Gujarat Pipavav shares: JM Financial retains target, sees 27% upside

JM Financial in its latest note retained 'Buy' rating Gujarat Pipavav Port Ltd with an unchanged target price of Rs 210, implying 27.3 per cent potential upside from its prevailing price of Rs 165 apiece. The brokerage said the recent comfort letter from the Gujarat Maritime Board (GMB) reduced a key overhang around the extension of the port's concession period.

The brokerage's Rs 210 target price already factored in an extension of the concession agreement by 20 years, with a royalty rate assumption of 5-15 per cent. JM Financial said it valued the stock on a discounted cash flow (DCF) basis under this assumption.

To recall, Gujarat Pipavav had received a comfort letter from GMB for an extension of the concession period. The maritime board asked the company to submit information including its performance record during the current concession period and its investment and business plan for the extended concession period within 90 days of the letter.

JM Financial said "this is a major positive for the stock in our view, as it reduces a key overhang with respect to the likelihood of no extension for port concession." The brokerage added that the final royalty rates on the extended concession remain the key factor to watch.

Gujarat Pipavav had signed an MoU with GMB in October 2025 for the proposed expansion of Pipavav Port, involving potential capital expenditure of Rs 17,000 crore. The proposed investment is subject to the concession extension and could include expansion of container, liquid and RoRo capacity, storage and rail siding capacity, as well as multimodal transit solutions to north-western India.

JM Financial expects Gujarat Pipavav to deliver an Ebitda growth of 13 per cent over FY27-FY28, compounded annually, led by strong growth in liquid and Roll-on/Roll-off (RoRo) volumes, although container volumes are expected to face headwinds. The brokerage said the stock trades at 7.5 times FY28 estimated EV/Ebitda, which it considered attractive.