Container Corporation of India hosted a conference call on May 19, 2023. In the conference call the company was represented by V Kalyanarama, CMD.

Key takeaways of the call

The company expects a growth of 10-12% for FY24 and look to sustain FY23 margin in FY24 as well.   No concern on domestic volume and the company look to sustain the growth momentum and perhaps increase it as well. Exports and Imports volume of the country is weak and thus the EXIM will remain as a challenge or tough task for the company in FY24 as well. But the thrust for the company in FY24 is to regain the market share it has lost in EXIM which will increase the overall EXIM volume. The company is looking for 10% growth in EXIM as well.   Secondly the company is looking at operational of WDFC the direct connection to Dadri is expected to boost shift in transport from road to rail as well as operation of more double stack containers.  Operations of more double stack containers in EXIM as well as domestic are to boost margin.  

Availability of key components of wheels and axles is a challenge in the country currently and thus putting road block in getting the rake manufactured and delivered on time. Similarly the weak ecosystem for container manufacturing in the country is also not making easy the delivery of acquisition of 19000 containers  for the company.  Manufacturing of 19000 container is not happening at the pace as liked by the company.  The company is working on leasing  of containers and placing more orders to ensure availability of containers for its growing domestic operations.  Hope to overcome this constraints going forward. 

Planned capex for FY24 is about Rs 600 crore against Rs 560 crore in FY23. In FY23 the investment was made towards new terminal, rolling stock and containers.  In FY24 the company is to commission 5 terminals and to 24-26 trains. 

Out of Rs 560 crore of capex in FY23 about Rs 300 crore of investment were made towards rolling stocks especially key components that were in shortage such as wheels and axles so as the delivery of the trains could at least happen this year.

 Out of planned acquisition of  270 rakes, the company has so far got only 33 rakes delivered and remaining will be acquired over next 3 years.  The cost of each rake and container will roughly work out to about Rs 14-15 crore and Rs 1-2 lakh each. 

Rail freight margin in Q4FY23 is about 26%.  Lead distance for Q4FY23 is about 657 km for EXIM and 1382 KM for domestic. 

Empty running is Rs 94 crore of which EXIM is RS 84 crore and Rs 7 crore in domestic.

The company has 90% share of container moved by rail but in EXIM the company has lost some market share. 

Order placed for 100 LNG trucks and the company making efforts to proliferate LNG transportation across the terminals  as the cost of transportation with LNG trucks is 50% that of diesel trucks and result in about 20-25% savings in local transportation for the company.

The company has not passed on the impact of withdrawal of 25% rebate on Empty running  and 5% rebate on loaded containers in FY22 and largely absorbed it. Part of the impact was offset by faster turnaround and other operational efficiency measures.

 Keep on improving the competency to retain market share as roads are also improving the lead time with Mumbai Delhi expressway etc.

Originating volume in EXIM is about 1918079 TEUs and 440878 TEUS in Domestic  for FY23. 

Higher other expenses is largely due to Rs 10 crore paid towards MCD tax paid on court order in case of Tukhlagabad deport,   Rs 15 croe spent on Repair & Maintenance across various depots/ternubals,   Rs 3.74 crore towards disposition of  hazardous material at Mulund depot,  Rs 5 crore towards CFS payment, Expense of 2 crore additional in bulk cement business.

Require 25000 more container for domestic and there is limitation in container manufacturing in the currently in the country.

LLF  cost expected for FY24 is about Rs 430 crore (up 7%) as against Rs 392 crore paid in FY23.

Circuit building, double stacking and value added services are to offset some part of pressure on margin owing to its efforts to regain market share.

The new five terminal for FY23-24 is to come up at Punjab, Haryana (South of Delhi for which land acquisition is negotiated with state government), Jadhpur in Odisha,  Mandalgarh and Varanasi.

 About 60% of domestic volume is coming through business associates of the company.

Now have two hubs at Palanpur and Dadri near NCR with 600 km distance in WDFC.

Double stack trains will go up from 4100 to 5000 trains.