CONCOR - Container Corporation Of India Ltd. Share Price

Management provided an optimistic outlook for Container Corporation of India Limited (CONCOR) during the Q1 FY26 earnings call, highlighting various operational achievements and growth prospects. Key figures reported include a throughput of 1.29 million TEUs, representing an all-time high for Q1 and an 11.3% growth, with EXIM contributing 12% and domestic 9%. The company announced a dividend of INR 1.60 (32% on a par value of INR 5).

Management identified challenges in domestic performance due to delays in tank container deliveries and a strategic decision to avoid low-margin traffic, leading to a conscious market share reduction at Mundra but a 200 basis point increase at JNPT. The rail freight margin improved from 24.36% to 26.96%, while the operating margin increased from 28.58% to 29.81%. The company recorded a 2.5% increase in operating income and a 1% growth in profit after tax (PAT).

For FY26, the company maintains a volume growth guidance of 13% overall, with EXIM anticipated to grow by 10% and domestic by 20%. The management expressed confidence in the upcoming quarters, bolstered by expected demand increases from new terminal operations, especially from the bulk cement sector and liquid cargo.

Additionally, management anticipates significant growth in EXIM, particularly with the commissioning of the Dedicated Freight Corridor (DFC) up to JNPT expected by December 2025. The enhancement of direct port delivery and the introduction of new services further contribute to a robust growth outlook. The focus on increasing double stacking operations and improving operational efficiencies suggests a positive trajectory for future financial performance.

1. Question: Sir, my first question is regarding the domestic volume and the domestic realization"¦ Answer: Yes, domestic growth was muted in Q1, but we're now seeing strong domestic demand. We've seen a reduction in empty running by about 12%. We expect significant domestic performance in the coming quarters.

2. Question: Sir, my second question is regarding the bulk cement containers"¦ Answer: Demand for bulk cement in tank containers is huge, potentially adding around 14-15 million tonnes per year. Initially, we'll see limited loading due to monsoon, but expect strong growth from Q3 onwards as we receive more containers.

3. Question: The employee cost, you mentioned it's a one-off for this period"¦ Answer: Yes, the employee cost this quarter included a one-time award totaling INR 18 crores, which is not expected to recur. We generally maintain employee costs around 5% of turnover.

4. Question: Sir, if you can just share the originating volumes for both EXIM and domestic? Answer: The originating volume for EXIM was 531,099 TEUs, for Domestic it was 121,624 TEUs, totaling 652,723 TEUs.

5. Question: Sir, what was the amount for volume discount? Answer: The volume discount adjustment in Q1 had around 1% impact, translating to about INR 21 crores for the quarter, and moving forward, we don't anticipate similar discounts.

6. Question: Can you give the lead distance? Answer: For Q1, the lead distance was 688 km for EXIM and 1,356 km for domestic, with an overall average of 792 km, indicating an uptick in demand.

7. Question: Are you seeing any slowdown due to trade-related issues? Answer: We posted 12% growth in export-import handling in Q1. So far, we haven't observed any adverse impacts from tariffs.

8. Question: Can you comment on the pricing landscape? Answer: We remain competitive with market shares of about 55-60%. Pricing decisions are strategically evaluated based on our service levels, not just against competitors.

9. Question: In terms of first-mile, last-mile, what is the mix in 1Q? Answer: First-mile and last-mile services constituted about 35% of our total volume. This segment has strategic importance for attracting further business, not just for high margins.

10. Question: Sir, any insight on market share changes in the domestic side? Answer: We saw a drop in market share from 57.7% last year to 55% now, primarily due to intense competition and our decision not to pick up low-margin traffic.

11. Question: Could you also provide the contribution from JNPT? Answer: JNPT contributed 35% to our volumes, signaling a healthy balance across various ports despite slight variations in other locations.

12. Question: What strategies are in place for achieving the 20% growth guidance in domestic? Answer: We're actively working with major corporations to secure traffic and preparing for increased demand through bulk cement and liquid cargo services.

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