Buy Dredging Corp; target of Rs 500: ICICIDirect

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26 Aug, 2025 12:21

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ICICIDirect's research report on Dredging CorpDredging Corporation of India (DCI) is India’s only public sector enterprise (PSE) primarily engaged in dredging activity. Being the preferred dredging company for major ports and the Indian Navy, DCI is in pole position in maintenance dredging with ~75% market share. With a fleet size of 16 dredgers, the company has a combined dredging capacity of 85 million cubic metre (mcm) and is considered the largest Indian dredger. With the central government’s biggest infrastructure projects centred on coastal development, DCI’s accessible market opportunity is pegged at | 20000 crore. Higher capital dredging activity for enhancing port capacity and capability would be followed by maintenance activity providing revenue visibility to the company. We believe DCI being the only PSU could be asked to undertake transformational projects like Sagarmala, Jal Marg Vikas, Clean Ganga that offer it very large opportunities. DCI has added three new dredgers over the past three years, which yields higher daily realisation rates. Further, on the back of higher visibility, it proposes to order two additional dredgers. With issues around Sethusamudram project expected to be resolved in the near term, DCI would be able to unlock investments of | 300 crore. Owing to huge opportunities around coastal development, we expect DCI to be the biggest beneficiary and assign a P/E multiple of 12x to the expected EPS of | 41.6 in FY18. We recommend BUY on DCI with a target price of | 500. 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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