Container Corporation of India Limited (CONCOR.BO) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Container Corporation of India Limited Earnings Call Q2 FY '26 hosted by DAM Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair. Thank you, and over to you, ma'am.

Yes. Thanks. Good morning, everyone, and a warm welcome to the Q2 FY '26 Earnings Call of Container Corporation of India. We have the management being represented by Mr. Sanjay Swarup, Chairman and Managing Director. At this point, I'll hand over the floor to him for his initial remarks, post which we'll open up the floor for Q&A. Thank you, and over to you, sir.

Yes. Good morning, Bhoomika. I'm joined by my directors, Mr. Ajit Kumar Panda, Director, Projects and Services; Mr. Mohammad Azhar Shams, Director, Domestic Division; Mr. Vijoy Kumar Singh, Director, International Marketing and Operations; and Mr. Anurag Kapil, Director, Finance; Mr. Harish Chandra, Principal Executive Director, Finance and CFO of the company. I would like to make initial remarks, and then we can proceed with question and answers. At the outset, I am glad to announce the dividend approved by Board of Directors, INR 2.60 on a share of par value of INR 5. That makes a total dividend this year of INR 4.20, which is 84% of the par value of share. And the performance of the company in Q2 has been the ever highest throughput of 1.44 million TEUs, ever highest operating income and ever highest PAT in the history of the company in any quarter. We have achieved throughput of 2.73 million TEUs in first half of FY '26, throughput growth has been 11% year-on-year basis, in which EXIM is 10.2%, domestic is 13%. And in the India's international trade also, merchandise trade has increased by 3% in first half of this financial year. And total export was USD 220.1 billion, which is 3% increase. Imports was USD 375.1 billion, which is 4.5% increase in the first half of this financial year. Domestic demand, domestic throughput has been slightly less as per our expectations. The main reasons were the less demand in cement due to monsoon season, which is now picking up. Then Gunny Bales also, there was less demand and tiles traffic also, there was less demand. Now demand has picked up, and we are having good loading in domestic. Apart from that, tank container supply, we had given orders for 1,000 containers. We have already got 200 containers and supply is now being smooth, and we will be getting good supply of tank containers, which will help us in ramp up our loading in domestic streams. Market share, there has been increase at JNPT, 178 basis points and decrease at Mundra, 261 basis points; increase at Pipavav, 178 basis points. The good thing is that we have increased the market share at ports. And at the same time, we have increased our margin also. So rail freight margin has increased from 26.17% to 27.80%. Operating margin has increased from 30.47% to 31.44%. So margin has also increased and market share has also increased. Growth in operating income for the first half is 2.7%, growth in PAT is 1.3%. And this growth would have been more, but because of 2 reasons, it is slightly not in conformity with the physical volume growth. First reason is the subdued demand in domestic business streams for the first half of financial year. And second reason is the decrease in EXIM leads by 2.5% due to less demand in North India ICDs. Then there has been a good growth in double-stack handling, almost 7.4% growth. Last year, we have handled 3,083 double-stack trains. This year, it is 3,312 in the same year-on-year basis. Then my operations team has performed excellently, and they have planned the rigs in a rig movement and loading in a very nice manner, which has resulted in reduction in empty running of rigs, rigs and containers. EXIM empty running is down by 18%, domestic, it is down by 6.7%. So overall, it is 10.2% on a year-on-year basis. We are quite optimistic of the demand in the future, which is now driving the infrastructure additions also. In the first half, we have commissioned 21 rigs, new rigs, high-speed rigs and which takes us total count to around 410 rigs. We have procured 3,000 containers, which takes our total count to around 56,000 container fleet for CONCOR. CapEx, we have already spent INR 420.35 crores as against a budget of INR 860 crores. Board of Directors have deliberated and most probably, we will be increasing the budget because we have to increase more infrastructure spending. Target for infrastructure for 2028 remains the same, 100 terminals, 500-plus rigs and 70,000 containers for CONCOR. In EXIM, we are experiencing excellent growth, which is likely to continue. WDFC, connectivity to JNPT is likely by March 