Dedicated Freight Corridor to boost Concor’s market share
The road-to-rail cargo shift is gaining momentum due to the Dedicated Freight Corridor (DFC), and Container Corporation of India (Concor) is expected to regain lost market share as its presence on the DFC network pays off.
Jefferies, a foreign brokerage firm, has raised its target price on Concor shares to Rs 825 from Rs 775, implying a potential upside of around 15% from the current levels.
The brokerage firm said the Dadri-Rewari stretch of the DFC was completed in the first quarter of fiscal year 2024. This stretch connects the western ports of Gujarat with the northern markets, and it is expected to significantly reduce the cost of transporting cargo by rail.
Jefferies noted that the DFC is transporting cargo at Rs 1.1 per tonne-kilometer (tkm) compared to Rs 1.4 and above by road. This, coupled with the fact that DFC trains are timetabled, which assures confirmed cargo delivery schedules, is making rail a more attractive option for shippers.
In addition, the DFC is being electrified, which will further reduce transit times. Trains are already electrified between Palanpur Junction and Dadri, and the last mile from Palanpur to Pipavav Port. The Palanpur to Mundra section is expected to be electrified by December 2023.
Concor has also placed orders for new rakes that can carry higher loads. This, along with its first mover advantage on the DFC network, will give the company an opportunity to regain market share at competitive prices.
Jefferies expects Concor’s volumes to grow at a CAGR of 15% in fiscal years 2023-26E with the DFC. The brokerage firm also believes that the company’s re-rating is on the cards.
Concor shares are down 3% on a year-to-date basis, while the one-year return stands at (-)6%. The company reported an over 17% decline in net profit for the first quarter ended June 30, 2023.
The DFC is a major infrastructure project that is expected to boost the Indian economy. It will help to reduce logistics costs, improve efficiency, and create jobs. Concor is well-positioned to benefit from the DFC, and its shares could be a good investment for investors who are looking for exposure to this growth story.
- 22 Sep
NBCC shares trade higher on Rs 100 crore work order from SAIL
NBCC shares were trading 3 percent higher on September 22 after the company announced having bagged a work order worth Rs 100 crore from SAIL. This is the fourth order-win announced by the company in this month, the total value of the same being Rs 450 crore. NBCC is a public sector undertaking engaged in the business of construction and real estate development. The company specializes in providing project management, consultancy and engineering services for civil construction, infrastructure development, and real estate projects.
- 22 Sep
Glenmark Pharma stock falls on stake sale in Glenmark Life Sciences
Glenmark Pharma stock fell after the company announced it would sell a 75% stake in its subsidiary Glenmark Life Sciences to Nirma. Analysts expect the stake sale to benefit Glenmark Pharma, as it will transition from a net debt position to a cash surplus position. This is expected to have a positive impact on the company's return ratios over the next two to three years.
- 22 Sep
Berger Paints Shares Hit 52-Week High After Turning Ex-Bonus
Berger Paints shares surged 6% to hit a 52-week high after turning ex-bonus on the record date for the issue of bonus shares in the ratio 1:5. The company posted a net profit of Rs 326.3 crore in the April-June quarter of FY24, up 39% year-on-year, on revenue of Rs 2,739.7 crore, up 10% year-on-year. The company expects to get net cash positive by the end of this fiscal year and expects to end the year with double-digit revenue growth on strong demand outlook.
- 22 Sep
Market Update for September 22, 2023
IdeaForge Tech up 3.4% on order RVNL up 3% on highway MoU JSW Steel up 0.4% on sale ICICI Lombard down 1.6% on CEO exit ICICI Bank down 1% on healthcare investment NHPC up 1.3% on extended additional charge Kalyani Forge up 3.2% on new MD IRB Infra up 2.5% on road project closure
- 22 Sep
Lux Industries Shares Down 3% After Income Tax Raid
Lux Industries shares fell 3% on September 22 after news emerged that the Income Tax department had conducted searches at the company's premises in Kolkata and alleged a tax evasion of Rs 200 crore. The company has confirmed the searches and is extending full support.