Container Corp Shares Gain As Goldman Sachs Upgrades Rating To 'Buy'
The brokerage has also set the target price on the company at Rs 720, implying an upside of 20%
Shares of Container Corporation of India Ltd. gained after Goldman Sachs upgraded the stock from 'neutral' to 'buy', citing recent corrections and continuing benefits from rail containerisation.
The brokerage has also set the target price on the company at Rs 720, implying an upside of 20% after the stock's valuation had corrected by 25% since its peak in November 2022.
The effect is expected to further accelerate as the dedicated freight corridor connects to the western coast ports by mid-CY2023, and the Jawaharlal Nehru Port Trust is expected to open within 18 months, the brokerage said in its April 19 note.
Container Corporation, which holds a 70% market share in India's rail logistics sector despite conservative estimates, is forecast 15.5% earnings CAGR in FY23-FY25, said Goldman Sachs.
"With full commissioning of DFC over the next 18 months, we think Concor could be at an inflection point as road-to-rail shifts of cargo accelerate," said the brokerage.
Despite consensus estimates not yet reflecting the slowdown in global trade, the waning M&A premium due to potential delays in the government's stake sale has positioned the stock for outperformance as positive catalysts begin to play out, the brokerage said.
Shares of Container Corp. gained 3.19% to Rs 618.5 apiece as of 10:06 a.m., compared to a 0.13% decline in the benchmark Nifty 50.
The total traded quantity so far in the day stood at 9.7 times the 30-day average volume.
Of the 28 analysts tracking the stock, 15 maintain a 'buy,' eight recommend 'hold,' and five suggest a 'sell', according to Bloomberg.
The average 12-month consensus price target implies a potential upside of 15.8%.