Container Corporation of India gets new CMD; stock trades flat

Shares of Container Corporation of India were trading flat early on September 27 post the appointment of Sanjay Swarup as the CMD of the company.

At 9:28 am the Container Corporation of India stock was trading at Rs 732 on NSE.

The state-owned company in a BSE filing dated September 26 said that the board of directors has appointed Sanjay Swarup as Chairman and Managing Director (CMD) of the firm, with effect from October 1, 2023, till July 21, 2026. He is currently the Director (International Marketing & Operations) in Container Corporation of India (CONCOR).

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Concor plays a vital role in facilitating trade and logistics, both domestically and internationally. Swarup’s appointment is seen as a strategic step to further enhance the company’s operations and strengthen its position in the industry.

Brokerage Views on CONCOR

Brokerage firm Jefferies has raised the target price on Concor to Rs 825, from Rs 775 earlier in a recent research report. The new target price represents a potential upside of around 15 percent from the current levels.

In a note, the brokerage firm said the Dadri-Rewari stretch of DFC was completed in 1Q FY24. “Gujarat ports to Dadri is 1,100-1,200 km and DFC is transporting cargo at Rs 1.1/t km vs Rs 1.4 and above by road. Time-table trains are assuring confirmed cargo delivery schedules with rail being at least 12-18 hours lower than road,” it noted.

Also Read: Jefferies raises target price for Concor, says re-rating on the cards; stock spurts 2%

Trains are electrified between Palanpur Junction and Dadri, and in the last mile between Palanpur and Pipavav Port. Besides, Palanpur to Mundra should be electrified by December 2023, which will further reduce transit time as diesel to electric loco changeover (2-4 hours) will not be needed.

On the operational front, Concor has placed orders for new rakes which can carry higher loads. First mover advantage here in tandem with Inland Container Depots (ICDs) along the DFC should give Concor an opportunity to regain shares at competitive prices, Jefferies noted.

“We believe Concor’s volumes should see 15 percent CAGR in FY23-26E with DFC. June 2023 saw the Gujarat cyclone impact port/rail operations and the Odisha rail accident leading to delays as railways realigned freight and passenger operations to prioritise safety. We believe normalized rail operations, the road to rail shift and market share/margin recovery should lead to stock upside,” it said, adding that Concor’s re-rating is on the cards.

Last month, Concor reported an over 17-percent decline in net profit at Rs 246 crore for the first quarter ended June 30, 2023. Revenue from operations dropped 3.6 percent to Rs 1,922 crore. The company said the export-import (EXIM) and domestic segments registered a fall of 5.3 percent and 0.3 percent, respectively.

Stock Performance

Concor stock has given a return of 26.24 percent over the last six months against the benchmark Nifty’s 15.33 percent during the same period.

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