CONCOR shares sink as Goldman Sachs slashes target price, sees 17% downside on weak volumes

Shares of CONCOR have corrected 27 percent from its 52-week high of Rs 1,180 apiece.

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Container Corporation of India Ltd (CONCOR) shares sank over two percent in the morning deals on December 12, as global brokerage Goldman Sachs reiterated its bearishness on the logistics player.

The brokerage maintained its 'sell' call and slashed its target price on CONCOR shares to Rs 710 per share. This indicates a downside of 17 percent from the previous session's closing price.

Goldman Sachs believes that the firm's results have further downside risk, which is driven by weak growth for rail container traffic and the earnings downgrade cycle is likely to continue. Further, there are concerns on market share erosion amid rising competition.

At 9.30 am, shares of CONCOR were quoting Rs 837 on the NSE, lower by 2.2 percent compared to the previous session's closing price.

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In Q2 FY25, CONCOR's handling volume grew by 6 percent, with Export-Import (Exim) volume increasing by 4 percent and domestic volume rising by 14 percent. In H1FY25, volumes grew by 6 percent on-year as well. However, according to GS, this was weak.

Given the run-rate for container traffic in October and November being similar to trends from H1, Goldman Sachs sees the CONCOR management's guidance as ambitious.

Previously, CONCOR had set a target of 15 percent growth for Exim and 25 percent for the domestic segment in FY25. To achieve this annual guidance, the company now needs to realize growth rates of 26 percent in Exim and 35 percent in the domestic segment during the second half of the fiscal year.

Shares of CONCOR have corrected 27 percent from its 52-week high of Rs 1,180 apiece. However, despite the recent correction, Goldman Sachs predicts a further downside for the share price.

CONCOR is a public sector undertaking (PSU) engaged in the transportation and handling of containers. Its core business is characterised by three distinct activities, that of a carrier, a terminal operator, a warehouse operator and Multi-Modal Logistics Parks (MMLP) operation.

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