Shipping Corporation shares surge over 12% after Q1 profit jumps nearly 70%

In a stock exchange notification issued after the market hours on Friday, Shipping Corporation said that its consolidated net profit for Q1 FY25 stood at ₹291.5 crore, up almost 70% compared to the year-ago period.

The company’s revenue from operations, meanwhile, jumped over 26% year-on-year to ₹1,514.3 crore during the June quarter.

The public sector firm’s operating profit, or earnings before interest, tax, depreciation, and amortisation (EBITDA), increased 40.4% year-on-year to ₹509.7 crore during the quarter. Ebitda margins improved to 33.7% in Q1FY25 against 30.3% in Q1FY24.

Reacting to the earnings, the Shipping Corporation stock climbed as much as 12.2% on Monday to hit an intra-day high of ₹288.75 on the National Stock Exchange of India (NSE). However, despite the rally, the stock is still down almost 19% in the past one month.

The negative sentiment around the stock is likely a reaction to a recent news report that claimed that the central government’s plan to privatise Shipping Corporation has almost collapsed.

The report said that potential bidders are shying away from buying the company after the government changed its structure by demerging its non-core assets like Shipping House (the company’s headquarters of in South Mumbai), the Maritime Training Institute and the officers’ flats in Mumbai and Kolkata into a separate company.

This would be a big deterrent for those who initially showed interest in the company due to its cash reserves and non-core assets, according to the report.

The Department of Investment and Public Asset Management had initiated the process of selling the government’s 63.75% stake in Shipping Corporation in December 2020.

Shares of Shipping Corporation of India shares were trading 9.75% higher at ₹282.5 apiece in the NSE at 11:44 am.