2026. Initially, it was December 2025, but it has been pushed by some accounts. The export growth for the first half is very good in rice, almost 41% growth, auto parts, 18% growth, meat, that is buffalo meat, reefer, which goes in reefer containers, we have seen 18% growth and aluminum ingots, 13% growth. Imports growth is quite good in solar panel. There's a glass item, which is a component in solar panel. It is -- we have seen a 5x growth in imports in this particular commodity. Raw pattern, we have seen 100% growth and auto parts, we have seen 46% growth in first part of financial year. We have commenced new EXIM reefer, road cum rail service from our ICD at Baddi to Mundra Port via Dadri. DPD movements will get a further boost, which will increase our volumes, and we have come up with a new liberalized policy of DPD, which will further bring us more business and more revenue. DPE movement from our terminal at Khemli has also grown manifold. In last year, it was nil. This year till now, we have moved 275 TEUs from Khemli to Mundra Port. Growth in imports has also been quite good at all the ports. JNPT, 17.5% growth. Mundra, 2% and Chennai Port, 15%, Visakhapatnam Port around 6% growth is there. In domestic, we have achieved a big breakthrough by signing MOUs with 2 giants in cement sector. First is UltraTech Cement and second is Adani Cement for movement of bulk cement in time containers. So this will be a very big driver of domestic streams in the 3 months. Gunny Bales and cement demand are showing very good growth signs from Q3 onwards. CONCOR has been an integral part of new initiatives of end-to-end logistics launched by Indian Railways. Three initiatives have been launched by Honorable Minister of Railways for which CONCOR is an integral part. First is the assured transit time train from Delhi to Kolkata, which is being well patronized by trade. And it is moving to -- it is almost 80% occupancy is there. And by this month end, we will have 100% occupancy of this assured transit train. This is a big hit with the trade. Second is management of Sonik Goods Shed in Lucknow division. We are developing this goods shed into an integrated logistics hub, which will be a new line of business for the company. This is -- has been given on pilot basis by Indian Railways to CONCOR for 4 years, and we will be demonstrating the positive impact of this move and Indian Railways is quite inclined to give us more goods shed to CONCOR for developing integrated logistics hub, where we will be giving warehousing and logistics solutions to customers. And this is a very big step for end-to-end logistics by Indian Railways. And third, the parcel service from Mumbai to Kolkata in which we are giving first mile, last mile solutions also. This is, again, a very big hit with the trade. And mind you, these businesses are very high margin businesses, which will be very keenly watched by all the investors in the coming months. Then guidance, I would like to keep them unchanged at 13%, EXIM 10%, domestic, 20%. We are quite optimistic and positive that we will achieve this guidance. Lastly, I will like to tell the -- all the investors that we are securing the future of the company in a very nice way for long-term business growth. First is we have signed MOU with Vadhvan Port, where they have appointed us common rail operator on a nomination basis. We'll be designing the rail yard, managing the rail yard, everything rail operations at new Vadhvan Port which is coming on north of JNPT and it will be on DFC. It's a port of the future. It will be commissioned by 2030. CONCOR has become an integral part of Vadhvan Port by signing this MOU. Second, we have signed MOU with Bhavnagar Port Private Limited. We will be operating the container terminals at Bhavnagar Port, which is again a port of the future. It is the nearest port for NCR area and very well connected by rail. Third is, we have made serious forays into shipping sector now. Our containers have crossed the shores of India. They are moving into Middle East. We have signed an MOU with a Dubai-based company. Already 200 containers have gone to Middle East and most of them have come back loaded. So we are getting both way loaded direction, loaded traffic, which is a very big boost to our business. We are in talks with some companies in Far East and we will very soon starting our Far East services also. This is also a very high-margin business. We are getting more than 30% margin on every container. So this is also -- this will be also a growth area as far as our top line and bottom line are concerned. And in future, we hope that we will expand it exponentially. So this is the opening remarks from my side. Now you can ask your questions, please.

