Result Update: GE Shipping Co (GESCO) - SELL - TP Rs.360 - Kotak

Q3FY17 for GESCO has been marked by decrease in daily earnings in the product segment, decrease in revenues both YoY and QoQ, fall in EBIDTA margins (780 bps QoQ and 460 YoY), higher interest payment, impairment loss of Rs 1.74 bn and net loss. Weak global shipping markets and lower crude prices which negatively impacts the offshore segment has been negatively impacting the performance of GESCO. Increased scrapping, slow new orders, lower bunker prices and stable demand for commodities is positive for the company, but we estimate that pressure of supply of ships to continue to keep freight rates subdued. Broadly, we estimate weak earnings for GESCO over FY17 to FY19E. We continue to value GESCO at 0.67 x (2/3) of the NAV of Rs 540 (from Rs 525) . Maintain SELL with an increased TP of Rs 360 (from Rs 350).

Shares of GREAT EASTERN SHIPPING CO.LTD. was last trading in BSE at Rs.416.6 as compared to the previous close of Rs. 418.25. The total number of shares traded during the day was 15731 in over 1043 trades.

The stock hit an intraday high of Rs. 421.7 and intraday low of 413.5. The net turnover during the day was Rs. 6566638.

Source : Equity Bulls

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