Concor trims FY17 volume growth target; sees no margin gains

State-owned Container Corporation of India missed analysts' earnings estimate for the first quarter ended June reporting 14 percent drop in standalone net profit to Rs 178 crore. Speaking to CNBC-TV18, CMD Anil Gupta said the company has trimmed its revenue growth guidance to 7.5 percent for FY17 from 12.5 percent expected earlier. Margins are also unlikely to improve due to tough competition from roads transport and might stay around 19 percent, he said. However, he hopes the situation will improve as the goods and services tax (GST) gets implemented. Market share of the company also dipped fractionally to 71.24 percent for quarter compared to 71.4 percent in the same quarter last year due to drying up of movement in the metals scrap space, he said.  Below is the verbatim transcript of Anil Gupta’s interview to Nigel D’Souza and Reema Tendulkar on CNBC-TV18.Nigel: On the topline we did see a bit of a dip of close to around 5 percent or thereabouts, could you tell us what were the volumes in the past quarter and also I think earlier you had guided for around 14 percent topline growth. Now in the first quarter we have seen a dip of around 5 percent. Are you maintaining that guidance? A: No, we had a very bad quarter. Of course volumes did go up slightly, 2.8 percent we had an increase in the international volumes, overall volumes went up by 1.8 percent but topline went down. Primarily because of our leads going down tremendously, our valuation was not in that. In accordance with this, our guidance is now revised to around 7.5 percent at this stage. We feel that from there, there will be a recovery. Reema: What about on the volumes for FY17 because I remember you had earlier guided for a 12.5 percent volume growth? With just 1.8 percent done on Q1 on a consolidated basis, what would be the fresh guidance on volumes? A: Same, actually 7.5 percent will be both for volume as well as value.Nigel: Could you help us out with what is the status in terms of the empty trains that were running? I believe that the empty running cost in the last year was more than Rs 250-280 crore or thereabouts. So, in the last quarter what was that number?A: In last quarter we have spent Rs 50 crore on empty running as against Rs 35 crore in the Q1 of last year. So, there was a 42 percent increase in the empty running. This was primarily on, first, overall imports moved by us were larger than the exports so there was a gap. Secondly there were a lot of things which were moved from one port to another port, so, some ports did very well in imports and other ports did very well in exports. So, there were a lot of cross port movement which resulted in these numbers.