Navkar Corporation hits record low; stock tanks 26% in two days

The stock hit an all-time low of Rs 41.35, down 17% on Friday, falling 26% in past two trading days on BSE.

Shares of Navkar Corporation have hit an all-time low of Rs 41.35 per share, dropping 17% on Friday, and falling 26% in past two trading sessions on BSE on concerns of a weak outlook. The stock of logistics firm was quoting at its lowest level since listing on April 6, 2010.

Since November 2018, Navkar Corporation slipped 40% after 87% year-on-year (YoY) declined in its standalone net profit at Rs 33 million in September quarter, due to higher operational expenses. The company had a profit of Rs 258 million in the year-ago quarter. It posted a profit of Rs 301 million in the previous quarter.

The company’s operational revenue grew 4% YoY at Rs 1,121 million, while total expenditure rose 35% at Rs 1,060 million over the previous year quarter.

The stock plunged 81% from its 52-week high level of Rs 219 touched on January 9, 2018, as compared to a 3% rise in the S&P BSE Sensex.

The company’s business is primarily dependent on Indian EXIM Trade which, in turn, is dependent on global economic conditions. All the factors which can affect global economic conditions have a direct impact on the CFS (container freight stations)/ICD (inland container depot) business.

Navkar Corporation in the annual report said the Government’s initiative direct port delivery (DPD) to reduce dwell time and transaction cost for shippers is an area of threat, the CFS operators may face in future. With DPD taking off in India in a big way towards a reduction of logistics cost, CFS business is likely to face grim future.

As far as operational aspects are concerned, delayed movement of containers from the port to the CFS continue to be a perennial problem at quite a few ports. Containers are allowed to stay on the wharf for a period of three days, post which demurrage has to be incurred on a daily basis, which boils down to considerable cost pressure for the importers. The delays in movement can be attributed to a multitude of factors, including congestion at the ports, dearth of modern container handling equipment, lack of adequate transport and an insufficient number of boarding officials among others, it added.

Navkar Corporation had raised Rs 6-billion through an initial public offering (IPO) at a price of Rs 152 per share. The stock hit an all-time high of Rs 247 on May 12, 2017, on the BSE in intra-day trade.

At 01:31 pm; Navkar Corporation was trading 13% lower at Rs 43.50, as compared to 0.24% rise in the S&P BSE Sensex. The trading volumes on the counter jumped five-fold with a combined 4.55 million equity shares changed hands on the BSE and NSE so far.