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Price - Rs.

Container Corporation of India Target - Rs. 952

Play on increasing containerization

We initiate coverage on Concor, India’s largest container rail haulage operator,
with an OUTPERFORM rating. In our view, containerization in India is poised for
a fillip with a cumulative government spend of Rs. 558bn on port and related
infrastructure. This should provide a significant boost to containerization, which is
currently at 18% in India compared with levels of 70% globally. Coupled with a Initiating Coverage
healthy EXIM (export – import) growth of 15-20%, we think Concor will be the
principal beneficiary of port-related infra build out. Dated 5th June 2008

We also believe that some of the concerns surrounding the opening up of the rail
haulage sector to private players and the attendant impact on Concor’s dominance BSE SENSEX 15770
are overstated. Given the breadth of Concor terminal network and the high start-up NIFTY 4677
costs involved in setting up container terminals, we believe that new players will
perforce have to adopt a collaborative stance vis-à-vis` Concor. O/S Shares 130mn
Market Cap Rs. 102,037mn
Investment rationale
52 week Hi-Lo Rs. 1,235 – Rs. 723
 Increase in EXIM cargo traffic and containerization – Considerable Average Daily 36,095
investments in port and related infrastructure will drive higher containerization Volume (nos)
and place Concor in a demand sweet spot Free Float (%) 37.0
 Railways set to gain market share - As port and associated infrastructure BSE Code 531344
build happens, we believe that the trend of railways gaining share from roads NSE Code CONCOR
(26% share in FY98 to almost 35% at the end of FY07) will accelerate, playing Bloomberg code CCRI IN
to Concor’s strengths Reuters code CCRI.BO
 Market dominance to sustain – In our opinion, new private operators will
continue to face challenges in terms of both start-up costs (terminals and Shareholding Pattern (%) as on March 2008
wagon procurement) and operations to pose a significant competitive threat to Promoters 63.0
Concor market dominance Institutions 33.5
 Strong relationship with key customers – Long-standing relationships with Public 3.5
corporate and ventures with shipping lines such as Maersk will ensure
predictable flow of business, in our view Concor vs Sensex - Relative performance
 Extensive terminal network is biggest entry barrier – Concor’s network of
57 terminals is, in our view, its biggest competitive advantage, which private
Close price

players will find tough to replicate; at best, we expect the latter to enter into
collaborative arrangements with Concor 0.00

Valuation and view

We are positive on Concor’s prospects and believe that it is best positioned to





capitalise on favourable infrastructure-related tailwinds. Over our forecast period

Concor Sensex
(FY08-10E), we expect Concor to post earnings CAGR of 14%. We expect RoEs
to sustain at healthy levels of above 20% over our forecast period and expect cash Perform ance (%) 1m 3m 12m
per share of Rs. 141 at end FY10E. We note that apart from its strong return Concor (12.7) (10.6) (28.2)
metrics, Concor generates significant free cash on account of a negative working Sensex (11.4) (6.3) 6.6
capital cycle and has almost zero leverage. Against this backdrop, we think the
current correction in the stock provides an attractive entry point, with current Nath Balakrishnan
multiples at 12.3x FY09E and 10.4x FY10E EPS.
We use a combination of P/E and DCF to value Concor’s core business (Rs. 929); +91.44.4344 0035
we then ascribe a value for its investments in various JVs (Rs. 23) to arrive at a
composite SOTP-based target price of Rs. 952. We initiate coverage with a Sriram Sekhar
OUTPERFORM rating and a 21% upside from current levels.
+91.44.4344 0040
Financial Summary
Revenues EBITDA PAT EPS P/E EV/EBITDA Spark Capital Advisors (I) Private Limited
(Rs. mn) (Rs. mn) (Rs. mn) (Rs.) (x) (x) ‘Reflections’, New #2, Leith Castle Center St.
FY08* 33,530 9,023 7,553 58.1 13.5 9.9 Santhome High Road
FY09E 41,858 11,023 8,309 63.9 12.3 7.9 Santhome, Chennai – 600 028

FY10E 50,748 12,993 9,783 75.3 10.4 6.5

*Consolidated estimates for FY08

Spark Research is available on Bloomberg <SPAK> GO and Reuters Knowledge Page 1 of 24


Page No.

Business Background..…………………………………………………………………………………………… 3

Investment Rationale……………………………………………………………………………………………… 5

Key Risks……………………………………………………………………………………………………………. 14

Valuation Discussion....…………………………………………………………………………………………… 15

Industry Overview ………….…………………….....……………………………………………………………. 18

Financial Summary ………………………………….…………………………….……………………………… 23

June 08 Page 2 of 24

Container Corporation of India (Concor), a mini-ratna enterprise, was established in
1988 by the Indian Railways to exclusively cater to container traffic. The company has
grown from a network of seven Inland Container Depots (ICD)/ Container Freight
Stations (CFS) to 57, giving it the largest network in the country. The company is run by
a team of professionals, headed by Mr. Rakesh Mehrotra, the managing director.
Core business of
operating container Concor’s core business is operating container wagons across the country, with EXIM
wagons trade accounting for over 79% of its revenues. It currently has ~7,200 wagons and
proposes to purchase ~3,300 wagons over the next two years. Until 2007 Concor was a
monopoly in this field, with government restricting private participation. However, in 2007
the Railway Ministry opened this sector to private players and till date 15 companies
have entered this space. Despite competition, Concor continues to retain its market
leadership position in FY08, with a 94% share on the Delhi-JNPT route. In order to
further strengthen its leadership position, Concor has tied-up with eight of the private
operators to share its infrastructure in return for a lease rental/ share of revenues.
In the EXIM segment, railways are the preferred mode of transport, with roadways
competing for market share only in the domestic segment. Although rail haulage is more
cost efficient and faster than transportation by road, the latter is preferred for shorter
distances, as railways does not provide door-to-door delivery. To overcome this hurdle,
Concor has tied up with Transport Corporation of India (TCI) and Reliance Logistics to
provide end-to-end solutions.
Concor enjoys higher realizations in the EXIM segment due to lower lead times and
lesser number of empties running. In addition to the CFS/ ICD handling charges, it
Entered cold chain receives ground rent in the case of imports, which is based on the dwell time of each
logistics in February 2006 container. Although the domestic segment enjoys higher realizations, margins are lower
due to longer lead times, running of more empties, and competition from roadways.

