Speaking on CNBC-TV18, Gupta said the exim revenues have helped the company recover costs. Concor expects to maintain margins of around 22% and may see an improvement, he said.
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Concor is one of the top midcap picks by Kotak Securities. The broking house says the company will benefit from higher export volumes due to falling rupee and an improvement in global demand. This could substantially bring down empty running of rakes and improve margins by offsetting slow imports, says Kotak Securities.
Both Religare and Antique have rated Concor 'hold' with a target price of Rs 780.
According to Kotak note, India's containerised cargo remains low at 22%. The bulk of India's cargo -- 64% of cargo traffic -- is moved on roads and average speed of cargo rail is about 25kmph. There's a strong necessity to improve rail infrastructure, which will benefit Concor, the note adds.
Below is the edited transcript of Anil K Gupta interview on CNBC-TV18
Q: Can you give us an idea of how FY14, the second half is likely to pan out in terms of growth, what is the stimulus you are getting from better import/export performance?
A: First half was very good for us. We had grown at around 8.5 percent. Now we expect that in the second half the momentum will continue, we are in fact hoping to do better in the second half than the first half.
Q: Some guidance on how much better because exports picked up in the second half, you have got good numbers starting from August?
A: That has been a very good factor and that has helped us reduce the import/export imbalances. It has helped us recover our cost also and be more aggressive in the market. We hope that we will be finishing this year at more than 10 percent.
Q: Just some more numbers, by more than 10 percent do you mean that this Rs 1,000 crore revenue run rate will grow by 10 percent quarter-on-quarter (Q-o-Q) because that Rs 1,000 crore is what you did in terms of EXIM revenues in the quarter gone by, just to get a sense of how much your export/import revenues will grow?
A: I am talking only about the physical throughput. Financial throughput was up by around 17 percent in the first half. We hope that we will remain at that particular level for the full year also. Physical throughput was up by around 8.5 percent, this will further strengthen to around more than 10 percent.
Q: what about on the margin front itself, you have been maintaining margins at around that 22-23 percent level, now that there will be a higher share of EXIM revenues, how much do you think your margins could move to in the next six-eight months?
A: We will maintain the margins that we had up to the second quarter's end. Although Q3 figures are yet to be put to my board of directors and therefore I wouldn't be able to comment on them. But we hope to do better.
Q: What will be the utilisation of your rakes percentage if you give us a comparison with the first half, how much will it be?
A: Utilisation is very good in fact I don't have any rake, which is stable. I have complete demand for all my stocks. I am also requiring more rakes. I am going ahead with my capital expansion programmes also. We have targeted Rs 1,096 crore to be invested in this year. We are bang on the target. We will excel in that field also.
Q: What about the ability to pass on diesel price hikes?
A: That is a very questionable thing. I don't think we will be able to pass on if there is any hike which I hope will not be there in this particular year. But if it is there, we will not be able to pass on because transport market is very bad. Road transport also there is excess capacity because of ban on the iron ore mining and movement in large areas. There is excess capacity on the roads. So in that sense the market remains -- the capability to pass on the hike will be constrained.
Q: Because of the improvement or rather the progress that we are seeing on the dedicated freight corridor, how much of an impact do you think a company like yours could see?
A: As you know, we have been readying ourselves to take the traffic increases on the dedicated freight corridor. I have got 15 projects out of which four are on the dedicated freight corridor itself. We are looking at it in a very positive manner. It will give us a tremendous boost in the capabilities to run faster trains and heavier trains.
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