Buy Container Corporation; target of Rs 1605:Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Container CorporationContainer Corporation (CCRI IN) reported in-line EBITDA at INR2.8b (est. of INR2.9b; -24% YoY, -11% QoQ). Revenue was also largely in line at INR14.0b (est. of INR13.7b; -3% YoY, -6% QoQ). Adjusted PAT was in line at INR2.1b (est. of INR2.0b; -32% YoY, -11% QoQ). Tax rate was 24.7% (est. of 26.4%) while other income was higher-than-estimate at INR813m (est. of INR780m; -5% YoY, -5% QoQ). Employee expenses increased 7% QoQ to INR396m. Overall volumes stood at 0.71m teu (-9% YoY and -6% QoQ), led by EXIM at 0.6m teu (-10% YoY, -8% QoQ) and domestic at 0.11m teu (-4% YoY, +6% QoQ). While DFC (Dedicated Freight Corridor) completion (expected in 2018/2019) will be a significant efficiency driver for CCRI, its investments in long gestation MMLP’s will impact near-term ratios.  We cut our FY17 earnings by 3% on the back of lower volume growth assumption of ~7% in EXIM and domestic in FY17.  We value CCRI on DFC-based valuation (WACC: 12.6%, TGR: 5%) to arrive at a fair value of INR1,605/sh (v/s INR1,636/sh earlier). The stock trades at a rich valuation of 22.3x FY17E EPS of INR54.2, with continued near-term volume growth concerns. Maintain Buy For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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