Historical Throughput (TEUs)






FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08

EXIM Domestic

Source: Company

In an effort to diversify from a pure rail haulage company to a complete logistics

provider, Concor is entering other areas such as cold chain logistics. This sector is still at
a very nascent stage in India, and is expected to grow significantly on the back of the
retail boom. Concor established a subsidiary, Fresh & Healthy, in February 2006 to
pursue opportunities in this space. Fresh & Healthy purchases apples from wholesalers
in Himachal Pradesh, rebrands them and sells them to retailers. It currently has one cold
chain store at Rai, Sonepat, with a capacity of 12,000 MT.
Apart from the cold chain venture, Concor is actively looking at entering the coastal
shipping sector as well as foraying into the air cargo business. The company has also
formed joint ventures with companies such as Maersk India, Transworld Group and APL

June 08 Page 3 of 24

India to setup and run CFSs/ ICDs across the country. Concor constructed and runs the
third berth at JNPT through a joint venture with Maersk Copenhagen, and proposes to
Concor runs the form further alliances to bid for expansion in key ports.
third berth at JNPT
with Maersk Revenues and margins
40,000 35
28.8 29.0 28.7 29.3 26.9
35,000 30
21.5 21.6 23.1 22.5
20.8 20
Rs. mn

20,000 18.4


5,000 5

0 0
FY03 FY04 FY05 FY06 FY07 FY08

Revenues EBITDA Margins (RHS) PAT Margins (RHS)

Source: Company

Concor’s revenues have grown by a CAGR (03-08) of 17.7% to Rs. 33,530mn in FY08.
Concor’s revenues The operating margins have consistently been over 25%, while net margins have
grown by 17.7% increased from 18.4% in FY03 to 22.5% in FY08. The growth in revenues has been on
CAGR (03-08) the back of an 11.3% CAGR (03-08) in container throughput, while the favourable mix
between EXIM and domestic container traffic contributed to the improvement in margins.
Return Ratios
29.7 29.8
30 27.9 27.7
20 22.7 22.0 22.4



FY04 FY05 FY06 FY07 FY08


Source: Company

Established to operate Joint Venture with Maersk Joint Venture with

container trains Copenhagen for BOT Gateway Distriparks to
project - JNPT’s third operate an ICD at Garhi
terminal and run container trains

1988 2004 2005 2006 2008

Joint Venture with Maersk Formed “Fresh & Healthy”,

India for ICD at Dadri a 100% subsidiary, to
foray into cold chain

June 08 Page 4 of 24


# 1 – Increase in EXIM cargo traffic and containerization

Cargo traffic at major ports is increasing at ~15-20% p.a. on the back of improved global
trade and the consumption boom in India. According to the National Maritime
Development Program (NMDP) the cargo handled at major ports is expected to increase
EXIM cargo traffic is from the current 469mn tons to 616mn tons by FY12. The current port infrastructure is
increasing at ~15-20% p.a. not capable of supporting these volumes, and capacities at major ports are nearing
100% utilization.
The Ports Authority of India has established the National Maritime Development
Program (NMDP) to increase capacities at ports and improve the existing infrastructure.
Some of the port projects are expected to be through the PPP route, while some will be
follow a BOT model.
Development program at major ports
Port No. of Spend on Current Targeted Total
projects road and rail Capacity Capacity by Capacity by
connectivity (mn tons) FY09 FY12
(Rs. Mn) (mn tons) (mn tons)
Haldia 15 - 42.2 42.8 65.2
Paradip 28 10,200 51.4 60.1 88.9
Vizag 38 4,160 54.9 74.7 106.6
Ennore 14 3,760 13.0 35.0 45.2
Chennai 14 4,500 48.8 73.6 60.6
Tuticorin 24 1,250 20.6 35.6 39.5
Cochin 14 4,750 19.4 33.5 42.9
New Mangalore 20 9,960 38.0 47.8 54.9
Mormugao 12 - 29.5 41.5 53.3
Mumbai 14 3,280 43.8 57.9 61.5
JNPT 32 15,810 36.1 59.5 81.9
Kandla 26 1,445 46.0 77.4 92.2
Total 251 59,115 443.7 651.0 792.7
Source: NMDP, Spark Research

Containerization in India is very at ~18% as against ~70% in other countries due to the
lack of adequate infrastructure in terms of ports, roads, and railways. The Ports Authority
Containerization in India is of India is spending over Rs. 558bn to develop infrastructure and increase capacities at
low at ~18% the major and intermediate ports to 810.4mn tons by FY12. It is expected to spend Rs.
59bn on developing road and rail connectivity to the ports.
In our opinion, this infrastructure development bodes well for augmenting the share of
containers as a percentage of total cargo handled. After the expansion at major and
intermediate ports, capacity for container traffic is expected to increase to ~15.2mn
TEUs by FY12 from ~4.2mn TEUs in FY05, representing a CAGR of 20%. As per NMDP
estimates, container traffic is likely to increase from 83mn tons to 140mn tons by FY12E.

June 08 Page 5 of 24

Total EXIM cargo vs. container cargo

700 160

600 140 140

123 120
mn tons

mn tons
400 94
83 80
300 66
100 20
0 -
FY07 FY08 FY09E FY10E FY11E FY12E

Total EXIM cargo traffic (LHS) Container traffic

Source: NMDP

India is lagging in terms of container growth as compared to peers such as China. The
lack of port infrastructure was the main reason for this tepid growth. China had a total
India has tremendous capacity to handle ~76mn TEUs in 2005, as compared to India’s capacity of 5mn TEUs.
growth opportunities in Although EXIM trade in the region in burgeoning, India will not benefit unless the
cargo throughput capacity of ports is increased. The government, recognizing the earlier pitfalls, has
actively started to increase capacity and improve infrastructure. In our view, India is on
the cusp of a significant opportunity in terms of cargo throughput and containerization.
Containerization opportunity for India

2005 capacity (China)

was 76mn TEUs

2005 capacity (India) was

5mn TEUs


In our view, the increase in containerization combined with the railways augmenting its
market share in container haulage, will benefit existing players in the rail haulage space.
Concor is expected
We expect Concor to retain its market leadership position on the back of its extensive
to retain its market
terminal network, largest fleet of wagons and strong relationship with key customers.
leadership position
It is also likely to benefit from the enhancement in cargo throughput by way of its
investments into BOT projects at ports, such as the third berth at JNPT. Concor
proposes to form consortia to bid for BOT projects such as the expansion of Gujarat,
Ennore and Chennai Ports, and the fourth terminal at JNPT.

