Captains Speak     

Published: September 30, 2024
Updated: September 30, 2024

Container Corporation Of India

Win-win business deal with SCI

Container Corporation Of India (Concor) will resume coastal cargo transport activities as part of its multimodal logistics strategy.

Analysing the performance of the company during the quarter ended June 2024, Mr Swarup said that consolidated net sales (including other operating income) of Concor had increased 9.38% to Rs 2,103.13 crore. Sales of the exim segment had gone up 7.30% to Rs 1,321.54 crore (accounting for 62.84% of total sales). Sales of the domestic segment had gone up 13.08% to Rs 781.59 crore (accounting for 37.16% of total sales). Profit before interest, tax and other unallocable items (PBIT) jumped 8.49% to Rs 317.93 crore. PBIT of the exim segment rose 3.96% to Rs 266.69 crore (accounting for 83.88% of total PBIT). PBIT of the domestic segment rose 40.35% to Rs 51.24 crore (accounting for 16.12% of total PBIT). The PBIT margin of the exim segment fell from 20.83% to 20.18%. The PBIT margin of the domestic segment rose from 5.28% to 6.56%. The overall PBIT margin fell from 15.24% to 15.12%.

OPM jumped from 20.59% to 21%, leading to an 11.57% rise in operating profit to Rs 441.63 crore. Employee cost increased from 5.51% to 5.55%. Other expenses fell from 73.90% to 73.45%. Freight charges rose from 55.57% to 57.55%. Other direct service cost fell from 15.72% to 13.40%. PBIDT rose 12.27% to Rs 535.48 crore. Provision for interest rose 19.11% to Rs 18.95 crore. PBDT rose 12.03% to Rs 516.53 crore. Provision for depreciation rose 19.23% to Rs 169.42 crore. Profit before tax grew 8.83% to Rs 347.11 crore. Provision for tax was an expense of Rs 86.87 crore, compared to Rs 76.76 crore. The effective tax rate was 25.09% compared to 23.84%. Net profit increased 5.14% to Rs 258.17 crore.

GOOD GROWTH

According to Mr. Swarup, the exim throughput was up 3% to 8,69,464 teu in Q1FY25 and domestic was up 15% yoy to 2,89,787 teu, aggregating 11,59,251 teu, a growth of 6% yoy. Originating volume total in Q1FY25 was 6,06,756 teu (exim 4,81,912 teu; domestic 1,24,844 teu). The company has maintained the volume guidance given at the start of the current fiscal, i.e., exim growth of 15%, domestic growth of 25% and overall growth of 18-20% for FY25. Empty running cost in Q1FY25 was Rs 33.28 crore for exim, and Rs 86.91 crore for domestic. Lead distance in Q1FY25 for exim was 716 km, while for domestic it was 1,338 km, with the aggregate being 821 km.

Indicating that "we expect good improvement in the profit margin in domestic as empty running is coming down with improved return cargo availability in major domestic routes," Mr Swarup added that "increased marketshare in the ports of Mundra and Pipavav overall increased the exim marketshare by 50 bps in Q1FY25. The marketshare of Concor in major ports (in rail transport) was JNPT 56%, Mundra 38%, and Pipavav 49%. Growth in double stake was 14% yoy in Q1FY25. In a significant addition to infra in Q1FY25, one highspeed rake was added. The container count as of June 2024 stood at 47,000 containers, with a significant addition in Q1FY25. The company is going for an additional 200 LNG trucks for lastmile connectivity this fiscal.

MAJOR DEALS

According to Mr. Swarup, in domestic the company is entering into long-term contracts with large domestic players such as Tatas, Vedanta and Jindal. The exclusive contract with Jindal is only for exim while that for Vedanta is both exim and domestic. Under the long-term contract, these players will get the assurance of containers and best prices. The originating volume mix port-wise is: JNPT 32.3%, Mundra 9.9%, Chennai 3.7%, Vallarpadam 2.8%. Staff cost in Q1FY25 had the impact of a one-off item towards an additional payment/provision. From the next quarter, there will be a 10% yoy increase in staff cost. The rail freight margin in Q1FY25 stood at 24.36%.