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Container Corporation of India hosted a conference call on 31 Oct, 2018. In the conference call the company was represented by key management
Key takeaways of the call
In domestic market the demand is improving with increased interest for containerization. Similarly EXIM cargo demand is also improving. Company was able to gain better volumes than the market.
Some mismatch in export import continues.
The company has passed on Rs 1000 per TEU freight increase to customers and Rs 600 per TEU of service charges being done in June 18. So total of Rs 1600 per TEU increase in charges in Exim services. Further in Aug 18 the company increased Rs 1500 per TEU towards service and freight tariffs. This is fully passed on to the customers.
Customer value creation is being taken care
| Originating Container Cargo Volume (in TEUs) |
|
1809 (3) |
1709 (3) |
| EXIM |
557253 |
500150 |
| Y-o-Y growth (%) |
11.0 |
|
| Domestic |
68885 |
63374 |
| Y-o-Y growth (%) |
8.7 |
|
| Total |
626138 |
563524 |
| Y-o-Y growth (%) |
10.0 |
|
Port wise market share of the company; JNPT 80.5%, Mundra 52.5% and in Pipavav 53.8%.
Rs 800-1000 crore full year capex target. 30% of the capex completed in H1 Sep 18. The company expects 11 new more facilities will be commissioned this fiscal. The challenges in adding new facilities are not an issue but ramping up utilization is the challenge.
Change in axle load of trucks is unlikely to impact container train cargo as it is just legalizing what is already overloaded.
Strong growth in Rail business. No pressure coming from road side
The company has participated in coastal region logistics tenders and the same will be awarded soon.
The company also participated in distribution logistics tenders.
Double stack container train service in Q2 FY19 was 809 trains compared to 629 trains YoY. So the company is confident of 50% overall growth in double stack service in FY19 as guided at the start of the fiscal.
Overall lead distance for Q1FY19 declined to 779 km down from 794 km in Q2FY18.
SEIS Scheme benefit income in Q1FY19 was Rs 70 crore and in Q2 FY 19 is Rs 100 crore and entire of its accounted in EXIM segment. There is no such income in Q1 FY 18 or in Q2 FY 18.
The company continues to pass on the cost increase to customers. The company can pass on the cost increase not only through freight tariff but on any of other two revenue streams (i.e. Handling charges etc) as well.
Higher tax rates are due to lower deferred tax benefits which were there in past years. Tax rate will remain high in FY 19 but will reduce in FY 20.
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