Allcargo Terminals Concall: Key Insights and Updates
Economic Overview
The global economy is expected to grow at 3.3% in 2025 and 2026, which is slightly below the historical average. However, India is projected to grow at a steady rate of 6.5% in both years. This growth is largely driven by government initiatives focused on manufacturing and infrastructure development.
Industry Insights
The global ocean trade is currently facing challenges due to disruptions in key routes such as the Red Sea and the Panama Canal. Geopolitical issues are also contributing to these disruptions. Despite these challenges, India’s merchandise exports saw a 1.6% rise, reaching $321 billion in the first nine months of FY25. Imports also increased by 5.1%, reaching $532 billion during the same period.
Company Performance
Allcargo Terminals recorded a 2% increase in volumes and a 4% growth in revenue for the nine months ending December 31, 2024. EBITDA rose by 5% year-on-year, maintaining an EBITDA per TEU of over ₹2,000 for the second consecutive quarter. However, net profit for Q3FY25 declined by 19% to ₹12 crores due to accelerated amortization from changes in the CWC contract.
Strategic Developments
- Speedy Mundra facility received a six-year extension, improving operational capacity.
- A lease was signed for 22 acres adjacent to the JNPT facility, expected to be operational in Q1 of FY25-26.
Allcargo Terminals Project Financials
- The JNPT project is expected to have an internal rate of return (IRR) similar to existing projects with minimal capital expenditure.
- The Farukhnagar project requires an investment of ₹150 crores, with an estimated IRR between 25% and 30%.
- The Mundra project is also expected to achieve an IRR of 25% to 30%.
Volume Trends
January 2025 showed an 11% year-on-year volume growth. The management anticipates similar performance in February and March, following seasonal trends.
Regulatory Issues
An income tax search was conducted at company facilities. The management fully cooperated with authorities, and business operations were not impacted. The company is awaiting further communication from the Income Tax Department.
Capacity Utilization
Current capacity utilization stands at 80%-85%, reflecting strong demand for services. The company plans to expand capacity through strategic projects to support future growth.
Financial Health
- Revenue per TEU increased by 5% year-on-year, while gross margins improved by 7%.
- The company maintains a strong financial position with negative working capital and a healthy debt-equity ratio.
- Return on capital employed stands at approximately 35%, showcasing robust financial performance.
Allcargo Terminals remains focused on expanding its operations, optimizing financial performance, and navigating industry challenges to sustain long-term growth.
Read More at sharepricenews.com
I’m Rahul Chaudhary, and I write about everything related to the Share Market. From Stock Trends and Share Prices to the Latest News and IPO Updates, my articles aim to provide you with valuable insights to help you navigate the world of investing. Stay tuned for expert tips and updates to keep you informed!
