Company Update: Shipping Corporation of India - BUY - TP Rs.110 - Kotak

Shrinking global shipping order book, bottoming asset prices, lower crude prices (lower bunker) and stable shipping freight rates bodes well for shipping companies including SCI. From the above, we can infer that the freight rates to improve from here and operating cost to remain low with lower bunker cost which should translate into improvement in revenues, EBIDTA margin and return ratios for SCI. Also the Balance sheet (BS) of the company has improved over the last two years with debt prepayment and is expected to improve further going forward Strategic sale by government is expected to remove government bound constraints and improve management of SCI which should add value to the company. Recommend BUY (from SELL) with a TP of Rs 110 with changing industry dynamics and expected change in management control.

Shares of SHIPPING CORPORATION OF INDIA LTD. was last trading in BSE at Rs.81.7 as compared to the previous close of Rs. 82.6. The total number of shares traded during the day was 207664 in over 1655 trades.

The stock hit an intraday high of Rs. 84.1 and intraday low of 81.3. The net turnover during the day was Rs. 17253270.

Source : Equity Bulls

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