Buy Container Corporation; target of Rs 950: Motilal Oswal

Motilal Oswal is bullish on Container Corporation recommended buy rating on the stock with a target price of Rs 950 in its research report dated January 31, 2025.

Broker Research

February 03, 2025 / 13:35 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on Container Corporation

Container Corporation of India (CCRI)’s revenues were flat YoY at INR22b during 3QFY25 (10% below our estimate). Total volumes grew 12% YoY to 1.3m TEUs, with EXIM/Domestic volumes at 0.97m/0.3m TEUs, respectively (+8%/+25% YoY). Blended realization declined ~11% YoY to INR17,138/TEU. EXIM/Domestic realization stood at INR14,245/INR26,254 per TEU, respectively (-10%/-15% YoY). EBITDA margins came in at 20.8% (vs our estimate of 23.2%). EBITDA declined ~10% YoY and was 20% below our estimate. Lower depreciation offset the miss in operational performance, which led to an APAT of INR 3.4b (in-line with our estimate). During 3QFY25, the company reassessed the useful life of its wagons based on railway standards, technical advice, experience, and manufacturer certification, extending it from 15 to 30 years. As a result, depreciation for the quarter and nine-month period was INR125m and INR367m, respectively, reflecting a reduction of INR258m and INR792m. This change increased PBT by the same amount.

Outlook

3QFY25 was impacted by lower realizations and weaker volumes. Given the softened volume growth outlook, we revised our FY25/26/27 EBITDA estimates lower by 7%/6%/5%, respectively. With delays in DFC, the volume growth improvement would be more gradual than earlier estimated. We reiterate BUY with a revised TP of INR950 (based on 18x EV/EBITDA on Sep’26).

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