Container Corporation of India gets a new CMD, stock rises 1%.

Introduction:

The Container Corporation of India has a new CEO, and the stock is up 1%.

Concor has returned 26.24 percent over the previous six months, compared to 15.33 percent for the benchmark Nifty.

Concor’s net profit fell by more than 17% to Rs 246 crore in the first quarter ended June 30, 2023. Operations revenue fell 3.6 percent to Rs 1,922 crore.

Container Corporation of India shares were trading flat early on September 27 following the appointment of Sanjay Swarup as the company’s CMD. The Container Corporation of India shares was trading at Rs 732 on the NSE at 9:28 a.m.

According to a BSE filing dated September 26, the state-owned company’s board of directors has appointed Sanjay Swarup as Chairman and Managing Director (CMD) of the firm, effective October 1, 2023, till July 21, 2026. He presently works with Container Corporation of India (CONCOR) as the Director (International Marketing & Operations).

Concor is critical in facilitating domestic and international trade and logistics. Swarup’s appointment is viewed as a strategic move to bolster the company’s operations and position in the industry.In a recent research note, brokerage company Jefferies boosted its target price for Concor to Rs 825 from Rs 775 previously. The higher target price reflects a potential 15% increase above current levels.

The brokerage business stated in a report that the Dadri-Rewari section of DFC was finished in 1Q FY24. “Gujarat ports to Dadri are 1,100-1,200 km apart, and DFC transports cargo at Rs 1.1/t km versus Rs 1.4 and higher by road.” Time-table trains ensure guaranteed goods arrival timetables, with rail being at least 12-18 hours faster than road,” it said.

Trains between Palanpur Junction and Dadri are electrified, as is the last mile between Palanpur and Pipavav Port. Furthermore, the route from Palanpur to Mundra should be electrified by December.Concor has made orders for new rakes that can carry heavier loads on the operational front. First mover advantage here, combined with Inland Container Depots (ICDs) along the DFC, should allow Concor to reclaim shares at competitive prices, according to Jefferies.

“We believe Concor’s volumes will grow at a 15% CAGR with DFC in FY23-26E.” The Gujarat storm impacted port/train operations in June 2023, while the Odisha rail catastrophe caused delays as railways adjusted freight and passenger operations to prioritize safety. “We believe that normalized rail operations, the road to rail shift, and market share/margin recovery should lead to stock upside,” it stated, adding that Concor will be re-rated.

Concor reported a more than 17% drop in net profit for the first quarter ended June 30, 2023, at Rs 246 crore. Operations revenue fell 3.6 percent to Rs 1,922 crore. According to the corporation, the export-import (EXIM) and domestic divisions fell by 5.3 percent and 0.3 percent, respectively.

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