Container corporation India Ltd.

August 1, 2019

Analyst: Abhilasha Satale / Nidhi Babaria

022 67141435/67141450

Result Update @ Dalal & Broacha

BUY Result in-line backed by improved realization:

Current Price 510 Revenue up 3.6% yoy at Rs16.5bn. Overall volume down 1% yoy to 9.26lac TEUs.
52 Week Range 583/433 Realization up 4% yoy contributed by price hikes. No reported SEIS income as company
Target Price 670 has not received notification from DGFT.
Upside % 31% EBITDA up 17% yoy to Rs4672mn. Margin down 30bps yoy to 24.4%.
Other income up 12.5%yoy as company has received tax rebate of Rs280mn.
Key Share Data Interest cost increased from Rs14mn to Rs136mn as company had borrowed Rs7bn for
arket M M Market Cap (Rs.bn) 307 advance payment of freight expense.
Market Cap (US$ mn) 4459 PAT down 8% yoy to Rs3.5bn. EPS at Rs3.71per share.
No of o/s shares (mn) 609.3
Face Value 5 Segmental Performance:
Monthly Avg. vol 816 EXIM (75.8% of revenue/94.5% of EBIT): EXIM revenue up 1.7%yoy at Rs12.7bn,
(BSE+NSE) Nos (in volume down 1% yoy at 7.866lac TEUs and realization up 2.8% yoy at Rs16157/TEU
‘000) price increases. EBIT margin down 90bps yoy to 22.7%.
BSE Code 531344 Domestic (24.2% of revenue/5.5% of EBIT): Domestic revenue up 10.4% yoy at
Rs3.84bn. Volume down 0.55% yoy at 1.4lac TEUs and realization up 10% yoy. EBIT
NSE Code CONCOR
margin down 190bps to 2.7%.
Bloomberg CCRI IN
Price performance Other Highlights
CONCOR Sensex Adjusting SEIS margin has improved: Concor has not accounted for SEIS income during
110 the quarter. It had accounted Rs707mn SEIS income in Q1FY19 and Rs843mn SEIS
105 income in Q4GY19. Adjusting the same topline for the quarter is up 9% yoy and EBITDA
100 % up300bps yoy. PAT +20% yoy. EXIM realization increased 8% yoy post adjusting SEIS
95 income and domestic is up 10% yoy.
90

85
Lost market share in EXIM market: Cocnor has lost market share in the quarter by
80
300bps in EXIM market. Its current market share in EXIM is 68% and Domestic is 64%.
Market share loss is on account of increase in low margin short lead distance container
cargo and increase in axle load norms making road players competitive. Management
is confident of improving volume growth with pick-up in economy.

Revenue contribution to improve from distribution logistics and coastal services:

% Shareholding June-19 Mar-19 Concor opened a distribution logistics center at Chennai. It Is planning to set up 4 more
Promoters 54.80 54.80 centers in FY20E. These will be asset-light model where Concor will develop these
Public 45.20 45.20 centers on PPP basis. During the quarter Concor has current terminal network of 83
Total 100.0 100.0 terminals. It plans to add 8-10 centers during the year.

Concor did 2-3 voyages under coastal segment. It will start East-coast shipping services
connecting to Bangladesh. Concor accounted for revenue of Rs380mn under this
segment and expects to post Rs1.5bn during the year.
FINANCIALS
Year Net Sales %growth EBIDTA OPM% PAT %growth EPS PE(x) RoE% RoCE%
FY17 59,797.2 (4.8) 12,457.3 20.8 8,541.2 (11.6) 14.0 36.4 10 10
FY18 66,224.7 10.7 15,014.7 22.7 10,699.2 25.3 17.6 29.0 11 12
FY19 69,560.6 5.0 17,907.6 25.7 12,245.9 14.5 20.1 25.4 12 13
FY20E 79,943.2 14.9 20,463.5 25.6 13,235.7 8.1 21.7 23.5 12 14
FY21E 91,596.0 31.7 23,927.0 26.1 15,532.3 17.4 25.5 20.0 13 16

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 Container corporation India Ltd. August 1, 2019

Analyst: Abhilasha Satale / Nidhi Babaria

022 67141435/67141450

Result Update @ Dalal & Broacha

Other Highlights:

Turned debt-free: Repaid its short-term debt of Rs700cr and turned debt-free. Holds cash balance of Rs10bn. Other income includes Rs28cr
as tax refund.

IND-AS116 impact-marginal: Concor has 8-9rakes on lease. On this rent cost is now added to depreciation which earlier was recognized in
freight expenses. On PAT basis there is no major impact.

Originating volume down 5.7% yoy at 5.68lac TEUs. EXIM originating down 5.8%, Domestic originating down 4.7% yoy. Aggregate lead
distance increased 9% yoy at 777kms. Empty running cost for the quarter is at Rs49cr vs Rs29cr.

Port-wise market share- JNPT-71%, Mundra- 46% and Pipavav- 53%. Port-wise revenue share JNPT- 32.7%, Mundra- 32.7%, Pipavav- 15.8%.

DFC commencement to improve volume growth: It is expected that North-West corridor to get commissioned in 2020-21. North-West
corridor contributes 40% to Concor’s total volumes. Volume pick-up expected post DFC commissioning as Concor will be able to offer transit
guarantee.

Distribution logistics- Concor opened a distribution logistics center at Chennai. It Is planning to set up 4 more centers in FY20E. These
will be asset-light model where Concor will develop these centers on PPP basis. During the quarter Concor has current terminal
network of 83 terminals. It plans to add 8-10 centers during the year.

Coastal Services- Concor did 2-3 voyages under coastal segment. It will start East-coast shipping services connecting to
Bangladesh. Concor accounted for revenue of Rs380mn under this segment and expects to post Rs1.5bn during the year.

Concor Added 3 rakes during the quarter.

Outlook: We reduce Concor’s volume growth for the year to 9.3% vs 11.5% earlier for FY20e factoring in weak volume during the quarter.
Management maintained guidance at 10-12% volume growth. Realisation growth increased to 6% vs 4% earlier. We expect Concor to post
EPS of Rs21.7 in FY20E and Rs25.5 in FY21E. At CMP Concor is trading at 23.5xFY20E earnings and 20xFY21E earnings. We recommend BUY
with target price of Rs670.

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Container corporation India Ltd. August 1, 2019

Analyst: Abhilasha Satale / Nidhi Babaria

022 67141435/67141450

Result Update @ Dalal & Broacha

Particulars (Rs in MN) Q1FY19 Q1FY20

Revenue from Operations 15971.9 16547.6
Growth (yoy %) 8.8% 3.6%

EXPENDITURE :
Rail and Freight Expenses 8722.9 8953.3
Other Operating Expenses 2048.2 2187.6
TOTAL COGS 10771.1 11140.9
Growth 3.7% 3.4%
% to sales 67.4% 67.3%
Gross Margins 5200.8 5406.7
Growth 21% 4%
% to sales 32.6% 32.7%
Employee Cost 716.5 813.2
Growth 59.9% 13.5%
% to sales 4.5% 4.9%
Other Expenses 546.2 548.8
Growth 16.9% 0.5%
% to sales 3.4% 3.3%
Total Expenditure 12033.8 12502.9
Growth 6.5% 3.9%
% to sales 75.3% 75.6%
EBIDTA 3938.1 4044.7
Growth 16.6% 2.7%
EBIDTA Margins 24.7% 24.4%
Depreciation 1090.8 1335.7
Growth 14.5% 22.5%
% to sales 6.8% 8.1%
EBIT 2847.3 2709.0
Growth 17.5% -8.9%
% to sales 17.8% 16.4%
Interest 13.9 135.9
Other Income 604.9 680.3
Growth -30.9% 12.5%
3438.3
Profit Before Tax and extraordinary items 3253.4
Growth 4.2% -11.0%
Extraordinary items
PBT 3438.3 3253.40
Current Tax 1143.1 1097.70
Deferred Tax -164.5 -102.70
total tax 978.6 995.00
Tax Rate 28% 31%

