Neutral Container Corporation of India, target Rs 711: Nomura, India

Nomura, India has a neutral call on Container Corporation of India Ltd. with a target price of Rs 711. The current market price of Container Corporation of India Ltd. is Rs 619.95 Time period given by the brokerage is a year when Container Corporation of India Ltd. price can reach defined target. Container Corporation of India Ltd., incorporated in 1988, is a largecap company with a market cap of Rs 29811.55 crore.

Investment rationale by Nomura

Following CCRI’s 1:1 stock split, we adjust our target price by the same ratio. The stock split is effective from 26 June 2018. Our methodology remains unchanged and our target price of INR711 is based on 16x FY20F EV/EBITDA, implying ~14% upside. Key upside risks are improving rail market share and reversal of GST tax differential, while further loss of share to roadways and delay in the DFC are key downside risks. EPS estimates adjusted by similar proportion for stock split. To adjust for the 1:1 stock split, our per share metrics are one-half of their previous values. There are no changes to our revenue/margin/net profit estimate.