[Operator Instructions] The first question comes from the line of Disha from Ashika Institutional.

You did mention a lot of initiatives and a lot of MOUs that would help fuel the growth of CONCOR for the future. But my question is regarding FY '26, that a 10% volume growth in EXIM and a 20% volume growth in domestic, how will you be able to fulfill it? If you could just help us understand it in quantitative terms because for these growth rates to be fulfilled, we would need a minimum of low single-digit growth going forward for the quarter-on-quarter. So that's what I wanted to understand.

If you are observing it closely in the first half of financial year, already, we have achieved 10.2% growth in EXIM. So as I mentioned to you, this growth is likely to continue, and maybe it will further increase now that busy season has picked up, and we are getting good volumes in imports as well as exports. So EXIM, I'm quite optimistic that it may exceed my guidance also. I gave the guidance of 10%, already 10.2% we are achieving. I am hopeful we will exceed this guidance. As far as domestic is concerned, I gave the guidance of 20%. And in the first half, we have achieved 13%. So there is a lag. And in almost -- and for the second half, we will have to go from 26% to 27% of growth in domestic to maintain the -- to end the year with 20% growth. So we are working on it. As I told you, we have good demand in bulk cement. We have signed MOUs with UltraTech Cement as well as Adani Cement. And then we are getting good demand in Gunny Bales. We had good demand in tiles traffic. So all these will be drivers for growth in domestic. So I'm quite optimistic that we will be able to end the year with 20% growth in domestic also.

For domestic, could you help us kindly understand it in quantitative terms, if any numbers you can throw in, like how much volume boost you are expecting from MOUs with the Adani and UltraTech and how much from Gunny Bales?

At this moment, it will be difficult to tell the numbers to you, but we have made our internal calculations, and we are quite optimistic to achieve the target.

All right. Sir, my second question is regarding the average revenue per TEU. While volumes have been increasing, our realizations have been going down since the past 4, 5 quarters on a minimum basis, which kind of impacts our revenue. Should we assume that for the domestic business, 14,000 approximately -- sorry, for the EXIM business, INR 14,000 and for the domestic business around INR 22,000 per TEU to be the average realization that we are looking forward for?

If you see in EXIM, it is not INR 14,000. It is in the range of INR 27,000 per TEU, if you see the originating volume. As I already explained, EXIM, there is a drop of lead by 2.5%. So this is the basic reason for drop in realization. It is not INR 14,000, kindly correct your numbers.

Sure sir. And for domestic, sir?

Domestic, it is in the range of INR 57,000 to INR 58,000. So there is a slightly -- in domestic -- sorry, in domestic, it has increased from INR 56,000 to INR 57,000. So there is a growth in realization per TEU. What is -- what exactly is your question? There's no drop in domestic relation per TEU.

Sir, I am looking at in terms of total volumes handled. So that is what I'm trying to understand.

Kindly divide by originating volume, not by handling.

The next question comes from the line of Bhoomika Nair from DAM Capital.

Sir, could you first share the originating volume numbers for this quarter?

Yes, so -- for this quarter, originating volume in EXIM is 5,86,011 TEU. Domestic 1,35,440. Total, it is 7,21,451 TEUs.

Okay. Sir, when you give your guidance for the 10% growth in EXIM and 20% in domestic, is that on handling or on originating basis?

It is on handling.

Okay. So how should we look at -- because the profitability, everything is pretty much on the originating basis, how should we look at the originating volume growth for both these segments for the year?

Normally, all of you are very seasoned people. So you already know that from handling, very easily, you can derive originating. It is almost 65% of handling. Roughly, the ballpark is 65% of handling originating. You can see...

Yes, sir. Sir, in terms of EXIM, you did mention there's been some improvement in ports, et cetera. If you can talk about how are you seeing the outlook in terms of the shipping lines and uptick in the volumes from both export/import perspective? And then within that, how is the rail coefficient also kind of playing out at all the 3 ports, particularly once the DFC is operational, how do you see that further improving? If you can just give some qualitative comment on that.

