Sector Update | March 2015
Logistics
Transformational times!
Harshad Borawake
(HarshadBorwake@MotilalOswal.com); +91 22 3982 5432

Logistics | Transformational times!
Index
Transformational times! | Growth enablers visible; opportunities galore
CTOs to get DFC boost; organized player market share to increase
Page No.
Summary………………………………………………………………………………………………………………………………………..
Story in charts………………….……………………………………………………………………………………………………………
Indian Logistics sector poised for accelerated growth………………………………………………………………
a. India’s GDP growth is reviving; Logistics industry grows at 1.5-2x GDP growth
b. Infrastructural bottlenecks being addressed (not just growth; efficiency too)
i. Ports and evacuation infrastructure
ii. Dedicated rail freight corridors
iii. Toll / octroi / inter-state tax mechanisms through GST
c. Rapid growth of e-commerce
d. Other initiatives like 'Make in India'
3
6-7
8-17
Opportunities across the spectrum……………………………………………………………………………………………
a. Logistics encompasses a wide array of services
i. Transportation – Air, Surface (Rail, Road), Internal Waterways, Sea
ii. Storage – Warehousing, Logistics Parks, ICDs, Cold Chains
iii. Distribution – Courier Service, E-tail Deliveries
iv. Integrated/Allied Services – Freight Forwarding, 3PL
b. Opportunities galore; we attempt to identify some
i. Increasing containerization, EXIM growth, DFCs -
Container train operators, ports to benefit
ii. GST, E-commerce, increasing onrganized sector share -
Providers of supply chain management/3PL, cold chains to benenfit
18-35
Companies covered and our key stock picks……………………...….………………………………………………………
Company section…………………………………………………………………………………………………………………………….
Container Train Operators
1. Conta i ner Corpora ti on
2. Ga tewa y Di s tri pa rks
36-38
39-105
40
54
68
74
87
92
97
98
99
100
101
102
103
104
105
106
111
112
114
Multimodal Logistics Service Providers
3. Bl ue Da rt
4. Ga ti
5. Al l ca rgo Logi s ti cs
6. Tra ns port Corpora ti on of Indi a
Unlisted Players
7. Ocea n Spa rkl e
8. JM Ba xi & Co.
9. Conti nenta l Wa rehous i ng
10. Sta r Agri Logi s ti cs
11. Shree Shubha m Logi s ti cs
12.TVS Logi s ti cs
13. Sa fex
14. Ma hi ndra Logi s ti cs Ltd
15. SSN Logi s ti cs Pvt. Ltd.(Del hi very)
Annexure 1: Dedicted Freight Corridor………………………………….………………………………………………………………………………………
Annexure 2: Delhi – Mumbai Industrial Corridor (DMIC)……………………………………………………………………………………………….
Annexure 3: Indian Railways Financial and Operational Summary…………………………………………….…………………………………..
Annexure 4: Key global and domestic logistics trade statistics………………………………………..…………………………………………….
March 2015
2
Motilal Oswal research is available on
www.motilaloswal.com/Institutional-Equities,
Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through disclosures made at the end of the Research Report.

Logistics | Transformational times!
March 2015
3

Logistics | Transformational times!
Logistics
Growth enablers visible; opportunities galore
CTOs to get DFC boost; organized player market share to increase
n
n
n
India’s Logistics sector is poised for accelerated growth, led by GDP revival,
infrastructure ramp-up (railways/roads/ports), e-commerce penetration, impending
GST implementation, and other initiatives like “Make in India”.
We see opportunities across the spectrum – transportation, storage, distribution, and
integrated/allied services. With dedicated rail freight corridors, container train
operators (CTOs) should receive a boost. GST implementation and e-commerce
promises to alter the landscape for warehousing and 3PL services.
We initiate coverage on Container Corporation (CCRI IN; target price INR1,777, 17%
upside, Buy) and Gateway Distriparks (GDPL IN; target price INR535, 30% upside, Buy)
— key beneficiaries of dedicated rail freight corridors and economic revival, with a Buy
rating. We also cover Blue Dart, Gati, Allcargo Logistics and TCI (Not Rated), that
further benefit from GST and e-commerce.
Poised for accelerated growth led by multiple drivers
n
n
n
Growth of the Logistics business is directly correlated with economic activity.
Empirical evidence suggests that the Indian Logistics industry grows at 1.5-2x
the GDP.
With the Indian economy on a revival path, we believe India’s Logistics sector is
poised for accelerated growth. Infrastructural bottlenecks that have stifled
growth of the sector and have promoted inefficiency are being addressed.
Building of the dedicated rail freight corridors, for instance, will help promote
more efficient haulage of containerized cargo by rail. Logistics requirement for
e-commerce will grow as exponentially as e-commerce.
Opportunities across the spectrum
n
n
n
n
We see opportunities across the logistics spectrum – transportation, storage,
distribution, and integrated/allied services.
While economic growth itself presents a case for improved business prospects,
there are multiple developments and trends for logistics enterprises to ride on.
For CTOs, (a) Increasing containerization, (b) EXIM growth, and (c) dedicated rail
freight corridors are key volume growth triggers.
Implementation of GST will be a game-changing event for businesses in general
and organized logistics players. It would provide a boost to warehousing, supply
chain management and 3PL business.
Specialized needs of the burgeoning e-commerce and cold chain industry will
spawn a range of opportunities for niche organized logistics players.
In this report, we initiate coverage on two large CTOs – Container Corporation
and Gateway Distriparks with a Buy rating. While sharp ad-hoc haulage charge
increase is a concern, we expect 12-15% CTO volume ramp-up, with CCRI
continuing with its leading market share and GDPL benefiting due to its low
base.
4
Companies covered and our key stock picks
n
March 2015

Logistics | Transformational times!
n
n
Among the other listed entities we have profiled are express cargo/3PL
operators like Blue Dart, Gati, TCI and multi-modal operator Allcargo Logistics.
In the unlisted space, we include (1) port service providers JM Baxi & Co, and
Ocean Sparkle, (2) CFS players Continental Warehousing, Star Agri Logistics and
Shree Shubham Logistics; (3) auto logistics players TVS Logistics and Mahindra
Logistics; (4) express/3PL player Safexpress and (5) e-tail logistics player
Delhivery.
Exhibit 1: Summary of business presence of key logistics players
Company
Concor
Gateway Distriparks
TCI
Blue Dart
Gati
Allcargo
Aegis Logistics
Snowman Logistics
TVS Logistics Services
Safexpress Pvt. Ltd
Mahindra Logistics
Delhivery
Continental Warehousing
Star AgriWarehousing
Shree Shubham Logistics
Ocean Sparkle
J.M. Baxi
Road
Transportation
Air
Rail
Water
Ware-
housing
Storage
CFS/ICD Cold Chain
Bulk
Liquid
Valued Added Logistic Services
Express Supply
Multi-
Port
Cargo Chain/3PL modal Handling
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
Source: Company, MOSL
Exhibit 2: Business-wise revenue share of listed logistic players
MTO
TCI -
AllCargo
Blue Dart -
Gati
Gateway -
Concor -
5 -
56
76.0
70
29
Rail
CFS
57
85
90
-
4
3
-
6.3 -
3.2
-
Express
Road
E-Commerce
Seaways / Cold Chain
36
-
6
-
18
15
14.5
0
-
Other
-
5
8
10
--
2
Source: Company, MOSL
March 2015
5

Logistics | Transformational times!
Story in charts
Exhibit 3: Logistics sector grows at 1.5-2x* of GDP growth Exhibit 4: Road transportation, despite being inefficient
rate
mode has highest goods traffic share in India
Logistic Companies* sales growth (% YoY)
24.4
18.6
15.5
9.1
9.0
9.2
8.4
11.3
8.1
8.1
12.8
7.4
8.2
6.0
GDP Growth (% YoY)
GDP (% YoY)
Imports (% YoY) - RHS
12
9
6
3
0
Exports (% YoY) - RHS
38
26
14
2
-10
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY92
FY97
FY02
FY07
FY12
FY17E
Source: KPMG
* 2 year average growth; Listed companies include Concor, Gateway,
AllCargo, TCI, Blue Dart, Sical and Gati Source: CMIE, Industry, MOSL
Exhibit 5: Underinvestment in railways increased road sector Exhibit 6: Expect transport mode imbalance situation to
(relatively inefficient transport mode) share to 60% v/s 30- improve with GST implementation and expected capex on
46% share in other regions in India’s freight transport
transport infrastructure (USD b)
Rail
1%
8%
60%
30%
31%
India
48%
23%
China
US
Road
1%
46%
Water
1%
14%
37%
46%
10%
Europe
Source: KPMG, MOSL
319
173
69
76 29
2007-12
116
126
77
2012-17
Air
1%
43%
522
183
183
155
2017-22
Rail
Road
Other
Transport investment
1,186
778
273
252
252
2022-27
385
2027-32
417
385
Source: NTDPC, MOSL
Exhibit 7: GST reform to boost warehousing demand, expect Exhibit 8: Expect India’s major port container volume to be 2x
9% CAGR, implying addition of 520million square feet
by FY20 led by EXIM growth and increased containerization
Million
square feet
Manufacturing
Consumption
Exim*
Total
1,440
918
211
76
631
2014
2015
2016
2017
2018
386
115
939
Million
TEUs
16
14
12
10
8
6
FY10
FY12
FY14
FY16E
FY18E
FY20E
Source: IPA, Industry, MOSL
8
10% CAGR
15% CAGR
20% CAGR
16
14
13.6
2019
*Covered and uncovered portion of ICD/CFS considered
Source: Knight Frank, MOSL
March 2015
6

Logistics | Transformational times!
Story in charts
Exhibit 9: E-commerce market growth pegged at 25-30% Exhibit 10: Organized player share in cold chain logistics
CAGR over the next few years
estimated to grow at >20% CAGR through 2017 (INRb)
Projected E-Commerce market size (USDb)
Organized
Unorganized
125
60
13
Current Size
(IAMAI)
CY20
(Flipkart)
CY20
(Google India)
CY25
(Zinnov)
11
2012
70
140
220
28
2017
Source: MOSL
Source: Industry, MOSL
Exhibit 11: Business-wise revenue share of listed logistic players
MTO
TCI -
AllCargo
Blue Dart -
Gati
Gateway -
Concor -
5 -
56
76.0
70
29
Rail
CFS
57
85
90
-
4
3
-
6.3 -
3.2
-
Express
Road
E-Commerce
Seaways / Cold Chain
36
-
6
-
18
15
14.5
0
-
Other
-
5
8
10
--
2
Source: Company, MOSL
Exhibit 12: Expect Concor to maintain largest market share in Exhibit 13: Gateway’s RoE’s to improve, however long
Rail Container movement in India (%)
gestation investment to keep Concor’s RoE subdued
Concor
4
1
5
2
12
3
17
5
20
5
Gateway
18
6
15
8
Others
14
7
9
8
9
8
12
8
RoE (%)
40
30
Concor
Gateway Distriparks
95
94
85
78
75
76
77
79
83
82
80
20
10
0
FY07
FY09
FY11
FY13
FY15E
FY17E
FY07
FY09
FY11
FY13
FY15E
FY17E
Source: Company, MOSL
Source: Company, MOSL
March 2015
7

