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Logistics & Freight
India Railway Budget - freight loading target set at
(+6%) for FY12E
• Freight traffic target set at 993 million tonnes (+6% yoy) over
FY12E: The freight target comes off a low base – as loading over
FY11E is likely to grow at 4-5% (as compared to CAGR growth of 8%
over FY04-10). While the freight tariffs are unchanged – the ministry
tends to raise freight rates through the year.
• Dedicated Freight Corridors (DFC): The Railways minister
announced that 12,000 acres from the Railways land bank have been
allocated towards the DFC.
• Railways to construct 700 km rail track each year: As compared to
the current average (below 200km of rail tracks being added each
year), the railways are targeting to add 700km of new tracks in FY12E.
• Operating ratio rises: The operating expenses ratio has risen to c.92%
over the current year – expenses have risen particularly given the
additional burden of the sixth pay commission. However, the ministry
has targeted to lower this ratio over FY12E.
• The YTD performance of railways has been sedate: Railways
carried 756 million tonnes of freight during Apr’10-Jan’11 (+3%
YTD), while they have generated Rs. 505B of revenue earnings from
commodity-wise freight traffic during this period (+7% yoy).
• While the railways budget has announced several initiatives - increase
the laying of tracks, etc. we would monitor the implementation of the
same. Also, the financial situation of the railways will have to be
monitored, given that the operating ratio has risen over the year.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Logistics & Freight
India Railway Budget - freight loading target set at
(+6%) for FY12E
• Freight traffic target set at 993 million tonnes (+6% yoy) over
FY12E: The freight target comes off a low base – as loading over
FY11E is likely to grow at 4-5% (as compared to CAGR growth of 8%
over FY04-10). While the freight tariffs are unchanged – the ministry
tends to raise freight rates through the year.
• Dedicated Freight Corridors (DFC): The Railways minister
announced that 12,000 acres from the Railways land bank have been
allocated towards the DFC.
• Railways to construct 700 km rail track each year: As compared to
the current average (below 200km of rail tracks being added each
year), the railways are targeting to add 700km of new tracks in FY12E.
• Operating ratio rises: The operating expenses ratio has risen to c.92%
over the current year – expenses have risen particularly given the
additional burden of the sixth pay commission. However, the ministry
has targeted to lower this ratio over FY12E.
• The YTD performance of railways has been sedate: Railways
carried 756 million tonnes of freight during Apr’10-Jan’11 (+3%
YTD), while they have generated Rs. 505B of revenue earnings from
commodity-wise freight traffic during this period (+7% yoy).
• While the railways budget has announced several initiatives - increase
the laying of tracks, etc. we would monitor the implementation of the
same. Also, the financial situation of the railways will have to be
monitored, given that the operating ratio has risen over the year.
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