Insights

Anandrathi expects an upside of nearly 25% on this PSU stock

28 March 2022 • Parikshit Singh

Anandrathi has initiated coverage on Concor and has a BUY call on the stock with a target price Rs. 823 seeing an upside potential of nearly 25%.

The brokerage mentions that Concor is the uncontested market leader in containerized rail cargo in the country, accounting for 66% of the market. In addition to providing inland rail transport for containers, the company has grown to include port management, storage and warehousing, and coldchain establishment.

As of March 21, the company has the largest network, with 60 terminals in total. It has 15,500+ Container Wagons, 37,861 Containers, 14 Gantry Cranes, and 111 Reach Stakers among its mobile assets. Concor is providing world-class efficiency to its services by transitioning from single stack to double stack processes.

The company handled 3 million TEUs in 9MFY22, up from 2.6 million in 9MFY21, a 16% increase year on year. During FY22, management expects to handle over 4 million containers. Concor anticipates double domestic business volume from 11-12 million tonne to 22 million tonne due to increased flow of bulk commodities.

Concor has invested over Rs. 5,000 million during 9M-FY22 and estimates total Capex for the year to exceed 7,000 million.  It aims to open three Multi-Modal Logistics Parks (MMLPs) in FY22E at Dahej, Varnama, and Paradip, with six more to open in FY23E.

The effective implementation of the Dedicated Freight Corridor (DFC) will contribute to a rise in rail freight market share, of which Concor will be a major beneficiary. Concor is preparing to capitalise on increased volumes by establishing additional terminals, double stacking, ensuring transit time, and upgrading its infrastructure by adding more containers and rakes.

Source: Anandrathi Report

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