Prabhudas Lilladher's research report on AllcargoAllcargo’s (AGL) Q3FY16 performance were below estimates with Net profit declining to Rs 615m from Rs 718m YoY. While the operations remained strong in most sectors, increasing marketing spend and one‐off events was the main reason for the lower net income. MTO volumes grew 9.1% to 3,47,152 TEUs in 9MFY16 in a challenging global growth scenario.Decline in freight rates and notional currency impact continued in Q3FY16 (from where it left in Q2FY16), resulting in subdued revenues in MTO. One‐off expenses in terms of opening offices in US, Middle‐East and SE Asia & rebranding exercise carried about ECULINE during the quarter hit the MTO and consol performance. CFS business reported a strong show with 8% revenue growth YoY to Rs1.15bn and more importantly EBIT growth of 24% led by ramp‐up in JNPT 2 volumes, handling of special cargo & firm pricing.This segment has reached margins in excess of 33% for the first time in 36 months. PES business grew 6% YoY in revenues but EBIT saw a 51% decrease on account of two vessels under repair and higher base due to derivative income of Rs 110m booked in Q3FY15.The real revival in PES segment is yet to pick up which we foresee to strengthen going in FY17E. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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