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GICS Industry: Road & Rail l

Sub Industry: Railroads l

Website: www.concorindia.com

Container Corporation of India Ltd

Key Stock Indicators

Container Corporation of India Ltd Key Stock Indicators NSE Ticker: CONCOR CMP (as on 19 Apr

NSE Ticker:

CONCOR

CMP (as on 19 Apr 2011—Rs/share): 1,256.3

Shares outstanding (mn):

130.0

Bloomberg Ticker:

CCRI: IN

52-week range up to 19 Apr 2011 (Rs) (H/L):

1,500.00/1,058.10

Free Float (%):

36.9

Face value / Share:

10.0

Market Cap as on 19 Apr 2011 (Rs mn):

163,297

Average daily volumes (12 months):

53,726

Div. Yield (%):

1.1

Enterprise Value as on 19 Apr 2011 (Rs mn):

144,381

Beta (2 year):

0.7

Container Corporation of India Limited (CCIL), majority-owned by the Government of India, was incorporated in March 1988 and commenced operations in November 1989, taking over the seven inland container depots (ICDs) of the Indian Railways. CCIL’s core business is characterised by three distinct activities — that of a carrier, a terminal operator and a warehouse operator.

KEY HIGHLIGHTS

Largest network of ICDs in India CCIL is the undisputed market leader in India with 59 ICDs, the largest network of any player. Of this, 49 terminals are export-import container depots, while 10 are exclusive domestic container depots. CCIL has over 5,200 state-of-the-art high-speed bogies and low-height container flat- wagons (type BLC) in service. The company has expanded service offerings to cover management of ports, air cargo complexes and establishing cold chains.

Strategic alliances over the years CCIL has formed alliances with United Liner Agencies of India Pvt Ltd, Central Warehousing Corp, JM Baxi &Co, Power Rail Corp and MSC Shipping Line to jointly develop container terminals. In FY06, CCIL partnered with Maersk for construction of a third container terminal at the Jawaharlal Nehru Port Trust at Nhava Sheva (Maharashtra). The company has tied up with Gateway Distriparks to set up a rail-linked logistics park in Garhi Harsaru near Gurgaon (Delhi). It has also entered into a joint venture (JV) with Dubai Port World for setting up and managing container terminal at Cochin Port (Kerala).

Capital expenditure during the year During FY10, the company incurred capital expenditure of ~Rs 3.5 bn, mainly on development/ expansion of terminals, acquisition of wagons, handling equipments and IT infrastructure, etc. Two new terminals were commissioned during the year, at Durgapur (West Bengal) in April 2009 and Ratlam (Madhya Pradesh) in November 2009. Expansion works were commissioned at Kota, Whitefield, Dadri, Malanpur, Phillaur, Khemli, Kanpur and Fathua ICDs. During FY10, the company added 720 high-speed BLC wagons to its fleet, taking total number of high-speed wagons to 8,837 and total wagon count to 10,194. The company also expanded its VSAT-based network to 64 locations and added softwares, etc for better warehouse and delivery management.

KEY RISKS

Lack of trained and skilled manpower

Increasing competition from private players in container business

Decline in the exim throughput and export-import trade

Stock Performances vis-à-vis market

Returns (%)

YTD

1-m

3-m

12-m

CONCOR

NIFTY

-7

9

8

7

2

1

-7

10

Returns (%) YTD 1-m 3-m 12-m CONCOR NIFTY -7 9 8 7 2 1 -7 10

Note:

1) YTD returns are since April 1, 2010 to Apr 19, 2011. 2) 1-m, 3-m and 12-m returns are up to Apr 19, 2011.