Logistics | Transformational times!
Exhibit 14: Global peer comparison
Company
Country
Concor
India
Gateway Distriparks
India
Gati
India
Blue Dart
India
Allcargo
India
Transport Corp
India
Median
Average
Rail Transportation Service Providers
Union Pacific Corp
US
Central Japan Railway
Japan
East Japan Railway
Japan
Daqin Railway
China
Kansas City Southern
US
West Japan Railway
Japan
Guangshen Railway
China
All America Latina Logistica Brazil
Globaltrans
Cyprus
Median
Average
Large Cap Integrated Logistics Players
United Parcel Service
US
Canadian National Railway Canada
Fedex Corp
US
CSX Corp
US
Norfolk Southern Corp
US
Canadian Pacific Railway
Canada
Kuehne & Nagel Intl
Switzerland
Brambles Ltd
Australia
C.H. Robinson Worldwide
US
Yamato Holdings Co
Japan
Expeditors Intl Wash
US
Hyundai Glovis
South Korea
Old Dominian Freight Line
US
Median
Average
Integrated Logistics Players
TNT Express Nv
Netherlands
Oesterreichische Post Ag
Austria
Panalpina
Switzerland
Sinotrans Limited
China
Singapore Post
Singapore
Kamigumi Co
Japan
Sinotrans Air Transport
China
Seino Holdings Co
Japan
Forward Air Corp
US
Hitachi Transport System
Japan
Kintetsu World Express
Japan
Sankyu Inc
Japan
Uti Worldwide Inc
US
Aramex Pjsc
UAE
Mainfreight Ltd
New Zealand
Roadrunner Transportation US
Senko Co Ltd
Japan
Freightways Ltd
New Zealand
Yusen Logistics Co Ltd
Japan
Gd Express Carrier Bhd
Malaysia
Median
Average
M Cap
USD M
4,631
711
339
2,679
672
320
FY15E
49.2
16.9
4.9
67.9
16.8
11.6
EPS
P/E (x)
EV/EBITDA (x)
RoE (%)
FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E
62.2 70.6 30.3 23.9 21.1 20.1 15.7 13.7
13.3 15.2 15.5
19.2 23.7 24.3 21.3 17.3 14.1 12.5 10.4
15.7 16.9 19.6
6.7
9.9 52.0 37.7 25.6 17.7 13.5
9.9
7.6 10.1 13.1
85.5 103.9 103.8 82.5 67.9 74.4 57.0 47.6
22.2 26.8 26.8
23.6 28.2 19.8 14.1 11.8
9.4
8.2
7.6
10.7 13.3 14.3
15.0 18.9 22.8 17.6 14.0 11.4
9.3
7.8
22.1 23.4 24.8
27.3 22.6 19.2 15.9 13.0 10.1 14.5 16.0 17.5
42.2 32.9 26.3 24.5 19.4 16.2 15.3 17.6 19.0
17.7
16.2
19.5
8.8
21.0
19.8
26.4
16.6
10.4
17.7
17.4
19.5
20.2
19.3
15.6
15.8
21.8
25.8
20.9
21.5
28.4
22.3
15.2
21.2
20.9
20.6
18.1
18.8
26.9
13.0
27.2
19.5
18.9
21.1
22.2
18.0
21.4
14.5
n.a.
13.7
18.4
15.7
12.9
18.7
30.3
77.5
18.8
22.5
15.5
14.8
17.3
8.5
18.4
17.7
23.4
10.2
7.9
15.5
14.9
17.5
17.9
15.8
13.9
14.2
18.4
23.5
19.0
19.5
26.0
20.2
12.9
18.4
18.4
18.3
15.1
18.3
19.9
11.3
24.2
18.6
16.4
17.7
18.8
15.1
16.8
13.3
53.8
12.5
16.1
13.7
10.3
17.0
16.9
51.7
16.8
19.9
13.8
14.2
16.7
n.a.
16.2
16.7
n.a.
10.1
6.4
14.2
13.5
15.7
16.3
13.6
12.5
13.1
15.4
22.7
17.3
18.2
24.0
18.5
11.9
15.7
15.7
16.5
13.8
19.1
16.6
n.a.
21.1
18.2
n.a.
16.2
16.2
13.8
14.7
12.6
26.7
n.a.
14.3
12.8
9.5
15.5
14.5
38.8
15.5
17.3
9.6
8.9
9.0
5.8
11.8
8.1
8.3
3.7
5.3
8.3
7.8
10.2
12.4
7.5
8.2
8.6
13.2
15.4
10.4
13.2
9.9
11.6
11.0
9.9
10.4
10.9
6.3
9.3
12.9
8.6
19.6
8.4
22.6
6.2
10.0
6.8
9.4
6.8
21.4
8.5
11.4
9.5
9.2
11.7
6.5
41.8
9.4
12.3
8.7
8.7
8.8
5.7
10.6
7.8
7.7
3.2
4.7
7.8
7.3
9.5
11.5
6.5
7.6
8.1
11.8
14.5
9.6
12.2
9.5
10.7
9.4
8.7
9.5
10.0
5.5
9.1
10.3
7.8
17.6
8.2
25.0
5.7
8.7
6.3
8.1
6.5
10.1
7.4
10.1
8.5
8.3
10.8
6.1
33.4
8.4
10.7
8.0
8.7
8.6
n.a.
9.4
7.6
n.a.
2.9
4.1
8.0
7.1
8.9
10.7
5.9
7.0
7.6
10.7
14.0
8.9
11.7
9.3
9.9
8.6
7.5
8.9
9.3
4.7
9.0
8.6
n.a.
16.3
8.0
n.a.
5.4
7.7
6.1
7.1
6.3
8.2
n.a.
9.0
8.2
7.8
10.0
5.6
26.6
8.0
9.1
26.6
14.4
9.1
18.4
15.2
8.2
4.2
4.6
7.4
9.1
12.0
28.5
13.8
9.4
17.3
15.3
8.8
4.2
6.6
8.9
9.4
12.5
30.6
12.7
9.1
n.a.
15.6
8.8
n.a.
9.4
11.8
11.8
14.0
73.3
25.6
18.2
19.6
17.8
57.4
32.6
22.6
53.3
7.7
24.8
16.8
19.8
22.6
26.4
8.9
20.0
24.1
n.a.
20.7
5.2
n.a.
4.7
17.7
7.6
10.5
8.5
7.9
n.a.
19.4
11.3
11.4
26.4
6.5
29.3
11.3
14.1
102,626
37,678
32,597
23,914
12,557
10,956
4,492
1,031
906
6.6
7.5
8.4
1,369 1,491 1,554
513.5 578.2 601.9
1.2
1.2
n.a.
5.4
6.2
7.0
346.4 385.9 409.3
0.2
0.2
n.a.
0.3
0.5
0.5
0.5
0.6
0.8
90,813
5.2
5.7
6.4
54,942
4.2
4.8
5.2
49,067
9.0 11.0 12.7
33,362
2.2
2.4
2.7
33,265
6.8
7.6
8.2
31,090
10.9 12.9 15.4
17,325
5.5
6.1
6.3
13,602
0.4
0.5
0.5
10,767
3.4
3.8
4.0
10,015
97.9 107.2 115.8
9,139
2.1
2.4
2.6
7,682 14,935 17,618 19,167
6,660
3.6
4.2
4.9
128.9 249.0
24.3 25.7
15.9 18.1
18.3 19.1
16.4 16.9
31.8 38.8
27.7 31.0
23.0 22.7
46.7 49.5
7.3
7.6
22.3 24.1
18.5 18.3
19.2 19.4
22.3 22.7
22.6 24.3
6.4
21.8
16.7
10.6
23.7
5.3
14.6
3.8
15.3
6.5
8.0
8.5
-8.8
15.5
18.4
10.6
10.1
25.1
3.1
26.0
10.6
12.1
8.9
21.6
20.5
11.3
20.9
5.2
14.8
4.4
14.8
7.4
9.8
8.6
4.3
17.0
18.9
10.9
11.5
25.7
5.8
27.5
11.4
13.5
3,275
3,296
3,258
3,164
3,045
2,646
2,728
2,378
1,613
1,655
1,594
1,485
1,328
1,327
1,181
966
814
714
535
507
0.3
0.4
0.4
2.4
2.5
2.4
5.0
6.8
8.1
0.3
0.4
n.a.
0.1
0.1
0.1
59.9 62.7 64.3
1.0
1.2
n.a.
65.8 78.3 85.3
2.4
2.8
3.3
99.6 118.6 130.1
250.1 319.8 364.0
38.0 41.5 43.8
-0.3
0.2
0.5
0.2
0.3
n.a.
0.9
1.0
1.1
1.6
1.9
2.0
57.5 72.2 77.6
0.3
0.4
0.4
50.6 90.5 105.9
0.0
0.0
0.0
31.8
40.1
52.3
* CMP in Local Currency; MOSL estimates for Concor and Gateway
Source: Bloomberg Consensus Estimates on Feb 26, 2015, MOSL
March 2015
8

Logistics | Transformational times!
Poised for accelerated growth
Infra development, demand growth to drive volumes for logistics players
n
Growth of the Logistics business is directly correlated with economic activity. Empirical
evidence suggests that the Indian Logistics industry grows at 1.5-2x the GDP.
With the Indian economy on a revival path, we believe India’s Logistics sector is poised
for accelerated growth. Infrastructural bottlenecks that have stifled growth of the
sector and have promoted inefficiency are being addressed.
n
n
Building of the dedicated rail freight corridors, for instance, will help promote the
more efficient haulage of containerized cargo by rail. Logistics requirement for e-
commerce will grow as exponentially as e-commerce.
India logistics sector growth trending @1.5-2x GDP
India logistics sector growth
trending towards 2x GDP as
the economy picks up
Growth of the Logistics business is directly correlated with economic activity and
empirical evidence suggests that the Logistics industry grows at 1.5-2x the GDP
growth of a nation.
Indian Logistics is estimated to have grow at a healthy ~15% in the last five years.
However, growth in sub-sectors varies, with the lowest being in basic trucking
operations and highest in supply chain and e-tailing logistics.
In overall goods movement, bulk commodities contribute majorly (60-80%) in
volume terms. Logistics movement is guided by the location of manufacturers,
consumers and EXIM flow. Growth drivers for Logistics players covered in this report
include sectors like Auto Components, Textiles, Organized Retail, Pharmaceuticals,
Electronics, Cement and E-commerce (emerging).
Exhibit 15: India’s export-import volumes grew at 2x of the Exhibit 16: Listed logistics companies sales growth ahead of
GDP growth rate in the last decade
India’s GDP growth rate (%)
Exports (% YoY)
35
30
Imports (% YoY)
33
31
26
17
6
24
25
8
26
9
25
9
21
9
13
8
17
19
15
8
20
8
20
7 85
8
FY14
FY08
FY09
FY10
FY11
FY12
FY13
FY14
20
9.1
15.5
9.0
9.2
8.4
11.3
8.1
8.1
GDP (% YoY)
Logistic Companies* sales growth (% YoY)
24.4
18.6
12.8
7.4
8.2
6.0
GDP Growth (% YoY)
17
76 8
10
13
5
14
6
FY02
FY04
FY06
FY08
FY10
FY12
Source: CMIE, Industry, MOSL * 2-year average growth; Listed companies include Concor, Gateway,
AllCargo, TCI, Blue Dart, Sical and Gati Source: CMIE, Industry, MOSL
Domestic economy’s revival to augur well for sector
Post the change of government at the Center, the investment cycle appears to be
restarting, with increasing confidence at the consumer and investor level.
Investments in Manufacturing and Infrastructure, coupled with growth in the
sectors mentioned above will have a direct bearing on Logistics sector growth. Some
March 2015
9

