• Downside in revenue is largely due to lower revenue of EXIM business. While the segment revenue of domestic business was flat (up 0%) to RS 356.24 crore, the segment revenue of EXIM business was down by 10% to Rs 1171.34 crore (or 77% of sales). The EXIM revenue for corresponding previous period include SEIS Income of Rs 84.46 crore compared to nil for the quarter, as no notification has been issued by GoI for SEIS benefits. Excluding the SEIS income in corresponding previous period, the EXIM revenue was down by just 4% to Rs 1171.34 crore.

• PBIT was down by 18% to Rs 527.17 crore as segment profit of both EXIM and domestic stay low. EXIM business registered a segment profit of Rs 280.51 crore, a fall of sharp 12% hit by lower sales as well as 50 bps contraction in segment margin to 23.9%. The segment profit of Domestic was down by 90% to Rs 2.46 crore. The segment margin of domestic witnessed a sharp fall of 660 bps to 0.7%.

• Contraction in OPM to the extent of 90 bps to 24.3% largely due to rise in staff and OE cost heads. Staff cost as % to sales was higher by 120 bps to 5.9%. The other expense was up by 10 bps to 3.6%. However the other operating expense was down by 40 bps to 10.5% and the rail freight was flat at 55.7%. Thus hit by lower sales and lower OPM the operating profit was down by 11% to Rs 371.70 crore.

• Other income was down by 15% to Rs 62.64 crore. The interest cost jumped to Rs 5.96 crore from mere Rs 0.02 crore in corresponding previous period. And the depreciation was higher by 19% to Rs 126.26 crore. Thus the PBT (before EO) was down by 22% to Rs 302.12 crore. EO income for the quarter and corresponding previous period was nil. Thus the PBT after EO was down by 36% to Rs 175.49 crore.

• The taxation in absolute terms was higher by 13% to Rs 126.63 crore. But the tax rate was higher at 41.9% (compared to 28.9% in the corresponding previous period) even though the company adopted the new reduced corporate tax rate. Thus the PAT was down by 36% to Rs 175.49 crore.

Consolidated sales for the quarter were down by 8% to Rs 1544.74 crore. But with OPM contract by 80 bps to 24.4%, the operating profit was down by 11% to Rs 376.15 crore. After accounting for lower OI, higher interest and depreciation the PBT was down by 20% to Rs 299.12 crore. EO for the quarter and corresponding previous period was nil. With taxation (net of deferred tax) stand higher by 14% to Rs 127.18 crore, the PAT was down by 34% to Rs 171.94 crore. After accounting for lower share of profit from associate (down 47% to Rs 7.40 crore) and lower minority interest (down 38% to Rs 1.55 crore) the net profit was down by 35% to Rs 180.89 crore.

Nine month performance

Standalone sales for the period was down by 3% to Rs 4905.16 crore. The OPM was down by 150 bps to 24.5% and thus the OP was down by 9% to Rs 1200.47 crore. After accounting for lower OI, higher interest and depreciation, the PBT was lower by 19% to Rs 980.30 crore. With EO expense stand at RS 861.05 crore against nil in corresponding previous quarter, the PAT after EO was down by sharp 90% to Rs 119.25 crore Taxation in absolute terms was lower by 89% to Rs 37.95 crore and the tax rate was at 3.9% compared to 28.4% in corresponding previous period. Thus the PAT was down by 91% to Rs 81.30 crore.

Consolidated sales for the period was lower by 3% to Rs 4955.11 crore. But with OPM stand lower by 140 bps to 24.5%, the operating profit was down by 8% to Rs 1212.69 crore. Eventually the net profit attributable to owners was down by 89% to Rs 92.95 crore.

Interim Dividend

The BoD has declared an Interim dividend of 15% (or RS 0.75 per equity share of RS 5 face value). The record date for the purpose of payment of Interim Dividend has been fixed as Feb 20, 2020. The Interim dividend will be paid/dispatched to the shareholders on or after Feb 27, 2020. The payment will be made within 30 days of its declaration.

Other Developments

The company had recognized during the financial year 2015-16 to 2018-19 an amount totaling to Rs 1044.03 crores as the income on account of benefit available under Service Export from India Scheme (SEIS). The availability of this benefit to CONCOR was also confirmed through legal opinions, including from Additional Solicitor General (ASG). Vide letter no. F.No.O 1 / 6 l / 180 / 351 / AM 16 /PC-3 / 786, dated 26th September 2019 received from Directorate General of Foreign Trade (DGFT), the Company has been informed that services towards customs transit of foreign liners sealed containers by rail transport placed under customs control to/from ICDs are not eligible for SEIS. Consequently, an estimated amount of Rs 861.05 crore for ineligible SEIS benefit has been provided for in the quarter ended Sep 2019. The Company is in the process of filing appeal in the above matter. Further, other expenses include an amount of Rs. 9.15 crore provided for as estimated discount on the eligible amount of Rs 182.98 crore. No income has been recognized on account of SEIS benefits in current quarter/period ended Dec 2019 as no notification has been issued by Govt. for the same, which in Quarter ended and Period ended Dec 2018 was Rs 84.46 crore and Rs 254.85 crore respectively.