest
Total Liabilities
Application of funds
Net Fixed Assets
Capital Work-in-Progress
Investments
Total Current Assets
Total Current Liabilities

Total Assets
Key Ratios
Year End March

FY15

Cash Flow
FY15

FY16

FY17E

FY18E

Adj. EPS

7.16

6.22

8.41

14.49

Less: Other Income/Exceptionals

63

299

64

70

CEPS

8.54

7.62

10.49

17.06

Add:Depreciation

152

200

297

366

DPS

0.00

0.60

0.85

1.53

Add: Interest paid

264

254

285

236

68

94

103

117

Direct taxes paid

(223)

(223)

(2)

(690)

RoCE

9.62%

6.61%

8.97%

14.56%

RoNW

13.34%

8.49%

8.54%

13.20%

Net Debt/Equity

0.75

0.21

0.33

0.19

Current Ratio

6.69

34.24

8.43

7.40

Year End March (INR mn)

Per Share Data (INR)

BVPS

EBT

Return Ratios

Change in Working Capital

Cash Flow from operations (a)
Change in Fixed Assets

Liquidity Ratios

Change in CWIP
Change in Investments

Asset Turnover Ratio

0.31

0.32

0.30

0.45

Debtor Days

86

82

82

82

Creditor days

17

16

16

16

880

(456)

(56)

2939

2148

(4342)

(100)

(6839)

(100)

163

(2044)

2288

152

(1150)

1190

(113)

(161)

(4455)

(2104)

(4664)

(261)

Change in Equity

2156

5100

Debt Raised/(Repaid)

1186

350

(550)

(1800)

(100)

(142)

(264)

(254)

(285)

(236)

394

22

80

123

Cash Flow from Investing (b)

Dividend paid

Valuation Ratios

(1103)

(428)

Others

Efficiency Ratios

9
981

Interest paid

P/E (x)

30.89

22.83

13.25

P/BV (x)

2.04

1.87

1.64

NA

25.20

18.30

11.26

Cash Flow from Financing (c )

3472

5218

(854)

(2055)

Net Change in Cash (a+b+c)

(1)

3057

(2579)

(168)

P/CEPS (x)
Dividend Yield

Others

NA

0.31%

0.44%

0.80%

EV/Net Sales (x)

8.82

6.19

4.06

Opening Cash

12

11

3068

489

EV/EBIDTA (x)

23.80

15.65

9.29

Closing Cash

11

3068

489

321

Logistics
Sharad Avasthi

Head - Equity Research

sharad.avasthi@spagroupindia.com

Tel.: +91-33-4011 4800

Ext.832

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