Firstcall recommends Container Corp on Q4FY15 net profits of INR2,927.1m

1. CMP 1702.45
Target Price 1940.00
ISIN: INE111A01017
JUNE 9th
, 2015
CONTAINER CORPORATION OF INDIA LTD
Result Update (PARENT BASIS): Q4 FY15
BUY
Index Details
Stock Data
Sector Transport Related Services
BSE Code 531344
Face Value 10.00
52wk. High / Low (Rs.) 1944.00/1135.10
Volume (2wk. Avg.) 13000
Market Cap (Rs. in mn.) 331926.68
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY15A FY16E FY17E
Net Sales 55737.00 61087.75 65974.77
EBITDA 16672.60 18179.00 19630.50
Net Profit 10475.50 11406.21 12305.67
EPS 53.73 58.50 63.12
P/E 31.69 29.10 26.97
Shareholding Pattern (%)
1 Year Comparative Graph
CONTAINER CORPORATION OF INDIA LTD S&P BSE SENSEX
SYNOPSIS
Container Corp of India Limited provides multimodal
logistics support services for containerization and
trade in India.
The company’s net sales rose by 15.48% y-o-y of Rs.
14974.50 million in 4th quarter of FY15 against Rs.
12967.60 million in 4th quarter of FY14.
Net profit grew by 18.97% of Rs. 2927.10 million in Q4
FY15 as compared to Rs. 2460.30 million in Q4 FY14.
Operating profit or EBDITA rose by 12.65% to Rs.
4290.70 million in Q4 FY15 from Rs. 3809.00 million in
the same quarter previous year.
Revenues from EXIM division rose by 23% to Rs.
11852.50 million in Q4 FY15 when compared to Rs.
9645.80 million in the corresponding quarter of
previous year.
Reported Earnings per share of the company stood at
Rs. 15.01 in Q4 FY15 as compared to Rs. 12.62 in Q4
FY14.
The company has declared a final Dividend of 54% i.e.,
Rs. 5.40/- per share on face value of Rs. 10.00/- each
for the financial year 2015.
Container Corporation of India limited signed the
Memorandum of Understanding with Ministry of
Railways, for setting out various physical and financial
targets for FY 2015-16.
The Company has posted a net profit of Rs. 10475.50
million for the year ended March 31, 2015 as compared
to Rs. 9847.60 million for the year ended March 31,
2014.
Net Sales and PAT of the company are expected to grow
at a CAGR of 11% and 7% over 2014 to 2017E
respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Container Corporation Of India Ltd 1702.45 331926.68 53.73 31.69 4.35 134.00
Allcargo Logistics Ltd 312.50 39377.30 7.73 40.41 3.00 100.00
SANCO TRANS LTD 283.20 509.80 13.09 21.63 0.97 27.00
Sanghvi Movers Ltd 323.40 13999.30 1.86 173.87 2.13 25.00

2. ANAYSIS & RECOMMENDATION- ‘BUY’
Container Corporation of India (CONCOR), a public enterprise is one of the dominant players in Indian logistics
industry. Net sales of the company have increased by 15.48% Rs. 14974.50 million in the March quarter as
against Rs. 12967.60 million over the corresponding quarter in the previous year. Net profit grew by 18.97% of
Rs. 2927.10 million in Q4 FY15 as compared to Rs. 2460.30 million in Q4 FY14. Operating profit or EBDITA rose
by 12.65% to Rs. 4290.70 million in Q4 FY15 from Rs. 3809.00 million in the same quarter previous year. Total
Income has increased from Rs. 14112.50 million for the quarter ended March 31, 2014 to Rs. 16080.50 million
for the quarter ended March 31, 2015. Revenues from EXIM division rose by 23% to Rs. 11852.50 million in Q4
FY15 when compared to Rs. 9645.80 million in the corresponding quarter of previous year. CONCOR has no long
term or short term debt, thus no interest burden on already low profit margins. With improvement on the
economic front and increase in international trade, the company also signed the Memorandum of Understanding
with Ministry of Railways, for setting out various physical and financial targets for FY 2015-16. CONCOR will
definitely improve its financial strength, being one of the major players in the organized logistics industry in
India. Thus we recommend ‘BUY’ for the scrip with a target price of Rs. 1760.00 medium to long term
investment.
QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results Updates- Q4 FY15
Container Corporation of India Limited provides multimodal logistics support services for containerization and
trade in India, has reported its financial results for the quarter ended 31st March, 2015.
Revenue for the quarter rose by 15.48% to Rs. 14974.50 million from Rs. 12967.60 million, when compared with
the prior year period. The company’s net profit stood at Rs. 2927.10 million against Rs. 2460.30 million in the
corresponding quarter ending of previous year, an increase of 18.97%. Reported earnings per share of the
company stood at Rs. 15.01 a share as against Rs. 12.62 over previous year period. Profit before interest,
depreciation and tax is Rs. 4290.70 million as against Rs. 3809.00 million in the corresponding period of the
previous year.
Months Mar-15 Mar-14 % Change
Net Sales 14974.50 12967.60 15.48
PAT 2927.10 2460.30 18.97
EPS 15.01 12.62 18.97
EBITDA 4290.70 3809.00 12.65

