Small-caps and large-caps are wildly popular among investors; however, mid-cap stocks, such as Container Corporation of India Limited (NSEI:CONCOR) with a market-capitalization of ₹335.90B, rarely draw their attention. However, history shows that overlooked mid-cap companies have performed better on a risk-adjusted manner than the smaller and larger segment of the market. CONCOR’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysis into CONCOR here. Check out our latest analysis for Container of India

Does CONCOR generate enough cash through operations?

CONCOR’s debt level has been constant at around ₹620.00M over the previous year – this includes both the current and long-term debt. At this constant level of debt, CONCOR’s cash and short-term investments stands at ₹21.71B , ready to deploy into the business. Moving onto cash from operations, its trivial cash flows from operations make the cash-to-debt ratio less useful to us, though these low levels of cash means that operational efficiency is worth a look. As the purpose of this article is a high-level overview, I won’t be looking at this today, but you can assess some of CONCOR’s operating efficiency ratios such as ROA here.

Does CONCOR’s liquid assets cover its short-term commitments?

Looking at CONCOR’s most recent ₹10.64B liabilities, it appears that the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 3.03x. Though, anything above 3x is considered high and could mean that CONCOR has too much idle capital in low-earning investments.

Can CONCOR service its debt comfortably?

A debt-to-equity ratio threshold varies depending on what industry the company operates, since some requires more debt financing than others. As a rule of thumb, a financially healthy mid-cap should have a ratio less than 40%. For Container of India, investors should not worry about its debt levels because the company has very, very little on its balance sheet! It has been operating its business with miniscule debt and utilising only its equity capital. Investors’ risk associated with debt is virtually non-existent with CONCOR, and the company has plenty of headroom and ability to raise debt should it need to in the future.

Next Steps:

Although CONCOR’s debt level is relatively low, its cash flow levels still could not copiously cover its borrowings. This may indicate room for improvement in terms of its operating efficiency. However, the company exhibits an ability to meet its near term obligations should an adverse event occur. I admit this is a fairly basic analysis for CONCOR’s financial health. Other important fundamentals need to be considered alongside. I recommend you continue to research Container of India to get a more holistic view of the stock by looking at: