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Why brokerages see 40% upside in this Ashish Kacholia owned multibagger stock

Why brokerages see 40% upside in this Ashish Kacholia-owned multibagger stock

Why brokerages see 40% upside in this Ashish Kacholia-owned multibagger stock
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By Yashi Gupta  Oct 22, 2021 2:28:36 PM IST (Published)

Gateway Distriparks has given multi-bagger returns to its shareholders this year. The stock started this year at Rs 121 and was trading over Rs 268 higher on Friday in the afternoon deals. It has surged over 180 percent in the past 12 months and 110 percent so far this year.

Gateway Distriparks shares surged over 4.5 percent after the logistical company reported a 1271 percent surge in its net profit for the quarter ended September 2021. Gateway posted a net profit of Rs 46.91 crore in Q2 FY22 as against Rs 3.42 crore reported in the corresponding quarter of the previous year. Sales surged over 27.89 percent in the second quarter, up from Rs 262 crore to Rs 335 crore YoY.

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Gateway Distriparks is a Mumbai-based logistics company and deals in three verticals, container freight stations (CFS), inland container depots (with rail movement), and cold chain storage and logistics. It is the parent company of Snowman Logistics, India's leading logistics services provider.
The company's rail and CFS verticals have strong volume growth of 46 percent and 22 percent, respectively. So much so that volumes have bounced back to more than the pre-COVID levels, Prem Kishan Gupta, CMD told CNBC-TV18.
"We are seeing growth in volumes going forward also. All the business are running well, except for automobile," Gupta said.
As many as 6.11 lakh shares of the company had changed hands on BSE as of 10:50 am. The volume surged by over 30 percent as compared to its two-week average daily volume of 18,410 shares. At the time, it was trading at Rs 268, rising over 1.5 percent.


Share price history
Gateway Distriparks has given multi-bagger returns to its shareholders this year. The stock started this year at Rs 121 and was trading over Rs 268 higher on Friday in the afternoon deals. It has surged over 180 percent in the past 12 months and 110 percent so far this year.
Earlier in October, ace investor Ashish Kacholia had bought a fresh stake of 1.54 percent in the company. Kacholia now owns 19,17,606 shares in the company, according to its shareholding pattern for the July-September period.
However, in the past five sessions, the stock has declined nearly 10 percent. It started this week at Rs 293 and declined to Rs 265 on Thursday.
Brokerages see upside  
Gateway Distriparks reported better-than-expected operational performance in Q2, FY22 led by strong volume growth in CFS and rail verticals, Sharekhan by BNP Paribas said in a report. The company has also maintained operational profitability in the rail business.
The brokerage sees a 30 percent upside in the stock. It has a buy rating with a target price of Rs 347 for the stock on account of earnings growth.
"The company is slated to benefit from sustained export-import growth and benefits accruing from commissioning of DFC going ahead. It will also be embarking on the next round of capacity expansion once the National Logistics Policy is laid out," it said.
Snowman Logistics is expected to expand capacity to 2 lakh pellets from 1.13 pellets over three years and focus on the high margin warehousing business, it said.
Phillip Capital sees an upside of over 40 percent on account of outperformance in the rail business. It said the company has performed better than expectations with strong volume recovery in rail. It has a target price of Rs 380, against the current market price of Rs 265.
At 1.13 pm, Gateway Distriparks shares quoted at Rs 265, over a percent higher on BSE.
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