Concor Q1 FY '13 earnings: Domestic volumes are likely to remain flat

MUMBAI: In quarter ending june 2012, an increased realization from Export-Import (EXIM) volumes was able to offset a de-growth in domestic volumes for Container Corporation of India (ConCor). It reported a decent 4.7% growth in net profits this quarter.

EXIM volumes in the quarter ending june 2012 grew nearly 6%. However, domestic volumes declined 13% y-o-y due to higher freight costs this year. In March this year, Railways increased freight rates by nearly 20% for various commodities transported through the rail network.

Going forward, domestic volumes are likely to remain flat due to customers looking to transport through roads. But, the removal of pig iron/sponge iron from notified list of commodities brings a reason to cheer for the company. With this removal, these commodities will not be come into the gamut of higher freight rates. As a result, pig iron/sponge iron volumes may increase in the coming quarters.

The company has planned a capex of Rs 1,650 crore for building logistic parks and buying rakes. Over the next few years, it plans to increase its revenue share form value added services like warehousing and supply chain management. The management has guided for a an 9% growth in volumes for FY13, which looks difficult considering the slowdown in Europe and US. In June 2012 quarter, it was able achieve just 3% increase in volumes.