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What is the story about?
Shares of Great Eastern (GE) Shipping Company Ltd. are in focus on Monday, September 28, after brokerage firm Nomura initiated coverage on the stock, projecting an upside of 31% from its previous close.
Nomura initiated coverage on GE Shipping with a "buy" recommendation and a target price of ₹1,965 per share on GE Shipping.
The brokerage said that GE Shipping is a cyclical compounder with a strong cash pile to fund its next leg of growth. It is well-placed for a shipping downcycle.
The brokerage said the company's management has, across multiple cycles, demonstrated the discipline to buy tonnage when asset values are depressed, sell into strength, keep leverage low and return surplus cash.
GE Shipping is sitting on a cash pile of ₹8,000 crore as of the June quarter — 30% of its net asset value (NAV), 38% of market capitalisation — which the brokerage thinks can be used to double its existing fleet once the cycle turns negative.
Nomura said GE Shipping's NAV clocked a 27% compound annual growth rate (CAGR) across Financial Year 2021-2026, largely led by operating cash flow generation (13% CAGR) and an increase in value of assets as the global shipping market continues to be in a strong upcycle due to disruptions in local trade flows caused by the Russia-Ukraine war and the West Asia conflict.
On another note, GE Shipping reported its first quarter earnings last month.
Its net profit more than doubled to ₹1,309 crore from ₹505 crore in the previous year. Its revenue was up 66.9% at ₹2,005.4 crore from ₹1,201.5 crore in the first quarter last fiscal.
The company's earnings before interest, taxes, depreciation and amortization (EBITDA) also more than doubled to ₹1,337.7 crore from ₹642.8 crore while its margin expanded to 66.7% from 53.5% int he year-ago period.
All three analysts that have coverage on the GE Shipping stock have "buy" recommendations and Nomura has the highest target price among them.
Shares of GE Shipping ended the previous session 1.2% higher at ₹1,500 apiece. The stock has gained 11.9% in the past month and is up 34.6% this year, so far.
Also Read: Godrej Properties to add luxury project in South Mumbai's Marine Lines worth ₹6,000 crore GDV
Nomura initiated coverage on GE Shipping with a "buy" recommendation and a target price of ₹1,965 per share on GE Shipping.
The brokerage said that GE Shipping is a cyclical compounder with a strong cash pile to fund its next leg of growth. It is well-placed for a shipping downcycle.
The brokerage said the company's management has, across multiple cycles, demonstrated the discipline to buy tonnage when asset values are depressed, sell into strength, keep leverage low and return surplus cash.
GE Shipping is sitting on a cash pile of ₹8,000 crore as of the June quarter — 30% of its net asset value (NAV), 38% of market capitalisation — which the brokerage thinks can be used to double its existing fleet once the cycle turns negative.
Nomura said GE Shipping's NAV clocked a 27% compound annual growth rate (CAGR) across Financial Year 2021-2026, largely led by operating cash flow generation (13% CAGR) and an increase in value of assets as the global shipping market continues to be in a strong upcycle due to disruptions in local trade flows caused by the Russia-Ukraine war and the West Asia conflict.
On another note, GE Shipping reported its first quarter earnings last month.
Its net profit more than doubled to ₹1,309 crore from ₹505 crore in the previous year. Its revenue was up 66.9% at ₹2,005.4 crore from ₹1,201.5 crore in the first quarter last fiscal.
The company's earnings before interest, taxes, depreciation and amortization (EBITDA) also more than doubled to ₹1,337.7 crore from ₹642.8 crore while its margin expanded to 66.7% from 53.5% int he year-ago period.
All three analysts that have coverage on the GE Shipping stock have "buy" recommendations and Nomura has the highest target price among them.
Shares of GE Shipping ended the previous session 1.2% higher at ₹1,500 apiece. The stock has gained 11.9% in the past month and is up 34.6% this year, so far.
Also Read: Godrej Properties to add luxury project in South Mumbai's Marine Lines worth ₹6,000 crore GDV
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