Reported Net Profit 2459.7 2258.40

Growth -0.2% -8.2%
% to sales 14.8% 13.1%

Equity 3046.5 3046.5

Fv 5 5
EPS 4.04 3.71

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 Container corporation India Ltd. August 1, 2019

Analyst: Abhilasha Satale / Nidhi Babaria

022 67141435/67141450

Result Update @ Dalal & Broacha

P&L (Rs mn) FY18 FY19 FY20E FY21E Cash Flow St. (Rs. mn) FY18 FY19 FY20E FY21E
Net Sales 66,224.7 69,560.6 79,943.2 91,596.0 Net Profit 10,699.2 12,245.9 13,235.7 15,532.3
Freight Expenses (45,390.9) (45,610.0) (52,953.2) (60,489.9) Add: Dep. & Amort. 4,199.7 4,522.6 4,710.8 5,322.8
Employee Cost (2,793.8) (3,370.0) (3,639.6) (4,003.6) Cash profits 14,898.9 16,768.5 17,946.5 20,855.1
Other Expenses (3,025.3) (2,673.0) (2,886.8) (3,175.5) (Inc)/Dec in
Operating Profit 15,014.7 17,907.6 20,463.5 23,927.0 -Sundry debtors (277.7) (45.4) (143.0) (160.0)
Depreciation (4,199.7) (4,522.6) (4,710.8) (5,322.8) -Inventories (46.9) 41.9 (99.6) (49.0)
PBIT 10,815.0 13,385.0 15,752.8 18,604.3 -Loans/advances (482.0) 874.6 604.4 -
Other income 2,867.7 3,170.1 2,185.9 2,295.3 -Other Current Assets (169.7) (18,964.7) (106.2) 9,883.1
-Current Liab and
Interest (55.6) (65.4) (135.9) - Provisions 2,860.9 1,046.2 (333.4) 449.8
PBT 13,627.1 16,489.7 17,802.7 20,899.6 Sundry Creditors 166.5 771.9 (312.0) 458.2
Profit before tax (post Change in working
exceptional) 13,627.1 16,489.7 17,802.7 20,899.6 capital 2,051.1 (16,275.5) (389.8) 10,582.2
CF from Oper.
Provision for tax (3,485.9) (4,744.0) (5,147.2) (6,040.3) activities 16,950.0 493.0 17,556.7 31,437.2
Reported PAT 10,141.2 11,745.7 12,655.5 14,859.2
Share profit from JV 558.0 500.2 580.2 673.1 CF from Inv. activities (9,059.0) (9,787.0) (8,029.2) (9,000.0)
Net Profit 10,699.2 12,245.9 13,235.7 15,532.3
Adjusted Profit ( excl
Exceptionals) 10,699.2 12,245.9 13,235.7 15,532.3 CF from Fin. activities (5,174.4) (2,834.0) (8,429.0) (7,689.5)

Cash
generated/(utilised) 2,716.6 (12,128.0) 1,098.5 14,747.7
Cash at start of the
year 17,462.3 20,178.9 8,050.9 9,149.4

Cash at end of the year 20,178.9 8,050.9 9,149.4 23,897.1

- - - -

Balance Sheet FY18 FY19 FY20E FY21E Ratios FY18 FY19 FY20E FY21E
Equity capital 2,437.2 3,046.5 3,046.5 3,046.5 OPM 22.7 25.7 25.6 26.1
CCPS - - - - NPM 15.49 16.84 16.12 16.54
Reserves 90,780.5 1,00,252.5 1,05,059.2 1,13,602.0 Tax rate (25.6) (28.8) (28.9) (28.9)
Net worth 93,217.7 1,03,299.0 1,08,105.7 1,16,648.5
MI 1,133.7 1,063.4 1,063.4 1,063.4 Growth Ratios (%)
Non Current Liabilites 3,207.4 3,229.3 3,211.2 2,494.9 Net Sales 10.7 5.0 14.9 14.6
Current Liabilites 11,637.2 13,405.0 12,777.7 13,702.0 Operating Profit 20.5 19.3 14.3 16.9
PBIT 23.1 23.8 17.7 18.1
TOTAL LIABILITIES 1,09,196.0 1,20,996.7 1,25,158.0 1,33,908.8 PAT 25.3 14.5 8.1 17.4

