Container Corp Share Price Gains Despite Earnings Miss, Jefferies' Lukewarm Take

Share price of Container Corp. of India rose nearly 2% in Monday's trading session despite a miss in earnings for the fourth quarter.

Though the company's profit rose 3% to Rs 302.1 crore, revenue fell 1.6% to Rs 2,281.4 crore during the January-March period. The logistics provider also approved issuance of bonus equity shares in the ratio 1:4.

The board has also declared a final dividend of Rs 2 per equity share of face value of Rs 5 each for the year.

Jefferies' saw the fourth-quarter results as an all-round miss, with the company's move to forgo low-margin business in the domestic segment, railway network congestion, and container delivery delays by its vendor contributing to a 14% YoY decline in domestic volumes.

Export-import realisations weighed on the margins, according to the brokerage. This, along with lower volume growth affected the firm's earnings before interest, taxes, depreciation, and amortisation during the quarter, which was 19% below the brokerage's estimate.

• Revenue down 1.6% to Rs 2,281.37 crore versus Rs 2,317.63 crore.

• Ebitda down 11% to Rs 433.46 crore versus Rs 489.01 crore.

• Margin at 19% versus 21.1%.

• Net profit up 3% to Rs 302.14 crore versus Rs 294.54 crore.

The scrip rose as much as 1.96% to Rs 735 apiece. It pared gains to trade 1.82% higher at Rs 734 apiece, as of 10:53 a.m. This compares to a 0.47% advance in the NSE Nifty 50.

It has fallen 6.94% on a year-to-date basis, and 33.50% in the last 12 months. The relative strength index was at 33.69.

Out of 21 analysts tracking the company, 11 maintain a 'buy' rating, three recommend a 'hold' and seven suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 3.5%.