Size-wise there are no doubts. The Shipping Corporation of India (BSE: 523598, NSE: SCI) registers almost twice the annual sales of nearest player Great Eastern Shipping (BSE: 500620, NSE: GESHIP), and multi-times the size of fast growing players Mercator Lines (BSE: 526235, NSE: MLL) and Essar Shipping (BSE: 500630, NSE: ESSARSHIP). But when it comes to profits the bigger size or capacity has become a handicap, especially during years like 2008 & 09 when shipping went southward due to crude moving down. SCI has however drawn up a battle plan that will see 30 new ships joining its fleet, making it young and competitive, and this is going to be part powered by an FPO. The government will also disinvest a part of its stake through the offer. For retail investors, Shipping Corporation should be a cautious play, as ever since the near doubling of profits in 2004-05, it has been on a steady decline in profits. It effected a brief turnaround in 2008-09, but has again dipped alarmingly in 2009-10. However, with the fleet all set to be modernized, Shipping Corporation may have already hit rock bottom, with good chance for a sustained turnaround, going forward. The Shipping Corporation scrip is available at a bargain as it currently trades near its book value, though it looks fully priced by way of P/E.
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