Key Financial Indicators

 

Mar-08

Mar-09

Mar-10

Revenue (Rs mn) EBITDA margins (%) PAT (Rs mn) PAT margins(%) Gearing (x) EPS (Rs/share) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)

33,824.8

34,719.5

37,468.8

26.5

27.3

26.0

7,336.5

7,791.5

7,776.3

21.7

22.4

20.8

0.1

-

-

112.9

59.9

59.8

15.3

12.0

21.0

3.6

2.5

3.8

29.5

27.2

23.3

25.8

22.9

19.6

11.0

8.2

14.8

n.m.: Not meaningful

Shareholding (As on December 31, 2010)

FII

27%

DII 7% Others 3% Promoter
DII
7%
Others
3%
Promoter

63%

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NIFTY
Apr-10
May-10
Jun-10
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Feb-11
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Container Corporation of India Ltd

BACKGROUND

CCIL provides multimodal logistics support services for export, import and domestic trade. The company primarily engages in the carrier business. Its core business is characterised by three distinct activities, that of a carrier, a terminal operator and a warehouse operator. CCIL provides a single-window facility coordinating with all different agencies and services involved in the containerised cargo trade, right from customs, gateway ports and railways to road haulers, consolidators, forwarders, custom house agents and shipping lines. It offers freight transportation services by rail and road. The company also operates container terminals, which provide facilities such as warehousing, container parking, repair facilities and office complexes. In addition, the company provides services like transit warehousing for import and export cargo, bonded warehousing, enabling importers to store cargo and take partial deliveries, less than container load (LCL) consolidation, reworking of LCL cargo at nominated hubs and air cargo clearance using bonded trucking.

As of FY10, the company had ~15,754 containers, 49 exim depots and 10 domestic container terminals and 10,194 wagons, of which 8,837 were high-speed wagons. Exim segment contributes the major share of freight revenues for the company. In FY10, the company handled 2,421,247 Twenty-Foot Equivalent Units (TEUs), up from 2,308,232 TEUs in FY09. In the domestic business segment, total handling was 538,970 TEUs, compared with 453,273 TEUs in FY09.

COMPETITIVE POSITION

Peer Comparison

 

Container Corporation of India

Allcargo Global

Transport Corporation Of India Ltd.

 

Logistics Ltd

A B C India Ltd.

Mar-10

Dec-09

Mar-10

Mar-10

Revenue (Rs mn) EBITDA margins (%) PAT (Rs mn) PAT margins(%) Gearing (x) EPS (Rs/share) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)

37,468.8

20,619.5

15,229.2

1,464.7

26.0

10.6

7.7

5.8

7,776.3

1,407.1

412.7

8.0

20.8

6.8

2.7

0.6

-

0.3

0.9

0.9

59.8

56.4

7.6

7.0

21.0

2.4

16.0

13.8

3.8

0.4

1.6

2.0

23.3

21.7

13.5

7.8

19.6

24.2

12.9

2.2

14.8

2.0

2.6

86.3

n.m: Not meaningful

FINANCIAL PROFILE

Revenue growth picks up, but PAT stays flat in FY10

CCIL’s revenue grew 7.9% in FY10 to Rs 37.4 bn from Rs 34.7 bn in FY09. Increase in business volumes and successful induction of high-speed wagons were the main drivers of growth.

EBITDA margin dropped ~130 basis points (26% for FY10) as a result of terminal and other service expenses, which increased 11.13% over FY09. Administrative and employee costs increased ~2.05% and 3.74% during FY10.

PAT declined marginally to Rs 7.77 bn from Rs 7.79 bn in FY09. Decline was attributable to lower growth in operating profit coupled with increase in depreciation expenses and decline in non-operating income.

INDUSTRY PROFILE

Logistics

Key Financial Indicators

 

Units

Mar-08

Mar-09

Mar-10

Revenue

Rs million

33,824.8

34,719.5

37,468.8

EBITDA margins

Per cent

26.5

27.3

26.0

PAT

Rs million

7,336.5

7,791.5

7,776.3

PAT margins

Per cent

21.7

22.4

20.8

Revenue growth

Per cent

10.8

2.6

7.9

EBITDA growth

Per cent

-0.6

5.5

3.1

PAT growth

Per cent

4.3

6.2

-0.2

Gearing

Times

0.1

0.0

0.0

RoCE

Per cent

29.5

27.2

23.3

RoE

Per cent

25.8

22.9

19.6

CRISIL Research has estimated the overall Indian logistics spend at Rs 2.7 trillion in 2008-09, which includes only primary transport modes and infrastructure, equivalent to around 8.2 per cent of the Gross Domestic Product (GDP). And if the secondary movement (from the hub to the various depots) is also included, this shoots up to 10.7 per cent, which is significantly higher than those of developed nations where it averages 5-7 per cent. Higher logistics spend as percentage of GDP can be attributed to the overall inefficiency in logistics operations, multiple tax structures, inadequate infrastructure and unorganised nature of the industry in India.

