Container Corpn.

Container Corpn. reported a robust Q3 FY25 with a throughput growth of 11.6% over the corresponding period, driven by an 8% growth in EXIM and a significant 24.7% growth in the domestic segment. For the 9-month period ending December 31, 2024, overall throughput grew by 7.8%, with EXIM at 5% and domestic at 7.8%. This performance was achieved despite international supply chain disruptions and geopolitical challenges, which caused a small dip in volumes in December, though January saw a recovery with double-digit growth.

The company successfully gained EXIM market share, increasing by 73 basis points on a Pan-India basis, 180 basis points at Mundra Port, and 278 basis points at Pipavav Port. This was achieved without sacrificing margins, as the rail freight margin increased by 15 basis points year-on-year from 25.61% to 25.76%. Operating margin remained flat year-on-year at over 30%, reflecting operational excellence and customer-centricity. Domestic realization also saw an increase, attributed to better empty running management and competitive rates.

The Board of Directors revised the FY25 capex budget upwards by 40% to ₹855 crores from the initial ₹610 crores, with ₹444 crores already spent by December 31, 2024. The company aims for massive infrastructure creation, targeting 80 terminals, over 500 rakes, and around 70,000 container fleets by 2028. This includes procuring 1,000 tank containers, with supplies already beginning, to cater to the growing demand, particularly in bulk cement logistics.

Key growth drivers include the increased use of double-stack rakes, which grew by 11.25% in the 9-month period. New services like double-stack space from Nhava Sheva to MMLP Varnama (near Baroda) and new rail services at Gangavaram port have been initiated, showing promising volumes. The company is also focusing on long-term agreements with corporate customers and shipping lines, and expects the Dedicated Freight Corridor (DFC) to be a game-changer, with JNPT DFC commissioning expected by December 2025.

Operating income grew by 4.23%, and Profit After Tax (PAT) increased by 3.6% despite the challenging geopolitical environment. The company declared an interim dividend of ₹4.25 per share (on a par value of ₹5), bringing the total interim dividend for FY25 to ₹9.50, which is 190% of the par value. Management is confident in achieving the historic 5 million TEUs handling target for FY25.

The land license fee (LLF) for Q3 FY25 was ₹89.42 crores, up from ₹71.95 crores in Q3 FY24, with a target of ₹350 crores for FY25. Management expects a 7% annual escalation in LLF for the next financial year but is actively exploring options to contain this increase. Depreciation saw a reduction of ₹25 crores in Q3, primarily due to a change in the useful life of wagons, impacting the 9-month period by ₹79 crores and resulting in a ₹12.5 crores reduction in wagon depreciation for Q3.