scorecardresearch

Brokerages turn bullish on Concor; here's why

Revenue from operations grew 23.5 per cent to Rs 1,956.69 crore for the quarter ended March 2021 compared to Rs 1,584.31 crore in the year-ago period. Strong growth was led by 13% rise in volume

Representative Image Representative Image

Share of Concor rose nearly 5 per cent to hit a fresh 52-week high of Rs 664.50 after brokerages raised the target price post announcement of March quarter earnings.

Revenue from operations grew 23.5 per cent to Rs 1,956.69 crore for the quarter ended March 2021 compared to Rs 1,584.31 crore in the year-ago period. Strong growth was led by 13% rise in volume.

However, the company reported a net profit of Rs 25.6 crore in Q4, down 92 per cent on a Y-o-Y basis. Profit in the year-ago period stood at Rs 310.57 crore.

The share has delivered more than 87 per cent returns in the last 12 months and risen 63 per cent since the beginning of this year.

The stock opened 1.67 per cent higher at Rs 664.50 against the previous close of Rs 634.55 on BSE. Concor share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages. Market cap of the firm rose to Rs 39,658.97 crore.

Here is what brokerages have to say:

ICICI Direct has a 'Buy' recommendation with a target price of | 750 (earlier | 560). The brokerage house believes that with easing of uncertainty regarding the land licensing fee (LLF) issue and rightsizing of its assets, Concor stays a structural growth story that will play a pivotal role in the changing Indian logistics landscape (DFC, cargo containerisation).

On the diversification front, the management expects to resume scaling up its distribution logistics post clarity on divestment. It is also running trials for bulk transportation for FCI (saves time, resources by eliminating the traditional bagging-Debagging process)," it added.

Nomura has a 'Buy' call on the stock with a target at Rs 750 per share. It has raised FY22-23 EPS estimates by 2-6 per cent. The brokerage firm believes that the LLF issue is largely resolved and the company's guidance of Rs 450 crore as LLF charges for FY22 is much lower than the estimates of Rs 640 crore.

Goldman Sachs mentioned that clarity on LLF is a big positive but the operational guidance in the near term is not very encouraging. The brokerage has a 'neutral' call on the stock with a target at Rs 610 per share.

"We expect 40% CAGR in EBITDA over FY21-23E, led by healthy volume growth and margin improvement on operating leverage benefits," said Motilal Oswal. The brokerage firm has a 'Buy' rating with a target price of Rs 745 per share.

"Although strong revenue performance was impacted by the higher LLF charges in FY21, going forward, the Finance Ministry has proposed to the Union Cabinet to ease the LLF charges from 6 per cent to 3 per cent, to ease CONCOR divestment. The expected lowering of charges along with few CONCOR surrender of non-performing terminals and higher efficiencies (due to DFC), is expected to positively impact EBITDA in FY22E and FY23E," said ICICI Securities in a note.

Container Corporation of India is a navratna company engaged in the transportation of containers (rail and road) and handling of containers. The company is also engaged in the operation of logistics facilities, including dry ports, container freight stations, and private freight terminals.