Container Corp Q4 Review - Divestment Can Unlock Value: ICICI Securities
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ICICI Securities Report
Large non cash provisions booked by Container Corporation of India Ltd. in Q4 FY21 leads to a miss, reported Ebitda at Rs 1.9 billion Ebitda was down 60% YoY and ~50% QoQ.
Adjusted for the higher land licence fee expense and employee costs, we estimate Ebitda to be flat QoQ – still a miss when compared to peer performance, given the external margin triggers.
Rs 5.17 billion of land licence fee sets up for a prospective FY22.
Valuations have largely shaken off the possibility for higher land licence fee incidence, while acknowledging higher probability of divestment as well.
From here on real progress towards divestment and execution/profitability will drive performance.
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