Buy Navkar Corporation; target of Rs 261: SPA Research

Navkar Corp reported good set of results largely in-line with estimates, with top-line/bottom-line growing by 9.1% /26.4% YoY. Operating margins improved by 169 bps YoY to 40.1% on account of lower other expenses (down 3.7% YoY). Continuous gain in market share at JNPT (volume growth 1.7% YoY) enabled company to grow volumes by 13%. Given clarity on DFC’s plans from Indian Railways, Vapi ICD is expected to get commissioned by Sept 17. We continue to maintain our BUY rating on the stock with a target price of INR 261.

With expanded capacity, Navkar is likely to continue to gain market share in JN Port region on the back of execution of higher cargo orders and entry into new sectors. FY18 is likely to be a transformational year for Navkar Corp and it is likely to move to higher earning trajectory as it would be the first full year of operations after COP of new capacities. We expect container volumes, revenue and PAT to clock CAGR of 19.8%, 47.4% and 47.4% respectively between FY16E-18E. We maintain our BUY rating on the stock with a target price of INR 261 based on 18x FY18E earnings.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.