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Buy
| 1690
12 months
17%
Whats changed?
Target
EPS FY16E
EPS FY17E
Rating
Quarterly performance
Revenue
EBITDA
EBITDA (%)
PAT
Q3FY15
1,451.8
366.9
25.3
301.1
Q3FY14
1,239.3
285.6
23.0
249.6
YoY (%)
17.2
28.4
222bps
20.6
Q2FY15
1,354.8
312.7
23.1
191.9
QoQ (%)
7.2
17.3
219bps
56.9
Key financials
| Crore
Net Sales
EBITDA
Net Profit
EPS (|)
FY14
5,109
1,078
950
48.7
FY15E
5,573
1,310
994
51.0
FY16E
6,526
1,566
1,146
58.8
FY17E
7,972
2,013
1,496
76.7
Valuation summary
P/E (x)
Target P/E (x)
EV / EBITDA (x)
P / BV (x)
RONW (%)
ROCE (%)
FY14
29.6
34.7
23.6
4.1
13.8
12.8
FY15E
28.3
33.2
19.1
3.7
13.1
12.1
FY16E
24.5
28.8
15.7
3.3
13.7
13.2
FY17E
18.8
22.0
11.7
3.0
15.9
16.0
Stock data
Particular
Market Capitalisation (| Crore)
Totak Debt (Mar-14) (| Crore)
Cash and Investment (Mar-14) (| Crore)
EV (| Crore)
52 week H/L
Equity Capital (| Crore)
Face Value (|)
Amount
28,075.7
2,704.2
25,371.5
1505 / 705
195.0
10.0
Stock Return
Gati
Blue Dart Express
Concor
Gateway Distripark
1M
-15.4
-3.7
6.6
11.0
3M
-8.0
14.7
8.5
27
| 1450
6M
71.5
76.1
10.6
67.9
12M
280.3
112.1
99.7
205.2
Research Analysts
Bharat Chhoda
bharat.chhodal@icicisecurities.com
Soumojeet Banerjee
soumojeet.banerjee@icicisecurities.com
Variance analysis
Q3FY15 Q3FY15E
1,451.8 1,376.7
Revenue
Employee Expenses
Terminal & other Expenses
Administrative Expenses
Total Expense
EBITDA
EBITDA Margin (%)
Depreciation
Interest
Other Income
PBT
Total Tax
PAT
Q3FY14
1,239.3
YoY (%)
17.2
41.0
827.7
34.4
812.3
34.1
728.2
20.0
13.7
47.4
775.6
-13.6
6.7
216.3
1,084.9
210.0
1,056.6
191.2
953.6
13.1
13.8
219.1
1,042.1
-1.3
4.1
366.9
25.3
93.7
0.0
85.2
358.4
57.3
301.1
320.1
23.3
98.0
0.0
87.4
309.5
77.4
232.1
Q3FY15 Q3FY14
665,130 594,642
115,313 127,262
Key Metrics
EXIM Volume (TEUs)
Domestic Volume (TEUs)
285.6
28.4
23.0 222 bps
46.8
100.2
0.0
88.8
-4.0
327.6
9.4
78.0
-26.6
249.6
20.6
312.7
17.3
23.1 219 bps
148.6
-36.9
0.0
92.0
-7.4
256.2
39.9
64.3
-10.9
191.9
56.9
Comments
Revenue posted strong growth on back of strong Exim volume growth and decline in
overall empty haulage from ~7% to 6% on YoY basis
Higher charges as Railways increased its charges partially in the quarter.Going ahead,
charges are expected to increase from March 1, 2015 as Railways implements its
freight hike completely
Higher volume, lower empty haulage and double stacking aided margins
Change in estimates
(| Crore)
Revenue
Old
6,477.6
FY16E
New % Change
6,526.0
0.7
Old
7,911.6
FY17E
New % Change
7,972.0
0.8
EBITDA
EBITDA Margin (%)
1,554.6
24.0
1,566.2
24.0
0.7
0 bps
1,997.7
25.3
2,012.9
25.3
0.8
0 bps
PAT
1,132.8
1,145.8
1.1
1,479.4
1,495.7
1.1
EPS (|)
58.1
58.8
Source: Company, ICICIdirect.com Research
1.2
75.9
76.7
1.1
Comments
Revenue estimates remain in line
Continued double stacking and hub & spoke model together with lower empty haulage
to support operating margins
PAT estimates have been revised marginally upwards in line with the view of improved
revenue due to better container volumes and increased contribution from additional
revenue line of logistic parks
Assumptions
Exim Volume
Domestic Volume
Exim Realisation
Domestic Realisation
Unit
TEUs
FY14
2,361,419
TEUs
|/TEUs
|/TEUs
507,183
16,370
22,057
Current
FY16E
FY17E
2,956,984
3,311,822
469,137
18,224
24,243
519,708
19,902
26,571
Earlier
FY15E
FY16E
2,627,088 2,824,120
557,872
16,090
22070
620,765
17,197
23722
Comments
Prioritising of Exim cargo by management along with higher capex in rakes to support
Exim volumes
Domestic volume to taper as Exim cargo takes priority
Consequently, realisation to improve in the Exim segment
Page 2
Company Analysis
Focus to enhance Exim volume as major ports volume recoups
Exim revenues form ~84% of Concors total revenues. Exim volumes
posted a CAGR of ~6% over FY10-14 with FY14 posting robust growth of
~10% YoY, thereby, hinting towards a revival in FY14. Further, for major
ports, container volumes grew ~8% YoY on a YTD basis. Consequently,
going ahead, driven by buoyant container volume growth at major ports,
we expect Exim volumes for Concor to post a CAGR of ~12% over FY1417E. Further, as JNPT port is one of the largest volume contributors to
Concor, its volumes posted growth of nearly 13.3% YoY for Q3FY15. In
contrast, on a YTD basis, JNPTs container volumes grew ~10% YoY. The
port volume share for Concor from JNPT declined to 43% for YTD FY15.
