ICICI Direct Research
Container Corporation (Buy)
CMP: ₹377.95
Target: ₹433
Fundamental outlook: a) Container Corporation of India (Concor) reported a market share of 67-68 per cent in the container train operator segment for 9MFY20; b) In the near-term, revenue growth may remain muted. However, it expects the situation to reverse with DFC connectivity to Gujarat ports (infrastructure/facilities close to the DFC route). Concor aims to consistently invest about ₹1,000 crore annually, which has helped the company to shape up the business around MMLPs (83 in FY19
We expect the stock to undergo bottoming process over the next few weeks, which should be used to accumulate stock. Hence, it offers a fresh entry opportunity with favourable risk reward.
Stock price is expected to rally towards ₹433, which is 50 per cent retracement of February-March 20 decline (₹1,061-600), at ₹433.
Risks: About ₹ 12,000-16,000 crore cash outflow (media sources) due to potential buyout of ICDs on the railway land and continued downturn in Exim volumes due to the Covid-19 crisis.