June 08 Page 6 of 24

# 2 – Railways set to gain market share

Transportation by railways is much cheaper and faster than road transport. However,
manufacturers prefer roadways for domestic transportation and shorter distance, as
railway terminals are not present near all industrial zones. Moreover, the railways do not
provide a service guarantee similar to that provided by the trucking companies.
In the post independence era, the railways enjoyed a dominant market share in
container haulage due to a lack of road infrastructure and trucks capable of carrying
containers. However, backed by the improvement in highway quality and entry of flat bed
trucks, the market dynamics shifted in favour of roadways. The railways currently have a
~33% market share in transport of containers.
Market dynamics
favouring rail haulage
Railway market share vs. containerization Concor
34.7 wagons :
35 33.7 18 7,284
34 14.8 14.3 16
33 12.9 15.8 14
32 11.5 14.6
10.2 32.5 12
31 9.4 32.1
31.4 10

30.4 30.5 30.7
Concor wagons : 8
29 29.9 4,528 6
27 4

26 26.0 2
25 0
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07

Railway market share Containerization (RHS)

Source: IPA, Spark Research

As port and associated infrastructure build on happens, we believe that the railways is
well positioned to gain incremental share from roads. This is a structural positive for rail
haulage operators as a whole and specifically to Concor, the dominant player in this
Cost Differential – Road vs. Rail
Delhi - JNPT Delhi - Mundra Port
Rs./ TEU
Railways Road Railways Road
Upto 20 tons 12,942 42,000 10,896 33,000
20-26 tons 16,255 48,500 13,728 38,000
Above 26 tons 18,096 58,000 15,252 44,000
Source: Concor, Gateway Distriparks

# 3 - Market leadership to sustain

Concor enjoyed a monopoly position till 2007, when the government permitted other
companies to enter the rail container haulage sector. As a result of the competition,
Concor has a 94% Concor’s market share has come down to 94% in FY08. However, in our view the threat
market share in of private players garnering a chunk of the market has been overplayed.
EXIM traffic
We expect Concor to be able to retain its leadership position going forward despite the
advent of competition, since most of the private operators are struggling with
considerable land acquisition costs and the significant capital required for purchase of
wagons. Concor’s network has been developed at a substantially lower land cost than

June 08 Page 7 of 24

As it still has unutilised land at many of its ICDs, Concor can expand these facilities with
marginal overheads. The competitive advantage of owning land at historical costs is
evident in Concor’s high return metrics, an area we believe private operators will be
hard-pressed to match.
Most of the private players are currently plying their wagons on the lower margin
domestic route, as they do not have the necessary infrastructure to ply the EXIM route.
As a result, their margins suffer, as domestic routes entail higher running of empties and
longer lead times. EBIT margins for the domestic segment are ~14% as against 28% for
the EXIM segment.

Concor EXIM Market Share

7 100
100 100
mn TEUs

4 96

3 94

0 90
FY05 FY06 FY07 FY08

Total EXIM Container Traffic Containers Transported through Rail

Concor Market Share (RHS)

Source: IPA, Company, Spark Research

Some of the private operators are using their wagons for captive purposes, and do not
pose a threat to Concor. We have excluded these players, and estimated the total
Some private operators number of wagons the private operators currently have operational and expected
are using wagons for additions.
captive purposes
Private players using wagons for captive purposes
Adani Logistics
Box Trans (JM Baxi Shipping)
Dinesh ETA
Hind Terminals
Innovative B2B Logistics (Bothra Shipping)
Indialinx (APL)
Source: Spark Research

In our view, there are ~2,490 wagons currently being operated by private players, with
approximately 6,390 wagons to be operational by FY10. On the other hand, Concor
currently owns over 8,282 wagons and is expected to have ~11,584 wagons by end-
FY10. In addition, Concor also leases wagons from the railways based on the
requirement and type of container to be transported. We expect Concor to retain market
leadership in terms of wagons operated as well as throughput.

June 08 Page 8 of 24

Concor wagon addition

14,000 3.5
12,000 2.6 3.0
10,000 2.1 2.5

mn TEUs
8,000 1.7 2.0

6,000 1.5

4,000 1.0

2,000 0.5

- -
FY04 FY05 FY06 FY07 FY08 FY09E FY10E

Wagons (LHS) Throughput

Source: Company, Spark Research

In our view, end customers would prefer using Concor’s services due to the vast terminal
End customers would
network, sizeable wagon fleet, and door-to-door services provided through its tie-ups
prefer using Concor’s
with Reliance Logistics and TCI.
Wagons – Concor vs. private players
Wagons FY08 FY09 FY10
Concor (nos) 8,284 10,084 11,584
Private Players (nos) 2,490 4,440 6,390
Total number of wagons 10,774 14,524 17,974
Source: Spark Research

# 5 – Strong relationship with key customers

Concor has a well established relationship with several shipping lines, and has formed
joint ventures with key customers such as Maersk. These joint ventures are for
construction and running of CFSs/ ICDs, ensuring captive business from shipping lines.
Apart from the joint ventures, Concor has serviced these clients for nearly two decades,
and in our view it is unlikely that the private players will be able to garner a meaningful
share of the EXIM container traffic, as shipping lines are likely to continue transport
through Concor.
A few of Concor’s Joint Ventures (JVs)
Name of JV JV Partner Nature of JV
Star Track Terminal Maersk India ICD at Dadri
Trident Terminal APL India ICD at Dadri
Albatross CFS Transworld Group ICD at Dadri
Gateway Terminals India* Maersk Copenhagen Third berth at JNPT
JWG-Air Cargo Complex Hindustan Aeronautics & Mysore Sales Air Cargo Business in Bangalore
CMA-CGM Logistics Park (Dadri) CMA-CGM Global India ICD at Dadri
HALCON Hindustan Aeronautics Air Cargo Complex & ICD at Ozar Airport, Nasik
India Gateway Terminal Dubai Port International Setting Up and Managing Container Terminals at Cochin
Source: Company, Spark Research

June 08 Page 9 of 24

# 4 – Extensive terminal network is the biggest entry barrier

Concor has the advantage of a vast terminal network across the country, as compared to
a handful owned and operated by the private players. Concor currently has ~57
terminals and is adding a few more each year, these include CFSs/ ICDs. In our view,
Concor currently has ~57 the new players will face hurdles in land acquisition in the form of high land prices and
terminals regulatory issues, while Concor’s existing terminals are priced at historical costs, and it
can procure railway land for ICDs/ CFSs on a preferential basis due to its mini-ratna
Since setting up a similar terminal/ ICD/ CFS network is not feasible for any single
private company, most of them are entering into fee based agreements with Concor to
share its infrastructure. In our opinion, given the capacity constraint faced by private
players in terms of terminal network, they do not pose a significant threat to Concor’s
market dominance, especially with Concor benefiting from private players’ lack of
infrastructure. Unless the private players collaborate with Concor, we do not foresee
them increasing their container throughput as they lack the necessary infrastructure.
Concor’s terminal network

Source: Company

June 08 Page 10 of 24

# 6 – Focus on the fast growing northern hinterland

The majority of Concor’s revenues are derived from the northern regions of the country,
which contribute ~51% of EXIM traffic to JNPT, backed by the increased industrialization
in these regions. With the government thrust on developing the northern hinterland most
major industrial houses have setup factories in this region, resulting in an increase in
EXIM trade.

