Capitaline

Analyst Meet / AGM 29-May-15

Conference Call

Container Corporation of India

April and May have been very bad for the company

Container Corporation of India held conference call on 29 May 2015 after it declared results for March 2015. The call was addressed by Anil Kumar Gupta, Chairman & Managing Director of the company. Highlights of the call: FY 2015 was of restricted growth. Throughput stood at 3.11 million TEUs against the capacity of 3 million TEUs. This was the record and highest ever. For the quarter ended March 2015, it registered 15% rise in sales to Rs 1497.45 crore. OPM improved 70 basis points to 21.3% which saw OP rising 20% to Rs 318.53 crore. Depreciation jumped 62% to Rs 81.02 crore, Thus PBT went up 5% to Rs 348.11 crore. PAT grew 19% to Rs 292.71 crore. In FY 2015, sales grew 12% to Rs 5573.70 crore. OPM improved 120 basis points to 23.3% which saw OP growing 18% to Rs 1296.40 crore. As depreciation jumped 97% to Rs 372.69 crore, PBT went up just 1% to Rs 1294.45 crore. PAT grew 6% to Rs 1047.55 crore. For FY 2015, sales from EXIM segment jumped 15% to Rs 4441.12 crore and accounted for 80% of sales. PBIT from the same grew 5% to Rs 942.07 crore and accounted for 92% of total. Fo the FY 2015, sales from the Domestic segment grew 1% to Rs 1132.46 crore and accounted for 20% of sales. PBIT from the same fell 17% to Rs 78.64 crore and accounted for 8% of total. International Handling during the quarter stood at 647425 against 616693. Domestic Handling during the quarter stood at 118045 Total Handling during the quarter stood at 765470 against 761962. The company had planned capex for Rs 6000 crore for 12th year plan and the company is likely to cross it. The company has already spent Rs 4000 crore. The company moved 42% of cargo from JNPT in FY 2015 against 45.3%. The company moved 24.53% of cargo from Mundra in FY 2015 against 23.03%. The company moved 20.95% of cargo from Pippav in FY 2015 against 20.39%. Cargo handling in major ports fell from 54% to 51%. OPM improved because of more exports and price rise. OPM will fall by around 75 basis points in next quarter. Exports growth is sluggish. Even commerce minister is worried. Overall the company is targeting 10% growth in exports but it may not be possible. It is hoping Pantnagar facility to be operational in August but if this does not happen the growth will fall to 8%. For 10% growth it is expecting 4 of 5 facilities to be operational soon. But growth will not be 10% if this does not happen. It expects domestic business to grow 10%. 2 haulage hikes has put the domestic business on back-foot. Also increase in service tax is negative. Empty running charges were Rs 51.61 crore during the quarter. From 15 Dec the general haulage hike was 17-18% for exports and for imports it was 30%. Gujjar agitation in Rajasthan has hit very badly. Two months of April and May have been very bad for the company due to various work in few ports. But the company is expecting 10% growth taking consideration of all these. The company is reasoning with the railways to remove the congestion charges but no breakthrough has been made. However the company is hopeful. The company has earlier planned for 15% volume growth for FY 2016 for both domestic and export business but due to unfavourable circumstances of last 2 months it has been scaled down to 10%. For FY 2017 no projections have been made. If service tax issue is not sorted out domestic business could grow only 2.5-3% in FY 2017. Exports will be good. The company is building total 15 facility slated to be completed in 12th five year plan period. Tax rate has fallen due to change in depreciation. For FY 2016 it expects tax rate to be in 19-19.5% range. Export originating volume during the quarter was 464721 TEUs. Export originating volume was 72750 TEUs. Total originating volume was 537471 TEUs. The domestic average lead distance stagnated at 1528 km for March 2015 quarter compared to 1528 KM in corresponding previous period. The overseas average lead distance has come down to 1032 km for March 2015 quarter compared to 1096 KM in corresponding previous period.

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