Sell Shipping Corporation; target of Rs 26: ICICIdirect.com

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26 Aug, 2025 12:21

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"SCI reported another quarter of dismal results with revenue growth remaining flattish at -1.2 percent and 0.6 percent QoQ and YoY to Rs 1037.8 crore. EBITDA for the quarter declined significantly by 21 percent QoQ and 26 percent YoY to Rs 103.1 crore mainly on account of dry docking of five vessels (three liners and two bulk). Consequently the EBITDA margin for Q3FY14 declined 252 bps and 361 bps QoQ and YoY, respectively, to 9.9 percent. SCI reported a net loss of Rs 65.7 crore for Q3FY14 cushioned by profit from sale of ships to the tune of Rs 73 crore. On a segmental basis, liner segment revenues declined 33 percent YoY and 16 percent QoQ to Rs 186.2 crore whereas bulk segment revenues reported growth of 17 percent YoY, down marginally by 3 percent QoQ to Rs 745 crore. However, the offshore segment continued to report strong growth of 26 percent YoY to Rs 141.5 crore. On EBIT margin front, liner segment margins continued to be negative at -62 percent whereas bulk segment margins improved marginally to -1.6 percent. Further, offshore segment margins remained at 32 percent in Q3FY14 vis-à-vis 45 percent in Q2FY14 and 38 percent in Q3FY13."

"Though vessel cancellations reduce SCI’s revenue visibility, they provide no respite on depreciation and finance cost front. Also, earnings remain under pressure due to continued weak charter rates. Consequently, we further downgrade our earnings for FY14E (2 percent) and FY15 (19 percent) and ascribe a P/BV multiple of 0.2x FY15E BV. We maintain SELL rating on the stock with a target price of Rs 26," says ICICIdirect.com research report.

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