Shares of Lancer Container Lines surged over 8 percent on the BSE in early trade on December 5 following the company's partnership with Dubai-based Ocean Voyage Shipping Line LLC (OVSL) to enhance its global presence.
By 12:20 PM, the stock eased from its intraday high but remained up over 5 percent at Rs 38. Today marked the seventh consecutive session of gains for Lancer Container.
The company, with a market capitalisation of Rs 874 crore, saw its shares decline 54 percent year-to-date, significantly underperforming the Nifty 50 index, which has gained 12 percent in the same period. The stock had reached its all-time high of Rs 110 in February.
The shipping and container player said in an exchange filing on December 4 that it is entering in a 'strategic collaboration' for 'chartering of vessels and allied operations' with the Dubai-based company. Lancer expects the tie up to drive growth over the next few years. "With this alliance, Lancer Container Lines Limited expects multi-fold growth for next 3 years with margin expansion as scale of operations continue to improve," the statement added.
Follow our live blog for all the market action
Lancer said the tie up will play an 'integral part' in the company's development, adding that the company is looking at the expansion of its business operations 'globally'. Lancer added that it believes the pact will result in an enhanced shareholder value.
"...further developments in line with the aforesaid collaboration including execution of the “Charter Party Agreement” shall be intimated to the BSE and stakeholders in due course of time," Lancer Container informed exchanges.
Lancer Container clocked a 24 percent on year fall in revenue from operations at Rs 152 crore in Q1FY25, with a 8.6 percent YoY growth in net profit at Rs 16 crore.
The shipping company has been positioning itself in Dubai in an effort to seek advantages for the shipping and logistics operations. "The strategic location allows us to tap into key global shipping routes and facilitates seamless connectivity with major markets across Asia, Europe, and Africa. This advantage has been instrumental in enhancing our service offerings, reducing transit times, and improving overall customer satisfaction," the company's CMD A Khalik Chataiwala had said in its June investor presentation.
The shipping industry is seeing significant growth, with the government aiming to double the share of waterways in the overall transport mix from 6 percent to 12 percent by 2025. Initiatives to boost the shipping logistics in India have resulted in greater investment in port and waterways development, along with coastal shipping.
Also Read | Zomato, Swiggy shares rise up to 9% to hit fresh record highs amid brokerage upgrades
Centre has also put in place to promote Indian shipping companies, including a 12 percent subsidy on Indian-built and flagged vessels, along with subsidy on shipbuilding and ship repair.
Recently, there have been strong indications that important shipping-related bills could be tabled before the House and cleared.
The Merchant Shipping Bill, a new draft law planned by the government, seeks to ensure compliance with India's obligation under maritime treaties to which New Delhi is a party.
The Coastal Shipping Bill, 2024 will remove the requirement for Indian-flagged vessels to acquire a general trading licence to operate on coastal waters once it gets Parliament nod.
The proposed Indian Ports Bill, 2023, to replace the Indian Ports Act, 1908, seeks to empower the Maritime States Development Council (MSDC) and promote integrated planning between states and Centre with respect to port development.
Centre has also set in motion a plan to foray into the global container shipping business, which will be led by Container Corporation, and has commissioned a study by consultants for a roadmap in this regard, CNN-News18 reported on November 19, citing sources.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
