Professional Documents
Culture Documents
Key Financials
(| cr) Net Sales EBITDA Net Profit EPS (|) FY12 FY13E FY14E FY15E 3867.6 4460.5 5078.0 6110.5 23.4 446.0 584.0 763.8 -428.2 80.7 -291.4 -168.6 -9.2 1.7 -6.3 -3.6
Valuation summary
PE (x) Target PE (x) EV to EBITDA (x) Price to book (x) RoNW (%) RoCE (%) FY12 FY13E FY14E FY15E -5.3 28.3 -7.8 -13.5 -5.2 27.7 -7.7 -13.3 272.4 18.1 14.9 11.2 0.3 0.3 0.3 0.4 -6.4 1.2 -4.5 -2.7 -4.7 -2.4 -2.0 -1.1
Stock data
Market Cap. (| cr) Debt( FY12) (| cr) Cash (FY12) (| cr) EV (| cr) 52 week H/L (| cr) Equity capital (| cr) Face value (|) DII Holding (%) FII Holding (%) 2282 5525 1442 6365 82 / 46 465.8 10 19.4 2.1
Price movement
6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 Mar-12 May-12 Aug-12 Nov-12 Nifty (L.H.S) Price (R.H.S) 80 70 60 50 40 30 20 Feb-13
Analysts name
Bharat Chhoda bharat.chhoda@icicisecurities.com Soumojeet Kr Banerjee soumojeet.banerjee@icicisecurities.com
We expect revenue growth to pick up post completion of fleet addition by end of FY14. Average TCY $/day in case of dry bulk and product carriers have declined 44% and 15%, respectively YoY whereas crude carrier rates have improved 8% YoY. Massive tonnage addition in the dry bulk segment to the tune of ~106 million dwt in CY12 and another 99 million dwt by end of CY13 is expected to put pressure on freight rates
6110.5
LP PL 85.7
-55.4 NA -4.5
LP PL 90.0
PL -244 bps
NA NA -232 bps
13.5 6.5
10.0 584.0
700 600 500 | cr 400 300 200 100 0 -100 Q3FY12 -50.6 EBITDA OPM Q2FY13 Q3FY13 FY13E -5.2 67.3 139.7 446.0
11.5
12.5 763.8
15 10 5 0 -5 %
FY14E
FY15E
-10
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35 30 25 20 15 10 5 0 -5 -10 %
report loss at the net profit level in FY14E and FY15E in the absence of any extraordinary gain
Q2FY13
Q3FY13 -75.3
FY13E 2
FY14E
FY15E -168.6 -3
6 1 Passenger
6110.5 5078.0 4460.5 FY15E
VLCC
Dry bulk
Liners
Gas
OSV
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763.8
25.0 20.0
5.0 23.4 0.6 FY11 FY12 EBITDA FY13E FY14E EBITDA % FY15E 0.0 -5.0
US$/day
Thousands
VLCC
Suezmax
Aframax
8000 6000 Index 4000 2000 0 Jan-10 Jan-11 Jan-12 Jan-13 Jul-09 Jul-10 Jul-11 Jul-12
BDI
BCI
BPI
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11.5
12.5
15.0 10.0
Valuation
SCI continues to expand its fleet amid declining time charter yield rates (TCY $/day). Further, rates are expected to remain depressed owing to excess tonnage addition leading to insufficient revenue generation for covering depreciation and interest charges. Consequently, we anticipate SCI will report loss at the net profit level. Rolling over to FY15 estimates, we believe charter rates will remain under pressure. Hence, we value the stock at 0.35x FY15E book value and assign a target price of | 48. We change our rating on the stock from SELL to HOLD.
