Company Update : Container Corporation of India Ltd By Motilal Oswal Financial Services Ltd
Weak EXIM realization hurts earnings; lower depreciation supports APAT
* Revenues were flat YoY at INR22b during 3Q FY25 (10% below our estimate). Total volumes grew 12% YoY to 1.3m TEUs with EXIM/Domestic volumes at 0.97m/0.3m TEUs, respectively (+8%/+25% YoY). Blended realization declined ~11% YoY to INR17,138/TEU. EXIM/Domestic realization stood at INR14,245/INR26,254 per TEU, respectively (-10%/-15% YoY).
* EBITDA margins came in at 20.8% (vs our estimate of 23.2%). EBITDA declined ~10% YoY and was 20% below our estimate.
* Lower depreciation offset the miss in operational performance, which led to an APAT of INR 3.4b (in-line with our estimate). During 3QFY25, the company reassessed the useful life of its wagons based on railway standards, technical advice, experience, and manufacturer certification, extending it from 15 to 30 years. As a result, depreciation for the quarter and nine-month period was INR125m and INR367m, respectively, reflecting a reduction of INR258m and INR792m. This change increased PBT by the same amount.
* During 9MFY25, revenue was INR65.8b (+4% YoY), EBITDA was INR14.7b (+2% YoY), EBITDA margin came in at 22.3%, and APAT was INR9.9b (+6% YoY).
Other insights
* The land license fee for 9MFY25 stood at INR2.6b (1.7b in 1HFY25).
* The Board has declared 3rd Interim dividend of INR4.25/equity share, amounting to INR2.6b.
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