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CONCOR doubles FY2022 profit to Rs 1,028 crore, plans to invest Rs 10,000 cr by 2026

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MUMBAI : State-owned rail hauler Container Corporation of India (CONCOR), a government-owned multi-modal logistics company, reported more than doubling of net profit to Rs 1,028 crore ($139 million) for the year ended March 31, 2022. Consolidated revenue from operations increased 19 percent to Rs 7,653 crore ($1.03 billion) on 12 percent increase to Rs 5,290 crore ($715 million) in EXIM trades, according to results announced on May 19, 2022. Rail freight expenses increased 18 percent to Rs 4,105 crore ($555 million) for the year ended March 31, 2022.

“Till financial year 2019-20, Concor has been paying Land License Fee (LLF) to the Railways on the railway land leased to it on the basis of the number of Twenty Foot equivalent units(TEUs)handled. The Ministry of Railways had communicated that the LLF applicable on the Railway land leased to Concor shall now be charged w.e.f. 01.04.2020 to @6 percent of the value of land, which will be further increased to 7 percent annually.

“Accordingly, on the basis of rates taken from land revenue department{s) and Company’s assessment thereof for terminals on Railway land leased to Concor, after surrender of 17 such terminals earlier, an amount of Rs 465.11 crore has been provided as Land License fee payable to Indian Railways in Twelve months Period ended March 2022.”Domestic demand will see 25 percent growth while EXIM will be 15 percent, V. Kalyana Rama, Chairman & Managing Director, Concor, said in an analysts call after the announcement of the results. The target for FY2023 is 5 million tonnes, he added.

Concor is planning to invest Rs 8,000-10,000 crore towards capital expenditure (new terminals, rakes, containers and equipment) over the next four years, by 2026 in improving infrastructure, buying rolling stock, containers and equipment, a top official has said. The high capital expenditure budget is linked to the steps taken by the ‘navratna’ PSU to expand its domestic operations, increased activity on the western dedicated freight corridor, capacity expansion at its multimodal logistics park at Kathuwas, Rajasthan and the need for inducting rolling stock of higher capacity, the management said in a analyst call on Friday. The company is also planning to expand its last mile logistics business and product offerings to customers. The capital expenditure will be mostly funded through internal accruals,“There are about 246 rakes which we have planned, and the procurement action is on at various stages…and on containers…the company is planning to add anywhere between 50,000 and 1,00,000 lakh containers in the next three-four years,” Rama said. As of December end, the company had about 362 rakes and 37,000 containers.

On the domestic operations, the management is positive on gaining traction aided by demand for transportation of bulk cement going forward. “On the domestic front, we are expecting very good growth because of the bulk cement (operations) which we have started. We are expecting 12 million tonne traffic in that (cement segment) alone,” said Rama. On the issue of disinvestment, Rama stated that privatisation remains on the cards.

In November 2019, the Union Cabinet approved the sale of 30.8% of the government’s stake in the company along with transfer of management control to a private buyer. The government currently holds 54.80% in CONCOR. However, the sale process has been delayed due to issues related to land licence fee, which the company pays to Indian Railways, for running terminals built on Railways land.

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