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Container Corporation of India (Concor) hosted a conference call on Oct 31, 2019 to discuss the performance of the company for the quarter ended Sep 2019.
Key takeaways of the call
Originating and Handling volume for H1FY29 declined by 4%yoy and 1.5%yoy respectively. Handling volume for H1FY20 stood at 1169165 TEUs (EXIM 1033319 TEUs; domestic 135846 TEUs).
Expected the volume will pick-up from Q2FY20 but that did not happen and it will take some more time for the things to improve. Now the company expects to close the fiscal with a flat volume growth or at a max 1-2% growth. The revenue and bottomline on like to like basis is expected to register a growth of 4-5% and 5-8% respectively.
Revenue excluding SEIS income has increased by 1% and 5% for Q2FY20 and H1FY20.
Originating volume for the Q2FY20 stood at 610223 TEUS. Of the Q2FY20 originating volume the EXIM as 54135 and domestic is 68848 TEUS.
The market share of the company has declined to 67.4% in H1FY20 down from 73.1% in H2FY19. The company is keeping itself out from negative margin business which is largely in short lead distance so as to keep the margin intact. The short lead distance business from JNPT is not of negative margin.
Lead distance in H1FY20 was 786 kms compared to 773 km in corresponding previous period.
If volume is good in H2FY20 the margin will be better than H1. Expect volume to improve in H2FY20
Double stack containers operating in Q2FY20 stood at 674 numbers compared to 843 numbers in corresponding previous period.
Expect the first train of new wagon to roll out in Nov 2019. The company will invest its planned capex despite the market conditions.
The domestic cargo movement has also slowed down but the company is working with client for movement of bulk grains through container.
Land licence fee is Rs 1175/TEUs and that is linked to the PAT of the company. About 40-45% of the volume is on railways land and for which land licence fee is paid. Railway land lease is for 41 terminals.
As government department has denied SEIS the company has provided but according to its legal opinion it is eligible for it. There are other people who got this. So the company will go for an appeal to get ineligible SEIS income.
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