Exhibit 12 : Valuation parameter
Valuation based on Price to book value (x) Target price (|) Current market price (|) Upside (%) Global average 0.9 Target multiple 0.35 Target price (|) 48.0 48.0 49.0 -2.0
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Financial summary
Profit and loss statement
(Year-end March) Total operating Income Growth (%) Direct Operating Expenses Bunker Cost Hire of chartered ships Administration expenses Other expenses Total Operating Expenditure EBITDA Growth (%) Depreciation Interest Other Income PBT Others Total Tax PAT Growth (%) EPS (|) FY12 3,867.6 9.1 597.5 1,560.3 402.1 101.6 923.1 3,844.2 23.4 -97.2 608.7 387.3 599.6 -373.0 33.0 88.2 -428.2 PL -9.2 FY13E 4,460.5 15.3 857.1 1,605.8 401.4 133.8 1,025.9 4,014.4 446.0 1,808.6 766.2 210.6 188.8 -341.9 500.0 77.4 80.7 NA 1.7 FY14E 5,078.0 13.8 847.5 1,929.6 406.2 152.3 1,025.8 4,494.0 584.0 30.9 868.0 176.9 157.9 -303.0 100.0 88.4 -291.4 NA -6.3 (| Crore) FY15E 6,110.5 20.3 980.1 2,322.0 488.8 183.3 1,179.3 5,346.7 763.8 30.8 915.2 190.3 179.7 -162.1 100.0 106.5 -168.6 NA -3.6
Balance sheet
(Year-end March) Liabilities Equity Capital Reserve and Surplus Total Shareholders funds Total Debt Long term Provisions Other Long term liabilities Total Liabilities Assets Gross Block Less: Acc Depreciation Net Block Capital WIP Total Fixed Assets Intangible assets Non-current Investments Long term loans & advances Other non-current assets Inventory Debtors Loans and Advances Other Current Assets Cash Current investments Total Current Assets Creditors Other liab & Provisions Total Current Liabilities Net Current Assets Application of Funds FY12 465.8 6,268.5 6,734.3 5,525.8 77.4 10.0 12,347.6 FY13E 465.8 6,349.2 6,815.0 6,507.3 0.0 0.0 13,322.3 FY14E 465.8 6,057.8 6,523.6 7,644.5 17.0 0.0 14,185.1 (| Crore) FY15E 465.8 5,889.2 6,355.0 7,581.7 17.0 0.0 13,953.7
Key ratios
(Year-end March) FY12 Per share data (|) EPS -9.2 Cash EPS 3.9 BV 144.6 DPS 0.0 Cash Per Share 31.0 Operating Ratios (%) EBITDA Margin 0.6 PBT / Total Operating income -9.6 PAT Margin -11.1 Inventory days 17.0 Debtor days 75.1 Creditor days 57.7 Return Ratios (%) RoE -6.4 RoCE -4.7 RoIC -4.0 Valuation Ratios (x) P/E EV / EBITDA 272.4 EV / Net Sales 1.6 Market Cap / Sales 0.6 Price to Book Value 0.3 Solvency Ratios Debt/EBITDA 236.4 Debt / Equity 0.8 Current Ratio 1.7 Quick Ratio 4.4 Source: Company, ICICIdirect.com Research FY13E 1.7 18.2 146.3 0.0 15.1 10.0 -7.7 1.8 15.0 70.0 60.0 1.2 -2.4 0.6 18.1 1.8 0.5 0.3 14.6 1.0 1.3 3.0 FY14E -6.3 12.4 140.1 0.0 26.2 11.5 -6.0 -5.7 10.0 60.0 60.0 -4.5 -2.0 -2.3 14.9 1.7 0.4 0.3 13.1 1.2 1.4 3.1 FY15E -3.6 16.0 136.4 0.0 0.0 12.5 -2.7 -2.8 10.0 60.0 60.0 -2.7 -1.1 0.0 11.2 1.4 0.4 0.4 9.9 1.2 1.4 0.0
13,271.2 4,399.6 8,871.6 362.0 9,233.6 41.2 192.4 1,705.0 5.0 177.5 785.9 190.4 175.9 1,442.4 82.3 2,854.4 603.8 1,080.2 1,684.0 1,170.4 12,347.6
15,883.2 5,165.8 10,717.4 250.0 10,967.4 0.0 192.4 1,671.1 0.0 179.1 835.9 238.8 298.5 702.3 82.3 2,337.0 716.5 1,129.1 1,845.6 491.4 13,322.3
17,183.2 6,033.7 11,149.4 450.0 11,599.4 0.0 192.4 1,675.3 0.0 137.7 826.1 206.5 206.5 1,221.5 82.3 2,680.6 826.1 1,136.5 1,962.6 718.0 14,185.1
17,683.2 6,949.0 10,734.2 450.0 11,184.2 0.0 192.4 1,675.3 0.0 165.9 995.6 248.9 248.9 1,334.7 82.3 3,076.3 995.6 1,178.9 2,174.5 901.8 13,953.7
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Company Description
Shipping Corporation of India is the national maritime carrier with 79 vessels. It manages a fleet of bulk carriers, liquid/dry bulk service, international container service and offshore supply vessels. The companys fleet primarily transports crude oil.
