Shipping Corporation Ltd- This Ship may Fly!

Hi,

I just had a look on SCI last 3 Qtr numbers. Its seems company has turned around & its Achhe Din has arrived .Company has started making good profits now Debt has also reduced with bumper increase in PAT since last 2-3 Qtrs. This company has a record of very good Dividend payout in the year FY2006 to FY 2011, when it was making profits. So dividend of 3-4 Rs cannot be ruled out in FY16, which will make it a 5-6% Div yeild stock at CMP. Considering the low Oil Prices & possibility of Dividend this year,I think this company can give very good returns in next 2-3 Qtrs. PFA the Qtry Data for everybody’s refrence. Technicals also looking very strong. Other’s valuable views are welcome.Thanks.

Disclosure-: Invested

SCI DATA.pdf (36.1 KB)

can somebody explain why is the profit of the shipping companies increasing even though the sales are same . same pattern was seen in shreyas shipping. what different is happening nowadays.

Good news for indian shipping industry.

Why is Shreyas Shipping sinking while Shipping Corporation is recovering.
Surprisingly they have exactly moved in opposite direction for last one year, this is a very rare site, whenever a sector moves they generally move synchronously.

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With Baltic Dry Index hitting record lows, freight prices have collapsed. I do not know how the shipping companies are making money or will make more money in the near future. We are in turbulent times Guys !

http://www.ibtimes.co.uk/china-economic-crisis-baltic-dry-index-hits-record-low-amid-fears-over-global-trade-slowdown-1539953

One of my friends is in exim business of Aggro-commodities and has revealed that over last 6-8 months, the freight rates are decreasing. It used to take a few weeks to load the shipments because of congested ports and availability of ships/containers. Now, the situation is different. He said he has never seen so low freight rates in last 10 years. Well, this may not be generalized, but thought to share it with our group.

Discl : Not invested.

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@Mehnazfatima continuing from the Sugar stocks thread -

No news on the Q1 results yet that I know of. FY16 results are out -

http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/634CF159_CDCF_4DA8_9A7C_8DAA6E3C42EC_174657.pdf

Request you to give your opinion about the SCI chart. Thanks

Bunker(Fuel) is the main operating cost in shipping …Second thing is what type of ships company is operating.Baltic index is only for dry bulk cargo.
World scale is used for tanker markets and liquid cargo is definitely doing better

A recent article from Outlook Business -

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South Korea’s largest and world’s 7th largest shipping container Line Hanjin Co. filed for bankruptcy. This article calls it the “Lehman moment” for the shipping industry:

It’s true that overcapacity and increasing competition have led to extremely low cargo rates and have squeezed operating margins of companies worldwide. The world’s largest shipping companies are in dire financial conditions. This article gives details:

https://www.creditriskmonitor.com/blog/4-things-you-need-know-about-financial-distress-global-container-shipping-industry

The event will definitely rationalize supply / demand scene and the hope is companies would benefit in the medium to long term. I’d bet on SCI’s finances getting better in the coming quarters/ years.

Disclosure: Not invested in SCI, but party to a cargo stuck with Hanjin, and looking for safe alternatives to route shipments in the coming months.

@Aakash please explain what’s your rationale to puck SCI & how the business cycle of shipping businesses fare:ya it’s a cyclical business

Thanks

Anyone tracking\invested in this co? Want to understand more regardng value unlocking from its non-core assets demerger & divestment perspective.

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Results Q3’ FY22 published on 31-Jan-2022. The result look quite good. @hitesh2710 - How do you see SCI in context of the improving financials reflected in Q3 & potential privatization in next FY.

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Shipping Corporation of India’s final hearing to obtain demerger approval on December 29 - The Economic Times (indiatimes.com)

Demerger decision date; may see short run up in share price.

As per the FYe22 balance sheet/annual report of SCI, the value of non-core assets held for demerger stood at Rs 2,392 crore (about 27% of net worth as of March22 net worth). The main asset is the maritime training institute in Powai, Mumbai with land area of ~179K sqm which is currently valued at ~2376 Cr and this seems about right. However Shipping House building at Nariman point is valued at only ~9 lakhs which is ridiculous. Moreover, there is surplus cash of ~450 Cr. S P Tulsian has given an estimate 11000 crores for the current market value of the noncore assets of SCI which works out to about Rs. 230/- per share. To my mind, the main risk/concern is that the path to the monetisation of the core assets such as the land of Maritime Training Institute is unclear.

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The risk u mentioned seems to be perpetual case with govt cos. E.g :- See Hemisphere properties case.

Value unlocking happens bcoz there’s precisely a time whn value gets discovered and priced. That’s wat makes it a true arbitrage. Bt that doesnt seem to be the case with these cos.

Disclosure :- No investment as of now. Sold at a small loss