Logistics | Transformational times!
of the enabling initiatives could be to form a National Integrated Logistics policy that
will focus and ensure cohesive growth of infrastructure.
Our interactions with the industry players indicate that with GDP inching towards 7-
9% range, Logistic sector growth should move towards 20% and beyond.
Exhibit 17: India’s EXIM trade shows high correlation to GDP growth; expected GDP revival to boost EXIM trade again
GDP (% YoY)
12
9
6
3
0
Exports (% YoY) - RHS
Imports (% YoY) - RHS
38
26
14
2
-10
Source: CMIE, MOSL
Infrastructural bottlenecks stifled growth
Logistics by definition is the management of goods flow between the points of origin and
consumption to meet customers or corporations’ requirements. Hence, it becomes critical
that all components of the value chain should be available at the right time and place, in
desired condition and pertinently at right cost to efficiently complete the goods flow chain.
India logistics cost higher at
~13% of GDP due to
inefficiencies
Some studies estimate the share of India’s logistics spend in GDP at ~13% (versus 7-
8% in developed countries), implying overall size of USD180-220b (direct costs +
wastages led by inefficiencies). While the actual number (% share) could vary to
some extent, the comparison with other countries clearly shows the inefficiencies in
Indian logistics sector.
Exhibit 18: Logistics spend in India at ~13% - one of the highest in the world
20%
15%
10%
5%
0%
*Figure share in China as manufacturing contributes to >30% of its GDP v/s ~15% in India
Source: Armstrong & Associates, MOSL
Infrastructural bottlenecks across modes (rail, road, waterways) have stifled growth
of the sector and have promoted inefficiency. Capacity constraints and inefficiencies
March 2015
10

Logistics | Transformational times!
can be noted from the high transit time in rail as key train routes operate at >110%
utilization, thus leading to an average speed of ~25km/hr. Road sector is fraught
with inadequate and low quality highway availability, thereby limiting the trucks’
size and impacting economics.
Exhibit 19: Comparing India’s logistics efficiency with global averages
Logistics Efficiency Indicators
Road Transportation
Average truck speed (in kmph)
Four lane road length (in kms)
National highway length (in kms)
Average distance travelled by a truck /day (km)
Air Transportation
Airport charges (in USD)
Airport waiting time –Exports (in hours)
Airport waiting time –Imports (in hours)
Ports & Sea Transportation
Turnaround time at ports (in hours)
Annual container handling capacity (TEUs)
Containers handled per ship, per hour (max)
Throughput density (maximum, TEUs/hectare)
Warehousing
Average inventory days
Others
3PL share of logistics
Logistics cost as percent of country’s GDP
India
30 – 40
~8,000
~80,000
250-300
471
50
182
84
10.5m
15
45,000
33
Global
60 –80 (incl. China)
34,000 (China)
1,900,000
600-800
265
12
24
7 (Hong Kong & Singapore)
150m (China)
25-30
170,000-220,000 TEUs / hectare
24 (China)
• US: 57%
• Japan: 80%
• Europe: 40%
7-8% (developed countries)
Source: KPMG, MOSL
16-18%
13%
Exhibit 20: Comparing India’s logistics dynamics with US and China
India
GDP composition
Industry
Agriculture and allied services
Services
Logistics cost as a % of GDP
Transportation cost as % of GDP
Warehousing cost as % of GDP
Other logistics costs as % of GDP
Major industries driving the logistics sector
18%
17%
65%
13.0%
8%
4%
1%
Auto components, Textiles,
Pharma, Cement and E-
commerce (emerging)
Inadequate road networks
Losses during transportation
9.9 m
4.3m TEU (43% share) - JNPT
4.8m.
1,173
64,000
14,750
China
47%
10%
43%
18% (v/s 21% in 1997)
9%
6%
2%
Metals, Cement, Textile,
Electronics
High toll charges
Shortage of trained
manpower
139.7m
31.7m. TEU (23% share) -
Shanghai
4m.
7,018
66,239
59,331
USA
20%
1%
79%
8.5% (v/s 16% in 1980's)
5%
3%
0%
Food and Beverages. E-
commerce
High employee costs
Major challenges
Total containers handled at ports (TEUs)
Containers handled by busiest ports
Road network (m km)
Weight of goods moved annually per km of
road
Rail network (km)
Weight of goods moved annually per km. of
rail line
42.9m
7.9m. TEU (18% share) Los
Angeles
6.5m.
1,727
228,513
8,293
Source: Knight Frank, Industry, MOSL
March 2015
11

Logistics | Transformational times!
India has to do a lot of
catching up in logistics
service levels
Additionally, Indian logistics flow is unbalanced, as major portions of the goods
transported are only on select few routes. The freight share is skewed towards
western India, which connects the sea ports in Mumbai and Gujarat to the Northern
hinterland.
Exhibit 21: India’s freight traffic is concentrated on limited routes
Source: McKinsey & Company, MOSL
Exhibit 22: India has a long way to go in logistics service level versus regional peers
Logistics industry – development level
Hong Kong
Singapore
n
Poor facilities and
South Korea
n
Excellent infrastructure
n
Sophisticated
infrastructure
n
Low IT penetration
n
Industry partners
Taiwan
Malaysia
Philippines
China
Thailand
India
capabilities and
technology
n
Easier to attract quality
limited
labour
n
Supply chain partners
n
Processes and
Vietnam
Indonesia
Cambodia
Laos
Low
n
Traditional channels
n
Moderate infrastructure
n
Medium IT penetration
Infrastructure that
support collaboration
with no integration
High
Source: Industry, MOSL
March 2015
12

Logistics | Transformational times!
Key issues constraining the sector
We analyze the key issues that have stifled the Indian Logistics sector growth and
resulted in inefficiencies, leading to cost increases.
Exhibit 23: Key issues constraining the sector
Source: KPMG, McKinsey, MOSL
1
Inadequate
infrastructure;
sub-optimal
port scale
Inadequate infrastructure, sub-optimal port scale:
Despite being a more
economical mode of goods transport, railways in India has lost market share in
freight movement to roads in the last few decades due to huge under-investments,
leading to capacity constraints. Compared to other countries, India’s rail share in
goods transport is 31% versus ~60% in 1980’s and 48% in 1990’s. Indian Railways,
uses freight earnings to cross-subsidize the losses in its passenger service
operations, thereby resulting in higher tariff for freight operations.
Exhibit 24: Rail share (efficient mode) in freight traffic has
been overtaken by road (inefficient mode for long distance Exhibit 25: Share of railways in India’s logistics sector is low,
transit) due to capacity constraints
roads, despite being inefficient, carry more freight traffic
Freight traffic share (%)
100
80
60
40
20
0
FY51
FY71
FY81
FY91
FY00
FY05
FY12
India
31%
60%
30%
48%
23%
China
US
Railway
Road
1%
8%
Rail
Road
1%
46%
Water
1%
14%
37%
46%
10%
Europe
Air
1%
43%
Source: NTDPC, MOSL
Source: KPMG, MOSL
March 2015
13

Logistics | Transformational times!
Exhibit 26: Rail is the preferred mode of transport beyond 500km
8.0
6.0
4.0
2.0
0.0
200
300
Road
Preferred
400
500
600
700
Rail
Preferred
800
900
1000
1100
Rail / Waterways
Preferred
Road
Rail
Waterways
Source: KPMG, McKinsey, MOSL
Exhibit 28: Indian Railways: Passenger fares significantly
Exhibit 27: Indian Railways: Freight revenues used to cross- lower, freight rates significantly higher thans China and
subsidize passenger losses
Russia
Cost (Paise / km)
Recovery (%)
125
100
75
50
25
0
Revenues (Paise / km)
6.70
200
160
120
80
40
0
India
Passenger Service
Freight Service
Source: Indian Railways, MOSL
China
Russia
India
China
Russia
1.00
2.70
1.00
0.58
0.75
cents/passenger-km
cents/tonne-km
Source: Indian Railways, MOSL
Sub-optimal port scale:
All major ports in India are facing capacity constraints
both on the front-end and back-end, and operations remain highly inefficient.
This has led to the strong emergence of minor ports, mainly on the west coast to
cater to the increasing traffic growth.
Exhibit 29: India’s largest port (JNPT) is at meaningfully lower scale compared to global majors (m TEUs)
36.6
32.6
23.3 22.4
17.7 17.4
15.5 15.3 13.6
13.0 11.6
10.4 10.0
9.9
9.3
8.6
8.0
7.6
6.2
6.2
4.3
Several ports listed between Los Angles and JNPT not shown in the exhibit
Source: Ministry of Shipping, MOSL
March 2015
14

