Mundra Port & SEZ

Current market price: Rs 457.45
Target Price: Rs 716
Upside: 56.5%
Brokerage: Kotak Securities

    
Mundra Port and Special Economic Zone (Mundra) displayed robust operational performance in FY08, handling 1,624 vessels, up 42.7 per cent on year-on-year (y-o-y) basis. Similarly, cargo handled at the port by the company was up by 45.5 per cent y-o-y to 28.79 million metric tonne (mmt).

The textile park, created at Mundra’s SEZ, has already sold the allotted area (116.24 acres) to the technical textile, garments and terry towel units. A second textile park has also been conceptualised in the same SEZ. The company is also offering the required logistical and utility infrastructure for effective operation in SEZ units.

In view of the two mega-thermal power plants and other industries nearby, the company is setting up a dedicated coal handling terminal comprising of deep water offshore berths with stockyard and mechanisation. The company has entered into an agreement with Maruti Suzuki, which will involve export of cars out of India from Mundra port.

The company is adding loop-lines, doubling the railway link and enhancing the port road connectivity to measure up the increase in cargo at the port. Mundra port is estimated to handle 100 mmt by FY14. At Rs 494, the stock trades at 5.8x BV and 33.1x EPS based on FY10E earnings. The SOTP price target for the stock is Rs 716. Maintain Buy.

CMP as on 19 September

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