Allcargo surges 10% as brokerage firm MOSL initiates coverage

NEW DELHI: Shares of Allcargo surged over 8 per cent in Wedenesday's trade after brokerage house Motilal Oswal Securities initiated coverage on the stock with a target price of Rs 243 and a 'buy' rating.

Reacting to the development, the scrip gained 10.51 per cent to hit an intraday high of Rs 203.40 on the BSE. "We believe Allcargo Logistics through its superior size and global presence via ECU Line has established an effective competitive advantage versus its competitors," said MOSL.

"We estimate Ebitda/PAT CAGR of 15 per cent/23 per cent through FY15-18E and return ratios are expected to improve from 13 per cent to 17-19 per cent driven by an improvement in margins and reduction in capex intensity in the business," it said.