Break-up of TEUs handled by Concor






Northern Central Eastern Western Southern

Source: Company
Ports catering to the Many companies are setting up ICDs in the northern and central hinterland since
north capacities of existing ICDs in regions such as Tughlakabad are already running at close
to 100%. ICDs are being constructed in places like Dadri and Garhi to cater to the rise in
EXIM trade.
The railway route between JNPT and Delhi and its surrounding regions carries the
maximum throughput. The current capacity on this route is ~34 rakes/ day, and is
running at 76% utilization. Concor runs ~20 rakes/ day on this route, while the private
operators run ~5 rakes/ day. In our view, the track utilization on this route will go to
~100% in the next few years, with increasing cargo volumes being handled by the
western ports. The government proposes to start construction of the north-west freight
corridor, which when operational will de-bottleneck the current congestion on the route.
Source: JNPT We expect an increase in railway container freight trains running on this route once the
corridor is on-stream, with Concor garnering a majority of the cargo throughput.
Region-wise contribution to JNPT’s cargo traffic
2004-05 2005-06 2006-07 2007-08 2008-09E 2009-10E
Exports Imports Exports Imports Exports Imports Exports Imports Exports Imports Exports Imports
Chandigarh 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
Haryana 5.1% 5.6% 5.1% 5.6% 5.1% 5.7% 5.1% 5.7% 5.2% 5.8% 5.2% 5.8%
Himachal Pradesh 0.8% 0.7% 0.8% 0.7% 0.8% 0.7% 0.8% 0.7% 0.8% 0.7% 0.9% 0.7%
Punjab 3.9% 2.2% 3.9% 2.2% 3.8% 2.1% 3.7% 2.1% 3.7% 2.1% 3.6% 2.0%
Rajasthan 3.0% 2.3% 3.0% 2.3% 3.1% 2.3% 3.1% 2.3% 3.2% 2.3% 3.2% 2.3%
Uttar Pradesh 10.2% 11.7% 10.3% 11.7% 10.3% 11.7% 10.3% 11.8% 10.4% 11.8% 10.4% 11.8%
Uttaranchal 1.5% 1.4% 1.5% 1.4% 1.4% 1.3% 1.4% 1.3% 1.4% 1.3% 1.3% 1.3%
Delhi 1.4% 1.0% 1.4% 1.0% 1.4% 1.0% 1.4% 1.0% 1.4% 1.0% 1.4% 1.0%
Andhra Pradesh 7.4% 7.1% 7.3% 7.0% 7.2% 6.9% 7.1% 6.9% 7.0% 6.8% 6.9% 6.7%
Gujarat 11.1% 16.2% 11.1% 16.2% 11.2% 16.3% 11.2% 16.4% 11.2% 16.5% 11.2% 16.6%
Karnataka 6.6% 5.0% 6.6% 5.0% 6.6% 4.9% 6.6% 4.9% 6.6% 4.9% 6.6% 4.8%
Kerala 2.5% 1.8% 2.5% 1.8% 2.5% 1.8% 2.5% 1.8% 2.5% 1.7% 2.5% 1.7%
Madhya Pradesh 3.2% 3.4% 3.2% 3.4% 3.2% 3.4% 3.2% 3.4% 3.3% 3.4% 3.3% 3.4%
Maharashtra 18.3% 19.7% 18.4% 19.8% 18.5% 19.9% 18.6% 20.0% 18.7% 20.1% 18.8% 20.1%
Others 25.0% 22.0% 24.9% 21.9% 24.9% 21.9% 24.8% 21.8% 24.7% 21.7% 24.6% 21.7%
Source: JNPT, Spark Research
26% of export traffic and 25% of
import traffic to JNPT originate
from the north

June 08 Page 11 of 24

# 7 – Revenue mix favouring highly profitable EXIM sector

The majority (79%) of Concor’s revenues come from the high margin EXIM sector. This
is in contrast to many of the private players, who derive most of their revenues from the
lower margin domestic container haulage sector. The reason for Concor’s dominance in
the EXIM sector is its established relationships with major shipping lines, and tie-ups
with some of these shipping lines to construct ICDs. For instance, Concor formed a joint
venture with Maersk India to construct an ICD at Dadri resulting in Maersk having a
vested interest in transporting cargo through Concor.

Revenue break-up vs. margins

60,000 33.0 35
29.2 29.7 28.5 28.2
31.6 27.8 30
Rs. mn


30,000 18.5 18.9 17.2 15.0
15.1 14.0 15
20,000 13.7
10,000 5

- -
FY04 FY05 FY06 FY07 FY08 FY09E FY10E
EXIM Revenues (LHS) Domestic Revenues (LHS)
EXIM EBIT Margins Domestic EBIT Margins

Source: Company, Spark Research

EXIM sector EBIT The EXIM sector is highly profitable, with EBIT margins ~28%, as compared to the ~14%
margins are ~28% margins in the domestic sector. Although the domestic sector is less profitable, it enjoys
higher realizations of ~Rs. 15,200 compared to ~Rs. 14,000 for the EXIM sector. This
disparity between the realizations and margins is due to the longer distances and more
number of empties running on the domestic sector.
Unlike the EXIM sector, where Concor receives revenues on empty containers
transported, in the domestic sector it bears the cost of empties run. Apart from the empty
containers transported, Concor has a higher proportion of trains running without any
containers on the domestic sector.
Due to Concor’s dominance in the EXIM sector, and an increasing demand for domestic
railway container haulage, private operators are plying most of their trains on the
domestic route.
# 8 – Entry into door-to-door services will position Concor as end-to-
end solutions provider
Concor has tied-up with Transport Corporation of India (TCI) and Reliance Logistics to
provide door-to-door services to its clients. Since the main reason for customers
preferring road transport is due to the unavailability of railway infrastructure near their
factories, in an attempt to garner market share from road transport, railway container
haulage players are now providing complete end-to-end solutions.

