Buy Container Corporation of India - Karvy

Container Corporation of India (CCRI IN): We initiate coverage on the stock with "BUY" recommendation with a target price of Rs. 1,115 per share, valuing CCRI at 13.2x its FY13-14E average EPS.

- Largest container train operator in India: Container Corporation of India (CCRI) is India's largest container train operator (CTO) with container train fleet strength of 240 container trains and 61 terminals spread across India. Currently, CCRI has ~68% of total container fleet operational in India.

- Strategic tie-ups with competitors & customers to support revenue growth: CCRI has formed various JVs across India partnering with its customers as well as competing CTOs to support its revenue growth. In the domestic train handling, CCRI's FY11-12E volume growths got impact after Indian Railways in Dec'10 announced commodity-specific haulage charges increase for domestic cargoes. However, the quarterly volume trends suggest a bottom out situation in FY12E. Subsequently, we expect revenues to grow at 12% CAGR during FY12-14E.

Source : Equity Bulls

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