Wednesday, December 19, 2007


I am positive on the long term outlook of the Indian economy. Investing in CONCOR allows you to participate in the core infrastructure development of the country and the subsequent benefits of expansion in trade once all the infrastructure is in place. The stock currently trades at Rs. 1790 (at a PE Ratio of 17 times its trailing 12 month earnings) and has sharply underperformed the BSE SENSEX Index over the last year. It has been rangebound between Rs.1800-2400. According to technical analysts, it has a long term support at Rs. 1550.

Reasons to Invest:

  • Established integrated rail logistics giant.

  • Long gestation period in the logistics business.

  • Improvement in Road and Port infrastructure.

  • Concor is DEBT FREE.

  • Unlocking of value through Privatization/Disinvestment: The Indian Railways currently holds 63.09 % in CONCOR. The Indian government has recently been divesting stakes in public sector enterprises in the power sector, so a further stake sale by the government in the future cannot be ruled out.


  • Increased competition from the private sector

  • Increased rail freight charges payable to Indian Railways.

  • Delays in development of Port and Rail Infrastructure.

  • Delays in implementation of the Dedicated Freight Corridor Project.

  • Slowdown in Export- Import (EXIM) business, if there is a global slowdown, (EXIM =80% of total business now)

  • Risk of a rising Rupee hurting Indian Exporters

  • Low Liquidity of CONCOR stock: The stock is thinly traded, with 27% being held by Foreign Institutional Investors, many of whom have been long term investors, and just 2% being held by individual investors.
    I have been holding shares of CONCOR over the last two years and have been buying the stock this week. I will continue to add it on declines.
    For a patient and risk averse long term investor, this integrated rail logistics player is an ideal bet.

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