Dolat Capital is bullish on Container Corporation of India has recommended buy rating on the stock with a target price of Rs 560 in its research report dated June 26, 2020.
Dolat Capital's research report on Container Corporation of India
Q4FY20 report lower than estimated Sales, while EBIDTA and PAT came higher with margins improvement of ~840bps to 30.2%. COVID-19 had impact of ~9% on revenue. Impact of COVID will continue in the coming year FY21 also. FY21 guidance: 1) Volumes will decline 20% YoY to 3mn Teus 2) Price hike deferred to 1st Oct 3) Capex will be Rs 5bn 4) Land License fee will be Rs 4.5bn vs Rs 1.4bn in FY20. 5) Surrendered 15 of 41 terminals built on Indian Rail land, impact insignificant as revenue contribution was 4%. Volume from the other terminals been shifted to nearby terminals.
Factoring the weakness in volume growth, we lower our PAT estimates by -26%/-19% in FY21E/FY22E, respectively, which lowers our DCF based target price to Rs 560. Maintain Buy.
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