Logistics | Transformational times!
Exhibit 30: Four of the largest Indian container ports operating at ~100% utilization levels
5,000
4,000
3,000
2,000
1,000
-
FY14 Volume ('000 TEU)
Capacity Utilization (%) - RHS
125%
100%
75%
50%
25%
0%
2
Lack of last
mile
connectivity
Source: IPA, Company, Industy, MOSL
Lack of last mile connectivity:
Lack of coordination in infrastructure development
leads to interconnectivity issues among different modes of transport. This leads to
delays and unreliability in services, which increases cost, reduces competitiveness,
and discourages investments.
Exhibit 31: India has one of the largest road networks in the world, but quality of roads is
very poor given the lower share of large national highways
Type
National Highways
State Highways
Other Roads
Total
Length (km)
92,851
142,687
4,649,462
4,885,000
% share
2
3
95
100
Source: Ministry of Roads FY14, MOSL
3
Administrative
delays
Administrative delays:
A country’s competitiveness is judged by the ease of doing
business, and logistics play a vital role in the same. Despite being a relatively low
cost country, logistics cost in India tends to be higher due to administrative delays
led by paper work (resulting in huge inventory investments and wastages) and
complex tax structure.
Exhibit 32: India ranks below the relatively developed countries in logistics performance index
Indicator
Bangladesh
Docs for export
6.0
Docs for import
8.0
Ability to track
2.6
Quality of services
2.4
Customs efficiency
2.3
Infrastructure
2.5
Time to enforce a contract*
1,442
Time to get electricity *
142
Time to export*
25.0
Time to import*
34.0
Logistics performance index
2.7
*Days
India Sri Lanka Pakistan
9.0
6.0
8.0
11.0
6.0
8.0
3.1
2.7
2.6
3.1
2.8
2.8
2.8
2.6
2.9
2.9
2.5
2.7
1,420
1,318
976
67
132
206
16.0
20.0
21.0
20.0
19.0
18.0
3.1
2.8
2.8
China Hong Kong Cambodia Indonesia Malaysia Singapore Thailand Vietnam
8.0
4.0
9.0
4.0
5.0
4.0
5.0
6.0
5.0
4.0
10.0
7.0
6.0
4.0
5.0
8.0
3.5
4.1
2.8
3.1
3.5
4.1
3.2
3.2
3.5
4.1
2.5
2.9
3.5
4.1
3.0
2.7
3.3
4.0
2.3
2.5
3.5
4.1
3.0
2.7
3.6
4.1
2.2
2.5
3.4
4.2
3.1
2.7
406
360
401
498
425
150
440
400
145
41
183
108
46
36
35
115
21.0
5.0
22.0
17.0
11.0
5.0
14.0
21.0
24.0
5.0
26.0
23.0
8.0
4.0
13.0
21.0
3.5
4.1
2.6
2.9
3.5
4.1
3.2
3.0
Source: APL, MOSL
4
Low
penetration
of new
technology
Low penetration of new technology
in supply chain process is resulting in damage
of goods. India has least warehouse capacity with modern facilities, and given the
fragmented industry state (large share with unorganized players), investment in IT
infrastructure is almost absent at required scale.
March 2015
15

Logistics | Transformational times!
Infrastructural bottlenecks being addressed (not just growth;
efficiency too)
Significant investment
required to iron out
infrastructural bottlenecks
Indian government and private players, having identified the issues, are working on
various initiatives on infrastructure as well as policy front. Investment in logistics
helps not only support its growing demand but also boosts growth in other
upstream and downstream economic activities.
Building of the dedicated rail freight corridors, for instance, will help promote the
more efficient haulage of containerized cargo by rail. GST implementation will bring
in ease of inter-state goods movement across India. There is no e-tail without
delivery – delivery at the doorstep is a pre-requisite. Logistics requirement for e-
commerce will grow as exponentially as e-commerce.
A recent study by the National Transport Development Policy Committee (NTDPC)
indicates an annual investment requirement of USD570b by 2032 versus the current
level of USD100b. It proposes to increase the investment commitment in railways as
a percentage of GDP from the last two-decade average of 0.4% to 0.8% in 2012-17
and further increase it to 1.1/1.2% by 2030.
Exhibit 33: Proposed investment in transport infrastructure: Higher allocation for logistics will help railways to increase the
share in goods transportation (USD b)
USD Billion
Rail
Road
Other
Transport investment
Other
35%
Rail
32%
1,186
417
Rail
Other 16%
40%
Road
44%
319
173
69
29 76
2007-12
116
126
77
2012-17
Road
32%
778
522
183
183
155
2017-22
273
252
252
2022-27
385
385
2027-32
Source: NTDPC, Company, MOSL
March 2015
16

Logistics | Transformational times!
Exhibit 34: Desired scenario of infrastructure in India
PIPELINES
l
Presence of National Pipeline Grid
l
Pipeline are multi-commodity and
multi-user
MULTIMODAL FREIGHT CORRIDORS
l
Dedicated networks of rail and road routes
l
Provision for high-speed cargo movement with high
tonnage capacities
ROADS
l
Provision for last-mile
connectivity to terminals
l
Linkage of national and state
highways
PORTS
l
Presence of coastal terminals at 200km
intervals
l
Sufficient capacity to handle domestic
cargo
LOGISTICS PARKS IN REMOTE
AREAS
l
Multimodal parks serving
inaccessible areas
ECONOMIC/TRADE ZONES
l
Free trade warehousing zones
l
Assembly and light manufacturing
services
VESSELS
l
Sufficient number of vessels to
handle bulk and container cargo
MULTIMODAL LOGISTICS PARKS
l
Identify zones for multimodal hubs at inter-
section between rail-road, rail-port and road-air
Source: KPMG, MOSL
March 2015
17

Logistics | Transformational times!
Opportunities across the spectrum
Drivers: GST, Containerization, E-Commerce, ‘Make in India’
Multiple sub-sectors offer
huge investment
opportunities
n
We see opportunities across the logistics spectrum – transportation, storage,
distribution, and integrated/allied services.
While economic growth itself presents a case for improved business prospects, there
are multiple developments and trends for logistics enterprises to ride on. For CTOs,
(a) increasing containerization, (b) EXIM growth, and (c) dedicated rail freight corridors
are key volume growth triggers.
n
n
Implementation of GST will be a game-changing event for businesses in general and
organized logistics players. It will provide a boost to warehousing, supply chain
management and 3PL business.
n
Specialized needs of the burgeoning e-commerce and cold chain industry will spawn a
range of opportunities for niche organized logistics players.
While the logistics activity can be broadly classified into inbound and outbound
category, its value chain involves transportation (rail, road, air, waterways),
warehousing (CFS, ICD) and value added services.
Exhibit 35: Structure of Indian Logistics market
Indian Logistics Market
Road Freight
Express Logistics
Container Logistics
Liquid Logistics
CTO
ICD / CFS
MTO
Source: Industry
A logistics company’s service offerings range from a simple point-to-point transit to
complex multimodal logistics that include supply chain and third party logistics
management.
n
Evolution of Logistics in India:
Logistics is no more viewed as the cost center but
forms a vital part of the product delivery value chain for a company. Changed
perception about the industry and value delivered is driving the outsourcing
business towards logistics players.
n
Organized player share still very small:
Despite being the oldest industry, it
continues to remain largely unorganized primarily due to complex tax structure
and lack of world-scale infrastructure. Organized players’ share in certain
categories (road transport) is <1%, while higher share is in the complex 2PL
categories, where scale and back-end IT infrastructure investments are required.
n
Margins vary widely in sub-categories:
Business dynamics of each sub-category
varies widely and so does the margin profile. The margin profile would range
from 3-5% in point-to-point transit to 20-30% in supply chain management.
March 2015
18

Logistics | Transformational times!
Exhibit 36: Snapshot of Logistics Sector services
• Warehousing related to inland
distribution whether inbound or
outbound
• LTL transshipment centers
Transportation + Warehousing:
• Courier (express), e-commerce
• Cold chain; Freight forwarding
• Packaging; Consulting
Services bundled around rail
transportation and warehousing:
• Dedicated rail container services
• Stuffing/de-stuffing
• Consolidation
•
•
•
•
Freight forwarding
Freight consolidation
NVOCC
Customs clearance
Road
• Trucking and related services like
fleet management, network
optimization, route planning etc,
Rail
• Railway cargo transportation
• Container Train Operators
• Rail-side Container Depots
• Inland Container Depots
• Multimodal warehouses
Water
• Coastal shipping and inland water
transportation
• International EXIM shipping
• Container Freight Stations
• Inland Container Depots
• Port based warehousing and
storage
Air
• Air cargo and passenger
operations on domestic and
international routes
• Air cargo transshipment
warehouse near airports1
• Express and courier services
• Freight forwarding
• Customs clearance
Transportation
Warehousing
Range of services
Value added services
Source: Industry, MOSL
Exhibit 37: Country-wise logistics cost composition – India spends higher amount on
inventory and losses (%)
Transportation
31
25
9
35
India
49
50
Warehosing
18
24
9
Inventories
Others (incl. Losses)
10
15
25
China
US
Source: KPMG, MOSL
March 2015
19

Logistics | Transformational times!
Exhibit 38: Summary of business presence of key logistics players
Company
Concor
Gateway Distriparks
TCI
Blue Dart
Gati
Allcargo
Aegis Logistics
Snowman Logistics
TVS Logistics Services
Safexpress Pvt. Ltd
Mahindra Logistics
Delhivery
Continental Warehousing
Star AgriWarehousing
Shree Shubham Logistics
Ocean Sparkle
J.M. Baxi
Road
Transportation
Air
Rail
Water
Ware-
housing
Storage
CFS/
Cold
ICD
Chain
Bulk
Liquid
Valued Added Logistic Services
Express Supply
Multi-
Port
Cargo Chain/3PL modal Handling
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
Rs
þ
þ
þ
þ
þ
þ
Source: Company, MOSL
While economic growth itself presents a case for improved business prospects,
there are multiple developments and trends for logistics enterprises to ride on,
namely, increasing containerization, implementation of GST, ‘Make in India’
campaign and burgeoning e-commerce sector.
CTOs to benefit from several triggers
CTO’s will be direct
beneficiaries of multiple
growth drivers and enabling
infrastructure projects
The key triggers for container train operators’ volume growth would increasing
containerization, EXIM growth and dedicated rail freight corridors.
Exhibit 39: Key triggers for CTO growth
Increasing
containerization
Exim growth
Dedicated rail
freight corridors
Source: KPMG, McKinsey, MOSL
March 2015
20

Logistics | Transformational times!
1. Increasing containerization
Increasing
containerization
Containerization is a system of inter-modal freight transport using inter-modal
containers (also called shipping containers and ISO containers) made of weathering
steel. The containers have standardized dimensions measured in terms of twenty-
foot equivalent units (TEUs).
Containerization – a background
Of the total global trade, 90% is through sea, of which ~50% volume is break-bulk
(cargo which can be containerized). In India, ~50% of the break-bulk cargo is
containerized, as against the global average of 75-80%.
Exhibit 40: India containerization level v/s other regions - significant scope to grow India’s
containerized volumes
70%
48%
54%
71%
73%
India - FY09
India - Current
US
Europe
China
*Containerization is calculated as containerized volumes as a % of break-bulk volumes
Source: Industry, MOSL
Containerization in India began in 1966 and Indian Railways commenced rail
operation between Mumbai and Ahmedabad in 1968. However, big jump in
container operations was after formation of Container Corporation in 1988.
Introduction of containers reduced the goods transfer handling steps from seven to
two, thereby significantly reducing chances of damage.
Some of the key benefits of containerization are:
n
Safety of goods with lower risk of transit damage and pilferage
n
Smoother integration between various modes of transportation (ship, rail and
road)
n
Savings in costs through lower packaging, distribution costs
n
Ability to track movement
Containerization in India
Container volume in India is expected to be 2x by 2020, driven by EXIM trade and an
increase in containerization from the current 55% to >65% (versus developed
countries’ average of 70%). The containerization growth will be driven by:
1. Growth in the typical containerized cargo like electronics, textiles, food
products, pharmaceuticals, machinery and paper, and other break-bulk
commodities like steel, cement, sugar and rice.
2. Availability of rail transit capacity post DFCs commissioning, expansion in the
container handling capacity at ports, CFCs, ICDs and inland waterways.
3. Multi-modal logistics park development.
March 2015
21

