Gujarat Pipavav Port

GUJARAT PIPAVAV PORT

Gujarat Pipavav Port is engaged in running a port in the state of Gujarat near to Jawaharlal Nehru Port Trust in Mumbai. The company is controlled by its major shareholder Maersk Shipping which is

one of the largest shipping companies is the world. We have following strong reasons for

recommending this stock:

 

1. The quality of the management is excellent like any MNC and interested to keep

     the company debt free.

2. The future expansion will be funded more or less by the internal accruals and

    hence company will command high FII, DII and HNI interest.

3. Company is going to have 30-40% growth in its revenues every year as India’s

    export growth will be excellent during the next 5-10 years.

4. With expenses to go up by 10% plus like any port business, the net profits can go

     up by more than 70-80% year after year as company is having tax exemptions.

5. Company management has expressed building more number of ports in India

    and with this company’s share price will always be in demand from institutional

    and retail investors.

6. Indian economy is based on domestic consumption theory and export potential is not at all

    tapped. India’s exports have a long way to go up and exponential growth is very

    much possible in the years to come.

7. We have seen this company’s profits going up from Rs. 57 crores to Rs. 191

    crores in the last 3 years when export growth of India was subdued. In case of

    good export growth figures like 30-40%, the profits will go up exponentially.

8. This stock will be real money spinner in longer periods like MRF we covered in

    the first article.        

 

Caveat

1. Equity investment is not for income generation but only for wealth creation and
    enhancement.
2. Investment in equity should be only with the money not required in your life time and
    not even for any retirement plans etc.
3. Investors are likely to reap real values after 10-30 years only.
4. Investors are kindly advised to investigate thoroughly for each script and its merits
    before taking the final decision.