Informist, Wednesday, Oct. 30, 2024

By Darshan Nakhwa and Akshay V. Johnson

MUMBAI – Container Corp. of India Ltd. has maintained its guidance of 18% growth in overall business for 2024-25 (Apr-Mar) and the expectation of 15% growth in export-import business and 25% growth in domestic operations, the company's management said on Wednesday. The company has identified three to four growth drivers to achieve this guidance.

The state-owned logistics and transport company will introduce a double stacking service in Jawaharlal Nehru Port Terminal by November-end, which will be beneficial for customers in north India. Then, by December-end, the company will start getting tank containers which will be used for bulk cement movement. This will be an additional source of revenue in the coming months, the company's management said while discussing its Jul-Sept financial performance.

In recent times, Container Corp. has witnessed good demand for rice exports and expects to see more traction after Diwali. It has also signed long-term agreements for volume-based discounts with shipping companies. All these factors will help the company achieve its growth guidance, the management said.

The management said its market share grew in the September quarter without any sacrifice in its margin. The company's export-import margin grew by 91 basis points in the first half of FY25 and rail freight margin grew by 80 bps. The operating margin, excluding exceptional items, grew by 95 bps. Unlike in the previous years when the busy season surcharge was levied only in Oct-Dec and Jan-Mar, the Indian Railways is now levying it across the year, the management said. However, the company does not expect it to affect its margin.

The company had pencilled-in a capital expenditure budget of INR 6.1 billion for FY25 and has already spent INR 2.76 billion in Apr-Sept. In the first half of FY25, the company commissioned two high-speed rakes and hopes to commission 10 more rakes by the end of the financial year. Currently, the company has 350 rakes.

The international supply chains were adversely affected in the September quarter because of the challenging geopolitical situation which resulted in erratic vessel schedules. The domestic loading was affected in the September quarter due to good rainfall in north India and Gujarat, the company said. The management expects good growth in Oct-Dec, as volumes have picked up in October.

The western freight corridor is expected to be connected to Jawaharlal Nehru Port Terminal by December 2025. The company will provide double-stacking facilities for customers from Jawaharlal Nehru Port Terminal to the Varnama terminal near Baroda. The company expects to retain its rail freight margin for Oct-Mar. The company handled 3,083 double stack trains in Apr-Sept, compared to 2,766 double stack trains handled in FY24. This has helped to reduce the empty-running of trains and improved rail freight margins.

The company has 4 million square feet of warehousing space in 66 terminals across the country. The company said it will commission its first liquefied natural gas pump in November at its multi-modal logistics park in Kathuwas, Rajasthan.

In response to a query regarding a news report, the management said CONCOR gives 90 days of free storage for all terminals for free containers, and 15 days for loaded containers. Currently, 27-30% of the company's volume comes from first to last mile. The company aims to increase this to 50% by the end of FY25 and 80% by FY26.

CONCOR reported a better-than-expected net profit for the September quarter. Its net profit for the quarter was INR 3.71 billion, up 3.7% from INR 3.58 billion a year ago, beating analysts' estimate of INR 3.42 billion. The revenue for the quarter was INR 22.83 billion, up 4.2% from INR 21.90 billion a year ago. On the National Stock Exchange, shares of the company closed 3.3% higher at INR 835.45. End

Edited by Avishek Dutta and Ashish Shirke

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