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Srividhya Sivakumar

The September quarter numbers of Container Corporation of India, the country’s biggest carrier of rail cargo containers has yet again surprised the street positively. Despite a challenging macro scenario reflected in its modest 10 per cent growth in topline, the company has managed to expand its operating margins by over 4 percentage points to 29.8 on a year-on-year basis. This is quite commendable considering that the quarter was marked by economic upheavals both in India and rest of the world.

While the tightening credit scenario and the ensuing slump in the shipping sector did impact the company’s volumes, it has had little impact on its margins since the company decided to pass on the entire hike in haulage charges by the Indian Railways (IR) to its clients. IR had increased the haulage charges by as much as 14-16 per cent with effect from August 1, 2008. Besides this, margins would also have got a lift from the company’s better cost management, route rationalisation and reduction in running of empty rakes.

Helped by improved margins and high ‘other income’, the company’s net profits registered a growth of 28 per cent.

Concor, however, did not remain completely unscathed from the brewing global turmoil. Container volumes in both its exim and domestic segment witnessed a lower or negative growth during the quarter. While the exim segment managed a sedate 3 per cent growth in volumes, that of the domestic segment shrunk by over 8 per cent. Lower offtake in manufacturing sector and the imposition of export ban on commodities such as rice, sugar and maize, besides the slowing economic growth may have triggered the drop in volumes.

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