3. Break up of Expenditure
Revenue Segment
Result updates:
• Container Corporation of India limited signed the Memorandum of Understanding with Ministry of
Railways, for setting out various physical and financial targets for FY 2015-16.
• The company has declared a final Dividend of 54% i.e., Rs. 5.40/- per share on face value of Rs. 10.00/-
each for the financial year 2015.
• Total Income has increased from Rs. 53562.70 million for the year ended March 31, 2014 to Rs. 59444.40
million for the year ended March 31, 2015.
Break up of Expenditure
(Rs in millions)
Q4 FY15 Q4 FY14 Chng %
Rail Freight Expenses 8934.20 7637.40 17%
Employee Benefit Expenses 373.20 329.80 13%
Depreciation &
Amortization Expense
810.20 499.50 62%
Other Expenses 1024.90 773.80 32%
Other Operational Exp 1457.50 1562.50 -7%

4. COMPANY PROFILE
Container Corporation of India Ltd. (CONCOR) was incorporated in March 1988 as a Public Sector Enterprise
under the Ministry of Railways with the prime objective of developing modern multimodal transport logistics
and infrastructure to support the country's growing international trade. The company commenced operations on
November 1, 1989, by taking over seven Inland Container Depots from the Indian Railways located at Delhi,
Ludhiana, Bangalore, Coimbatore, Guwahati, Guntur and Anaparti. Since then, CONCOR has developed a vast
network of container terminals at prime locations all over the country. At present, the company is the undisputed
market leader having the largest network of 62 ICDs/CFSs in India. In addition to providing inland transport by
rail for containers, it has also expanded to cover management of Ports, air cargo complexes and establishing cold-
chains. The company has developed multimodal logistics support for India’s International and Domestic
containerization and trade. Though rail is the main stay of the company’s transportation plan, road services are
also provided to cater to the need of door-to-door services, whether in international or domestic business. The
core business of the company comprises of three distinct activities, that of a carrier, a terminal operator, and a
warehouse operator. The company has two wholly owned subsidiaries, M/s. Fresh and Healthy Enterprises Ltd
which was set up in 2006 and CONCOR AIR set up in 2012. During the year 2012-13, company entered into a
Joint Venture with State Infrastructure and Industrial Development Corporation of Uttarakhand Limited
(SIIDCUL) for development of Logistics facilities in the state of Uttarakhand. The Joint Venture Company (JVC)
with shareholding of 74% and 26% of CONCOR and SIIDCUL respectively named M/s. SIDCUL CONCOR INFRA
Company Limited was incorporated on 21 March, 2013. Another Joint Venture Agreement has been signed by
company with Punjab State Container and Warehousing Corporation (CONWARE) on 13 March 2013. This 51:49
Joint venture with majority shareholding of CONCOR will be creating Logistics facilities in the state of Punjab.

5. FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March 31, 2014 -2017E
FY14A FY15A FY16E FY17E
SOURCES OF FUNDS
Shareholder's Funds
Share Capital 1949.70 1949.70 1949.70 1949.70
Reserves and Surplus 67903.40 74407.20 80508.59 86063.68
1. Sub Total - Net worth 69853.10 76356.90 82458.29 88013.38
Non Current Liabilities
Deferred Tax Liabilities 3050.20 2067.40 1550.55 1621.88
Other Long term Liabilities 166.20 238.10 285.72 320.01
Long term Provisions 277.60 331.50 376.25 406.35
2. Sub Total - Non Current Liabilities 3494.00 2637.00 2212.52 2348.23
Current Liabilities
Trade Payables 1755.80 2015.10 2256.91 2437.46
Other Current Liabilities 4002.50 4424.60 4867.06 5207.75
Short Term Provisions 1393.40 1465.50 1524.12 1563.75
3. Sub Total - Current Liabilities 7151.70 7905.20 8648.09 9208.97
Total Liabilities (1+2+3) 80498.80 86899.10 93318.90 99570.58
APPLICATION OF FUNDS
Non-Current Assets
a) Fixed Assets 32407.70 35424.60 38258.57 40936.67
b) Non-current investments 8640.30 11547.50 13857.00 15997.88
c) Long Term loans and advances 6128.00 5498.50 5058.62 5159.79
d)Other non-current assets 193.40 151.80 129.03 116.13
1. Sub Total - Non Current Assets 47369.40 52622.40 57303.22 62210.47
Current Assets
Inventories 149.10 168.20 186.70 205.37
Trade receivables 329.80 365.70 402.27 434.45
Cash and Bank Balances 25451.40 25879.30 27070.54 27990.94
Short-terms loans & advances 5814.00 6419.20 6868.54 7211.97
Other current assets 1385.10 1444.30 1487.63 1517.38
2. Sub Total - Current Assets 33129.40 34276.70 36015.68 37360.11
Total Assets (1+2) 80498.80 86899.10 93318.90 99570.58

