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Motilal Oswal Report
Container Corporation Of India Ltd.'s reported volume growth of 8% YoY in Q2 FY24. Revenues increased 11% YoY to Rs 21.9 billion in Q2 FY24 (6% above our estimate). Total volumes increased 8% YoY to 1.23 million twenty-foot equivalent unit's with export import/domestic volumes at 0.97 million /0.26 million teus (up 4%/up 26% YoY).
Domestic volumes were 17% above our estimate, while EXIM volumes were largely in line with our estimate. ļ®
Blended realisation increased 3% YoY to Rs 17,797/ teu. Exim/domestic realisation stood at Rs 14,888/Rs 28,605 per teu (up 6%/down 9% YoY).
Ebitda margin came in at 24.5% (versus our estimate of 21.3%). Margin was down 80 basis points YoY. Ebitda increased ~8% YoY to Rs 5.4 billion (against our estimate of Rs 4.4 billion).
Land license fee for Q2 FY24 stood at Rs 850 million (Rs 1.3 billion in Q1 FY24). The LLF for H1 FY24 stands at Rs 2.15 billion (compared to Rs 1.91 billion in H1 FY23). Recently, one terminal was surrendered, and another will be partially surrendered in Q3 FY24.
Therefore, the LLF for FY24 and FY25 will be ~Rs 4.5-4.6 billion. Strong operating performance led to growth of 18% YoY in profit after tax (31% above our estimate of Rs 2.7 billion)
Container Corporation's volumes are expected to register double-digit growth, driven by-
pick up in EXIM volumes,
continued momentum in domestic volumes and
commissioning of the dedicated freight corridor from Mundra to Dadri.
As EXIM volumes pick up, the margins are expected to remain strong ahead. Lower than previously estimated LLF provisioning of Rs 4.5 billion for FY24 and FY25 would also support margins.
We raise our earning per share estimates for FY24/25 by ~12%/5%, factoring in higher volume growth and lower LLF provisioning. We reiterate our 'Buy' rating with a revised DCF-based target price of Rs 840.
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