Container Corporation of India Ltd. share price target

Trade indicators exhibited mixed trends in Jan'20.

We reiterate BUY as (1) With the DFC Phase-I expected to be commissioned shortly, we expect volume growth in mid-teens over FY21/22E (2) Margins have been resilient amidst a weak macro and (3) Privatization initiatives will improve valuations in the medium term. Key risk: A delayed recovery in demand. While CONCOR reported weak revenues (-8% YoY), operating margins sustained at a healthy 24.3% (-20 bps QoQ). The operator is preparing for the first phase of DFC, which is expected to start by Jun-20 and has started receiving DFC compliant wagons. We reiterate that it will be a key beneficiary of the DFC. We revise earnings downwards and maintain BUY with a revised TP of Rs 635 (at 24x Dec-21 EPS, 5% premium to its long term average trading multiple).

Concor reported weak numbers with reported revenues and PAT below Idirect estimates. The company did not record any exceptional income during the quarter vs. | 84 crore in Q3FY19. Operationally, Exim volumes de-grew 2% (realisation de-growth of 1%YoY) while domestic volumes grew ~ 2% (realisation de-growth of 2%). Exim revenues de-grew 4% to | 1171 crore while domestic revenues remained at | 356 crore. Standalone EBITDA margins grew 312 bps YoY to 24.3% while absolute EBITDA grew 11%. Due to the inclusion of SEIS income in the previous comparable...

10 February 2020 Container Corporations (CCRI) results highlight its market share loss v/s peers. CCRIs market share has reduced from 73% last year to 67% currently. However, margins have improved for the company by 3pp YoY. The commissioning of DFCC should be a key volume/margin growth trigger for the company. Total volumes were down 2% YoY to 910,407 TEUs (v/s est. EXIM volumes came in at 766,822 TEUs (-2% YoY) and domestic volumes at 143,585 TEUs (+2% YoY). CCRIs 3QFY20 reported revenues were at INR15.2b (-3% YoY, -12% QoQ) below est. EXIM revenues stood at INR11.7b (-4% YoY, -14% QoQ) while domestic revenues came in at INR3.

Trade indicators exhibited mixed trends in Dec'19.

We reiterate BUY as (1) Vol growth is expected in mid-teens with the commissioning of the DFC. We are building in 14/18% growth in volumes over FY21/22E (2) Margins have been resilient amidst a weak macro and (3) Any developments on privatization will improve valuations. Key risk: Any increase in charges by Indian railways. CONCOR has sustained operating margin at a healthy 24.5% (flat QoQ) despite a sluggish demand environment. The operator will receive DFC compliant 25T axle load wagons from 3QFY20 onwards. We reiterate that it will be a key beneficiary of the DFC. Maintain BUY with a revised TP of Rs 645 (at 24x Sep-21 EPS).

Concor reported a mixed set of numbers with revenues in line with our estimates while EBITDA was higher than our estimates. However, net profit was impacted by one-offs while the company reported a net loss of | 322 crore. Concor did not record any SEIS incentive during the quarter. The company reported an exceptional loss of | 861 crore in the quarter. The loss pertains to the ineligibility of the company for earlier recorded SEIS incentive towards customs transit of foreign liner sealed containers. Operationally, Exim volumes de-grew 3% (realisation growth of 2% YoY) while domestic...

We believe CCRI's unmatched presence across the country as compared to its peers coupled with positive long-term industry prospects would support prolonged growth and maintain its market leadership. We remain positive on the structural growth story considering 1) continuous market share gains in the domestic segment 2) strong EXIM volumes, 3) new strategic initiatives and 4) a pick-up in economic trade. We have revised our revenue/PAT estimate downward by 5.9/11% for FY20E and 11%/5.2% for FY21E factoring in lowered guidance. We introduced our FY22E estimate with a Revenue/PAT...

Container Corp (CCRI) reported an in-line operating performance in Q2FY20.