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Miss on earnings; focus remains on profitable growth

• Container Corporation of India (CCRI)’s revenue grew 3% YoY to INR21.5b during 1QFY26 (6% below our estimate). Total volumes grew 11% YoY to 1.3m TEUs, with EXIM/domestic volumes at 0.97m/0.32m TEUs (+12%/ +9% YoY). Blended realization dipped ~8% YoY to INR16,662/TEU. EXIM/ domestic realization stood at INR14,384/INR23,676 per TEU, (-5%/-12% YoY).
• EBITDA margins came in at 19.8% (v/s our estimate of 21.1%). EBITDA degrew ~1% YoY and was 12% below our estimate.
• The land license fee (LLF) stood at INR1.1b for the quarter.
• CCRI delivered weak operational performance in 1QFY26, marked by lower realizations in EXIM and domestic segments. The company faced challenges such as subdued demand in parts of North India and delays in receiving specialized containers, while maintaining momentum through strong traction in central and southern regions. Its focus on integrated logistics solutions, including first-mile last-mile (FMLM) services, continued to gain scale and contributed to volumes.
• Factoring in lower realization in EXIM and domestic business and delay in delivery of containers, we reduce our revenue/EBITDA/PAT estimates by ~4%/4%/7% and ~1%/3%/3% for FY26 and FY27, respectively. Reiterate BUY with a revised TP of INR670 (based on 18x EV/EBITDA on FY27E).

Highlights from the management commentary

• CCRI’s LLF stood at INR1.1b during 1Q FY26. The company continues to evaluate and surrender underutilized land parcels to rationalize LLF, which is expected to remain at FY25 levels during FY26.
• Delays in the delivery of specialized tank containers continue to hurt domestic volumes. The company has placed an order for 1,000 units (two tranches of 500). The first rake has been received, and the remaining 500 containers are expected within three months.
• North India, which was earlier muted, has started showing strong traction in both EXIM and domestic volumes from 2QFY26 onwards. Volumes from JNPT are also witnessing growth and are likely to improve further after the commencement of double-stack rake operations by Dec’25.
• For FY26, CCRI is targeting a 13% growth in total volumes, with 10%/20% growth in EXIM/domestic volumes.

Valuation and view

• CCRI strengthened its logistics ecosystem by expanding double-stack rail operations, utilizing the Dedicated Freight Corridor to drive efficiency, and advancing its integrated logistics network. The company remains focused on scaling its rail freight services and infrastructure, supported by a higher capex allocation toward new terminal commissioning, fleet augmentation, and enhanced multimodal connectivity.
• Factoring in lower realization in EXIM and domestic business and delay in delivery of tank containers, we have reduced our revenue/EBITDA/PAT estimates for FY26 by ~4%/4%/7% and for FY27 by ~1%/3%/3%. We reiterate our BUY rating with a revised TP of INR670 (based on 18x FY27E EV/EBITDA).

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