Nomura cuts target price on Container Corporation shares

MUMBAI: Nomura Financial Advisory and Securities India has cut target price on Container Corporation of India to Rs 1,386 from Rs 1,585 as near term outlook for the company has weakened further following demonetisation.

“Demonetisation of high-denomination bank notes will lead to weakness in EXIM (Export-Import) trade with exports more impacted than imports. We have lowered our India container trade volume growth estimate for FY18 to 7.5% from 8.5%,” said Nomura in a report.

Nomura said core import volumes are likely to weaken further in the coming months due to demonetisation, which could lead to weak growth in container volume growth in the near term.

On November 8, the government demonetised Rs 500 and Rs 1,000 notes, which accounted for 86% of the currency in circulation with the public.

Though near term outlook has been affected by demonetisation and that will continue to impact stock performance in the near term, Nomura has retained a ‘buy’ rating on the stock as it believes the company would be a beneficiary of the upcoming Dedicated Freight Corridor Project.

The stock was up 1.4% at Rs 1,105.65 in afternoon trade on Thursday.