Result Update: Container Corporation of India Ltd - REDUCE - TP Rs.1210 - Kotak

Concor Q1FY18 result highlights include improvement in volumes in the domestic segment, strong growth in volumes in the Exim segment and higher realisations. Sales was reported at Rs 14.6 bn (-6.5% QoQ and +8.8% YoY) with a 3 year high quarterly EBIDTA margin of 22.4% (+ 130 bps QoQ and + 280 bps YoY) with lower empty running cost and increased double stacking. Consequently, PAT was reported at Rs 2.44 bn vs. our expectation of Rs 2.29 bn. We interpret the results as a lead indictor that trade is improving in both Exim and domestic segment. Estimate volume CAGR of 10% in EXIM and 6% in Domestic segment and earnings CAGR of 13% over FY17 to FY19E with improving return ratios. Recommend REDUCE with an increased TP of Rs 1210 (from Rs 1100) at 27x FY19E (from 25x). Start of Dedicated Freight corridor (DFC) is estimated to further add value post FY19E.

Shares of CONTAINER CORPORATION OF INDIA LTD. was last trading in BSE at Rs.1179.9 as compared to the previous close of Rs. 1179.8. The total number of shares traded during the day was 30000 in over 538 trades.

The stock hit an intraday high of Rs. 1201.6 and intraday low of 1176. The net turnover during the day was Rs. 35562198.

Source : Equity Bulls

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