In its Q1 results preview on ports & logistics sector, Elara Securities said surface logistics players may report growth in line with macros; B2B express operators may see a slowdown in volume growth and decline in realisations while rail container players may post a mixed bag. Ahead of the earnings season, the brokerage prefers Delhivery Ltd, VRL Logistics and Ltd Container Corporation of India Ltd in the ports & logistics sector.
Among surface logistics players, VRL Logistics Ltd and Delhivery Ltd are likely to report average revenue growth of 11 per cent, the brokerage said. For VRL Logistics, Ebitda margin could be soft in Q1, due to operational issues on shortage of drivers and labourers in metro cities. Elara has factored in a 13.4 per cent margin, down 170 bps YoY.
For Delhivery, Elara sees a third straight quarter of positive Ebitda with blended margin of 2.6 per cent. In the 3PL space for Mahindra Logistics, it expects revenue growth of 19 per cent YoY, led by 3PL and Last Mile Delhivery (LMD) segments on Wizzard consolidation. "The key things to watch for would be contraction in Rivigo losses and the gradual move toward break-even by mid-FY25," it said.
Among B2B express logistics players, Elara expects lower tonnage growth of 3 per cent YoY for Blue Dart Express, with stable realisation. Ebitda margin is expected to be stable at 10.6 per cent based on input cost.
For Allcargo Gati, revenue growth is likely to be muted with volume expected to rise 6 per cent but realisations falling 3 per cent. Margin for Allcargo Gati could expand 60 bps YoY to 4.5 per cent on continued focus on cost optimisation.
In the case of ports, major ports in India grew at 4 per cent YoY for Q1FY25. Elara Securities said Adani Ports & SEZ's volume was up 7.5 per cent YoY at 109 million tonnes in Q1.
"A temporary shutdown at the Gangavaram port due to worker’s strike dragged 6 mn tonne cargo volume during the quarter. For Q1FY25E, we expect port revenue growth of 12 per cent YoY with an Ebitda margin of 70.5 per cent, up 80 bps QoQ, on higher container, up 18 per cent YoY, and liquid volume, up 11 per cent YoY. ADSEZ consolidated revenue is set to improve 11 per cent YoY with an Ebitda margin of 59.6 per cent," Elara Securities said.
For Container Corporation of India, Elara expects blended originating volume growth of 11 per cent YoY with EXIM volume growth of 10 per cent and domestic volume of 15 per cent on account continued global supply chain disruption, increase in ocean freight rates and slow domestic activity due to the elections.
"We expect volume to pick up from H2. Ebitda margin is set to rise 200 bps to 22.5 per cent YoY within guidance of 22-24 per cent on lower operating cost and Land License Fees (LLF) charges. Adani Logistics (subsidiary of ADSEZ) revenue growth rose 20 per cent YoY on healthy rail volume, up 20 per cent YoY, with margin reverting to 25 per cent from 18 per cent in Q4," it said.