Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Concor: No containing - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Aug 29, 2002

    Concor: No containing

    Concor, the company with a virtual monopoly in moving containerised cargo traffic, reported good performance for 1QFY03 with a rise of 11% in topline. Operating margins however, dropped by around 260 basis points. The drop in operating margins is explainable considering the backdrop of a slowing economy.

    (Rs m) 1QFY02 1QFY03 %Change
    Sales 2,966 3,302 11.4%
    Other Income 98 118 20.6%
    Expenditure 1,985 2,294 15.5%
    Operating Profit (EBDIT) 981 1,009 2.9%
    Operating Profit Margin (%) 33.1% 30.5%  
    Interest 9 7 -23.3%
    Depreciation 78 95 20.9%
    Profit before Tax 992 1,025 3.4%
    Extraordinary Income - -  
    Tax 323 377 16.6%
    Profit after Tax/(Loss) 668 648 -3.0%
    Net profit margin (%) 22.5% 19.6%  
    No. of Shares (eoy) (m) 65 65  
    Diluted Earnings per share* 41.1 40.0  
    P/E (at current price)   6.6  
    (*- annualised)      

    Container traffic can be broadly differentiated in two categories – EXIM (Export/Import) and Domestic traffic. Majority of the company’s revenue is derived from international traffic (mainly in the Delhi-JNPT route). The Exim business contributes around 70% of revenues and 83% of the company's profitability. With liberalization and opening up of the Indian economy, lowering of import tariffs and reduction in the number of commodities whose import were prohibited by the Government earlier, there is an increasing trend of containerised imports into India.

    Particulars 1QFY03 FY02
    (Rs m) Sales Margins Sales Margins
    Exim Business 2,304 33.2% 8,911 33.0%
    Domestic Business 998 18.3% 3,954 15.3%
    Total 3,302 948 12,865 3,549

    Since 1994-95, the total container traffic handled in Indian ports has grown by more than 50%. The country currently has 1 m TEU’s each (Twenty foot equivalent units/1 standard size container) of export and import container traffic. The growth of container port traffic is expected to have a relatively better growth rate in the coming years, especially in ports of JNPT (Jawaharlal Nehru Port Trust), Mumbai and Chennai. Other important container handling ports are Haldia and Tuticorin.

    The company’s entry into the domestic business, which could be solely attributable to the shortage of wagons with Indian Railways in 1996, has large growth potential today. Around one third of port traffic originates from and terminates at places within 300 kms from the port and the balance is carried to the hinterland (either through roadways or railways). Since consumption centers are vast distances away from ports, there is always a huge demand for inland transportation. Further, growth of non–bulk traffic is expected to be much faster than the growth of bulk traffic. The share of non–bulk traffic in total traffic is expected to go up from 35% to 50% by the year 2010. Significantly, much of this traffic is containerisable.

    Globally, the average level of containerisation is more than 70%, while in India it is in the range of 30-35%. The level of containerisation in India can improve, only if the road infrastructure improves. The proposed golden quadrangle project connecting the four metros by expressways is expected to help Concor in its ultimate objective of being a terrestrial logistics service provider facilitating door-to-door delivery. With the gradual reduction in import tariffs, including removal of quantity and quota restrictions as committed to the WTO, trade growth will add to Concor’s business. Also, the e-commerce eventuality will provide significant opportunities in the field of distribution and Concor has the potential to be a fully integrated third party logistics company.

    Till recently, investment by Concor has not been significant. However, to reduce dependence on railways and increase market share in inland container movement, Concor has huge capex plans in the future. The source of funds for Capex plans would be met through a combination of a World Bank loan, internal accruals and debt. Consequent to this expansion, the company's revenues are expected to grow at a faster clip.

    At the current market price of Rs 263, the stock trades at 6.6x its annualised earnings for 1QFY03. The stock has almost doubled in the last six months on the back of rally in PSU stocks. Given the expansion plans of the company in the near-term, one can expect Concor to report a significant growth in profits. Keeping in mind the company' monopoly status and immense growth potential, valuations are still on the attractive side.



    Equitymaster requests your view! Post a comment on "Concor: No containing". Click here!


    More Views on News

    Concor: Lower Realisations Offset Volume Recovery (Quarterly Results Update - Detailed)

    Apr 11, 2017

    Volumes recover, return ratios to remain under pressure.

    Container Corporation: A Weak Quarter (Quarterly Results Update - Detailed)

    Dec 7, 2016

    Container Corporation of India Ltd has announced results for the quarter ended September 2016. The company has reported 8.2 % year on year (YoY) decline in sales, while bottom-line is down 31.9% YoY.

    Container Corporation : A disappointing quarter (Quarterly Results Update - Detailed)

    Aug 17, 2016

    Container Corporation of India Ltd has reported a decline of 6% and 14% in the topline and bottomline respectively for the quarter ended June 2016.

    Container Corporation: Headwinds Continue (Quarterly Results Update - Detailed)

    Feb 5, 2016

    Container Corporation of India Ltd has reported 4.7% year on year (YoY) decline in the topline for the quarter ended December 2015 while the bottomline for the quarter declined by 31.5% YoY.

    Concor : A muted quarter (Quarterly Results Update - Detailed)

    Nov 9, 2015

    Container Corporation of India Ltd has reported 11% year on year (YoY) growth in the topline for the quarter ended September 2015 while the bottomline for the quarter grew by 21% YoY.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (Close)


    • Track your investment in CONTAINER CORP with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks



    Detailed Quarterly Results With Charts