With escalating competition and cost pressures, companies are increasingly focusing on their core competencies by outsourcing their logistics requirements to third party logistics (3 PL) players. The future of the Indian logistics industry is currently governed by three key factors viz. increasing domestic demand, reducing logistics cost and improvement in Infrastructure.

Container Corporation of India Ltd

ANNUAL RESULTS

Income Statement

Balance sheet

 

(Rs million )

Mar-08

Mar-09

Mar-10

(Rs million )

Mar-08

Mar-09

Mar-10

Net Sales

33,644.8

34,522.5

37,306.0

Equity share capital Reserves and surplus Tangible net worth Deferred tax liablity:|asset| Long-term debt Short-term-debt Total debt Current liabilities Total provisions

649.9

1,299.8

1,299.8

Operating Income

33,824.8

34,719.5

37,468.8

30,485.5

35,523.5

41,203.6

 

31,135.4

36,823.3

42,503.4

EBITDA

8,970.0

9,465.0

9,758.0

1,736.8

1,937.6

2,109.0

EBITDA Margin

26.5

27.3

26.0

499.2

483.6

421.2

 

1,226.6

1,022.4

587.3

Depreciation

1,075.8

1,173.9

1,352.9

1,725.8

1,506.0

1,008.5

Interest

28.1

42.9

39.1

3,033.9

3,811.0

4,265.8

Other Income

1,390.8

1,840.4

1,486.7

1,229.2

1,398.1

1,452.9

 

Total liabilities

38,861.1

45,476.0

51,339.6

PBT

9,316.6

10,139.2

9,975.5

Gross block Net fixed assets Investments Current assets Receivables Inventories Cash

22,616.5

26,549.3

30,014.9

PAT

7,336.5

7,791.5

7,776.3

18,657.4

22,207.8

23,883.9

 

1,203.6

1,680.8

1,921.6

PAT Margin

21.7

22.4

20.8

19,000.1

21,587.4

25,534.1

 

168.8

203.7

197.2

No. of shares (Mn No.)

65.0

130.0

130.0

163.6

182.1

157.6

 

15,225.7

17,666.5

19,925.0

Earnings per share (EPS)

112.9

59.9

59.8

Total assets

38,861.1

45,476.0

51,339.6

Cash flow

Ratio

(Rs million )

Mar-08

Mar-09

Mar-10

 

Mar-08

Mar-09

Mar-10

Pre-tax profit Total tax paid Depreciation Change in working capital

9,256.9

10,088.6

9,852.7

Revenue growth (%) EBITDA growth(%) PAT growth(%)

10.8

2.6

7.9

-1,856.4

-2,146.9

-2,027.8

-0.6

5.5

3.1

1,075.8

1,173.9

1,352.9

4.3

6.2

-0.2

-15.5

799.5

-1,178.6

 

EBITDA margins(%) Tax rate (%) PAT margins (%)

26.5

27.3

26.0

Cash flow from operating activities

8,460.8

9,915.1

7,999.2

19.9

21.2

20.3

Capital Expenditure Investments and others

-2,166.3

-4,699.4

-2,999.9

21.7

22.4

20.8

-236.6

-477.2

-240.8

 

Dividend

payout (%) per share (Rs)

23.0

23.4

23.4

Dividend

26.0

14.0

14.0

Cash flow from investing activities

-2,402.9

-5,176.6

-3,240.7

BV (Rs)

479.1

283.3

327.0

Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries)

0.0

649.9

0.0

Return on Equity (%)

25.8

22.9

19.6

308.9

-219.8

-497.5

Return on capital

employed (%)

29.5

27.2

23.3

-1,977.0

-2,129.1

-2,125.0

60.2

-598.7

122.5

Gearing (x) Interest coverage (x) Debt/EBITDA (x)

