Buy Container Corporation of India; target of Rs 870: Motilal Oswal

Motilal Oswal's research report on Container Corporation of India

During FY22, CONCOR handled 47.7 MT of containerized cargo by rail v/s 42 MT in FY21 (reporting 13.5% YoY growth). In terms of TEU's, CONCOR achieved throughput of 4.1m TEUs in FY22 v/s 3.6m in FY21 (posting 11.8% growth). While EXIM volumes grew 8% YoY, domestic volumes spiked 32% YoY in FY22. Over the years, the company has developed its infrastructure, and it now operates 61 terminals across India of which six are pure EXIM terminals, 36 are combined container terminals and 17 are pure domestic terminals. CONCOR has also entered into two strategic tie-ups at various locations. The company is increasingly focusing on profitability and continues to operate more on long-lead profitable routes where it faces lower competition. CONCOR is also enhancing its value-added services and looking to generate higher margins from terminal handling and logistics solutions.

Outlook

We maintain our BUY rating on the stock with a DCF-based TP of INR870, implying an FY24E EV/EBITDA of 18x.