However, the decline in volume share at JNPT was compensated by an
increase in share from Mundra and Pipavav port where Concors share
stood at 25% and 21%, respectively, in YTD FY15. As volumes pick up at
ports, Concor focuses on Exim to improve its earnings.
Exhibit 1: Exim container volume
3,500
3,000
2,152
2,361
2,957
3,312
2,000
500
533 528
Q3FY14
1,000
Q3FY13
1,500
Q1FY13
000 TEUs
2,500
2,664
FY17E
FY16E
FY15E
FY14
FY13
Q3FY15
Q2FY15
Q1FY15
Q4FY14
Q2FY14
Q1FY14
Q4FY13
Q2FY13
EXIM
Page 3
507
481
469
520
434
400
96
106 114
117
146 135
121
115
Q1FY14
Q4FY14
Q2FY15
Q3FY15
100
Q4FY13
200
Q2FY13
300
Q1FY13
000 TEUs
500
FY15E
600
FY14
FY17E
FY16E
FY13
Q1FY15
Q3FY14
Q2FY14
Q3FY13
Domestic
Concor to post strong growth numbers aided by PFTs and private ports
Concors revenues grew at a CAGR of 4.5% over FY11-FY13 as container
volume remained under pressure with a decline in volume at major ports.
However, going ahead, with an improved market share in private ports
such as Mundra and Gujarat Pipavav we expect volumes to improve. On
the EBITDA front also, we expect Concor to post a CAGR of ~23% over
FY14-17E vis--vis CAGR of ~3% over FY11-13. As EBITDA margins have
remained under pressure over the years due to a steep increase of freight
rates by railways, going forward, we believe hikes will pause, thereby
allowing the company to stabilise its margins. Also, introduction of
double stacking and hub & spoke model for its operations is expected to
provide further scope to improve margins (in the range of 23% to 25%) in
future. Further, introduction of PFTs is expected to improve the earnings
of the company in the future. Consequently, PAT is also expected to post
a CAGR of ~16% over FY14-17E against 3% in FY11-13.
Page 4
8.0 X
10.0 X
15.0 X
20.0 X
25.0 X
Page 5
Apr-16
Dec-15
Aug-15
Apr-15
Dec-14
Aug-14
Apr-14
Dec-13
Aug-13
Apr-13
Dec-12
Aug-12
Apr-12
Dec-11
Aug-11
Apr-11
Dec-10
Aug-10
Apr-10
2000
1800
1600
1400
1200
1000
800
600
400
200
0
Company snapshot
1,800
1,600
1,400
1,200
1,000
800
600
400
200
Jan-16
Sep-15
Nov-15
Jul-15
Mar-15
May-15
Jan-15
Sep-14
Nov-14
Jul-14
May-14
Jan-14
Mar-14
Nov-13
Jul-13
Sep-13
May-13
Jan-13
Mar-13
Nov-12
Jul-12
Sep-12
May-12
Jan-12
Mar-12
Nov-11
Jul-11
Sep-11
May-11
Jan-11
Mar-11
Nov-10
Jul-10
Sep-10
May-10
Jan-10
Mar-10
Key events
Date
Feb-08
Event
Concor NYK to set up JV company
May-09
Q3FY12 profit up 13.9 % YoY; forthcoming Rail Budget keeps stock in focus
Jan-11
Concor TCI plan to set up JV company Infinite Logistics Solutions Ltd for ocean freight carrier service
Jul-11
Feb-12
Concor plans to set up three logistics parks in West Bengal and further plans to set up 15 such parks across the country; Q1FY12 result profit up 5%
Jul-12
Competition panel absolves Concor of abusing its position in container train operator segment
Aug-12
Jan-13
Cut in rail freight and stabilisation of container volumes; the freight rate cut varies between 5% and 13% after steep 31% increase in February 2013
Apr-13
Jul-14
Top 10 Shareholders
Shareholding Pattern
Rank
1
2
3
4
5
6
7
8
9
10
(in %)
Promoter
FII
DII
Others
Name
Latest Filing Date % O/S Position (m) Change (m)
Government of India
31-Dec-14 61.80
120.5
0.0
Aberdeen Asset Management (Asia) Ltd.
