MOSL: CONTAINER CORPORATION (Neutral)-Beat led by volume growth and margin expansion
​Container Corporation: Beat led by volume growth and margin expansion
(CCRI IN, Mkt Cap USD3.9b, CMP INR1176, TP INR1214, 3% Upside, Neutral)
- Revenue increased 9% YoY (-6% QoQ) to INR14.5b in 1QFY18, ahead of our estimate of INR13.8b, led by strong volume growth. EBITDA of INR3.3b (+25% YoY, -34% QoQ) too exceeded our est. of INR2.6b, boosted by (i) strong volume growth (market share gains), (ii) Margin expansion (higher double-stacking and lower empty running charges). EBITDA margin stood at 22.4% v/s 19.6% in 1QFY17, led by expansion of 0.9pp YoY in EXIM margin. Reported PAT of INR2.4b (est. of INR1.7b; +36% YoY, -42% QoQ) was further boosted by higher other income of INR936m (+35% YoY).
- Overall volumes grew 15% YoY to 843k teu (est. of 782k teu), led by pick-up in trade, and market share gains of ~400bp. EXIM volumes grew 13% YoY to 712k teu (est. of 663k teu). Domestic volumes grew 26% YoY to 129k teu (est. of 118k teu), driven by destocking of inventory ahead of GST roll-out.
- Overall realization was at INR17,287/teu (est. of INR17,637 teu; -5% YoY), with EXIM/domestic realization at INR15,875/INR25,033.
- Overall segmental EBIT stood at INR2,959/teu (est. of INR2,373 teu; -3% YoY), led by EXIM EBIT of 3,112/teu (-3% YoY) and domestic EBIT of INR2,121/teu (+457% YoY). Improvement in EXIM margin was led by higher double-stacking and in domestic margin by lower empty running charges.
Container Corp. of India is engaged in the transportation of containers by rail, management of ports, air cargo complexes and establishing cold-chain. Though rail is the main stay of Co.'s transportation plan, road services are also provided to cater to the need of door-to-door services, whether in the International or Domestic business. Co. is organized on All-India basis into two major operating divisions which are EXIM and Domestic divisions.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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