Gujarat Pipavav stock hits new high, soars 9% in subdued market

Pipavav Port is in the forefront amongst all Indian ports in driving the government's initiative of increasing the market share of railways in freight handling.

Shares of Gujarat Pipavav Port hit a new high of Rs 250.15, as they rallied 9 per cent on the BSE in Tuesday’s intra-day trade  backed by heavy volumes in an otherwise subdued market. The stock surpassed its previous high of Rs 243.25 touched on July 30, 2024. A combined around 24 million shares changed hands on the NSE and BSE till 11:05 am. In comparison, the BSE Sensex was down 0.2 per cent at 79,476.

Gujarat Pipavav Port is engaged in port development and operations at Pipavav Port, in Saurashtra region of Gujarat state. The company is operating the port on a 30-year concession vide agreement dated September 30, 1998 with Gujarat Maritime Board (GMB) and Government of Gujarat. The port handles containers, dry bulk, liquid, and RORO vessels.

Domestic brokerage firm ICICI Direct has recommended a ‘Buy’ rating on Gujarat Pipavav Port with a target price of Rs 260 per share in 14 days in their momentum picks.

For April to June 2024 quarter (Q1FY25), the company posted 58.8 per cent year-on-year (YoY) jump in its standalone net profit at Rs 104.64 crore as compared to Rs 65.91 crore recorded in Q1FY24. Revenue from operations grew by 14.5 per cent YoY to Rs 245.98 crore from Rs 214.92 crore in a year ago quarter.

In order to cater to the increased volume of car exports, Pipavav recently completed development of the first phase of open stackyard covering the area of 42,000 sq. mtrs. and has been put to use. The construction of the second phase covering an additional area of 20,000 sq. mtrs. was in progress and is likely to be completed by September 2024.

In its FY24 annual report, Gujarat Pipavav Port said, the company’s board of directors las year had approved capital expenditure of $ 90 million for construction of a new liquid berth. 

The company has initiated the necessary statutory and regulatory approvals and is hopeful of receiving the approvals within reasonable time in order to commence the construction of the berth. This addition of new berth and the dedicated rail siding for LPG rakes located inside the port provides a credible and cost effective proposition to the LPG importers. It will not only enhance the port’s liquid cargo handling capabilities but will also be an effective contribution in supporting the Government of India’s initiative of providing LPG connection to every household under the Pradhan Mantri Ujwala Yojana, the company said.

On an overall basis all rakes put together, the port handles about 330 rakes per month for Containers, Fertiliser, LPG and Cars averaging about 11 rakes per day or one rake every two hours. Pipavav Port is in the forefront amongst all Indian ports in driving the Government of India’s initiative of increasing the market share of railways in freight handling. The company shall continue building on its unique selling proposition of efficient rail evacuation of cargo to and from Pipavav Port, Gujarat Pipavav Port said in its annual report.