Some analysts feel that the proposed capital expenditure of Gujarat Pipavav Port (GPP) may benefit it in the long run.
It may be noted that the port plans to execute Rs 11 bn worth projects to expand its present berth capacity. It plans to double container capacity by March 2015 to 1.5 mn TEUs and increase bulkhandling capacity to 10 mn ton.
The additional demand for coal that would arise from proposed power plants of groups like Videocon, Torrent Power, Simplex and Visa may benefit the port as it could handle more imported coal cargo.
It would also be in a position to benefit from the pick-up in trade from an improving economy, some brokerages feel.
The port, which was suffering losses during 2010, regained financial health and posted a profit of around Rs 740 mn in 2012.
The main reason was higher utilisation levels, which aided its margin expansion from 7.6 percent in 2008 to 43.1 percent in 2012.
Some analysts expect the operating margin to improve to 46.1 percent in 2015, given the steady improvement in utilisation levels.
The port may benefit from sound road and rail connectivities to its site and Jawaharlal Nehru Port Trust (JNPT)’s saturation levels. It may be noted that JNPT is 152 nautical miles away from GPP.
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