Concor: Little pick-up in momentum

With India’s exports and imports declining, it’s not surprising that Container Corporation has seen volumes come off by 7 per cent year-on-year during the September 2009 quarter.

However, on a sequential basis, Concor’s export-import traffic, which contributes 80 per cent of revenues and 90 per cent of operating profits, was up 6.7 per cent. Strong realisations helped the company post reasonably good revenues, up 4 per cent year-on-year to Rs 773 crore.

The company’s operating profit margins at 26 per cent, however, were not that impressive because it had to pay more for railway freight. For several quarters now, Concor has had to contend with running empty container trains, though things seem to be improving. Due to relatively lower export volumes in the six months to September, the company lost traffic but was forced to pay for railway freight. The management, however, believes that exports should start looking up soon.

Meanwhile, Concor is also focussing on improving its position in the fiercely-competitive domestic market by targeting higher volumes as the economy recovers. That should not be a problem since the company offers fairly competitive rates. In the past, though, the company was not always in a position to raise prices as it was targeting higher volumes and a bigger market share.

Going ahead, the Concor management believes that the company could well post a volume growth of around 5 per cent as exports and imports start picking up. As for the domestic segment, a 20 per cent growth in the current year should not be out of reach. Analysts, however, believe that the target may be somewhat ambitious. They point out that the company would have to achieve high growth rates in second half of 2009 to fulfil these targets.