Container Corporation, Results in line: :: Motilal Oswal

 Results in line: CCRI's 3QFY13 results were in line with our expectations,
with EBITDA down 5% YoY at INR2.6b (our estimate: INR2.8b). Revenue grew
3.5% YoY to INR10.8b (our estimate: INR11.7b), while net profit declined
1.8% YoY to INR2.4b (our estimate: INR2.3b).
 Volumes remain under pressure: Volumes in TEU terms remained under
pressure. EXIM volumes declined 5.8% YoY to 0.52m TEU while domestic
volumes declined ~5.2% YoY to 0.1m TEU. Overall volumes declined 5.7% to
0.64m TEU. While volumes declined in TEU terms, in tonnage terms, YTD
volumes grew ~7.5% YoY, implying higher share of bulk goods in the cargo.
 EBITDA margin under pressure: EBITDA margin was 24.3%, down 219bp YoY
and 11bp QoQ. Margins were negatively impacted on account of higher
empties cost (up 20% YoY at INR570m) and CCRI's inability to pass on the
entire haulage charge increase (70% passed on) by Indian Railways. CCRI has
managed to successfully pass on ~70% of the price hike (~12.5% fare hike v/
s cost hike of 18%); it is hopeful of passing on the remaining cost hike in a
phased manner over the next few quarters.
 Valuation and view: We are revising our revenue estimates by -3.9%/-7.8%/
-7.6% for FY13/FY14/FY15 and net profit estimates by 0.2/-6%/-5% for FY13/
FY14/FY15. CCRI trades at 12.6x/11.4x FY14E/FY15E earnings. We maintain Buy
with a revised DCF-based target price of INR1,322 (upside of 42%).

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