Container Corp

Container Corporation of India or Concor as it is popularly referred to, was a major gainer yesterday after NSE stated that effective 4th Feb, which is today, Concor and 5 more PSUs will not have a price band. This means it will not have limit of maximum up or down movement during the day’s trade. Because the price has been more or less steady, no volatile spikes, the circuit breaker has been removed. On the other hand, its performance for Q3FY13 was very muted. Its inability to pass  on the entire burden of the cost hike by railways left a telling effect on its bottomline. YoY, net sales rose 3.5% at Rs.1083 crore of which Exim showed a growth of 1.17% and domestic grew 14%. But net profit came down at Rs.236 crore, down 2% on YoY. EBIT of Exim was down 5% and that of Domestic was down 13%. In terms of margins, EBIT margin for Exim fell from 27% to 25% and that of domestic fell from 11% to 8.35%. Its railway freight expenses, which makes up for over 57% of its total costs, was up 4.5%.

 Its twenty-foot equivalent units (TEUS), which is unit of cargo capacity, was at 468140 TEUS of which exim was 410274 TEUs and domestic was 57866 TEUs. Overall volumes declined 5.7% but tonnage was marginally up at 20.92 tonnes. Overall empty running expenses in Q3FY13 was at Rs.57 crore v/s Rs.48 crore in Q3Fy13, up 19%. And of the overall empty running, domestic empty running expense was down 40%. It was able to pass on only 4.5% of the 8% cost hike by Indian Railways. There was another round of cost hike in Feb’12 and freight expenses will go up, on an average by 18% and the company hopes to pass on 12% through price hike. Thus margins could remain under pressure till Concor continues to absorb the cost hikes. Its Dedicated Freight Terminal (DFT) at Nagalpall in Andhra Pradesh is expected to start operations by end of this month and the other one at Katwa near Bhiwandi, in another 8-9 months.