Sell Container Corporation of India for a price Target of 1194 says Angel Securities

SELL CONTAINER CORPORATION OF INDIA – ANGEL SECURITIES

Angel Securities in its 23rd June, 2010 research report has recommended a sell rating on the stock, Container Corporation of india (ConCar) with a price target of Rs 1194.

Angel Securities says that “Concor is gradually losing its pricing power in the Exim Segment, which could be a further threat once more Rail-linked ICDs from the private players come up.

However, we remain bullish on the Container sector in the long term, which is the core driver of Concor’s business. Nonetheless, higher IR tariffs and opening up of the Container industry to the private players will impact the company’s market share in the long run.

We also believe that the company’s growth trajectory will be lower than its historical trend. Thus, key risk to our recommendation will be Concor maintaining its market share and accelerated construction of the dedicated Rail-freight corridor, which could help it wrest market share from the Road segment.”

“We estimate Concor to post muted Earnings CAGR of 10.1% over FY2010-12E, as against the 17.6% CAGR registered during FY2005-09. At the current market price, the stock is trading at 18.0x FY2012E Earnings and at 12.2x FY2012E EV/EBITDA. We maintain our Reduce rating on stock, with a target price of Rs 1,194.”