Navratna Company Set for Bonus Issue. A Good Deal or Pitfall?

Bonus issues serve as a tool for companies to reward shareholders. It improves marketability of shares, while shareholders gain additional shares without extra cost.

However, the overall market capitalisation remains unchanged as the share price adjusts proportionally to the bonus shares issued.

One company that has announced this investor friendly bonus measure recently is the Navratna company Container Corporation of India (CONCOR).

About CONCOR

CONCOR is a public sector enterprise engaged in container transportation and logistics services.

The company provides inland container transport predominantly by rail and operates a large network of inland container depots, container freight stations.

It offers services to both international (EXIM) and domestic trade, including container handling, transportation, warehousing, port management, air cargo complexes, reefer and cold chain services, and factory stuffing/destuffing.

The company operates through three core business segments: cargo carrier, terminal operator, and warehouse operator including multi-modal logistics parks.

CONCOR uses modern rail wagon fleets and extensive information technology to provide customer-friendly commercial practices.

CONCOR Bonus Issue

The company announced its first bonus issue after 2019. The bonus ratio is 1:4. This means that shareholders who have 4 shares would get 1 share as bonus.

So, as an example if you own 100 shares you will receive a bonus of 25 shares.

Key Details:

• Announcement date: 28 May 2025
• Record date: 4 July 2025
• Allotment date: 7 July 2025
• Ratio: 1:4
• Face value: Rs 5 each fully paid-up

Capital Expenditure

CONCOR projects a 13% volume growth in FY26, driven by expected 10% growth in EXIM volumes and 20% growth in domestic volumes.

To support this growth, the company plans a capital expenditure of Rs 8.6 bn, focusing on acquiring new containers, container rakes, and establishing new terminals as part of infrastructure expansion.

#2 Financial Performance

In Q4 FY25, CONCOR reported a slight decline in net profit by 5.81% to Rs 2.98 bn and a 1.6% decrease in sales to Rs 22.88 bn compared to the previous year.

However, for the full year FY25, net profit rose 2.23% to Rs 12.89 bn and sales increased 2.7% to Rs 88.8b bn.

CONCOR declared a final dividend of Rs 2 per share for FY25, in addition to the multiple interim dividends paid during the year.

How Shares of CONCOR Have Performed Recently

The share price of CONCOR has been flat in the last one month. The change is less than 1%.

In 2025, the company's shares have lost about 6%. Over the past one year, shares of the company have lost 33%.

The stock touched its 52-week high of Rs 1,115 on 21 June 2024 and its 52-week low of Rs 601.65 on 3 March 2025.

For more details see the CONCOR fact sheet and quarterly results.

Conclusion

CONCOR has seen a sharp drop in the share price over the last one year. The financial performance for Q4 2025 has not been great with a decline in net profits.

The company has projected an overall volume growth of 13% in FY26, driven by 10% growth in EXIM (export-import) volumes and 20% growth in domestic volumes, particularly in sectors like cement, rice, tiles, and food grains.

To support this, the company plans to invest Rs 8.6 bn in capital expenditure focused on acquiring new containers, container rakes, and establishing new terminals as part of infrastructure expansion.

CONCOR aims to increase its terminal network to around 100 terminals and expand its container handling capacity. It plans to commission new terminals in locations such as Patri, Mandalgarh, Chunar, and near Jodhpur in FY26, enhancing its logistics footprint.

The company maintains a dominant market share in containerised cargo transport by rail in India. It is also increasing market share at key ports like Mundra and Pipavav.

Despite the stock's fall, the valuations are still at a premium.

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Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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