Concor banking on internal accruals for Rs 6k-cr capex plans in 5 years

Concor has been a market leader in multi modal transport in India with nearly 75 per cent market share catering to export-import and domestic container movement

Container Corporation of India (Concor) is banking on internal accrual to fund a capital expenditure plan of Rs 6,000 crore over five years. 

The moneu is meant to set up distribution logistics centres (DLCs) for the e-commerce sector, both agricultural and industrial products. A government-owned entity under the ministry of railways, Concor leads the market in multi-modal transport, with nearly 75 per cent of the market in export-import and domestic container movement. Its first DLC was recently inaugurated at Ennore, Chennai, and the company has identified 20 nodes for opening more of these, totalling 50 million sq ft, in the next few years. 

V Kalyana Rama, chairman and managing director, said the DLCs will cover warehousing, inventory, invoicing and last-mile delivery of products. Of the Rs 6,000 crore to be spent, he said, a sixth of this is allocated for the current financial year, 2019-20. For investment in DLCs and procurement of containers and wagons. 

Revenue grew 12 per cent over a year in 2018-19 to Rs 7,216 crore; profit after tax was Rs 1,688 crore. The target for revenue growth this year would be the same, said Rama. 

In FY19, its throughput was an all-time high of 3.83 million twenty-foot equivalent units (TEUs), up 11 per cent from the previous year. That came to 43.5 million tonnes. Both export-import and domestic volumes saw double-digit growth in the past three years and this momentum is likely to continue. In terms of regions, the northwest one, saw the highest growth of 39 per cent and contributed Rs 1,658 crore to revenue, Rama added.

As for the central government’s Dedicated Freight Corridor (DFC) rail project, he expects the Palanpur-Rewari section to commission by December 2019, thereby connecting Mundra and Pipavav ports in Gujarat and boosting Concor's rail-bound container logistics business.

He said he was confident on recovery of dues worth Rs 1,044 crore from the Centre under the Service Exports from India Scheme (SEIS), which had accrued between 2015-16 and 2018-19. "There is a lot of progress in the matter. There were some clarifications and some budget issues. Now, we get a sense that we will be receiving it very soon," said Rama.

This was an issue flagged by independent auditors in their report for 2018-19. The company had classified the amount of income receivables, though the claims it had filed were yet to be approved by the central government.