Logistics | Transformational times!
4. Rail freight regulator to ensure no ad-hocism in the haulage charge changes.
Exhibit 41: Container volumes at major ports could double by FY20 (m TEUs)
10% CAGR
16
14
11
9
6
FY10
FY12
FY14
FY16E
FY18E
FY20E
8
15% CAGR
20% CAGR
15.6
14
13.6
Source: IPA, Industry, MOSL
Exhibit 42: Increasing share of container traffic in India at major ports (%)
POL
14.8
17.6
13.3
3.4
17.7
33.2
2009
Iron Ore
16.9
18.0
12.8
3.2
17.9
31.2
2010
Fertilizer
17.0
20.0
12.8
15.3
31.4
2011
3.5
Coal
18.1
21.4
14.1
3.6
10.8
32.0
2012
Container
Other Cargo
20.2
22.0
15.9
5.22.7
34.1
2013
19.9
20.6
18.9
4.4 2.5
33.7
2014
Source: IPA, Industry, MOSL
Exhibit 43: India’s container handling capacity is expected to reach 33mmt by 2020
Source: Marine Container Services, MOSL
March 2015
22

Logistics | Transformational times!
Exhibit 44: Estimated destination-wise break-up of container cargo in EXIM trade
Source: Drewry, MOSL
2. Exim growth to drive CTO volumes
EXIM growth
EXIM business accounts for >75% of CTO operators and is also a higher profitability
business (higher volume, higher asset turn leading to higher RoCE) compared to
domestic cargo movement.
n
EBIT margins in the EXIM segment are high at 21-25%, compared with 9-12% in
the domestic segment.
n
The key reasons for this divergence are: (1) EXIM segment enjoys higher
terminal handling revenue due to customs and clearance, (2) EXIM trade has
more balanced up and down loads, leading to lower empties cost, and (3)
turnaround time for the domestic segment is high.
n
The north-western part of India accounts for >60% of EXIM trade, with JNPT
alone handling ~42% of the container port traffic.
n
Traffic handling capacity of major ports has posted a CAGR of 13.4% from
504.7m tons in FY07 to 947m tons in FY12. During this period, most major ports
operated at a capacity of over 90%.
Exhibit 45: Domestic container volume growth has high correlation to EXIM growth
30
20
10
0
-10
FY96
FY98
FY00
FY02
FY04
FY06
FY08
FY10
FY12
FY14
Container Volume growth (%)
EXIM volume growth (%)
Source: IPA, MOSL
March 2015
23

Logistics | Transformational times!
Exhibit 46: Major products exported through containers in Exhibit 47: Major products imported through containers in
India (2013, in % share)
India (2013, in % share)
Containerized
Exports
Textiles
11%
Chemicals
11%
Fabric/Yarn
10%
Steel
Products
Reefer food
9%
products
8%
Source: UNCOMTRADE database, Drewry Maritime Research, MOSL
Containerized
Imports
Electrical &
electronic
goods
17%
Others
41%
Machinery/
spares
16%
Others
51%
Steel
Food
products Products
8%
6%
Chemicals
12%
Source: UNCOMTRADE database, Drewry Maritime Research, MOSL
Exhibit 48: CTOs operating in India
Name
Adani Logistics
Concor
CRRS*
CWC
ETA Star Group
Gateway Rail Freight
Hind Terminals
India Infra.
SICAL Logistics
Boxtrans (India)**
TransRail Logistics
Arshiya Rail Infra.
KRIL
Inlogistics
Total
Group
Adani
IR#
DPW
PSU
Dubai
GDL
MSC
APL
-
JM Baxi & Co.
-
-
-
NOL, Singapore
Rakes
6
269
7
11
21
14
9
7
12
2
20
8
15
401
4
6
95
100
-
-
0
5
-
100
100
0
Rail
Terminals
2
63
1
Exim
(%)
82
100
100
Domestic
Locations
(%)
Gurgaon /Kishangarh
18
Pan India
-
-
Other Activities
Ports, Container terminals, CTO, CFS
Multi modal operator
Ports, Container terminal
Warehousing, CFS
Shipping and port services
1
2
1
80
Ludhiana / Mumbai /
CFS, CTO
Faridabad
Shipping/ Freight Forwarding
Container shipping, infra
CFS, container terminal
Container terminal, CFS,
Trucking
Khurja
Fertilizers
Source: Industry, MOSL
March 2015
24

Logistics | Transformational times!
Dynamics of CTO business
The key success factors for CTOs include (a) port side infrastructure and reach to key
trade locations, (b) satisfactory service levels to shipping companies, and (c) multi-
modal delivery service capabilities.
Liberalization of CTO industry in India
n
The domestic CTO industry was first liberalized in 1988, when Indian Railways
carved out its CTO operations, leading to the creation of Container Corporation
of India (CCRI).
n
CCRI was established with the objective of facilitating primarily EXIM container
movement and providing other logistics services like one-window customs
clearing and ICD/CFS facilities. To execute these services effectively, Indian
Railways provided land at strategic locations where trade originates.
n
In January 2006, private sector companies were permitted to enter the industry
to attract a greater share of container traffic for Indian Railways and to
introduce competition in rail freight services. Indian Railways remains the sole
owner of the rail network and the sole haulage service provider in India.
n
Since 2006, ~15 new players (13 private and two state-owned) have entered the
industry, though only 1-2 players were able to achieve meaningful scale.
Exhibit 49: Analyzing the CTO value chain
Source: KPMG, MOSL
March 2015
25

Logistics | Transformational times!
3. Dedicated rail freight corridors
We expect CTOs to benefit significantly from the completion of planned dedicated
freight corridors connecting Delhi to Mumbai in West India and Kolkata in East India.
Also, DMIC (Delhi-Mumbai Industrial Corridor) will boost integration and
development of India’s manufacturing sector and logistics efficiency.
Dedicated freight corridor (expected to complete in 2018/2019, given the scale of
the project should expect some delays) will improve the four key factors in train
operations
(a) Double stacking:
Containers can be double-stacked on full route, currently
available from Gujarat ports
(b) Speed:
Would increase from current average 25km/hr to >60km/hr
(c) Load carrying capacity:
Axle load to increase from 25MT to 32.5MT,
enhancing track loading capacity from 8.67MT/mtr to 12MT/mtr
(d) Length of trains:
To increase from current 700 to 1,500m (but unlikely on
the full stretch of the corridor)
Train frequency between key ports and ICD destination is expected to increase
significantly. JNPT to Vadodara train’s frequency could increase from 9 to 49, and
Ahmedabad to Marwar train’s frequency could increase from 15 to 72.
CTOs would benefit from higher asset utilization, cost savings, and time savings,
leading to higher volumes and profitability.
Exhibit 50: Indicative map of DFC’s route*
Dedicated rail
freight
corridors
CTO’s to witness quantum
jump in operations post
DFC
*~80% route is parallel to the existing rail track
Source: PTI, PMO, MOSL
March 2015
26

Logistics | Transformational times!
Expert Speak: Adesh Sharma, Managing Director; DFCCIL
DFC will be game changer for Indian Logistics
n
Dedicated Freight Corridor (DFC) is being developed under Dedicated Freight Corridor
Corporation of India Limited (DFCCIL).
It promises to be a ‘game changer’ for improving the competitiveness of Indian
manufacturing. DFC plans to run freight trains in India on time tables.
Travel time for goods transportation between Mumbai – Delhi would decline from 60
hours currently to just 18 hours.
In addition, there will be multiplier effects by setting up various Industrial Corridors
through the route length.
n
n
n
Key highlights of the DFC program
n
DFC promises to be a ‘game changer’ for improving the competitiveness of
Indian manufacturing. The share of Indian Railways in freight traffic has declined
to just 36% (v/s ~70% in several other countries) and the Dedicated Freight
Corridor Corporation of India (DFCC) intends to improve the ratio to 50% over
the next few years.
n
One of the key advantages of DFC is that freight trains in India could be run on
time tables similar to passenger trains currently; the frequency can be
theoretically increased to one train in 10 minutes. As a result, travel time for
goods transportation between Mumbai and Delhi would decline from 60 hours
currently to just 18 hours. Setting up of various industrial corridors along the
route length would result in a multiplier effect.
n
Despite being a greenfield network, freight charges in the system will not
increase. DFCC’s operating ratio would be just 45% against the Indian Railways’
98%. Also, DFCC’s maintenance and operational costs would be just 33% of
Indian Railways’ current costs primarily driven by ‘Faster-Longer-Heavier’ trains,
which would significantly increase operational efficiency.
n
Post the western and eastern DFCs, four new freight corridors are being
planned: Delhi-Chennai (2,173km; USD22b), Mumbai-Kolkata (2,000km;
USD21b), Kharagpur-Vijayawada (1,100km; USD12b), Chennai-Goa (890km;
USD10b). The surveys have been recently completed and suggest an IRR of
18%+ for several of these networks.
Project cost and timelines
n
The intent is to complete the project by December 2018, and there is strong
confidence that deadlines would be met. The western and eastern (till Khurja)
DFCs would be completed by December 2018. The Khurja-Ludhiana section
would be completed by December 2019.
n
Total project cost for the western and eastern DFCs is estimated at ~INR820b, of
which construction cost (including civil, tracks, electrical, signaling) would be
INR560b. Contracts worth INR260b have been awarded (including ~INR90b to
L&T consortium, INR50b to GMR consortium, and INR33b to Tata Projects-led
consortium). The balance contracts of INR300b are targeted to be awarded by
March 2016, which entails a strong pipeline of project awards for equipment
suppliers.
March 2015
27

Logistics | Transformational times!
GST to usher consolidation and growth for organized players
GST - The ultimate
legislature for domestic
logistic service business
Goods and Services Tax (GST) would (i) amalgamate a large number of Central and
State taxes into a single tax, (ii) mitigate cascading or double taxation in a major
way, and (iii) pave the way for a common national market. From the consumer point
of view, the biggest advantage would be in terms of reduction in the overall tax
burden on goods, which is currently estimated at 25%-30%. Introduction of GST
would also make our products competitive in the domestic and international
markets. Studies show that this would instantly spur economic growth. Last but not
the least, this tax, because of its transparent character, would be easier to
administer. Source: CBEC
Implementation of a common nation-wide GST will be a game-changing event for
businesses in general. The current indirect tax structure in India (mix of state and
central government taxes) is akin to countries within the same country — inter-state
goods movement is governed by state level tax structures, whereby operational and
logistics efficiency takes a backseat.
Manufacturers have to maintain warehouses (cost share in logistics vary between
15-35%) in each state for economical (taxation structure) reasons, leading to
wastage of infrastructure, manpower and increasing costs. The proposed GST will
result in a unified market across India and manufacturers shifting to the hub and
spoke model for goods delivery — goods delivery decision will be driven by logistics
and operational efficiencies.
Share of organized players, particularly in the road transport segment is very
minimal. GST coupled with gradual shift towards higher share of supply chain
management business will benefit organized players to increase their market share.
Implications of GST
n
Government and corporate sector to benefit alike:
Corporate sector would
benefit from simplification of the tax structure, uniformity of treatment across
states, much wider applicability of input tax credit, lower compliance cost of
litigation due to elimination of multiple categories and resultant disputes over
definition (most notably the distinction between goods and services). For the
government, both Centre and States, they will benefit from higher tax
collection.
n
Supply chain management to get a boost:
Currently, significant amount of time
is lost at the numerous check points at the state borders resulting in increase of
cost as well as travel time. Apart from taxation, these long lead times to supply
goods have also forced manufacturers to keep large number of warehouses.
Elimination of checkpoint time will result in manufacturers realigning their
distribution strategy to make it more logistically efficient and many will
outsource the activity to logistics companies (similar to developed countries) to
focus on the core business.
n
Organized sector to get a boost, partly at the cost of unorganized:
In the
current tax structure, tax credit is not available for all taxes post manufacturing.
March 2015
28