See, rail proficient is seeing an increase in all the 3 main container ports. JNPT also, it has increased from 15.68% to 15.83%. Mundra, it has increased from 23.82% to 24.9%. Pipavav, it has increased from 57.42% to 58.14%. So all the ports are showing a growth in rail coefficient. So -- and when DFC comes, then definitely, there will be further boost in rail coefficient at JNPT and -- which is at present, it is in the range of 16%. I am hoping that overnight, of course, that miracle will not happen. It will take at least 1 year time. It will double up in 1 year. I'm quite sure of that.

Right. And will that drive more double stacking and more balance of trade in your opinion, which will help further in terms of the margin improvement? Or do you think there will be enough competition from road and other operators, which will restrict the margin profile and we may need to pass it on to the customers the benefits of the efficiency improvements.

You are right, double stacking will further get a big boost when DFC is connected to JNPT. And secondly, we will be able to assure transit train also from NCR area to JNPT, maybe in 24, 25 hours, train will be reaching Nhava Sheva, which is at present constraint because of the line capacity in various sections. And this will give a very big boost. And in double stacking in the upper deck normally, it is light cargo is carried and light cargo at present is economical to move by role. So when double stack comes, then upper deck, we have to pay less haulage charges. So we will share the benefits. As I had mentioned earlier also, we don't sacrifice our margins. Whatever savings we are doing, part of that saving, we will share with our customers so that it becomes very economical to them to move by train. And it becomes a transit assurance kind of thing will also be there. So basically transit assurance and cost, these are the 2 things in logistics, which are extremely important for a trader.

That helps. Sir, can you just share the lead distances and also the empty running charges?

Yes. lead distances were 687 kilometers in EXIM and 1,326 kilometers in domestic. Total it is 785 kilometers for this first half. I'm telling the figures for first half of this financial year. Similarly, empty running is for EXIM, first half, it is INR 52 crores and domestic, it is INR 132.53 crores. Total, it is INR 184.53 crores. Last year, it was EXIM 63.47 crores; domestic INR 142 crores, total INR 205.47 crores.

The next question comes from the line of Mukesh Shah (sic) [ Saraf ] from Avendus Park.

This is Mukesh Saraf here. Sir, the first question is on market share. You had alluded that there's some improvement in market share. Could you kind of give the number for EXIM market share currently for you?

I had mentioned that we have increased our market share at ports. But overall market share, we have seen a slight dip. In EXIM, it has dropped for first half of the financial year. It has dropped from 55.9% to 54.1%. In domestic, it has dropped from 58% to 55.7%. And total, it has dropped from 56.5% to 54.5%, almost 200 basis points, it has dropped in total.

Okay. So this is again only because you're kind of not taking the lower margin and the shorter lead distance business? Or is there some competitive intensity change that we are seeing in terms of pricing or services offered by others?

Basic reason is that we have consciously decided not to pick up low-margin business and which are low lead also. And the second thing is there is less demand in domestic. So now we are hoping to recover it. And then one more thing is that we were actually one commodity wastepaper in North India, which is coming from Mundra Port. That we were -- we had actually -- our competitors had given some competitive rates, and it was -- it has moved from us. That is the reason for decrease in market share at Mundra. So now we have done our work, and we have offered good rates to customers, and it is likely to come back to us now.

Got it. Got it. And in one of the comments you had mentioned about this assured transit trains that you'll start to Nhava Sheva. Obviously, once DFC connectivity comes. But currently, are you not doing this already for, say, Mundra, Pipavav ports from NCR because a large part of that is already connected on the DFC?

Yes, of course, we are doing for Mundra Port, in my earlier conference calls, I have already told you, it is a very big hit freight express trains from our mega MMLP at Dadri, we are running trains to Mundra Port and which has helps us to shift a lot of cargo from road to rail.

