Container Corporation of India - Q4 FY21 Result Update - YES Securities

(Rating: ADD, TP: Rs669, Upside: 5%)

- Container Corporation (Concor) reported topline growth of ~24% yoy (to Rs.19.3 bn) led by ~13% volume growth and 11% growth in realization. CONCOR reported volumes of 1.05 mn TEUs in Q4 FY21 of which 0.85 mn TEUs were of EXIM and balance Domestic.

- During FY21, the company has provided ~Rs5.2 bn towards LLF for all terminals on Railway Land. The dispute with the Railways Ministry about the calculation of LLF has been cleared and it would be booked by the Company as per the number it had earlier provisioned (6% of the market value of land).

- Our view: The resolution of the LLF issue provides comfort and clears the path for disinvestment. The Company is now looking to enter into long term lease agreements with Railways and buy new terminals which would save on costs. While Q4 has been impacted by several one-time costs, the margins are expected to improve from FY22 onwards. As DFC becomes operational, the volumes should pick up from FY23 onwards. While we have lowered our estimates for FY22, to factor in the weak economic activity during Q1, we expect FY23/24 to be strong on the base of increase in volumes and some benefits of DFC coming through. We have rolled forward our estimates to FY24 and retain our ADD rating on the stock for target of Rs669/share (24x FY24 EPS).

Shares of CONTAINER CORPORATION OF INDIA LTD. was last trading in BSE at Rs.666.85 as compared to the previous close of Rs. 634.55. The total number of shares traded during the day was 866356 in over 25992 trades.

The stock hit an intraday high of Rs. 677.95 and intraday low of 635. The net turnover during the day was Rs. 568839466.

Source : Equity Bulls

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