31-Dec-14 7.02
13.7
13.7
Matthews International Capital Management, L.L.C.
30-Nov-14 4.14
8.1
8.1
Life Insurance Corporation of India
28-Jun-13 3.02
5.9
5.9
ICICI Prudential Asset Management Co. Ltd.
31-Dec-14 1.80
3.5
1.2
T. Rowe Price International (UK) Ltd.
31-Dec-14 1.50
2.9
2.9
LIC Nomura Mutual Fund Asset Management Company L
31-Dec-14 1.49
2.9
0.0
GIC Private Limited
31-Dec-14 1.32
2.6
0.4
IDFC Asset Management Company Private Limited
31-Dec-14 0.74
1.4
0.0
Goldman Sachs Asset Management (India) Private Ltd.
31-Dec-14 0.73
1.4
-0.1
Recent Activity
Buys
Investor name
Aberdeen Asset Management (Asia) Ltd.
Matthews International Capital Management, L.L.C.
Life Insurance Corporation of India
T. Rowe Price International (UK) Ltd.
ICICI Prudential Asset Management Co. Ltd.
Value
293.90m
174.87m
71.08m
62.93m
25.59m
Shares
13.69m
8.07m
5.88m
2.93m
1.19m
Sells
Investor name
The Vanguard Group, Inc.
APG Asset Management
T. Rowe Price Hong Kong Limited
First State Investment Management (UK) Limited
FIL Investment Management (Hong Kong) Limited
Value
-32.10m
-8.29m
-5.67m
-5.62m
-4.03m
Shares
-1.47m
-0.48m
-0.47m
-0.38m
-0.33m
Page 6
Financial summary
Profit and loss statement
(Year-end March)
Revenue
Growth (%)
Terminal/Other Service charge
Employee Cost
Administrative & other exp.
Op. Expenditure
EBITDA
Growth (%)
Depreciation
EBIT
Interest
Other Income
PBT
Growth (%)
Tax
Reported PAT
Growth (%)
Adjustments
Adj. Net Profit
| Crore
FY14
5,108.5
14.9
3,645.6
126.4
258.5
4,030.5
1,078.1
2.7
193.4
884.7
1.0
369.9
1,253.6
4.2
302.3
951.3
2.2
0.0
951.3
FY15E
5,573.4
9.1
3,929.2
139.3
195.1
4,263.6
1,309.7
21.5
390.1
919.6
0.0
338.0
1,257.7
0.3
264.1
993.5
4.4
0.0
993.5
FY16E
6,526.0
17.1
4,584.5
146.8
228.4
4,959.8
1,566.2
19.6
450.1
1,116.1
0.0
411.6
1,527.8
21.5
381.9
1,145.8
15.3
0.0
1,145.8
FY17E
7,972.0
22.2
5,540.5
183.4
235.2
5,959.0
2,012.9
28.5
498.9
1,514.1
0.0
474.9
1,989.0
30.2
493.3
1,495.7
30.5
0.0
1,495.7
| Crore
FY14
951.3
193.4
177.0
1,321.7
-61.6
-1.3
1,258.8
-535.3
-689.2
FY15E
993.5
390.1
-30.7
1,352.9
-69.4
22.6
1,306.1
-1,000.0
333.1
FY16E
1,145.8
450.1
91.8
1,687.7
-117.2
7.7
1,578.2
-700.0
-73.5
FY17E
1,495.7
498.9
155.0
2,149.6
-162.8
21.0
2,007.7
-450.0
-79.0
-1,224.5
3.5
0.0
-279.7
-276.2
-241.8
2,946.0
2,704.2
-666.9
3.8
0.0
-298.1
-294.2
344.9
2,704.2
3,049.1
-773.5
7.8
0.0
-343.7
-335.9
468.8
3,049.1
3,517.9
-529.0
11.9
0.0
-448.7
-436.8
1,041.9
3,517.9
4,559.8
FY14
FY15E
FY16E
FY17E
353.4
138.7
48.7
58.7
12.3
389.0
156.4
51.0
71.0
12.7
430.2
180.4
58.8
81.9
14.7
483.9
233.9
76.7
102.3
19.2
21.1
18.6
1.5
4.0
2.1
40.5
23.5
17.8
1.4
3.5
2.2
40.3
24.0
17.6
1.6
3.0
2.3
39.3
25.3
18.8
1.9
3.0
2.3
38.0
13.8
12.8
25.2
13.1
12.1
24.1
13.7
13.2
27.2
15.9
16.0
37.2
29.6
4.1
23.6
5.0
28.3
3.7
19.1
4.5
24.5
3.3
15.7
3.8
18.8
3.0
11.7
3.0
0.0
NA
0.0
4.3
4.3
0.0
NA
0.0
4.5
4.4
0.0
NA
0.0
4.5
4.5
0.0
NA
0.0
4.9
4.8
Balance sheet
| Crore
(Year-end March)
Source of Funds
Equity Capital
Reserves & Surplus
Shareholder's Fund
Minority Interest
Loan Funds
Deferred Tax Liability
Provisions
Source of Funds
FY14
FY15E
FY16E
FY17E
195.0
6,694.8
6,889.8
27.5
0.0
305.0
45.7
7,268.0
195.0
7,390.3
7,585.3
0.0
0.0
315.0
45.7
7,946.0
195.0
8,192.4
8,387.3
0.0
0.0
325.0
45.7
8,758.0
195.0
9,239.4
9,434.3
0.0
0.0
335.0
45.7
9,815.0
Application of Funds
Gross Block
Less: Acc. Depreciation
Net Block
Capital WIP
Total Fixed Assets
Investments
Inventories
Debtor
Cash
Loan & Advance, Other CA
Total Current assets
Current Liabilities
Provisions
Total CL and Provisions
Net Working Capital
Application of Funds
4,801.6
1,488.0
3,313.6
0.0
3,313.6
