Broker’s call: Concor (Add)
JM Financial
Container Corporation of India's (Concor) inaugural long haul double stack container movement from JNPT to Vadodara on August 21, covering 422 kilometers with 360 TEUs, marks a significant milestone for the company. This demonstrates the Western Dedicated Freight Corridor's operational status and confirms that longer double stacking is indeed a practical reality.
Increased long haul double stack has the potential to alleviate congestion and enhance asset utilization, as current single stack operations handle only 90 TEUs. This development could improve rail competitiveness against road transportation and reduce train moves for the same load, thereby minimizing track congestion and shortening delivery times.
The ongoing West Asia crisis has led to an increase in truck freight rates, driven by diesel price hikes, which, coupled with WDFC operations, may result in a boost in rail container volume post-monsoon (Q3FY27). Concor's core business is valued using the discounted cash flow (DCF) methodology, resulting in a target price (TP) of ₹540, and the analyst maintains an 'Add' rating.
The risk-reward ratio is deemed justified, with the WDFC connection and anticipated rail modal share gains due to higher truck freight rates, partly attributed to rising diesel prices, supporting potential share price appreciation. However, this could turn adverse as before, as the stock's underperformance has persisted.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
