Motilal Oswal's research report on Container Corporation
The management of Container Corporation of India (CCRI) has projected handling volume growth of 15% for EXIM, 25% for domestic, and 18% overall in FY25. The growth in EXIM will be driven by a) stabilizing geopolitical situations, b) operations of double-stack trains near Nava Sheva, c) an increase in direct port delivery (DPD) services, and d) volumes generated from new terminals. For domestic volumes, CCRI has ordered cement tank containers to transport bulk cement and anticipates a significant shift in total bulk cement transported in the country (~25% of the 300 MT of bulk cement transported is via bulkers) from roads to rail. CCRI expects to start benefiting from transporting bulk cement via tank containers in 2QFY25.
Outlook
We expect EBITDA margin of 24-25% over FY24-26. The stock trades at 18.5xFY26E EV/EBITDA. Reiterate BUY with a TP of INR1,260 (based on 22xEV/EBITDA on FY26E).
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