June 08 Page 12 of 24

Concor outsources Concor outsources the last mile delivery to one of its two trucking partners (TCI and
last mile delivery Reliance Logistics) depending on the region. This enables it to provide complete logistics
solutions without requiring purchasing of trucks and operating them. In our view, this
value added service will further strengthen Concor’s market leadership position, and aid
in improving the railways’ market share.

Shipping line Railway terminal Transport by railways

Delivery to
Transport by truck Delivered to ICD
customer's factory

Last mile delivery:

value added service

Source: Spark Research

June 08 Page 13 of 24

# 1 – Slowdown in EXIM trade
Concor's revenue growth is leveraged to growth trends in EXIM trade; a slowdown on
this front would have a substantial negative impact. EXIM trade typically grows at ~2x
growth in GDP, and any significant drop in India’s GDP could lead to a sharp
deceleration in EXIM trade growth, impeding Concor’s growth prospects.
# 2 – Higher-than-anticipated margin contraction
Concor’s margins are expected to contract going forward due to increased competition.
Although we do not foresee a significant drop in Concor’s market share, margins are
likely to drop with prices becoming more competitive. Apart from this, due to the
increased sensitivity to price, Concor might not be able to fully pass on any hikes in the
haulage charges levied by the railways.
# 3 – Increasing contribution of the low margin domestic sector
The domestic container rail haulage sector is growing faster than the EXIM sector, which
Delays in wagon could result in revenues tilting in favour of the former. This would result in a drop in
procurement will profitability since Concor will face competition not only from the private rail operators but
negatively impact also from companies operating in the road haulage space. Apart from the competition in
earnings this sector, Concor also faces the problem of running more empties (containers and
# 4 – Delays in wagon procurement
Concor proposes to acquire 1,800 wagons in FY09 and 1,500 wagons in FY10, and any
delay in the procurement of wagons will negatively the earnings potential, and might
erode market share. Since axles for wagons are facing a supply crunch, Concor intends
to import axles from railway approved vendors to ensure its requirements are met.
However, in the event of wagon procurement being delayed despite import of axles,
Concor’s revenue potential and market share will drop.

June 08 Page 14 of 24

At the current price of Rs. 785, Concor trades at 12.3xFY09E and 10.4xFY10E EPS.
Over our forecast period (FY08-10E), we expect Concor to post an earnings CAGR of
14%. Return metrics are robust, with ROE of 23.7% and 23.3% in FY09E and FY10E
Concor enjoys a negative
respectively. With a negative working capital cycle, we forecast free cash flows of Rs.
working capital cycle
4,613mn in FY10E. We expect Concor to generate cash per share of Rs. 141 in FY10E.
We have not ascribed any value for the cold chain subsidiary – Fresh and Healthy, as it
is still in a nascent stage and we do not expect it to scale up significantly till FY11.
Concor is compared domestically to only Gateway Distriparks, as there are no other
listed competitors operating in the same industry sub-sectors.
In the global arena, we compare Concor with CSX Corp (USA) and Canadian National
Railway Co. (Canada). We note that global peers trade at an average one-year forward
P/E of 14x, in spite of an earnings growth of only 11%. In contrast, Concor enjoys
significantly better return metrics, higher earnings growth and more attractive valuations.
We use a combination of P/E and DCF to value the core business and overlay that with
an SOTP to capture Concor’s investments in JVs to arrive at a composite target price.
Applying a target multiple of 12x on our FY10E EPS, we arrive at a target price of Rs.
903. Our DCF model yields a fair value of Rs. 954. We use an average of the two
valuation methods to arrive at our target price of Rs. 929 for the core business. We value
Concor’s investments in JVs at Rs. 23 per share. Combining the value of core business
and the investments, we arrive at our SOTP-based target price of Rs. 952. At our target
price, Concor would trade at 14.9x FY09E and 12.6x FY10E EPS with EV/EBITDA of
9.9x FY09E and 8.2x FY10E.
In our opinion, Concor’s earnings will have a fair degree of predictability and given the
current volatility in the markets, will think it will command a multiple that closely trails
earnings growth. In this context, we believe that our target multiple of 12x FY10E EPS in
the context of a 14% EPS CAGR is not unjustified. Initiate coverage with a
OUTPERFORM rating for a 21% upside from current levels.

Valuation methodology
Valuation Value/ Share
method (Rs.)
Core business P/E 12x 903
Core business DCF 954
(A) Average value 929
(B) JWG-Air Cargo Complex P/E 10x 8
(C) Other joint ventures P/B 2x 15
(A+B+C) Target Price 952

Domestic Peer Comparison

(Rs mn) (%) (Rs mn) (x) (x)
Concor 41,858 50,748 23.7 23.3 8,309 9,783 12.3 10.4 7.9 6.5
Gateway Distriparks 4,151 5,844 14.2 16.5 990 1,235 11.5 9.2 6.6 5.1
Source: Bloomberg, Spark Research
International Peer Comparison
(USD mn) (%) (USD mn) (x) (x)
CSX Corp 11,150 11,840 15.9 17.6 1,458.0 1,620.0 18.0 15.2 9.0 8.1
Canadian National Railway Co. 8,331 8,840 7.2 7.5 1,713.0 1,906.0 15.1 13.1 8.9 8.1
Source: Bloomberg, Spark Research

