CONCOR’s revenues grew ~16% YoY (up 3% QoQ) in Q4YF15 to Rs.1497.5 crore, mainly driven by Exim volumes that grew 5% YoY to 647425 TEUs. However, domestic volumes declined 19% YoY to 118045 TEUs. This decline was completely offset by a 17% increase in realisation on domestic route EBITDA for the quarter grew 20% YoY (down 13% QoQ) to Rs.318 crore. EBITDA margin for the quarter expanded 72 bps YoY (down 400 bps QoQ) to 21.3%. Margins remained sticky at ~21% on the back of an increase in haulage charges that resulted in an increase in terminal and other service charges PAT for Q4FY15 stood at Rs.293 crore, posting robust growth of nearly 19% YoY (down 3% QoQ).
“We believe the “Make in India” campaign would revitalise trade activities, which will rake in higher volumes for CONCOR. Further, revenues from PFTs and MMLPs would put Concor’s revenues on a strong footing. Regulatory changes like implementation of GST and DFC would back our growth estimates, for which we maintain our growth estimates and expect Exim and domestic volumes to post a CAGR of ~12% and 5%, respectively, over FY15-17E, thereby leading to revenue and earnings CAGR of 21% each during same period. Consequently, we assign a P/E multiple of 25x FY17E EPS of Rs.78 to arrive at a target price of Rs 1950. Though in the near term there could be volatility in the stock price, on the probability of 5% Government stake sale (currently at 61.8%), we recommend BUY on the stock”, says ICICIdirect.com research report.
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