Container Corporation of India (Concor) delivered solid results in the second fiscal quarter as the intermodal giant appears to have greatly benefited from the government’s ongoing rail push and tax reforms that knocked off the cascading effect of multiple indirect levies on supply chains.
Concor’s net income in the July-to-September period swelled 41.3 percent to Rs. 222.94 crore (about $34.5 million) from Rs. 157.84 crore a year earlier, on quarterly revenue that rose 6.2 percent to Rs. 1,525.54 from Rs. 1,436.6 crore in the corresponding three months of 2016, a company filing with the Bombay Stock Exchange shows.
That performance is the second straight quarter of double-digit gains for the container rail operator, with net profit up 36.4 percent and revenue up 11.2 percent in the first quarter year over year, following lower earnings in the last fiscal year.
Second-quarter operating income from Concor's core export-import operations rose 2.5 percent year over year to Rs. 1,141.4 crore, whereas its domestic segment increased that figure 17 percent to Rs. 288.73 crore from a year earlier, according to the earnings release.
Operating expenses during the July-to-September quarter were up 2 percent to Rs. 1,245 crore from Rs. 1,219 crore previously, with rail-haulage charges applied by parent Indian Railways amounting to Rs. 867 crore compared with Rs. 850 core during July to September 2016.
Concor’s first-quarter net profit jumped 39 percent to Rs. 466 crore from Rs. 336 crore from the same six months of 2016, on half-yearly revenue that climbed 8.5 percent to Rs. 3,071 crore from Rs. 2,831 crore during April to September 2016, the release shows.
The company has a network of about 65 inland terminals nationwide and is in the process of adding more inland locations to stay ahead of private rivals. It accounts for roughly 85 percent of the railed containers passing through Jawaharlal Nehru Port Trust (JNPT) and slightly more than half of the container rail market at the dominant private ports of Mundra and Pipavav.
With slow but steady rail share gains at JNPT, improving from a long-term trend of 15 percent to 17 percent in August as outlined in a previous JOC.com analysis, Concor’s volumes could grow further in the coming months.
Domestic market research and credit rating firm ICRA (formerly Investment Information and Credit Rating Agency) in an analysis this week said the Indian logistics industry is on a faster growth track as the economy gains speed, benefiting from infrastructure improvements and reform measures, especially the Goods and Service Tax (GST) rollout.
“While there have been fluctuations in the economy and freight demand due to [the] GST implementation, the impact of the same would be temporary and would be corrected over the near term,” ICRA stated in its report.
The agency also forecasts that the domestic logistics industry will grow by 9 to 10 percent annually in the medium term. “The outlook for logistics companies is likely to turn favorable going forward.”