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Informist, Tuesday, Jan. 28, 2025

By Akshay V. Johnson

MUMBAI – Container Corp. of India Ltd. is expected to post low single digit growth in earnings for the December quarter on account of weak pricing trends due to increased competitiveness. The logistics company's net profit is seen rising 3% on year to INR 3.46 billion in the December quarter, according to an average of estimates from four brokerages. The estimates for net profit range from INR 3.20 billion by Kotak Institutional Equities to INR 3.67 billion by Elara Securities (India) Pvt. Ltd.

The state-owned company's net revenue is seen growing 6% on year to INR 23.41 billion for the December quarter, according to the average of estimates from four brokerage firms. Of the four estimates, the highest estimate is INR 24.58 billion by Motilal Oswal Financial Services and the lowest is INR 22.50 billion by Kotak Equities. Sequentially, the company's net profit is expected to fall 7% but the revenue is expected to rise 3%.

The company's earnings before interest, tax, depreciation, and amortisation, or EBITDA, for the December quarter is seen at INR 5.39 billion, according to an average of estimates from four brokerages. Container Corp. had reported a net profit of INR 3.71 billion on revenue of INR 22.83 billion for the September quarter.

For the December quarter, the company reported a total volume of 1.28 million twenty foot equivalent units, up 11.6% from 1.15 million twenty foot equivalent units a year ago. The company's export and import trade was 975,243 twenty foot equivalent, up 8% on year and domestic volume was 309,551 twenty foot equivalent units, up 25% on year.

The company's revenue growth for the December quarter is expected to moderate to 2%, from a higher volume growth, Kotak Equities said. The moderation is due to the busy season surcharge and the recent price cuts taken in the domestic segments, the brokerage added. The company's EBITDA margin is expected to fall 120 basis points on year due to weak pricing trends and increased competitive intensity, especially in the domestic segment and select pocket of export-import segments, the brokerage added.

The company's margin is likely to remain flat on year at 23.2%, Motilal Oswal said. Logistics activities picked up sequentially with the onset of the festival season in the December quarter. However, the activities remained subdued on account of soft consumption trends, especially in the rural areas. High operating expenses such as elevated fuel prices and increased toll charges continued to hurt the transportation costs of logistics companies, the brokerage added.

Between Oct. 29, when it reported its September quarter earnings, and Jan. 27, shares of Container Corp. have fallen 8.8%. Of the four brokerage reports on the company available with Informist, three have a 'buy' rating, and one has a 'hold rating'.

The company is scheduled to announce its December quarter results on Thursday. On Tuesday, shares of the company closed at INR 738.15 on the National Stock Exchange, up 0.2% from the previous close.

Following are the Oct-Dec earnings estimates for Container Corp. of India based on reports compiled by Informist from four brokerages in descending order by the estimate of net profit:

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Edited by Ashish Shirke

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