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Informist, Monday, Oct. 28, 2024

By Akshay V. Johnson

MUMBAI – Container Corp. of India Ltd. is expected to post muted earnings for the September quarter on the back of lower growth in export-import volumes. The logistics company's net profit is seen declining 4% on year to INR 3.42 billion in Jul-Sept, according to an average of estimates from four brokerages. The estimates on net profit range from INR 3.30 billion by Elara Securities (India) to INR 3.67 billion by Kotak Institutional Securities.

The state-owned company's net revenue is seen growing 10% on year to INR 24.04 billion for the September quarter, according to the average of estimates. Of the four estimates, the highest estimate is INR 25.03 billion by Kotak Institutional Securities and the lowest is INR 23.54 billion by Motilal Oswal Financial Services.

The company's earnings before interest, tax, depreciation, and amortisation, or EBITDA, for Jul-Sept are seen at INR 5.42 billion, according to the average of estimates from four brokerages. Container Corp. of India reported a net profit of INR 2.55 billion on revenues of INR 20.97 billion in the June quarter.

For the September quarter, the company reported a total volume of 1.30 million twenty foot equivalent units, up 6% from 1.23 million twenty foot equivalent units a year ago. The company’s export and import trade was 1.01 million twenty foot equivalent, up 4% on year and domestic volumes were 297,647 twenty foot equivalent units, up 14% on year.

The logistics sector is expected to report a weak quarter due to muted consumption trends, especially in rural areas, and an extended monsoon in several parts of the country, Motilal Oswal said. The brokerage said freight rates have remained high due to high fuel costs and consistently high operational expenses.

The company’s total revenue is expected to increase 14% on year on the back of 11% volume growth and busy-season surcharge, Kotak said. Owing to sluggish export-import volume growth, Nuvama Institutional Equities estimates the company’s blended volumes to grow 6% on year. The shift of volumes from the high-margin Tughlakabad container terminal to other terminals in the Delhi National Capital Region may affect the company’s performance in the quarter, Kotak said.

Kotak expects the EBITDA margin to fall by 120 basis points on year due to flat pricing trends. The company’s EBITDA margin is expected to fall by 22.2% on year due to weakness in export-import volumes, Motilal Oswal said. The pressure on the company’s margin will continue on an year-on-year basis due to continued discounting given by the company to gain market share, but an improvement will be seen over the previous quarter, Nuvama said. Growth in export-import trade, progress on commissioning of the dedicated freight corridor, and divestment of stake by the government will be the key monitorables for the Container Corp., Motilal Oswal said.

Container Corp. of India will detail its earnings for the September quarter on Tuesday. On Monday, shares of the company closed at INR 780.75 on the National Stock Exchange, down 1.8% from the previous close.

Following are the Jul-Sept earnings estimates for Container Corp. of India based on reports compiled by Informist from 4 brokerage houses: (in INR million)

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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