June 08 Page 15 of 24

DCF valuation
(Rs. mn) FY08 FY09E FY10E FY11E FY12E FY13E FY14E FY15E FY16E FY17E FY18E FY19E
Revenues 33,530 41,858 50,748 60,898 72,468 85,513 100,050 116,058 133,466 152,152 171,931 190,844
Revenue Growth (%) 10.2 24.8 21.2 20.0 19.0 18.0 17.0 16.0 15.0 14.0 13.0 11.0
EBIT 7,949 9,688 11,383 12,789 14,494 16,247 18,009 19,730 21,355 22,823 22,351 22,901
EBIT * (1-tax rate) 6,200 7,557 8,879 9,975 11,305 12,510 13,867 15,093 16,229 17,117 16,540 16,489
Depreciation 1,074 1,335 1,610 1,979 2,226 2,474 2,699 2,924 3,126 3,329 3,509 3,689
Change in WC 155 416 445 507 579 652 727 800 870 934 989 946
Operating Cash Flow 7,430 9,308 10,933 12,461 14,110 15,637 17,293 18,818 20,226 21,380 21,038 21,123
Capex 5,069 6,173 6,010 6,000 5,500 5,500 5,000 5,000 4,500 4,500 4,000 4,000
Free Cash Flow 2,361 3,135 4,923 6,461 8,610 10,137 12,293 13,818 15,726 16,880 17,038 17,123
No. of Years - 1 2 3 4 5 6 7 8 9 10
Discount Factor 1.00 1.14 1.29 1.47 1.68 1.91 2.17 2.47 2.81 3.20 3.64
Discounted FCF - 3,135 4,327 4,990 5,844 6,046 6,444 6,366 6,367 6,006 5,327 4,705

WACC Calculation Target price calculation

Equity (Rs. mn) 38,241.12 Terminal growth 4%
Debt (Rs. mn) 450.00 Terminal Value (TV) 181,928
Total Capital (Rs. mn) 38,691.12 Discounted TV 49,993
Debt : Capital 0.01 Cumulative Discounted FCF 109,550
Equity : Capital 0.99 Debt 450
Risk Free Rate (%) 8% Cash 14,905
Risk premium (%) 7% DCF 124,006
Beta 0.9 No. of Shares (mn) 130
Cost of debt (%) 11% Fair Value/ Share (FY09) 954
Tax rate (%) 22%
Tax-adjusted Debt Cost 9%
WACC 14%

FY10 EPS sensitivity to change in market share (Rs.)

Concor market share (%)
90 85 80 75
Railway 40 85.9 81.8 77.6 73.5
share 36 79.1 75.3 71.6 67.8
(%) 33 72.9 69.4 66.0 62.6
30 67.3 64.2 61.1 57.9
Source: Spark Research

Base case

June 08 Page 16 of 24

Key Assumptions FY09E FY10E

Rakes & Capex
Total No. of Rakes 10,084 11,584
Capex (Rs. mn) 6,173 6,010
Wagon Addition per Year (Nos) 1,800 1,500
Trips/ Month/ Rake 12 12
Empty Containers as a Percentage of Total TEUs (%) 55 54
Rail Haulage Charges (Rs./ TEU) 10,834 11,364
Throughput & Realizations
EXIM Throughput (TEUs) 2,081,749 2,394,011
Domestic Throughput (TEUs) 550,168 671,205
Total Throughput (TEUs) 2,631,917 3,065,217
EXIM Realizations (Rs./ TEU)* 14,000 14,500
Domestic Realizations (Rs./ TEU)* 15,000 15,500
Market Scenario
Total Container Traffic in India (mn TEUs)# 8 10
Assumed Share of Railways (%) 35 36
Wagon Additions/ Year by Competitors (excluding captive usage) 4,440 6,390
Concor EXIM Market Share (%) 90 85
* Realizations exclude Terminal Handling Fees Source: KPMG

June 08 Page 17 of 24

The logistics industry is highly fragmentedd in terms of service offerings, with each
company offering a specialized service. The
he larger conglomerates offer complete end-to-
end solutions,
solutions backed by joint ventures, subsidiaries or acquisitions.
Components of logistics chain

• The exporter selects the logistics provider based on

Exporter quality of service, efficiency, and presence in the region

• Undertakes the shipment from the exporter , and liases

Logsitics Provider with the various intermediaries in the supply chain, to
deliver the goods to the importer

Container Freight Station (CFS)/ • The stuffed container is sent to the CFSs/ ICDs where the
customs clearence takes place. These companies charge
Inland Container Depots (ICD) a fee based on the services provided

Freight Forwarder/ Customs House • These agents complete the customs clearence procedures
and are in charge of forwarding the containers to the
Agent shipping lines

• Since manufactured products are typically shipped in

LCL Consolidators containers, these companies consolidate cargo from
different logsitics players into a single container load
Fragmentation is
rampant in the logistics • These companies own ships and transport the containers
industry Shipping Line to the destination country. They run on a fixed schedule
between ports and charge rates per container

• Shipping lines deliver the containers to the CFSs/ ICDs at

the destination country to complete customs formalities.
CFS/ ICD The latter charge a ground rent apart from the other
charges levied on services

Freight Forwarder/ Customs House • They work in conjunction with the CFS/ ICD to complete
Agent the customs formalities in the destination country

• These companies split a container load into different

LCL Consolidators components based on the importer and final destination

• The logistics provider hired by the exporter uses its

Logistics Provider international network to transport the goods from the CFS/
ICD to the importer

• These are the end customers of the supply chain, and

Importer depending on the agreement with the exporter, these
companies sometimes bear the cost of the supply chain

Source: Spark Research

Despite the multiple functions and companies involved, the supply chain is a
homogenous network, with the logistics provider typically coordinating with the various
parties involved.

June 08 Page 18 of 24

Logistics matrix
We have mapped the listed integrated logistics providers into their areas of
specialization, to better understand the business models, competition, and market
The biggest entry barrier to dynamics. In our view, the CFS/ICD business, although highly profitable, is evolving into
the CFS/ ICD sector is land a real estate play. The biggest entry barrier to the CFS/ ICD sector is land, and in our
availability opinion the company with the best placed land will get a chunk of the container traffic.
There are significant entry barriers in the other areas of specialization as well, such as a
network of terminals for the railway container haulage space, tie-ups and relationship
with the shipping lines for the LCL consolidation sector, and ships with adequate
capacity and permissions in coastal shipping. In our view, new players will find it difficult
to break into these markets, while existing players will start consolidating to provide
complete services to the end customer.

Cold Chain

Concor Cargo




North-West rail
connectivity and major Air Cargo 3PL


Source: Spark Research

Rail logistics
Rail haulage is one of the least expensive forms of transportation, and the railways have
a ~33% share in container haulage. Railways are used extensively for EXIM traffic since
customs clearance is possible at the ICDs and exporters are not required to go to the
Source: Company, Spark Research
port to complete these formalities. Since railway haulage is cheaper and faster than
transportation by roadways, exporters are enticed to send their shipments via rail.
However, on the domestic container traffic, manufacturers prefer road transportation

June 08 Page 19 of 24

despite being more expensive, since railway terminals are not located close to every
industrial zone. In order to overcome this challenge, rail haulage companies are now
providing door-to-door services through tie-ups with trucking companies.
We expect the market share of railways in container haulage to increase to ~36% in
We expect railways’ FY10 on the back of its cost advantage and improved services like last mile delivery. The
market share to cost advantage of rail haulage is significantly higher than road haulage, as it costs ~Rs.
increase to ~36% 1.6/km to transport 1-ton of goods through road, while the railways cost only ~Rs. 0.8/km
for a similar cargo load.

