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Container Corporation of India
CCRI.BO, CCRI IN
3QFY11 PAT grows 14% yoy; reiterate Neutral
• 3QFY11 PAT at Rs.2.3B (+14% yoy) was largely inline with estimates.
Volumes grew 11% yoy, driven by healthy growth in the EXIM segment,
EBITDA margins were flat yoy at 28.9%.
• Conference call takeaways: Volume outlook: Management highlighted
that while EXIM traffic is benefiting from an uptick in foreign trade
(given a global recovery), domestic segment is likely to witness pressure
post the 75-150% price hike by the Indian railways on select commodities.
Thus, management has lowered their volume guidance for FY11E to 9%
(from 10-12%). Further, they will scale down their exposure to the
domestic segment, given that customers will now shift to roadways. Over
3Q, realizations have declined by -1% yoy on lower lead distances as
Concor's volumes grew from the new / minor ports. Price hikes: The
Indian Railways took a price hike of 3-4% over the quarter, of which
Concor has been able to pass on c.50% to customers. Margins: the
margins have been healthy over the year, given lower running of empties.
The management stated that cost of empty running expenses are 28%
lower YTD.
• Revising estimates: We are lowering our FY11E EPS by -7% & FY12E
EPS by -12% to factor in the lower volume outlook (given the change in
government policy on the domestic segment). We are also introducing
FY13 estimates and are rolling forward our PT to Mar-12. We set a
revised PT of Rs.1,320, which is at a 15% premium to our DCF based
value. At this price, the stock is valued at a one year forward PE of 15x on
FY13E EPS, which is at a 10% premium to the company’s historical
trading multiple. We re-iterate our Neutral rating given our view that at
current levels the stock price is adequately factoring in the growth ahead.
• Risks: on the upside – higher than expected operating margins. On the
downside: growth rates may be impacted in case of a moderation in global
growth; any further policy change may impact business prospects.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Container Corporation of India
CCRI.BO, CCRI IN
3QFY11 PAT grows 14% yoy; reiterate Neutral
• 3QFY11 PAT at Rs.2.3B (+14% yoy) was largely inline with estimates.
Volumes grew 11% yoy, driven by healthy growth in the EXIM segment,
EBITDA margins were flat yoy at 28.9%.
• Conference call takeaways: Volume outlook: Management highlighted
that while EXIM traffic is benefiting from an uptick in foreign trade
(given a global recovery), domestic segment is likely to witness pressure
post the 75-150% price hike by the Indian railways on select commodities.
Thus, management has lowered their volume guidance for FY11E to 9%
(from 10-12%). Further, they will scale down their exposure to the
domestic segment, given that customers will now shift to roadways. Over
3Q, realizations have declined by -1% yoy on lower lead distances as
Concor's volumes grew from the new / minor ports. Price hikes: The
Indian Railways took a price hike of 3-4% over the quarter, of which
Concor has been able to pass on c.50% to customers. Margins: the
margins have been healthy over the year, given lower running of empties.
The management stated that cost of empty running expenses are 28%
lower YTD.
• Revising estimates: We are lowering our FY11E EPS by -7% & FY12E
EPS by -12% to factor in the lower volume outlook (given the change in
government policy on the domestic segment). We are also introducing
FY13 estimates and are rolling forward our PT to Mar-12. We set a
revised PT of Rs.1,320, which is at a 15% premium to our DCF based
value. At this price, the stock is valued at a one year forward PE of 15x on
FY13E EPS, which is at a 10% premium to the company’s historical
trading multiple. We re-iterate our Neutral rating given our view that at
current levels the stock price is adequately factoring in the growth ahead.
• Risks: on the upside – higher than expected operating margins. On the
downside: growth rates may be impacted in case of a moderation in global
growth; any further policy change may impact business prospects.
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