Non Current Assets 76,559.7 80,480.3 83,194.3 86,871.6 Per Share (Rs.)
Net Earnings (EPS) 17.56 20.10 21.72 25.49
Fixed Assets 47,110.6 51,904.0 55,222.4 58,899.7 Cash Earnings (CPS) 30.6 27.5 29.5 34.2
Goodwill - - - - Dividend 6.8 7.5 8.1 9.5
Non Current Investments 11,262.8 11,711.6 11,711.6 11,711.6 Book Value 191.2 169.5 177.4 191.4
Deferred Tax Asset 20.2 28.2 28.2 28.2 Free Cash Flow 16.2 (15.2) 14.9 35.7
Long Term Loans and
Advances 515.2 604.4 - -
Other Non Current Assets 17,650.9 16,232.1 16,232.1 16,232.1 Valuation Ratios
Current Assets 32,636.3 40,516.4 41,963.6 47,037.2 P/E(x) 29.0 25.4 23.5 20.0
Current investments - - - - P/B(x) 2.7 3.0 2.9 2.7
Inventories 278.3 236.4 336.0 384.9 EV/EBIDTA(x) 14.5 16.3 14.2 11.5
Trade Receivables 909.4 954.8 1,097.8 1,257.8 Div. Yield(%) 1.3 1.5 1.6 1.9
Cash and Bank Balances 20,178.9 8,050.9 9,149.4 23,897.1 FCF Yield(%) 3.2 (3.0) 2.9 7.0
Short Term Loans and
Advances 1,332.0 368.2 368.2 368.2
Other Current Assets 9,937.7 30,906.1 31,012.3 21,129.2 Return Ratios (%)
ROE 11% 12% 12% 13%
TOTAL ASSETS 1,09,196.0 1,20,996.7 1,25,158.0 1,33,908.8 ROCE 12% 13% 14% 16%

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 Container corporation India Ltd. August 1, 2019

Analyst: Abhilasha Satale / Nidhi Babaria

022 67141435/67141450

Result Update @ Dalal & Broacha

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 Container corporation India Ltd. August 1, 2019

Analyst: Abhilasha Satale / Nidhi Babaria

022 67141435/67141450

Result Update @ Dalal & Broacha

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Contact Email ID Contact No. Sector

Auto, Auto Ancillary,
Mr. Kunal Bhatia kunal.bhatia@dalal-broacha.com 022 67141442 FMCG

Ms. Charulata Gaidhani charulata.gaidhani@dalal-broacha.com 022 67141446 Pharma /Healthcare

Ms. Abhilasha Satale abhilasha.satale@dalal-broacha.com 022 67141135 Midcaps

Mr. Avinash Tanawade avinash.tanawade@dalal-broacha.com 022 67141439 BFSI

Mr. Mayank Babla Mayank.babla@dalal-broacha.com 022 67141412 IT, Media

Mrs. Nidhi Babaria nidhi.babaria@dalal-broacha.com 022 67141450 Associate

Mr. Suraj Nandu suraj.nandu@dalal-broacha.com 022 67141438 Associate

Mr. Tanush Mehta tanush.mehta@dalal-broacha.com 022 67141441 Associate

Address: - 508, Maker Chambers V, 221 Nariman Point, Mumbai 400 021. Tel: 91-22- 2282 2992, 2287 6173, Fax: 91-22-2287 0092
E-mail: research@dalalbroachaindia.com, equity.research@dalal-broacha.com

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