Break-up of EXIM cargo handled in India in 2008

Total EXIM Cargo

519 mn tons

General & Other Cargo Container Cargo

427 mn tons 92 mn tons

JNPT Other Ports

52 mn tons 40 mn tons

Transport by Road Transport by Railways

62 mn tons 30 mn tons

Source: IPA, Spark Research

The EXIM cargo in the country can be classified on the basis of type of cargo, and in
Containers accounted 2008 containers accounted for ~18% of the total cargo handled. JNPT handled the
for ~18% of the total majority of the container cargo with a 60% market share. Once the containers are
EXIM cargo in FY08 unloaded into the port, ~40% of them are transported to CFSs, the rest are transported
to ICDs or directly to factories if customs clearance has been completed.
Containerization in other countries is around 70%, while it is much lower in India due to
poor infrastructure and bottlenecks in transportation. In our view, containerization in India
is set to increase backed by infrastructure development and more private participation in
developing berths at ports.
Private participation in container rail haulage
The government has recently permitted private participation in container rail haulage for
Rail haulage enjoys a license fee of Rs. 500mn to operate on all tracks, and Rs. 100mn for point-to-point
ROCE of ~25% operations. There has been significant interest to receive railway licenses, and 15
companies have received approval till date. The economics of rail haulage is highly
attractive, with a ROCE of ~25%. The main entry barrier is lack of a terminal network,
and all the new entrants have to construct terminals and ICDs across the country to
effectively provide rail haulage services. Until the terminal network is established, a
majority of the private players are using Concor’s terminals for a fee/ lease.

List of Private Players

Adani Logistics Gateway Rail Freight
Arshiya International Hind Terminals
Boxtrans Logistics India India Infrastructure & Leasing
Central Warehousing Corporation Innovative B2B Logistics Solutions
Concor Pipavav Railway Corporation
Container Rail Road Services Reliance Infrastructure Engineering
Delhi Assam Roadways Sical Logistics
Emirates Trading Agency
Source: Spark Research

June 08 Page 20 of 24

Economics of Rail Haulage

No. of Rakes 1
No. of Wagons/ Rake 45
Containers/Wagon (Nos.) 2
Total Trips/ Year/ Wagon @ 10 Trips/ month 120
Total Traffic (TEUs) 10,800
Average Realization (Rs/ TEU) 15,000
Haulage Charges to Railways (Rs/ TEU) 10,200
Total Revenues (Rs. mn) 162
Less: Operating expenses (Rs. mn) 110
Less: Other Expenses (Rs. mn) 8
Less: Depreciation (Rs. mn) 7
EBIT (Rs. mn) 37
Capital Employed (Rs. mn) 113
ROCE (%) 25
Source: Spark Research

Dedicated freight corridor

The government proposes to setup a dedicated freight corridor to facilitate faster
Estimated cost movement of trains and double stacking of containers. The estimated cost for the project
for the project is is $ 4.7bn, and the tracks will run between JNPT and Dadri and from Ludhiana to
$ 4.7bn Howrah. This corridor will solve various problems, such as:
• Speed – Freight and Container trains which currently run at speeds of 25-30
km/hr can reach speeds of ~100 km/hr on the freight corridor as there are no
passenger trains on these routes
• Loading – Due to electrical lines on the normal railway tracks, container trains
are unable to double stack loads. The freight corridor will allow double stacking
as it is a diesel line
As a result of industrialization in the northern region, there is a burgeoning demand for
rail container haulage. There are a considerable number of ICDs being setup in this
region to cater to this demand, as most of the private players with a railway license
propose to operate in the north-west and north-east sectors.

Source: DFCC & Spark Research

The government proposes to start work on the corridor shortly, and the north-west
corridor is expected to be on-stream in approximately five years. Since the routes are

June 08 Page 21 of 24

diesel based and have no passenger traffic, rail operators will be able to increase the
axle load and speed of the rakes, as well as double stack containers, making rail
haulage more efficient.
The container traffic in the north-west sector is expected to increase to 6.2mn TEUs by
2022 from the current 0.7mn TEUs, while the total cargo traffic in the north-east sector is
to increase to 143mn tons by 2022 from 52mn tons as per the Railway Ministry.
Cold chain logistics
With the advent of a retail boom in the country, there has is a burgeoning demand for
cold chain logistics. Apart from the retail boom, other industries such as pharmaceutical
companies require refrigerated transportation due to the temperature sensitive nature of
the drugs. To cater to this demand, several cold chain logistics companies are being
setup, with the large logistics conglomerates also entering this space.
The client base varies depending on the specialty of the cold chain provider. Certain cold
Cold chain gives an chain operators cater solely to FMCG and diary companies while others cater to
additional shelf life pharmaceutical companies. Goods are typically stored in a controlled atmosphere, with
of ~6-months segregated temperature settings for each product. This translates into an additional shelf
life of over 6-months.
Depending on the nature of the product, storage is either in cold stores or controlled
atmosphere stores. In a cold storage the goods are frozen using refrigerators, while
controlled atmosphere storage regulates the atmosphere in the warehouse, this results
in better preservation. Cold storage is used for dairy products such as ice cream and
seafood; controlled atmosphere storage is typically used for fruits & vegetables, and
Shelf Life of Cold Storage vs. Controlled Atmosphere Storage
Storage Temp. Shelf Life Shelf Life
Fruit / Vegetable
(Centigrade) Cold Store CA Store

Apples 1 3 months 10 months

Mango 12-13 2 weeks 8 weeks

Grapes 1 2 weeks 4 weeks

Dry Fruits/ Nuts 0-10 3-4 months 10 months
Litchi 2 2 weeks 8 weeks

Tomato 10-12 2 weeks 10 weeks

Carrots 0 2-3 weeks 12-16 weeks

Source: Company, Spark Research

In India, the cold chain storage a capacity to handle only 10% of the total food produce
In India, cold chain and as a result of the lack of storage facilities over 25% of the food gets spoiled.
capacity is only 10% According to a report by FICCI, the cold chain industry in India is expected to grow at
of the total produce ~20-25% p.a. backed by the entry of foreign retail players and the setting up of food
parks. In our view, this industry is in a very nascent stage and it will be a few years
before the newer players are able to break-even.

