buying and selling shares in India of concor stock

Container Corporation of India Ltd
Merchandise exports fell a steep 16 per cent y-o-y in January this year, the fourth consecutive month that exports fell while imports slid by just over 18 per cent. With news on the trade front not too encouraging, Container Corporation’s volumes in the export-import (ex-im) transport segment could continue to be under pressure.

Already, exim volumes, which account for the bulk of the firm’s business, came off by 11.4 per cent in the December 2008 quarter. Cargo movement within the country too is turning somewhat sluggish — Concor’s domestic volumes came off by just under 6 per cent in the December 2008 quarter with some of its main customers such as Indo Rama Synthetics not bringing in much business.

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That’s why despite better realisations, the company is staring at an increase in revenues in 2008-09 of below 5 per cent over the Rs 3,347 crore reported in 2007-08.
In the nine months to December 2008, revenues have risen by just 5 per cent while net profits have grown by 14 per cent y-o-y. That would clearly upset the trend of the past three years when Concor posted a compounded growth in net sales of 20 per cent. As for 2009-10, as of now analysts are pencilling in a 10 per cent rise in revenues given that it would be coming off a low base.

While the firm’s operating profit margins expanded by 160 basis points y-o-y to 28.8 per cent in the December 2008 quarter, mainly due to better operating efficiencies, it may not be easy to sustain these margins on smaller volumes. As a result, net profits for 2009-10, they reckon could increase at around the same pace as revenues. If that is so then the stock, at the current price of Rs 667, is valued at close to 10 times estimated earnings for 2009-10, making it a tad expensive given that the outlook for trade is somewhat hazy.
The stock has outperformed the market over the past one year losing 22 per cent to the Sensex’s 48 per cent
source - BS

Container Corporation of India Ltd (updated - 16 Oct 2009)
With India’s exports and imports declining, it’s not surprising that Container Corporation has seen volumes come off by 7 per cent year-on-year during the September 2009 quarter. However, on a sequential basis, Concor’s export-import traffic, which contributes 80 per cent of revenues and 90 per cent of operating profits, was up 6.7 per cent.

Strong realisations helped the company post reasonably good revenues, up 4 per cent year-on-year to Rs 773 crore. The company’s operating profit margins at 26 per cent, however, were not that impressive because it had to pay more for railway freight. For several quarters now, Concor has had to contend with running empty container trains, though things seem to be improving.

Due to relatively lower export volumes in the six months to September, the company lost traffic but was forced to pay for railway freight. The management, however, believes that exports should start looking up soon. Meanwhile, Concor is also focussing on improving its position in the fiercelycompetitive domestic market by targeting higher volumes as the economy recovers. That should not be a problem since the company offers fairly competitive rates. In the past, though, the company was not always in a position to raise prices as it was targeting higher volumes and a bigger market share.

Going ahead, the Concor management believes that the company could well post a volume growth of around 5 per cent as exports and imports start picking up. As for the domestic segment, a 20 per cent growth in the current year should not be out of reach. Analysts, however, believe that the target may be somewhat ambitious. They point out that the company would have to achieve high growth rates in second half of 2009 to fulfil these targets.
source - BS