Shipping Corporation of India Ltd. share price target

SCI has reported weak set of numbers for Q2FY18 despite improvement in macroeconomic environment and up-trend in shipping cycle. This is primarily due to poor strategy adopted by the company in placing its ships, improper capex plan and poor bargaining with customers. Sales was reported at Rs 8.08 bn (+6.5% YoY and -6.5% QoQ) with weakness in the key tanker segment despite upcoming winter in the west. This dragged the overall EBIDTA margin to 15.49% (-200 bps QoQ and -380 bps YoY) which is the lowest in the last 8 quarters. Consequently...

ICICI Securities Ltd | Retail Equity Research Revenues sequentially grew 4.7% YoY (down 3.7% QoQ) to | 865 crore (I-direct estimate: | 828 crore). A sustained recovery in Baltic Dry Index (BDI) led its bulk segment revenues to nearly double to | 88.2 crore (vs. | 48 crore in Q1FY17). In addition to the same, the liner segment (which includes break bulk, container transport passenger vessels and research vessels) also nearly doubled to | 167 crore vs. | 90 crore in Q1FY17. Also, revenues from offshore grew...

ICICI Securities Ltd | Retail Equity Research Revenues sequentially de-grew 7% QoQ (down 5.1% YoY) to | 898 crore (I-direct estimate: | 861 crore). A sustained recovery in Baltic Dry Index (BDI) led bulk segment revenues to nearly double to | 66.3 crore (vs. | 36 crore in Q4FY16). In addition to the same, a revival in the container market also led to revenue growth of 41% to | 133 crore in its liner division. The outperformance was completely offset by a weakness in tanker markets, which forms 72% of its total revenues...

ICICI Securities Ltd | Retail Equity Research Revenues declined 2% YoY (up 27% QoQ) to | 964.9 crore (I-direct estimate: | 838.1 crore). Revenues from tanker segment (77% of total revenues) grew 12% YoY to | 745.9 crore. However, offshore and bulk segment de-grew for a third consecutive quarter with a YoY decline of 39% and 30%, respectively in Q3FY17 Higher charter hire expenses (up 63% YoY) were partly offset by lower repair & maintenance charges (down 22% YoY). Subsequently,...

ICICI Securities Ltd | Retail Equity Research Shipping Corporation of India's (SCI) Q2FY17 revenues sequentially declined 9% (down 32% YoY) to | 759 crore (I-direct estimate: | 812 crore). Revenues across all segments drastically declined with offshore segment (5% of total revenues) declining the most by 58%. In addition to the same, earning from tanker (74% of total revenues), liner (14% of total revenues) and bulk segment (7% of total revenues) de-grew 29%, 24% and 16%, respectively...

Shipping Corporation of India’s (SCI) Q1FY17 results were below our estimates across all parameters. Revenues sequentially declined 13% (down 23% YoY) to | 841 crore (I-direct estimate: | 971 crore). Revenues from the liner segment approximately halved to | 90 crore in Q1FY17 compared to | 164 crore in Q1FY16. Revenues for tankers, bulk, offshore segments de-grew 17%, 26%, 36%, respectively • Higher cargo handling expenses coupled with increased repairs and maintenance charges adversely impacted EBITDA, which de-grew 40% YoY (down 28% QoQ) to | 214 crore (I-direct estimate | 272 crore). Subsequently, EBITDA margins were negatively impacted by 754 bps YoY (down 531 bps QoQ) to 25.4% (vs. our estimate of 28%).

Valuation: They believe that a ramp up in this subsidiary remains key for an upgrade. However, given the current subdued scenario, They continue to retain HOLD recommendation on the stock with a target price of | 63.

ICICI Securities Ltd | Retail Equity Research SCI's Q4FY16 revenue remained flat sequentially (down 6% YoY) to | 984 crore (I-direct estimate: | 1037 crore). Liner segment continues...

ICICI Securities Ltd | Retail Equity Research SCI's Q3FY16 result was below our estimate on the back of the dual impact on revenue and margins due to higher dry docking. Revenue...