Container Corp. - Commissioning Of DFC To Drive The Containerized Cargo Movement: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Container Corporation Of India Ltd. will be a key beneficiary of the Dedicated Freight Corridor, which is likely to result in volume growth driven by a modal shift and enhanced operating efficiencies. The DFC connecting Dadri to Mundra became operational in May 2023. Container Corp is operating a timetable of trains on this route, and this development has led to a significant shift in the proportion of its business from road to rail.  .Further, we anticipate that Container Corp would benefit from the shift in northern hinterland volumes from Gujarat ports to JNPT after the entire DFC commissioning, which is likely to be completed in FY26. Container Corp’s strong positioning at JNPT (~55% market share in 9M FY24) could result in tailwinds from operating efficiencies stemming from DFC and the ability to offer full-fledged scheduled services..Domestic container volumes for Container Corp grew 11% YoY in 9M FY24, while EXIM volumes rose 6% YoY during the same period. Weak trade volumes due to the geopolitical headwinds hit EXIM volumes. We expect domestic operations to scale up (35% contribution in 9M FY24) due to the addition of new services/ commodities for multiple sectors, and a strong network of terminals. Further, strategic initiatives such as addition of FMCG-led cargo, deployment of LNG trucks, partnerships for solar energy products, etc., are likely to result in higher double-digit growth for domestic cargo..With DFC commissioning and a continuous ramp-up in the number of doublestacked trains, we expect blended volumes to report 10% compound annual growth rate during FY24-26. Further, with clarity on land license fee provisioning, we project the Ebitda margin to be 23- 25% over FY24-26. The stock trades at 16.9 times FY26E enterprise value/Ebitda. Reiterate Buy with a target price of Rs 1,120 (based on 22 times EV/Ebitda on FY26E)..Click on the attachment to read the full report:.FMCG Q4 Results Preview - Volumes, Sales Growth Under Pressure, Recovery To Take Time: Nirmal Bang.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Container Corp. - Commissioning Of DFC To Drive The Containerized Cargo Movement: Motilal Oswal

Reduction in land license fee provisions to expand margins

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