Sir, any sense you can give us, maybe just approximately what proportion of volumes we are moving on, are these assured timetable kind of trains in this route? Just to kind of help us understand how much more improvement can come once you start offering more of this service.

You mean shift in volume from road to rail. That is almost 12% to 15% shift is there in from road to rail.

Okay. But you'll also be offering the non-assured services right now, sir, on this route, the nontimetable adoption.

That numbers, I don't have with me right now. Can give you later on here.

[Operator Instructions] The next question comes from the line of Achal from Nuvama.

Sir, if you could give us some sense about the opportunity size for the bulk cement. I'm not seeking for the volume guidance on that, but just an opportunity, how large is this? And currently, it is moved by road or by Indian Railways, if you could clarify that? And what is the cost saving proposition to the customer when they are shifting to the tank containers?

It's a very big growth area, and I can only say that very less is moving by rail. Most of the quantity is moving by road only. And my director domestic, Mr. Azhar Shams will give all the details. I will pass on the phone to him.

Hello. I am Mohammad Azhar Shams, Director, Domestic. With respect to bulk demand, whatever you raised the question as of now, that in total, the total production of cement in India is around 400 million tonnes. Out of this 400 million tonne cement production, 70 million tonne is being moved by road. That is in 1 condition. Out of this 70 million tonnes, railway is moving 7 million, only 10% of the bulk cement is being moved as of now by Indian Railways in their specialized wagon, we call it BCCW and BCFC, okay? So the remaining 63 million is moving by bulker on road. We all have been saying on road that bulk cement going on bulkers. So we want to tap this gap of 63 million tonnes, whatever is being moved by the bulkers because the containers offer very door-to-door car, for example, in 1 bulker 35 to 40-tonne cargo is going. And in one train of 90 containers, we are moving around 2,500 tonnes. And keeping in view the infrastructure projects and development and the focus of the government on different infrastructure projects, the demand of the bulk cement has increased like anything. We had been in touch with UltraTech, Adani as our CMD sir just underlined. So this movement of bulk cement is just to multiply. So to get those business and the sky is the limit. The 63 million tonnes is a huge quantity. And if we will start getting 1 million, 2 million or 3 million, the only constraint is availability of the tank container. As of now, we can't import the tank container from China. So as Atmanirbhar Bharat Initiative of Government of India, we have given 1,000 container orders to Indian companies, 500 to Braithwaite and then 500 to the open market that is buttoned in container manufacturer in Ahmedabad. So out of 500 orders given to Braithwaite, that is the railway PSUs, we have got 200 containers, which we are moving in 3 circuits from Hyderabad area. And the 5 container order, whatever we gave to Vasant manufacturers, so they are likely to start giving us deliveries by mid of December. So as soon as we get the container, the constraint only is the availability of the container. As soon as we get the container, we are having agreement in place, cargo is available. We will start immediately moving the cargo. So the limiting factor is availability of the container on which we are focusing on just ensuring that how quickly we can get those containers.

Just to clarify, in terms of the profitability of this tank container will be similar? Or it could be better than the existing margin per TEU?

Actually, it will be certainly -- I mean our margin will increase because as of now, we are not moving much of cement. We are moving just bag cement that is to 50 containers with whatever we are allowed. So in that, our margins are very limited. But with bulk cement, whatever 3 streams we are running from I mean as of now, our margins are certainly on the higher side and which are likely to increase. The agreement, whatever we have entered with the UltraTech, so that is the quantity is around 1 lakh tonne per month. So -- and similar with Adani and other parties. So our margin in this bulk cement will certainly be on higher side as compared to our existing margin in domestic.

Got it. The second question, sir, if you could help us with the port mix, please? And the port price market share, please?

Okay. Yes. It is -- JNPT, it is 35.5%. Mundra Port, 35 point...

This is for the quarter or first half? Sorry, sir, I'm interjecting. Is this for the quarter or first half, you're saying?

It's for the first half, actually.

First half, okay. 35.5% JNPT?

