Shares of Container Corporation of India (CONCOR) declined by approximately 2% on October 14, following Morgan Stanley's issuance of an 'Underweight' rating on the stock with a target price of Rs 774 per share, indicating a potential downside of 13% from the previous closing price.
In Q2 FY25, CONCOR's handling volume grew by 6%, with Export-Import (Exim) volume increasing by 4% and domestic volume rising by 14%.
However, this growth fell short of Morgan Stanley's estimate of 7% for the quarter, which had projected a 5% increase in Exim and a 20% rise in domestic volume. For context, Q1 FY25 also posted a 6% growth, featuring a 4% rise in Exim and a 15% increase in domestic volume.
Previously, CONCOR had set a target of 15% growth for Exim and 25% for the domestic segment in FY25. To achieve this annual guidance, the company now needs to realize growth rates of 26% in Exim and 35% in the domestic segment during the second half of the fiscal year, as noted by Morgan Stanley analysts in a recent report.
At 9:32 am, CONCOR shares were trading 1.6% lower at Rs 879 on the National Stock Exchange (NSE). So far in 2024, the stock has risen around 2, underperforming Nifty's returns of 14%. In the last year, the counter has risen around 22% compared to Nifty's gain of 26% during this period.
CONCOR is a public sector undertaking (PSU) engaged in the transportation and handling of containers. Its core business is characterized by three distinct activities, that of a carrier, a terminal operator, a warehouse operator, and a Multi-Modal Logistics Parks (MMLP) operation.
The state-owned firm is soon starting the coastal movement of goods as part of its multi-modal logistics strategy to offer a cheap, fast, and cleaner mode of transportation.
The company has been focusing on providing first- and last-mile connectivity to its customers and coastal shipping can be a key link to this. It has also started a logistics app for providing first-mile and last-mile services.
In Q1 FY25, the company reported an income of Rs 82 crore from these services, reflecting a robust year-on-year growth of 35%. The PSU has set a growth target of 50% for FY25.
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