Shipping Corporation of India has been in focus over the last month or so over the government’s plans to divest its stake. We spoke with Mrs HK Joshi, Managing Director and Chairperson of the company.
The leading shipping company in India, government-controlled, Shipping Corporation of India has been in focus due to results in a crucial quarter at a time when the Government is looking to offload its entire 63% stake.
The company owns a fleet which includes Bulk carriers, Crude oil tankers, Product tankers, Container vessels, Passenger-cum-Cargo vessels, LPG and Offshore Supply Vessels. The company owns and operates around one-third of the Indian tonnage.
On the Q1FY22 performance, the company clocked revenues of Rs. 1028 crore down 10% YoY. Further, EBITDA was down 34% YoY and the margin contracted from 46% to 34% at a consolidated level. Net Profit sank 53% YoY.
On the 4th of August, the company announced plans of a demerger of non-core assets to a separate listed company. Current shareholders of the company are expected to receive 1 share for every share held.
The company believes the demerger will help both companies achieve better efficiencies and is in line with the Government’s intention to divest fully from the company.
ET Now spoke with Mrs. HK Joshi, Managing Director and Chairperson of Shipping Corporation of India to get a perspective. Mrs. Joshi believes that the company will continue to have a stable outlook given the diversified set of businesses it has.
On the YoY numbers, Mrs. Joshi pointed out that Q1FY21’s inflated tanker prices led to huge profitability which was not the case in this quarter. This has seen reduced profitability in that vertical. However, container prices have seen “unforeseen” levels and the liner business is expected to be robust till the end of FY22. In her view though, these prices however, are not sustainable over the longer term.
Mrs. Joshi was unable to provide us with a view on how non-core assets were being bifurcated or what the revenue of the new company would look like, but she assured that investors would get more information soon.
The divestiture though, is expected to happen before the end of FY22. The stock is down 5.63% in the last month and 12% in the last 3months.
Source: ETNowNews.com