Container Corporation of India hosted conference call on Nov 3, 2023. In the conference call the company was represented by Sanjay Swarup, CMD.

Key takeaways of the call

Volume throughput for Q2FY24 was up 7.59% to 1230768 TEUs [EXIM up 3.5%yoy to 969746 TEUs; Domestic up 26.13%yoy to 261022 TEUs].

Volume throughput for H1FY24 was up 7.76% to 2324378 TEUs [EXIM up 5.21%yoy to 1811436 TEUs; Domestic up 17.88%yoy to 512942 TEUs]. 

Q2FY24 Originating volume – EXIM is 504990 TEUs and Domestic is 106998 TEUs.

Volume growth for FY24 is expected at 12-15% as guided at the start of the year but the company can slightly beat the guidance.  

Strong volume growth in Domestic segment and hope to maintain very good growth going forward.  Lot of good circuits the company has picked up and that have driven the domestic volume.

In EXIM business Import volume were strong driven by solar panels, waste paper and heavy melting scraps etc. Expect the trend to continue for balance period of current fiscal. However exports are expected to be weak considering current geo political uncertainties.

Market share of the company is around 65-70% in Q2FY24. The company consciously stays away from low margin business.

Not taken any price hike during Q2FY24. As far as the busy season charge now levied by IR, the company is passing on the same in some route and not passing on in certain routes. So it is dynamic pricing depending on competition and demand supply situation. 

Apart from commissioning terminals the company will get more than 500 containers a month for domestic use.

Focus on increasing double stack container train operations which stood at 2766 trains vs 2100 double stack containers.

LLF – H1FY24 LLF was Rs 215 crore against  Rs 191.49 crore in H1FY23.  The company has provided more in Q1FY24  and thus it has rationalized in Q2FY24.   Expect LLF for FY24 to be in the range of Rs 460-470 crore. 

Share of rail is very less in FMCG cargo as the industry relies on road now.  The company have now come up with innovation of 12 feet high container, which facilitated higher loadability compared to 20 feet container.  As IR agreed to charge the same rail freight charges as applicable for 20 feet container, with more laudability at same cost the competitiveness has increased.  Customers have to bring the volume to originating terminal .Terminal stuffing and terminal destuffing.

For white goods currently in 20 feet container the white goods loading were 2-3 tonne but were forced to pay the freight rates for 7.5 tonnes.  Because of height increase in container the lading will increase to 10 tonne benefiting cargo customers. 

Port wise market share - JNPT 60%, Mundra36%, Pipavav 45%.

Empty running cost for Q2FY24  in case of EXIM was Rs 31.42 crore and Rs 86.70 crore for domestic.    

Expect to improve the bottom-line in domestic going forward.

Lead distance in H1FY24is 700 km for EXIM and 1400 km for domestic. 

DFC  started from month of May 2023. Operating TimeTable trains to Mundra port currently.

Rail freight margin for Q2fy24 is 27%.

Capex – Incurred Rs 284 crore of capex in H1FY24. Confident of surpassing the Rs 600 crore capex for balance period of current fiscal.

About 30% of volume is first and last mile connected.

JNPT, Mundra and Pipavav 33, 35 and 11% respectively.

Can sustain 9-10% margin in domestics business going forward.