Logistics | Transformational times!
Availability of tax credit under GST will increase engagement of organized
players as the manufacturer and purchaser will get the tax credit benefit.
Incentives to stay outside the tax system will reduce, thereby minimizing the
economic advantage of unorganized players.
GST to promote hub-and-spoke model
The warehousing business, in particular will witness significant metamorphosis –
from small warehouses spread across the country to large, global-size warehouses
concentrated in a few hubs. Industry reports estimate 9% CAGR in warehousing area
in India in the next five years to 1,440msf (addition of 520msf).
Exhibit 51: GST is expected to reorganize warehousing clusters, giving rise to the hub and spoke model, and lead to higher
outsourcing and thereby benefit logistics companies
Source: KPMG, MOSL
Exhibit 52: Warehousing demand in India expected to grow at 9% CAGR, implying addition
of 520msf of addition (msf)
Manufacturing
Consumption
Exim*
Total
1,440
9% CAGR
918
211
76
631
2014
2015
2016
2017
2018
386
115
939
8% CAGR
9% CAGR
13% CAGR
2019
Source: Knight Frank, MOSL
*Covered and uncovered portion of ICD/CFS considered
March 2015
29

Logistics | Transformational times!
(Please refer to our update
on E-Commerce dated
November 5, 2014)
E-Commerce has emerged as fastest growing vertical for logistics
players
E-commerce has emerged as a fast growing segment for logistics players with last
mile delivery capability. Given the nascence of e-commerce in India and dominance
of cash-on-delivery (COD), many online players set up their own logistics
infrastructure. Third-party logistics providers (3PLs) have matured to the delivery
mechanisms for e-commerce, and as e-commerce players attune to focusing on
their core business, growth in delivering products bought online should be
disproportionate for 3PLs.
Existing 3PL logistics players like Blue Dart, Gati, DTDC (DotZot), TCI have ramped up
their capabilities to serve this segment while several new specialized players like
Delhivery, E-Com Express have also come up.
Click here
Logistics cost in the total e-commerce merchandise value is estimated at ~10%.
Exhibit 53: Indian e-commerce market is extremely small as Exhibit 54: Various industry sources peg extremely high
compare with other countries
growth rates over the next few years
E-Commerce Market Size (USDb)
260
295
Projected E-Commerce market size (USDb)
125
60
13
India
US
China
13
Current Size
(IAMAI)
CY20
(Flipkart)
CY20
(Google India)
CY25
(Zinnov)
70
*E-tailing market size is estimated at USD4b
Source: Industry, MOSL *Google India predicts e-tailing market size at USD45b by CY20
Source: Industry, MOSL
Logistics critical for e-commerce success
While e-tailing does not require the opening of physical stores to capture consumer
demand, it needs an effective website through which customers can access product
information and place orders. Once the order is placed, it passes through another
set of stakeholders who bring the ordered product to the customer’s doorstep.
Most e-tailers view themselves as supply chain and technology integrators who
manage a complex web of stakeholders.
Given the geographical complexity, suboptimal infrastructure and regulatory
variations across the country, logistics in India has always been challenging. It has
also been more of a B2B service; the B2C logistics ecosystem (requires customer
interaction, cash handling – COD ~60% of all deliveries, and returns handling) is still
a new and underdeveloped capability for 3PLs.
Up to 90% of goods ordered online in India are moved by air, which pushes up
delivery costs by around half, according to several online retailers and logistics
March 2015
30

Logistics | Transformational times!
companies. Road and rail transport networks remain woefully underdeveloped and
entangled in graft and bureaucracy.
Doing it on their own
E-tailing growth in Tier2/3
cities open up vast growth
opportunity for third party
logistics players
Some of the more established e-tailers have invested in setting up their own
delivery networks, as: [1] this enables them to have a ‘tangible’ customer
interaction through which they can get feedback and tailor services accordingly, and
[2] most 3PLs are still in the process of developing efficient and comprehensive
logistics networks.
n
Flipkart created a separate brand for its logistics arm in April 2013 and has so far
used eKart only for in-house deliveries. In February 2014, it opened eKart
Logistics Services for other e-tail ventures too.
n
Amazon too is pumping up capacities at Amazon Logistics. This is in addition to
existing partnerships with 3PLs like GATI, Blue Dart and FedEx Corp. Amazon
also started a pilot project with India Post to test the system and use the
channel to collect COD payments as well. This could help it reach deep into
India's hinterland. India Post has over 150,000 post offices in India, of which
89% are in rural areas.
n
In 2012, Jabong helped design the process for JaVAS, a logistics solution similar
to Amazon fulfillment services so that other e-commerce players can outsource
their logistics to Jabong on a contract basis.
India has ~21,000 pin codes and most 3PL players are able to reach 8,000-10,000 pin
codes at best. India Post, with its formidable network across urban and rural India
and its already established mechanism to handle money orders, can harness this
opportunity in a big way.
As per research by TechnoPak, case studies of the US Postal Service (US) and
Deutsche Post (Germany) demonstrate that these organizations have attempted to
remain relevant in the changing times by tapping into and benefiting from the
growth of e-tailing in their respective countries. Both the organizations are
significant in delivering parcels to e-tailing customers.
Exhibit 55: Share of revenues from e-commerce is significant for US and German postal
services
E-Commerce revenue share
Other revenues
59%
85%
41%
15%
US Postal Services, US
Deutsche Post , Germany
Source: Industry, MOSL
March 2015
31

Logistics | Transformational times!
EXPERT SPEAK: Mr Sanjiv Kathuria, Director & CEO, DotZot
Simply put, growth in logistics will be as exponential as e-commerce
n
Launched in mid-2013, DotZoT is the first pan India delivery network, focused
exclusively on the e-commerce/e-retail space. It is backed by DTDC's size, scale and
reach, and covers 8,000 plus pin codes and 2,300 cities across India.
n
DotZot aims to bridge the gap faced in logistics infrastructure by providing superior
logistics solutions to e-tailers, who are increasingly looking to enhance customer
shopping experience. DotZot ensures constant visibility of shipments and real-time
flow of information. It offers superior value and reliability to e-retailers.
Massive opportunity
There is no e-tail without delivery. Delivery at the doorstep is a pre-requisite.
Logistics requirement for e-commerce will grow as exponentially as e-commerce.
Sizing the market today:
The current market size of e-tail in India is estimated at
USD3b. If the average shipment value is of INR2,000, that puts the number of
shipments per year at 90m. E-tailers cater to ~50% of the shipment deliveries on
their own. 90m annual e-commerce-driven shipments as explained above imply
0.3m deliveries per day only for e-commerce parcels even today. That implies
~0.15m daily shipments of 4.5m annual shipments through 3PLs (assuming 50% is
catered to by the platform owners themselves). This pegs the overall cost of
delivering the e-commerce parcels at INR8b-9b, out of which the revenue
opportunity for 3PLs in e-commerce delivery alone is INR4b-5b.
Why growth should surpass growth in e-commerce:
Traditionally, documents have
comprised 75-80% of the volumes for the courier market in India. E-commerce
deliveries are changing this scenario, as every shipment to be delivered in
ecommerce is a parcel. 1m+ per day of ~1kg per parcel implies huge tonnage for the
market from e-commerce alone. Platform owners like Flipkart and Amazon are likely
focusing on the bigger cities, where density is high. However, increasingly the
growth opportunity in e-tailing is tilting towards smaller cities and tier-III/IV towns.
This implies that the play for even 3PLs is massive. The USD3b market is likely to
grow multi-fold, and daily shipments from e-commerce alone should easily reach
1m in a few years.
Greater share for 3PLs over time
Cost of delivery for e-commerce companies is huge at 8-10%. This is centered on
brand-building and giving customers an excellent delivery experience. However, as
profitability assumes greater importance, there will be greater propensity to
outsource functions like logistics to specialist players. They may not phase it out
entirely, given the investments in the platform, but may start pruning their
networks. They may restrict themselves to select cities with the highest density.
Also, managing day-to-day aspects of the logistics business at higher scale may be a
problem – take for example, managing attrition across thousands of delivery boys
needed to deliver 1m+ parcels every day.
March 2015
32

Logistics | Transformational times!
Why separate focus on e-commerce
An increasing number of e-tailers are shifting to the marketplace model. Parcels are
being picked up from sellers located all over. This requires a different piece of
technology and control on the pick-up process.
Once the parcel reaches the destination, there is a requirement for a parcel network
for residences – earlier only documents got majorly delivered at residences. COD
adds to the complexity, making logistics a quasi cash management service. For
DotZot, the COD remittance cycle post delivery is down from 15-20 days a year ago
to less than 7.
Secondly, the return-to-origin percentage is also in double-digits; parcels have to be
delivered back to the originating merchants. E-commerce also demands reverse
pick-up of exchange and returned shipments in large numbers, and that is also a
change that logistics companies have adapted to.
DotZot’s advantage lies in pre-established DTDC network that it can use The pre-
requisite for rolling out any delivery service is setting up a network. It is also the
biggest cost and takes several years to have a pan-country network. DotZot comes
with an established network and the largest pan-India network outside of India Post,
through DTDC. DotZot will ride on that network rather than duplicating the network.
This not only makes the business viable right from the beginning it also allows
DotZot to offer a country-wide delivery service from day-1.
The costs incurred in setting up of shipment network are significant. Also, many of
such networks that exist in the smaller cities may end up becoming cost centers,
where deliveries of products happen from higher tier cities, and the reverse traffic is
virtually non-existent. However, that is not a significant concern for DotZot, given
DTDC’s already established network that it can ride on.
Cold chain has emerged a niche logistics growth area for
organized players
Cold chain logistics and
warehousing is a nascent
sector in India and offers
huge opportunity for
organized players
India is amongst the least cold chain adoption countries, implying huge potential.
Organized players have a huge growth opportunity in this space given the 6-7%
share in the cold chain warehousing segment and 15-20% share in temperature
controlled transportation.
Cold chain logistics also known as temperature controlled logistics (TCL) business
includes (a) warehousing services to store at temperatures ranging from -25ºC to
+20ºC and distribution through temperature controlled containerized trucks and
cargo trains.
Existing cold chain warehousing capacity in India is estimated at 30m tonnes and
7-8,000 reefer vehicles, with majority of the facilities in UP (41%) and West Bengal
(33%) followed by Punjab (6%), Gujarat and Bihar. 75% of the warehousing capacity
is used by potatoes, ~2% for meat/seafood and the rest is for multipurpose
products.
March 2015
33

