Guj Pipavav Port

Gujarat Pipavav Port reported an exceptionally strong Q2 FY26, with revenues increasing by 32% and EBITDA by 34% year-on-year. EBITDA margins expanded by 100 basis points to 59%. Net profit saw a significant surge of 74%, or 38% excluding a one-off^📎 insurance recovery of Rs. 43 crores. Reflecting this robust performance, the company revised its full-year EBIT outlook upwards from an initial 5-7% to a more optimistic 12-15%.

The quarter's strong performance was primarily driven by robust growth in Dry Bulk, RoRo, and liquid cargo segments. Dry Bulk volumes are expected to increase by 30-40% for the full year, with RoRo growing at 20-25% and liquids at around 10%. Container volumes, however, remained muted, declining by 9% in Q2 and 5% in the first half, largely due to the impact of US tariffs. Management expects container volumes to end the year flat to a -2% decline, with signs of recovery anticipated in the coming quarters.

The company is undertaking significant capacity expansion, particularly in the liquid segment. A new liquid jetty, with a CapEx of 720 crores, is expected to come online by November/December 2026, adding 3.2 million metric tons of capacity. This new capacity is projected to be fully utilized over 3-4 years from 2027 onwards. Additionally, the Kandla Gorakhpur pipeline, expected to be commissioned by March/April next year, will provide an evacuation capacity of 1.5 million metric tons for LPG, further bolstering the liquid business.

Gujarat Pipavav Port recently signed an MOU with Gujarat Maritime Board for a 17,000 crore CapEx plan, spread over 30 years, focusing on infrastructure development across new liquid jetties, bulk, container, and RoRo facilities. This ambitious plan is contingent on the concession extension, which management indicated is progressing positively with 'zero red flags,' though a final decision is awaited from GMB and the Government of Gujarat. This extension is crucial for the company's long-term strategic growth and investment pipeline.

The company's EBITDA margins are expected to be between 58-59% for the full year, slightly diluted from the previous year's 59.5% due to the higher mix of bulk cargo. Container realizations saw an uptick, with management confirming a 5% tariff increase effective January, translating to approximately 3% revenue impact. Realization ranges were provided as Rs. 9500-10500 for containers, Rs. 550-650 per metric ton for bulk, and Rs. 550-600 per metric ton for liquids.

While bulk fertilizer volumes are currently elevated due to government tenders, management noted that the company's fertilizer handling capacity is maxed out in terms of bagging, warehousing, and evacuation. This suggests limited organic growth in this specific segment without further investment. Looking ahead, the key drivers for earnings over the next three years are identified as containers, RoRo, and liquids, with RoRo expected to achieve at least 20% CAGR growth.