0.1

0.0

0.0

 

319.2

220.6

249.6

0.2

0.2

0.1

Cash flow from financing activities

-1,607.9

-2,297.7

-2,500.0

Change in cash position Opening cash

4,450.0

2,440.8

2,258.5

Asset turnover (x) Current ratio (x)

1.6

1.4

1.3

10,775.7

15,225.7

17,666.5

3.5

3.5

4.0

Closing cash

15,225.7

17,666.5

19,925.0

Gross current assets (days)

179

201

208

n.m : Not meaningful;

assets (days) 179 201 208 n.m : Not meaningful; QUARTERLY RESULTS Profit and loss account  

QUARTERLY RESULTS

Profit and loss account

 

(Rs million)

Dec-10

% of Rev

Dec-09

% of Rev

Sep-10

% of Rev

Dec-10

% of Rev

Dec-09

% of Rev

No of Months Revenue EBITDA Interest Depreciation PBT PAT

3

3

3

9

9

10,190.0

100.0

9,226.1

100.0

9,822.5

100.0

29,530.2

100.0

28,751.0

100.0

3,285.2

32.2

2,931.1

31.8

2,999.4

30.5

9,113.2

30.9

8,795.5

30.6

-

-

-

-

-

-

-

-

-

-

334.7

3.3

334.9

3.6

364.6

3.7

1,051.5

3.6

978.3

3.4

2,950.4

29.0

2,596.2

28.1

2,634.8

26.8

8,061.7

27.3

7,817.2

27.2

2,284.8

22.4

2,006.2

21.7

2,067.3

21.0

6,287.3

21.3

6,058.7

21.1

Container Corporation of India Ltd

FOCUS CHARTS & TABLES Rs mn Quarterly sales & y-o-y growth Per cent Rs mn
FOCUS CHARTS & TABLES
Rs mn
Quarterly sales & y-o-y growth
Per cent
Rs mn
Quarterly PAT & y-o-y growth
Per cent
2,500
35
10,500
20
30
10,000
15
2,000
25
20
9,500
10
1,500
15
10
9,000
5
1,000
5
0
8,500
0
500
-5
8,000
-5
-10
0
-15
7,500
-10
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Sales Sales growth y-o-y (RHS) Net Profit Net profit growth y-o-y (RHS) Rs/share EPS Per
Sales
Sales growth y-o-y (RHS)
Net Profit
Net profit growth y-o-y (RHS)
Rs/share
EPS
Per cent
Movement in operating and net margins
20
40
18
35
16
30
14
25
12
20
10
15
8
10
6
5
4
2
0
0
OPM
NPM
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10

Shareholding Pattern (Per cent)

 

Mar 2010

Jun 2010

Sep 2010

Dec 2010

Promoter

63.1

63.1

63.1

63.1

FII

23.4

24.3

25.9

27.0

DII

10.1

9.2

7.5

6.9

Others

3.4

3.4

3.5

3.0

Additional Disclosure This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).

Board of Directors

Director Name

Designation

Syamal Bhushal Ghosh Das tidar

(Mr.) Rakesh Mehrotra (Mr.) Managing Director

Srinivas an Balachandran (Mr.) Director

Non-Executive Chairman

Pradeep Bhatnagar (Mr.)

Non-Executive

Director

Sures h Kumar (Mr.)

Director

Ravinder Kumar Narang (Mr.)

Non-Executive Director

Daniel Babu Paul (Mr.)

Non-Executive Director

Shri Prakas h

(Mr.)

Part-Time Chairman

V. Sanjeevi (Mr.)

Director

Janat Ghanshyam Bhai Shah (Mr.)

Director

Puthenmana Subramania Sharma (Dr.)

Non-Executive Director

R.K. Tandon (Mr.)

Nominee

Director-GOI, Non-

Executive Director Paynoor Gopal Thyagarajan (Mr.) Director

Disclaimer This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person – especially outside India or published or copied in whole or in part, for any purpose. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please contact 'Client Servicing' at +91-22-33423561, or via e-mail: clientservicing@crisil.com.