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Container Corporation (Concor) Q2FY11 numbers were better than our
estimates, on the back of better then expected EXIM volumes. The
company reported a marginal growth in EXIM volumes against our
expectation of de-growth for the same. We had anticipated lower
container volumes because of oil spill near JNPT. The company
recorded net sales of Rs 944.2 crore, growth of 3.1% YoY and decline of
1.6% QoQ in Q2FY11. EXIM and domestic volumes registered growth of
1.8% and 6.6% YoY, respectively, in Q2FY11. Net profit increased
marginally YoY to Rs 206.7 crore.
Highlights for the quarter
EXIM route volumes increased 1.8% YoY to 4,93,371 TEUs in
Q2FY11. However the realisations in EXIM route declined by 6.9%
YoY to Rs 14,863.3 per TEU. Primarily due to fall in realisations the
revenue from EXIM segment declined by 5.2% YoY to Rs 733.31
crore.
Domestic route volumes increased 6.6% YoY to 1,31,616 TEUs in
Q2FY11. Realisations in domestic route increased by 6.1% YoY to Rs
16,021.6 per TEU. The revenue from domestic segment increased by
13.1% YoY to Rs 210.87 crore.
Valuation
We expect Concor’s volume growth and realisations to be subdued,
going forward. Hence, we have maintained our REDUCE rating on the
stock with target price of Rs 1301. Our target price discounts FY11E and
FY12E EPS by 20.5x and 17.5x, respectively.
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