Khambatta Securities has given Buy recommendation for Lancer Container Lines with a target price of Rs. 306 in its research report issued on Feb 02, 2022
Khambatta Securities’ research report on Lancer Container Lines
A shipping agency and logistics solution provider, Lancer’s core business is liner service. As a Non-Vessel Operating Common Carrier (NVOCC), the company does not own or operate any ship but acts as a carrier by contracting vessels for shipping its containers. Lancer operates an asset-light business with a mix of 10,000 owned and leased containers, offering services to 74 ports as well as inland destinations through 14 offices in India and a subsidiary in Dubai, covering more than 30 countries. The company’s principal geographies of operations include the Indian subcontinent, Southeast Asia, Gulf, Europe and the Mediterranean. Lancer plans to expand its container fleet by 25% to 30% (2,500 to 3,000 TEU) by the end of FY22. Management looks to penetrate into new geographies, mainly covering the European region. To this end, the company has initiated the process of setting up a branch in the UK as it also seeks to explore the Mediterranean market more aggressively.
Lancer’s revenue growth will be driven by capacity addition and expansion into new geographies over the next couple of years. The Lancer stock currently trades at an attractive forward P/E level of 15.6x FY24E EPS. Assigning a target multiple of 20.0x FY24E EPS, our valuation generates a price target of Rs 306, informing an upside potential of 28%, as we initiate coverage on Lancer with a BUY rating.
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At 12:10 hrs Lancer Containers Lines was quoting at Rs 241.00, up Rs 1.80, or 0.75 percent.
It has touched an intraday high of Rs 242.40 and an intraday low of Rs 236.10.
It was trading with volumes of 161,185 shares, compared to its thirty day average of shares, a decrease of percent.
In the previous trading session, the share closed down 0.27 percent or Rs 0.65 at Rs 239.20.
The share touched its 52-week high Rs 404.45 and 52-week low Rs 58.25 on 12 October, 2021 and 20 April, 2021, respectively.
Currently, it is trading 40.41 percent below its 52-week high and 313.73 percent above its 52-week low.
Market capitalisation stands at Rs 726.40 crore.