1,440.3
16.7
47.8
2,704.2
508.3
3,276.9
566.8
195.9
762.8
2,514.1
7,268.0
5,801.6
1,878.1
3,923.5
0.0
3,923.5
1,107.2
53.4
33.6
3,049.1
615.2
3,751.3
614.6
221.4
836.0
2,915.3
7,946.0
6,501.6
2,328.2
4,173.3
0.0
4,173.3
1,180.7
53.6
41.1
3,517.9
752.3
4,365.0
701.8
259.3
961.0
3,404.0
8,758.0
6,951.6
2,827.1
4,124.5
0.0
4,124.5
1,259.7
65.5
50.2
4,559.8
891.0
5,566.5
830.0
305.8
1,135.7
4,430.8
9,815.0
Key ratios
(Year-end March)
Per share data (|)
Book Value
Cash per share
EPS
Cash EPS
DPS
Profitability & Operating Ratios
EBITDA Margin (%)
PAT Margin (%)
Fixed Asset Turnover (x)
Inventory Turnover (Days)
Debtor (Days)
Current Liabilities (Days)
Return Ratios (%)
RoE
RoCE
RoIC
Valuation Ratios (x)
PE
Price to Book Value
EV/EBITDA
EV/Sales
Leverage & Solvency Ratios
Debt to equity (x)
Interest Coverage (x)
Debt to EBITDA (x)
Current Ratio
Quick ratio
Page 7
EV/EBITDA (x)
RoCE (%)
FY14 FY15E FY16E FY14 FY15E FY16E
23.6 19.1 15.7 13.8 13.1 13.7
15.4 12.0 10.8 18.2 22.9 22.2
92.2 76.6 57.5 22.5 25.9 23.5
40.0 25.7 20.2 11.4 18.3 17.7
RoE (%)
FY14 FY15E FY16E
13.8 13.1 13.7
16.2 20.8 20.2
19.1 19.4 23.4
13.7 18.6 20.3
Page 8
RATING RATIONALE
Pankaj Pandey
Head Research
pankaj.pandey@icicisecurities.com
Page 9
ANALYST CERTIFICATION
We /I, Bharat Chhoda, MBA and Soumojeet Kr Banerjee, MBA, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report
accurately reflect
our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or
RATING
RATIONALE
view(s) in this report.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and
Buy:
>10%/15% for large caps/midcaps, respectively;
meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without
prior written
consent
of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current.
Hold:
Up
to +/-10%;
Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended
temporarily
and such
Sell:
-10%
orsuspension
more;is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this
company, or in certain other circumstances.
This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This
report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their
receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific
circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate
the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any
loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the
risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to
change without notice.
Pankaj Pandey
Head Research
pankaj.pandey@icicisecurities.com
ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment
in the past twelve months.
It is confirmed that Bharat Chhoda, MBA and Soumojeet Kr Banerjee, MBA, Research Analysts of this report have not received any compensation from the companies mentioned in the report in the
preceding twelve months.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
ICICI Securities or its subsidiaries collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the
publication of the research report.
Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject
company/companies mentioned in this report.
It is confirmed that Bharat Chhoda, MBA and Soumojeet Kr Banerjee, MBA, Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report.
ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.
Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.
We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution,
publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities
described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and
to observe such restriction.
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