Exhibit 15:Recommendation History
80 70 60 50 40 30 20 10 0 Mar-12 Apr-12 May-12 Jul-12 Price Aug-12 Oct-12 Nov-12 Jan-13 Feb-13
Target Price
27392 34438 54
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Company Dry Bulk Diana Shipping* DryShips* Genco Shipping* Mercator Lines#
P/BV (x) P/E (x) EV/EBITDA (x) ROE (%) CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E 0.5 0.2 0.1 0.2 0.5 0.2 0.2 0.2 0.6 0.2 0.2 0.2 12.2 NA NA 23.5 NA 18.8 NA 10.1 64.7 2.0 NA 5.5 5.7 12.2 23.0 5.0 11.3 7.7 18.3 4.3 8.1 4.8 10.1 3.8 4.7 -4.0 -11.7 0.8 -0.1 0.5 -11.9 2.0 0.9 7.2 -6.8 3.5
Company Offshore Diamond Offshore* ENSCO* Hercules Offshore* Transocean* Aban Offshore#
P/BV (x) P/E (x) EV/EBITDA (x) ROE (%) CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E CY11E CY12E CY13E 2.2 1.2 1.1 1.2 0.9 2.1 1.1 1.1 1.1 0.6 1.8 1.0 1.0 1.0 0.6 15.4 11.5 15.6 4.8 14.0 8.7 20.6 11.3 8.9 9.6 7.5 13.1 8.9 5.9 7.7 8.9 11.0 8.4 6.9 7.1 7.0 7.0 5.0 6.9 6.0 4.6 5.1 6.4 4.6 6.0 5.7 5.8 15.2 10.6 -12.8 3.7 11.5 9.0 17.0 14.1 5.1 10.4 5.5 17.1 19.9 13.3 6.7 12.2 8.1 13.5
Global Offshore# India 0.6 0.5 0.4 6.2 2.8 3.1 Source: Bloomberg, ICICIdirect.com Research *consensus # With regards to Indian companies, three year data represents FY12, FY13 and FY14 (financial year ending in March)
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RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more;
Pankaj Pandey
Head Research ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No. 7, MIDC, Andheri (East) Mumbai 400 093 research@icicidirect.com
pankaj.pandey@icicisecurities.com
ANALYST CERTIFICATION
We /I, Bharat Chhoda MBA, 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 personal views about any and all of 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 view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.
Disclosures:
ICICI Securities Limited (ICICI Securities) and its affiliates are a full-service, integrated investment banking, investment management and brokerage and financing group. We along with affiliates are leading underwriter of securities and participate in virtually all securities trading markets in India. We and our affiliates have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. Our research professionals provide important input into our investment banking and other business selection processes. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their dependent family members from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. 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 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 reasonable basis, ICICI Securities, its subsidiaries and associated companies, their directors and employees (ICICI Securities and affiliates) are under no obligation to update or keep the information current. 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 suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities is 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 may 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 of investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities and affiliates accept no liabilities 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. ICICI Securities and its affiliates might have managed or co-managed a public offering for the subject company in the preceding twelve months. ICICI Securities and affiliates might have received compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of public offerings, corporate finance, investment banking or other advisory services in a merger or specific transaction. It is confirmed that Bharat Chhoda MBA, Soumojeet Kr Banerjee, MBA research analysts and the authors of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Our research professionals are paid in part based on the profitability of ICICI Securities, which include earnings from Investment Banking and other business. ICICI Securities or its subsidiaries collectively 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. It is confirmed that Bharat Chhoda MBA, Soumojeet Kr Banerjee, MBA research analysts and the authors of this report or any of their family members does not serve as an officer, director or advisory board member 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. ICICI Securities and affiliates may act upon or make use of information contained in the report prior to the publication thereof. 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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