Logistics | Transformational times!
Expect high growth:
Indian cold chain logistics industry size is estimated at
~INR150b with an expected growth rate of 15-20% in the medium term to reach
~INR250b by FY18. Key growth enablers include demand growth and aptly aided by
government incentives for investments.
Some of the key product categories transported through this route include dairy,
poultry/meat/seafood, ready-to-eat, chocolates, pharmaceuticals, industrial
products, and fruits and vegetables.
Key players in the cold chain warehousing business include Snowman Logistics, Dev
Bhumi Cold Chain, Fresh &Healthy Enterprise (CONCOR), RK Foodland, Brattle
Foods, Brahmanand Himghar, and Gubba Cold Storage, among others.
Key players in cold chain transportation include Coldex, Gati Kausar, Kelvin Logistics,
Crystal Logistics, Coldstar Logistics, Schedulers Logistics and XPS Cold Chain among
others.
Exhibit 56: Organized player share in cold chain logistics estimated to grow at >20% CAGR
through 2017 (INR b)
Organized
Unorganized
220
140
11
2012
28
2017
Source: Industry, MOSL
March 2015
34

Logistics | Transformational times!
(Please refer to our update
on Make in India dated
September 27, 2014)
‘Make in India’ initiative to boost manufacturing sector and
augurs well for Logistics
The Indian government recently launched the “Make in India” campaign to facilitate
investment, foster innovation, protect intellectual property and build best-in-class
manufacturing infrastructure in India. This campaign aims to make a sea change in
the government’s attitude to reposition itself as a true business partner and not as a
permit issuing authority. It pervades different sectors and will lead to significant
investments and growth in the domestic manufacturing sector. Though it is too early
to quantify any benefit, it is imperative that it will give a meaningful boost to the
Logistics sector, given the scale of the initiative.
Click here
Exhibit 57: Rising trade imbalance necessitates the boost for domestic manufacturing (USD b)
Exports
360
180
-
(180)
(360)
(540)
FY92
FY94
FY96
FY98
FY00
FY02
FY04
FY06
FY08
FY10
FY12
FY14
Imports
Trade Balance
Source: CMIE, MOSL
Exhibit 58: Some of the key exporting sectors from India are growing at a healthy rate
In USDb
160
120
80
40
0
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
Source: GoI, CMIE, MOSL
*Sectors depicted above contributes ~60% on non-POL commodity exports from India
Sector:
Textiles:
Electronics:
Transport:
Machinery:
Engg goods:
Pharma:
Last 10 yr CAGR
9%
10%
16%
27%
19%
19%
16%
Ready garments:
March 2015
35

Logistics | Transformational times!
Companies covered and our key stock picks
Buy Container Corporation, Gateway Distriparks
n
In this report, we initiate coverage on two large CTOs – Container Corporation and
Gateway Distriparks with a Buy rating. While sharp ad-hoc haulage charge increase is
a concern, we expect 12-15% CTO volume ramp-up, with CCRI continuing with its
leading market share and GDPL benefiting due to its low base.
n
Among the other listed entities we have profiled are express cargo/3PL operators like
Blue Dart, Gati, TCI and multi-modal operator Allcargo Logistics.
In the unlisted space, we include (1) port service providers JM Baxi & Co, and Ocean
Sparkle, (2) CFS players Continental Warehousing, Star Agri Logistics and Shree
Shubham Logistics; (3) auto logistics players TVS Logistics and Mahindra Logistics; (4)
express/3PL player Safexpress and (5) e-tail logistics player Delhivery.
n
CTO’s well placed to benefit from economic revival, initiate coverage on
Gateway Distriparks and Concor
Of the total container volume carried by the Indian Railways ~60% flows through
western corridor (JNPT/Gujarat to North India). Various industry estimates and
implied growth led by likely GDP trajectory indicates doubling of the container
volumes by 2019/20.
Exhibit 59: Modeling 15% railway container traffic growth through FY20
Source: Company, MOSL
March 2015
36

Logistics | Transformational times!
Gateway Distriparks (MCap: USD735m, TP: INR535, 30% Upside, Buy)
n
n
n
Gateway Distriparks is the largest private container train operator with end-to-
end service offerings and also offers exposure to steady profit CFS and high
growth cold chain businesses.
Key triggers include economic revival, DFC completion and increasing
containerization, while private ownership gives it the nimble footedness to gain
market share in rail business.
The stock trades at 17x FY17E EPS of INR24/sh, with an implied dividend yield of
~3%. We initiate coverage with a Buy, based on DCF-based (WACC: 11%, TGR:
4%) fair value of INR526/sh (includes INR45/sh for Snowman, post 20%
discount). Initiate coverage with a
Buy
rating.
Container Corporation (MCap: USD5b, TP: INR1,777, 19% upside, Buy)
n
n
n
n
Container Corporation of India Ltd (CCRI) is a leading (76% market share) rail
freight transporter and is investing to transform into a multimodal logistic
player.
Key triggers include economic revival, DFC completion and early monetization of
the MMLP investment.
The stock trades at 22.5x FY17E EPS of INR71 and has a dividend yield of ~1%.
We value CCRI on DCF basis (WACC: 12%, TGR: 4%) at INR1,693. Initiate
coverage with a
Buy
rating.
Exhibit 60: Summary of Business presence of key logistics players
Company
Concor
Gateway Distriparks
TCI
Blue Dart
Gati
Allcargo
Aegis Logistics
Snowman Logistics
TVS Logistics Services
Safexpress Pvt. Ltd
Mahindra Logistics
Delhivery
Continental Warehousing
Star AgriWarehousing
Shree Shubham Logistics
Ocean Sparkle
J.M. Baxi
Road
Transportation
Air
Rail
Water
Ware-
housing
Storage
CFS/ICD Cold Chain
Bulk
Liquid
Valued Added Logistic Services
Express Supply
Multi-
Port
Cargo Chain/3PL modal Handling
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
þ
Source: Company, MOSL
Key risks
Delay in economic uptick:
Our logistics sector growth expectations are driven by the
likely revival in the GDP led by initiatives post the government change at the Center.
March 2015
37

Logistics | Transformational times!
Any delays in the DFC completion, GST Bill approval could elongate the period for
our target growth.
Specific risks to logistics sub-sectors:
Lower than expected GDP growth will impact
all the logistics players, while some of the specific risks in the niche segments
include (i) CTOs profitability can be impacted by continued imbalance in EXIM
volumes leading to higher empties, (ii) slowdown in e-commerce could impact
players like Blue Dart and Gati, and (iii) sharp increase in energy costs (electricity,
diesel) could impact cold chain players’ profitability.
Sharp revision of haulage rates by railways:
Historically, railway haulage rates
(charge paid by CTOs to Indian railway) change had been ad-hoc. While CTOs have
been able to pass it on to consumers, any such sharp increase in future could limit
the ability of CTOs to pass on the increase to consumers and impact their
profitability.
Exhibit 61: Railways has historically increased the haulage share on ad-hoc basis (INR/TEU)
INR/TEU
Distance
(Kms)
1-Jul-09
1-Jan-10
1-Jan-11
1-Dec-12
1-Feb-13
1-Apr-13
5-Dec-14
15-Dec-14
1-Mar-15
Growth %
Train Haulage Charges (500-550km)
>10T
> 20T
> 26T
Upto
and
and
and
10T upto 20T upto 26T upto 30T
5,874 8,060 8,872
5,968 8,060 8,872
5,984 8,060 8,872
5,569 7,347 8,375 9,325
5,970 7,877 8,978 9,997
5,970 7,470 8,978 9,997
7,500 9,428 11,369 12,678
6,690 8,776 10,572 11,785
7,500 9,428 11,369 12,678
Empty Empty
(single
Flat
>30T
deck) Wagons
3,819 3,525
3,880 3,581
3,890 3,591
4,776 4,409
5,120 4,727
4,471 4,127
14,048 5,625 5,250
12,784 5,241 4,876
14,048 5,625 5,250
Train Haulage Charges (1000 - 1050km)
>10T
> 20T
> 26T
Upto
and
and
and
10T upto 20T upto 26T upto 30T
10,049 13,965 15,515
10,826 13,965 15,515
11,099 14,280 15,981
10,158 13,554 15,515 17,329
10,890 14,530 16,633 18,577
10,890 13,753 16,633 18,577
13,726 17,408 21,112 23,612
12,781 16,190 19,619 21,934
13,726 17,408 21,112 23,612
Empty Empty
(single
Flat
>30T
deck) Wagons
6,532 6,030
7,037 6,496
7,215 6,660
8,810 8,133
9,445 8,718
8,205 7,574
26,226 10,295 9,609
23,866 9,599 8,931
26,226 10,295 9,609
Train Haulage Charges (500-550km)
>10T
> 20T
> 26T
Upto
and
and
and
10T upto 20T upto 26T upto 30T >30T
Empty Empty
(single
Flat
deck) Wagons
2%
0%
23%
7%
-13%
26%
-7%
7%
2%
0%
23%
7%
-13%
27%
-7%
8%
Train Haulage Charges (1000 - 1050km)
>10T
> 20T
> 26T
Upto
and
and
and
10T upto 20T upto 26T upto 30T >30T
8%
3%
22%
7%
-5%
27%
-7%
8%
0%
2%
9%
7%
0%
27%
-7%
8%
Empty Empty
(single
Flat
deck) Wagons
1-Jul-09
1-Jan-10
1-Jan-11
1-Dec-12
1-Feb-13
1-Apr-13
5-Dec-14
15-Dec-14
1-Mar-15
7%
0%
26%
-11%
12%
2%
0%
23%
7%
-5%
26%
-7%
7%
0%
0%
4%
7%
0%
27%
-7%
8%
0%
0%
5%
7%
0%
27%
-7%
8%
-9%
10%
7%
0%
26%
-7%
7%
0%
8%
8%
3%
3%
3%
8%
22%
22%
7%
7%
7%
0%
-13%
-13%
27%
25%
27%
-7%
-9%
-7%
-7%
8%
10%
7%
8%
Source: Indian Railways, MOSL
March 2015
38

Logistics | Transformational times!
Companies
BSE Sensex: 29,449
S&P CNX: 8,938
March 2015
Companies
Container Corporation
Gateway Distriparks
Blue Dart
Gati
Allcargo Logistics
Transport Corp. of India
40
54
68
74
87
92
97
98
99
100
101
102
103
104
105
Unlisted players
Ocean Sparkle
JM Baxi & Co.
Continental Warehousing
Star Agri Logistics
Shree Shubham Logistics
TVS Logistics
Safex
Mahindra Logistics Ltd
SSN Logistics (Delhivery)
March 2015
39