Mundra, 35.3%. Pipavav 8.18%, Visakhapatnam 5.3%, Chennai 4.5%, Vallarpadam 5.3%, Ennore 2.1%, Katupalli 1.6% and Tuticorin 1%.

And if you could help us with the market share as well?

Market share at ports?

Ports. Yes, sir.

Market share at ports at JNPT, it has increased from 57.5% to 59.4%. Mundra Port, it has decreased from 38.8% to 36.2%. Pipavav Port, it has increased from 48% to 50%.

So 2 out of these 3 large ports have seen a market share expansion, yet you said the market share has actually come off. If you could clarify?

That's okay. Two have shown increase, but Mundra Port, we are down. Mundra Port is a major contributor. Almost you have seen 1/3 of our volumes are through Mundra Port. Mundra Port, our market share has come down. And at other places also, JNPT, there was -- there is a growth in market share, but we could have managed more because of the low-margin things we are not doing. All these have contributed in less -- slight dip in market share for us in EXIM.

Got it. And just last question. With respect to JNPT, whatever, 8 million to 9 million TEU gets handled, how much is actually going to north at this stage, sir, according to you?

JNPT is not sending -- I don't have the numbers with me right now, but not much is coming to north. It is catering to the Maharashtra area and a lot of volume is going there. And apart from that, a lot of volume is going to Hyderabad area. And it is -- we have an ICD there in Hyderabad, and it is getting good exports from Bangalore also for mainline vessels going to Western countries. So via Bangalore, we are running 3 services in a week, which are very well patronized by train for JNPT. So North India, of course, a lot of volumes are not coming, mostly it is catered by Mundra Port, but actually will change the scenario.

And that would be because of the timetable, because of the cost proposition because from a time perspective, it will be a little longer distance, right?

Yes. As I told you, transit time and costs are the 2 main factors which determine the choice of the traders, what port they will use. So both these things will be quite positive for JNPT.

The next question comes from the line of Krishnendu Saha from Quantum AMC.

Just quickly just on the container tanks for cement. Just to understand, 1 tank can take in how many -- like suppose they're going -- as you said, they are going by trucks. So 1 tank container takes how many trucks? Or is it like same amount of quantity or volume?

One tank container can have 31 tons of cargo. [Foreign Language]

35.

Truck can carry 35.

I've seen the same. Just a clarification. And just to understand on the rail freight...

Just 1 minute couple. [Foreign Language]

No, actually, the USP of tank container [indiscernible] and this can directly go to the project site, and then RMC plant. It is not the case with the bulker, whatever the bulk cement is being moved in those kind of arrangements, okay? So that is the hit. USP, it is very handy. You can take the tank container to whatever place you want. Suppose 31 tonne cement is there. So you can upload 15 tonne at 1 location, 10 tonne at other locations. And then similarly, you can serve the industry or the project. This is not a flexibility with respect to bulkers. And 1 more point, which I would like to underline is that in containers, we are giving free time and they can -- around 20 to 30 days. And cement manufacturer can store or remain, they will keep their cement in tank container for 20 to 30 days. So that saves the unloading and then warehousing kind of an arrangement. So this is again a very big plus.

It is a very big plus because it eliminates the requirement of secondary warehousing by the consumer. So he can use container as warehouse. And as Director, Domestic has explained, after a free time, we charge very nominal rate from the customer. And he can use like suppose 31-tonne cargo is there. He wants to use 15 tonne today, and he wants to use the rest of the cargo after 15 days. He can keep the container with him and pay the nominal charges to us. So this will eliminate the -- otherwise, we will have to hire another warehouse to keep the cargo. So that way, it is very beneficial and traders and customers are very happy with this kind of arrangement.

I see. And in spite of getting 30 days, 20 days free time, we are still above the company margins for this business.

Yes, yes. That we have -- that care we have taken. It will be good margins for the company.

On this, the cement tankers are not fungible. They can only be used for cement. That's my understanding, right?