With April volumes down 25% from normal, we factor in a gradual recovery leading to a 6% volume decline in FY21. This leads to an EPS cut of 19%/11% in FY21/22 vs earlier estimates. Relatively less impacted under COVID, with a 60% sticky cargo as base volume, new ports in its fold, improving utilisation, better volumes on DFC connect to Mundra as some of the triggers for the stock. Given the sharp price correction, we move rating to Buy with a DCF based TP of ` 360. Key risk remains economic slowdown, which impact volumes.
View: We expect the company to handle cargo volumes of 200MMT for FY19 with container traffic going up along with EXIM improving in Mundra and other ports managed by the company. We change our estimates for FY19 Sales/EBITDA/PAT by -10%/-12%/-19% due to loss of SEZ development income and FX losses of H1. We have also reduced our FY20 PAT by 23% leading to a lower TP of 362.