Buy Container Corporation; Target Rs.1530: Maximus Securities

Maximus Securities is bullish on Container Corporation of India (CONCOR) and has recommended buy rating on the stock with a target price of Rs 1530 in its July 16, 2014 research report.

“Container Corporation of India Ltd. (CONCOR) was incorporated in March 1988 under the Companies Act, and commenced operation from November 1989 taking over the existing network of 7 Inland Container Depots (ICDs) from the Indian Railways. From its humble beginning, it is now an undisputed market leader having the largest network of 62 ICDs/Container Freight Stations (CFSs) in India. In addition to providing inland transport by rail for containers, it has also expanded to cover management of Ports, air cargo complexes and establishing cold-chain. It has and will continue to play the role of promoting containerization of India by virtue of its modern rail wagon fleet, customer friendly commercial practices and extensively used Information Technology.

CONCOR is committed to providing responsive, cost effective, efficient and reliable logistics solution to its customers. It strives to be the first choice for its customers. CONCOR is a customer focused, performance driven, result oriented organization, focused on providing value for money to its customers.

CONCOR’s core business is characterised by three distinct activities, that of a carrier, a terminal operator, and a warehouse operator. Majority of CONCOR terminals are rail-linked, with rail as the main carrier for haulage. As rail is price-competitive over long distances, the price advantage can be passed on to clients, thus allowing for flexible and competitive pricing. Though rail is the mainstay of CONCOR’s transportation plan, some CONCOR terminals are exclusively road-fed as well.

CONCOR’s terminals provide a spectrum of facilities in terms of warehousing, container parking, repair facilities, and even office complexes.

CONCOR also use’s its terminal network to plan Hub and Spoke movements that allow single customers to move cargo to multiple locations, with CONCOR taking care of the distribution and re distribution requirements.

Valuations: Considering the improvement in volumes, stable margins, large cash balance, balance strength, market leader status with increasing market share, tailwinds such as the Dedicated Freight Corridor & GST, growth in global economy and formation of a stable government at the Centre, we value CONCOR with a P/E of 22.3x FY16E EPS to arrive at a target price of Rs 1530/share. Buy the stock,” says Maximus Securities research report.

To read the full report, Click Here: ContainerCorp_Maximus_220714