Mercator: offshore and coal businesses offer much-needed support

Mercator: offshore and coal businesses offer much-needed support

It’s well known that the shipping sector is not in great shape right now because of the weak freight rates. The pain in the dry bulk segment is expected to continue for at least one more year, said Atul Agarwal, managing director of Mercator Ltd, in a conference call on Wednesday.

Margins in the coal segment, though, were lower than in the corresponding period of last year.

The shipping business has again been the dampener, though the performance improved a bit from the March quarter. In fact, Mercator has done better on a sequential basis. It reported a net profit of 17 crore against a loss of 24 crore in the March quarter. That was possible because of the offshore business performance, which was far better sequentially, thanks to an Oil and Natural Gas Corp. Ltd contract. Mercator’s operating performance, too, was better on a year-on-year basis and sequentially as well.

Prajakta Patil/Mint

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That’s a key overhang for the company’s stock. Since the beginning of this fiscal year, it has underperformed the BSE-500 index. While the stock seems to be factoring most of the negatives at current levels, there are hardly any reasons for optimism in the near future.

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