Feather BSEsettled on Concor’s stock by 752.75 up 21.35 or 2.92%. Shares hit a new all-time high 771.40 each.
The market valuation of logistics solutions provider is approx. 45,864.63 crores.
Considering the company’s Friday closing price, store There has been an increase of at least 12.5 percent this week. The shares have gained more than 9% in one month. While the shares of Concor have gained about 21 per cent in the last three months.
In two years, the stock has jumped more than 100% or 2 times. While keeping in mind the new all-time high level of 771.40 each, so the shares have risen by more than 105% in two years.
Using Axis Direct Return Calculator, if an investor had invested 1 lakh in CONCOR in September 2020, in the next 24 months, the value of the investment has more than doubled 2 lakhs. If the investment is around 5 lakh in September 2020, then the value more than doubled 10 lakhs. The performance is calculated from September 10, 2020 to September 9, 2022.
Concor Shares was around 375.80 each on BSE as on September 9, 2020.
Why did Concor shares rise?
The jump in the shares of Concor comes after the Union Cabinet earlier this week approved the policy of leasing out railway land for Gati Shakti terminals, while the annual land license fee (LLF) is 1.5% of the market value of the land. % (earlier 6%) has been deducted. Extension of period also for a period of 35 years (first 5 years).
In addition, the company has fixed September 22 as the record date for the final dividend for the financial year FY22. These shares will become ex-dividend on September 20.
In May, the company declared the final dividend of 3 per equity share (60%) of the face value per equity share 5 each for the financial year 2021-22. The final dividend is in addition to the interim dividend of 80% ( 4 per share) and a second interim dividend of 40% ( 2 per share) for the financial year which has already been paid.
Should you invest in CONCOR shares?
Talking about the Gati Shakti policy, analysts Achal Lohare and Partha Gala of JM Financial said in their note, “While this new policy will be applicable to new terminals, it will make the existing entities transparent and competitive after switching to the new regime. Bidding process (most likely on revenue sharing parameter similar to Gati Shakti Cargo policy) where the incumbent will have the right of first refusal.”
However, both also explained that there is no clarity yet about the recovery of investments made in infrastructure by the incumbent operator at these terminals. He added, “We are eagerly waiting for the fine print which is expected to be released within the next 90 days.”
On Concor, the analysts’ note said, “We currently maintain our projections broad and will revisit our LLF assumption, only after clarity on Concor’s strategy on the policy and renewal of its terminals. We provide sensitivity to EPS and TP (1% lower). The LLF rate implies a 5% increase in EPS and a 3% increase in our TP. We begin FY25 and extend to Sep’23 860 (before March’23TP 770). Keep buying. The major risks to the recommendation are a) adverse consequences in the fine print of the policy and b) sub-par capital allocation decisions.”
Analysts at Anand Rathi said in their report that this new policy is applicable to new companies while old companies will have the option to switch to the new policy regime after a transparent and competitive bidding process. This will lead to the creation of 300 Gati Shakti Cargo Terminals which will be developed over the years and will create 1.2 lakh jobs. Full details of bidding parameters will be made available soon.
As per Anand Rathi’s note, if CONCOR switches to a new policy regime, the company will get the following benefits:
The LLF fee paid by the company is 6% of the market value of the land, which will be increased by 7% annually.
– Company paid during 1QFY23 95.59 crore as LLF fee. Annuity of LLF Fee The total fee for the years is ~. Is 382.36 crores.
– If CONCOR switches to the new policy regime, it will pay 1.5% as LLF fee which is ~. comes 95.59 crore for FY23.
– The savings in LLF fee due to adoption of this policy keeping in view the above calculation is ~. will be 286.77 crore (pretax) which entails a growth of 15% annually in FY23 EPS.
On valuation, Anand Rathi’s note said, “We continue to remain positive on the stock, as the change in LLF policy opens up opportunities for privatization and the growth momentum is expected to continue over the medium to long term, which is expected to continue.” That DFCd growth is supported by CAPEX plans and positive growth. Outlook from the domestic vertical,” adding, “We maintain BUY rating on the stock with a revised target price of Rs 820 per share.”
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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