6. Annual Profit & Loss Statement for the period of 2014 to 2017E
Value(Rs.in.mn) FY14 FY15 FY16E FY17E
Description 12m 12m 12m 12m
Net Sales 49845.50 55737.00 61087.75 65974.77
Other Income 3717.20 3707.40 3915.01 4126.43
Total Income 53562.70 59444.40 65002.77 70101.20
Expenditure -38826.90 -42771.80 -46823.76 -50470.70
Operating Profit 14735.80 16672.60 18179.00 19630.50
Interest 0.00 0.00 0.00 0.00
Gross profit 14735.80 16672.60 18179.00 19630.50
Depreciation -1893.30 -3726.90 -4285.94 -4714.53
Profit Before Tax 12842.50 12945.70 13893.07 14915.97
Tax -2994.90 -2469.00 -2486.86 -2610.29
Profit After Tax 9847.60 10476.70 11406.21 12305.67
Extraordinary Items 0.00 -1.20 0.00 0.00
Net Profit 9847.60 10475.50 11406.21 12305.67
Equity capital 1949.70 1949.70 1949.70 1949.70
Reserves 67903.40 74407.20 80508.59 86063.68
Face value 10.00 10.00 10.00 10.00
EPS 50.51 53.73 58.50 63.12
Quarterly Profit & Loss Statement for the period of 30th Sep, 2014 to 30th June, 2015E
Value (Rs.in.mn) 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15E
Description 3m 3m 3m 3m
Net sales 13547.90 14517.90 14974.50 15056.86
Other income 920.40 852.20 1106.00 862.68
Total Income 14468.30 15370.10 16080.50 15919.54
Expenditure -10420.80 -10849.20 -11789.80 -11473.33
Operating profit 4047.50 4520.90 4290.70 4446.21
Interest 0.00 0.00 0.00 0.00
Gross profit 4047.50 4520.90 4290.70 4446.21
Depreciation -1486.00 -937.30 -810.20 -769.69
Profit Before Tax 2561.50 3583.60 3480.50 3676.52
Tax -642.70 -572.80 -552.20 -591.92
Profit After Tax 1918.80 3010.80 2928.30 3084.60
Extraordinary Items 0.00 0.00 -1.20 0.00
Net Profit 1918.80 3010.80 2927.10 3084.60
Equity capital 1949.70 1949.70 1949.70 1949.70
Face value 10.00 10.00 10.00 10.00
EPS 9.84 15.44 15.01 15.82

7. Ratio Analysis
Particulars FY14A FY15A FY16E FY17E
EPS (Rs.) 50.51 53.73 58.50 63.12
EBITDA Margin (%) 29.56% 29.91% 29.76% 29.75%
PBT Margin (%) 25.76% 23.23% 22.74% 22.61%
PAT Margin (%) 19.76% 18.80% 18.67% 18.65%
P/E Ratio (x) 33.71 31.69 29.10 26.97
ROE (%) 14.10% 13.72% 13.83% 13.98%
ROCE (%) 23.81% 26.72% 27.24% 27.66%
EV/EBITDA (x) 20.80 18.36 16.77 15.48
Book Value (Rs.) 358.28 391.63 422.93 451.42
P/BV 4.75 4.35 4.03 3.77
Charts

8. OUTLOOK AND CONCLUSION
At the current market price of Rs. 1702.45, the stock P/E ratio is at 29.10 x FY16E and 26.97 x FY17E
respectively.
Earnings per share (EPS) of the company for the earnings for FY16E and FY17E are seen at Rs. 58.50 and Rs.
63.12 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 11% and 7% over 2014 to 2017E
respectively.
On the basis of EV/EBITDA, the stock trades at 16.77 x for FY16E and 15.48 x for FY17E.
Price to Book Value of the stock is expected to be at 4.03 x and 3.77 x respectively for FY16E and FY17E.
We recommend ‘BUY’ in this particular scrip with a target price of Rs. 1940.00 for Medium to Long term
investment.

9. INDUSTRY OVERVIEW
Despite the prevalent economic volatility, logistics sector is expected to record a positive growth pace. According
to Ministry of Road Transport, the logistics sector is expected to cross US$200 billion by 2020. At present, the
sector is worth US$125 billion. In India the cost of logistics is at 13-14% of GDP where as in developed nations,
the cost falls in the range of 7%-8% of GDP. Cost of logistics is a key component in the cost of any product or
service. Thus cost of logistics play a very important role in determining the cost of the product offered by the
manufacturer or service provider. The major drivers for logistics industry are high economic growth, growth in
retail sector, high demand for consumer durables, expansion of auto and auto components sector and of course
high growth of international trade. In India, Logistics sector has not been give the requisite attention by the
government. Lack of infrastructure is the key drawback for the development of the logistics industry. In addition
to that lack of skilled manpower and warehouse facilities are the major roadblocks for the growth of the logistics
in India. Thus a large part of the industry still operates in the unorganized sector. Thus government should take
urgent steps to address these issues to provide efficient, organized and cost effective logistics services in India.
Disclaimer:
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the recipients’ investment decision based on this document.

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