June 08 Page 22 of 24

Profit & Loss (Rs. mn) Growth ratios (%)
FY07 FY08E FY09E FY10E FY07 FY08E FY09E FY10E
Revenues 30,421 33,530 41,858 50,748 Sales 25.0% 10.2% 24.8% 21.2%
Operating Costs 21,511 24,507 30,835 37,755 EBITDA 27.7% 1.3% 22.2% 17.9%
EBITDA 8,909 9,023 11,023 12,993 EBIT 29.8% -0.3% 21.9% 17.5%
Depreciation 936 1,074 1,335 1,610 PBT 31.6% 8.1% 11.8% 17.7%
EBIT 7,973 7,949 9,688 11,383 Net Profit 33.8% 7.3% 10.0% 17.7%
Other Income 848 1,587 969 1,164 CAGR (08-10E)
Interest - - - - Sales 23.0%
PBT 8,821 9,536 10,657 12,547 EBITDA 20.0%
Net Profit 7,036 7,553 8,309 9,783 Net Profit 13.8%

Margin ratios (%)

FY07 FY08E FY09E FY10E
Balance Sheet (Rs. mn) EBITDA 29.3% 26.9% 26.3% 25.6%
FY07 FY08E FY09E FY10E EBIT 26.2% 23.7% 23.1% 22.4%
Paid up Capital 650 650 1,300 1,300 PBT 29.0% 28.4% 25.5% 24.7%
Reserves & Surplus 25,647 31,342 36,941 44,285 Net Profit 23.1% 22.5% 19.9% 19.3%
Total debt 305 400 450 500
Deferred Tax 1,613 1,632 1,670 1,728 Performance ratios
Total Networth & Liabilities 28,214 34,024 40,361 47,813 FY07 FY08E FY09E FY10E
Gross Fixed assets 20,254 25,583 31,916 37,976 RoA (%) 24.0% 21.0% 19.5% 19.5%
Accumulated Depreciation 4,738 5,812 7,147 8,757 RoE (%) 29.8% 25.9% 23.7% 23.3%
Net fixed assets 15,516 19,771 24,769 29,219 RoCE (%) 30.0% 26.7% 24.0% 23.7%
CWIP 2,570 2,310 2,150 2,100 Sales / Total Assets (x) 1.0 0.9 1.0 1.0
Investments 967 967 967 967 Fixed Assets Turnover (x) 1.6 1.5 1.5 1.5
Total Long term assets 19,053 23,048 27,886 32,286
Current assets Financial stability ratios
Inventory 47 75 95 117 FY07 FY08E FY09E FY10E
Debtors 99 110 138 167 Total Debt to Equity (x) 0.0 0.0 0.0 0.0
Cash 10,776 12,778 14,905 18,348 Net Debt to Equity (x) (0.4) (0.4) (0.4) (0.4)
Loans & Advances 2,710 2,790 2,870 2,950 Current ratio (x) 3.0 3.2 3.2 3.5
Other Current Assets 212 213 214 215 Working capital to Sales (%) (4.6) (4.2) (5.0) (5.1)
Current liabilities 4,685 4,993 5,749 6,273 Inventory & Debtor days 2.0 2.0 2.0 2.0
Net current assets 9,159 10,974 12,474 15,524 Creditor days 27.5 30.0 30.0 30.0
Misc. Expenditure 2 2 2 2 Debt to EBITDA (x) 0.0 0.0 0.0 0.0
Deferred Tax - - - -
Total Assets 28,214 34,024 40,361 47,813 Valuation metrics
FY07 FY08E FY09E FY10E
Current Share Price (Rs.) 785.0
Market Cap ( 102,036.5 102,036.5 102,036.5 102,036.5
Cash Flows (Rs. mn) Fully Diluted Shares (mn) 130.0 130.0 130.0 130.0
FY07 FY08E FY09E FY10E Fully Diluted EPS (Rs.) 54.1 58.1 63.9 75.3
Cash flows from Operations 7,527 7,230 9,305 10,623 P/E (x) 14.5 13.5 12.3 10.4
Cash flows from Investing (2,556) (3,482) (5,204) (4,846) Price to Sales (x) 3.4 3.0 2.4 2.0
Cash flows from Financing (1,109) (1,745) (1,975) (2,334) EV ( 91,565.5 89,658.0 87,581.1 84,188.2
Cash Generated 3,862 2,003 2,126 3,443 EV to Sales (x) 3.0 2.7 2.1 1.7
Opening Cash 6,913 10,776 12,778 14,905 EV/ EBITDA (x) 10.3 9.9 7.9 6.5
Closing Cash 10,776 12,778 14,905 18,348 Dividend Yield (%) 1.4 1.6 1.7 2.0
Note: FY08E numbers are consolidated estimates

June 08 Page 23 of 24

Rating interpretation
OUTPERFORM Greater than 15% upside from current price
NEUTRAL Upside or downside from the current price is within 15%
UNDERPERFORM Greater than 15% downside from the current price

Analyst Certification
The Research Analyst(s) who prepared the research report hereby certify that the views expressed in this research report accurately reflect
the analyst(s) personal views about the subject companies and their securities. The Research Analyst(s) also certify that the Analyst(s)
have not been, are not, and will not be receiving direct or indirect compensation for expressing the specific recommendation(s) or view(s) in
this report.

Spark Disclaimer

This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment
decision. Nothing in this document should be construed as investment or financial advice, and nothing in this document should be
construed as an advice to buy or sell or solicitation to buy or sell the securities of companies referred to in this document. Each recipient of
this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the
securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to
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This document does not constitute or form part of any offer for sale or subscription or incitation of any offer to buy or subscribe to any
securities. Spark Capital Advisors (India) Private Limited makes no representation or warranty, express or implied, as to the accuracy,
completeness or fairness of the information and opinions contained in this document. Spark Capital Advisors (India) Private Limited, its
affiliates, and the employees of Spark Capital Advisors (India) Private Limited and its affiliates may, from time to time, effect or have
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in this report. This report has been prepared on the basis of information, which is already available in publicly accessible media or
developed through the independent analysis of Spark Capital Advisors (India) Private Limited.

Copyright in this document vests exclusively with Spark Capital Advisors (India) Private Limited.

June 08 Page 24 of 24