Buy Container Corporation, target price Rs 1,050: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on Container Corporation of India with a target price of Rs 1050. The current market price of the stocks is Rs 847.45. Container Corporation, incorporated in 1988, is a large cap company with a market cap of Rs 51497.56 crore, operating in the logistics sector.

Container Corporation of India's key products/revenue segments include Freight, Other Services and Other Operating Revenue for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 2416.62 crore, up 10.00% from last quarter's Total Income of Rs 2196.98 crore and up 5.08% from last year same quarter's Total Income of Rs 2,299.78 crore. The company has reported net profit after tax of Rs 371.25 crore in latest quarter.

Investment Rationale
According to Motilal Oswal Financial Services, Container Corporation 2QFY25 experienced decent performance with margin expansions driven by lower LLF and cost control. Expanding the use of double-stacked trains with direct connections to ports will enable the company to capture a larger share of cargo volumes. Additionally, transporting bulk cement will help the company drive volume growth in FY25 and beyond. With DFC?s commissioning and a continuous ramp-up in the number of doublestacked trains, the brokerage expects blended volumes to post a 14% CAGR during FY24-27. They expect EBITDA margin to be 22-25% over FY24-27 and has reiterated a BUY with a revised target price of Rs 1,050 (based on 20x EV/EBITDA on Sep-26).

Promoter/FII Holdings
Promoters held 54.8 per cent stake in the company as of 30-Sep-2024, while FIIs owned 13.65 per cent, DIIs 25.66 per cent.