Container Corporation
Initiating Coverage | Sector: Logistics
Container Corporation
BSE Sensex
29,449
S&P CNX
8,938
CMP: INR1,488
TP: INR1,777 (+19%)
Buy
Market l eader, p re-emptive c apex to be nefit i n l ong
term
Large option value with likely freight shift from road to rail
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val. INRm/Vol‘000
Free float (%)
CCRI IN
195.0
1,650/750
5/3/48
290.2
4.7
156/127
38.2
n
n
n
Container C orp o f I ndia L td ( CCRI) is a l eading rail f reight t ransporter that i s
graduating to be a multimodal logistic player. It is set to benefit from GDP/EXIM
revival and DFCs completion that will accelerate containerization.
Despite private players entry in 2006, it has a leading market share (76%) that can
be a ttributed t o i ts s cale a nd v antage l ocations. Long t erm g rowth a cceleration
could come from its pre-emptive capex on multimodal parks.
We i nitiate coverage with a B uy, with a n DCF based fair value of INR1,777/sh,
implying 19% upside.
Financial Snapshot (INR Billion)
Y/E Mar
2015E 2016E 2017E
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh (INR)
RoE (%)
RoCE (%)
P/E (x)
P/BV (x)
58.9
13.0
9.6
49.2
1.0
13.3
17.5
30.3
3.8
73.6
16.3
12.1
62.2
26.4
15.2
20.0
23.9
3.4
82.9
18.2
13.8
70.6
13.6
15.5
20.4
21.1
3.1
388.0 431.8 481.6
Key beneficiary of DFCs and economic revival
n
CCRI’s businesses will benefit from (a) DFCs completion and increasing
containerization (last 12-year CAGR at 9% v/s 6% in overall EXIM at major
ports), (b) India’s expected GDP revival, (c) improving logistics infrastructure
and (d) GST implementation.
n
DFCs (full commissioning likely by 2019) will increase the rail freight capacity
and profitability of CTOs through double stacking and lower transit time.
n
India’s expected GDP revival will translate into higher EXIM trade, while
infrastructure improvement and GST implementation will improve the share
of organized logistics service providers over the medium term.
Dominant player, pre-emptive investments for long term growth
n
CCRI is an undisputed leader in rail transport (76% market share) led by
favorable depot locations (legacy benefit), scale (10x in size of next biggest
competitor) led by continuous core business capex focus.
n
CCRI is spending INR60b to develop 15 MMLPs (Multi Modal Logistics Parks)
along with upcoming DFCs, potentially upgrading the company to a full scale
multimodal logistics service provider.
Expect FY14-17E volume CAGR at 12% and EBITDA CAGR at 18%
n
While the expected economic recovery will benefit logistics sector, we
believe CCRI’s growth will be higher given its scale and likely
disproportionate benefit from investments in MMLPs.
n
We expect CCRI’s volume to post 12% CAGR and EBITDA 18% CAGR aided by
margin improvement as the double stacking share increases.
Valuation and view
n
We value CCRI on DFC-based (WACC 11.7%, TGR 5%) to arrive at a fair value
of INR1,777/sh implying 19% upside.
n
The stock trades at 21x FY17E EPS of INR71 and has a dividend yield of ~1%.
Initiate coverage with a
Buy
rating.
Shareholding pattern (%)
As on
Dec-14 Sep-14 Dec-13
Promoter
61.8
61.8
63.1
DII
7.8
6.7
4.9
FII
25.0
25.9
29.0
Others
5.4
5.6
3.1
FII Includes depository receipts
Stock Performance (1-year)
1,700
1,450
1,200
950
700
Container Corpn.
Sensex - Rebased
March 2015
40

Container Corporation
Dominant player, pre-emptive investments for long term
growth
n
n
CCRI i s a n u ndisputed leader i n ra il t ransport (76% ma rket s hare) l ed b y f avorable
depot locations (legacy benefit), scale (10x in size of the next biggest competitor) led
by continuous core business capex focus.
Company is spending INR60b to develop 15 MMLPs (Multimodal Logistics Parks) along
with upcoming DFCs, thus potentially upgrading it to a full scale multimodal logistics
service provider.
Early mover advantage and focused capex ensured high market share
n
n
n
n
CCRI, being the first container train operation (incorporated in 1988), received
railway’s surplus lands at strategic locations on a long term lease. Despite
private players entry, CCRI’s continual core capex focus ensured its leadership
position in the sector.
The key bargaining chip with container train operators apart from service
quality, in our view, is the wide network availability (rakes, number of locations
etc). CCRI, with 63 locations and 275 rakes, is well positioned to maintain its
volume share.
Post private CTOs entry, CCRI lost the market share for few years as private
CTOs entered new territories or the ones neglected by it. However, having lost
some market share, CCRI swiftly stepped up efforts through (a) tariff
rationalization (bulk discounts, rebates etc) and (b) strategic JVs to provide
seamless logistics solutions.
Private CTOs were not able to maintain the momentum given the slowdown in
EXIM business, lower RoCE, delays in ICD development (land acquisition issues)
coupled with steep hike in haulage rates (~29% in December 2012 and February
2013) by Railways.
Exhibit 1: CCRI regained market share in recent years and maintains it at >75%
Concor share (%)
5
7
15
22
Private CTOs share (%)
25
27
25
24
95
94
85
78
75
73
75
76
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
Source: Company, MOSL
Pre-emptive capex to develop MMLPs
CCRI’s ~80% revenue accrues from rail container operations, and in its efforts to
provide value-added services, is focusing on developing MMLPs. CCRI is building 15
new multimodal logistics parks (MMLP) along the upcoming DFCs to augment its
already large network of 63 CFS and ICDs.
March 2015
41

Container Corporation
It plans to spend ~INR60b (~50% on MMLPs and private container terminals) over
the FY13-17 period that includes land acquisition, terminal development and
purchase of equipments. The MMLPs will be set up over the next two to three years
and will be fully operational along with the completion of dedicated freight
corridors.
MMLPs can be defined as transport hubs that provide integrated logistics facilities
like warehousing, cold storage, handling, customs examination etc by mechanized
handling and intelligent inventory management to handle bulk, break bulk and
containerized traffic in a cost effective manner.
Exhibit 2: CCRI revenue breakup ( %): MMLPs ex pected t o r educe dependence o n freight
operations
Rail Freight
21
4
Road Freight
21
4
Warehousing and Handling
21
4
21
3
75
75
76
76
FY11
FY12
FY13
FY14
Source: Company, MOSL
While the acquired land (acreage) for MMLPs will be large, development will be in
phases and will also house dedicated warehouses for some individual
companies/industries. CCRI has started operations at Khatuwas and plans to start
operations in the next one to two years at around six locations.
Exhibit 3: Planned MMLPs across India
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Location
Nagaulapalli
Khatuwas
Sriperumbudur (Road Based)
Pantnagar (JVC with SIIDCUL)
Vallarpadam (Road based)
Vishakapatnam
Naya Raipur
Nagpur
Jharsuguda
Haridwar
Swarupganj
Vadodara
Kila Raipur
Parjang
Duburi
State
Telangana
Rajasthan
Tamil Nadu
Uttarakhand
Kerala
Andhra Pradesh
Chattisgarh
Maharashtra
Odisha
Uttarakhand
Rajasthan
Gujarat
Punjab
Odisha
Odisha
Area (Acres)
80
280
50
40
20
100
100
107
30
35
400
130
150
50
50
Status
Working as DCT & PFT in 17 acres
Working as Double Stacking Hub, 20 acres developed
Commissioning by Dec, 2014
Commissioning by Mar, 2015
Commissioning by Jun, 2015
Working as road based CFS – Ph I; developing 10 acres
Commissioning by Dec, 2015
Commissioning by Dec, 2015
Commissioning by Dec, 2015
Approached BHEL for land transfer
Land Acquisition – Sec 6 notification
Majority land acquired, construction started
JVC with CONWARE acquiring land
Land being identified by ASRL & IDCO
Land being identified by ASRL & IDCO
Source: Company, MOSL
March 2015
42

Container Corporation
Expect volume growth and margin recovery
n
n
While t he expected economic r ecovery w ill b enefit l ogistics s ector, we expect C CRI’s
growth t o b e h igher, given i ts s cale a nd l ikely d isproportionate b enefit f rom
investments in MMLPs.
We estimate CCRI to post 14% volume CAGR and 16% EBITDA CAGR aided by margin
improvement as double stacking share increases.
EXIM growth and containerization to boost volume growth
Driven by EXIM and containerization growth, we model EXIM volume at 14% CAGR
over FY14-17E and domestic volume CAGR at 12%, leading to overall volume CAGR
of 14% as EXIM is expected to continue to contribute ~83% of total volumes.
Exhibit 4: Model 14% volume CAGR over FY14-17E
Volumes (million TEUs)
EXIM
Domestic
2.9
0.5
2.4
Total
3.2
0.6
3.6
0.6
4.0
0.7
2.4
0.5
1.9
FY10
2.6
0.5
2.0
2.6
0.5
2.1
2.6
0.4
2.2
2.6
2.9
3.3
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
Source: Company, MOSL
Exhibit 5: Expect EBITDA t o post 18% CAGR l ed by volume growth and improvement i n
profitability
EBITDA (INR b)
Exim
Domestic
Total EBITDA
17
10
1
9
FY10
9
FY11
11
1
10
11
1
11
1
10
12
1
10
14
2
12
15
17
2
19
3
FY12
FY13
FY14
FY15E
FY16E
FY17E
Source: Company, MOSL
March 2015
43

Container Corporation
Exhibit 6: Western Corridor of India contributed to 76% of CCRI’s FY13 volumes
Volume (TEUs)
37 39 40 41 39
14 14 16 15 13 8 9 10 11 11 12 14 13 12 13
15 12 14 15 12
5 6 7 6 5
5 5 6 7 6 4 5 6 5 3
As a % of total
Western
North Western
North Central
Northern
Central
Eastern
Southern
South Cetral
Source: Company, MOSL
Exhibit 7: While EBITDA CAGR is healthy at 16%, PAT CAGR will be depressed due to higher
depreciation rate under new Companies Act 2013
FY12
EBITDA
Depreciation
Other Income
Interest
PBT
Tax
PAT
10.2
1.6
3.1
0.1
11.7
3.0
14.7
FY13
10.5
1.8
3.3
0.0
12.0
2.7
14.7
FY14
10.8
1.9
3.7
0.0
12.5
3.0
15.6
FY15E
13.0
4.0
3.7
0.0
12.7
3.1
15.7
FY16E
16.3
4.5
4.2
0.0
16.0
3.8
19.8
FY17E
18.3
4.9
4.9
0.0
18.2
4.4
13%
13%
FY14-17
CAGR (%)
19%
37%
10%
22.6
13%
Source: Company, MOSL
CCRI is a debt free company (net cash at INR29b as of September 2014) with healthy
cash flows. Currently, it has embarked on an INR60b capex to be spent over the next
few years, primarily on MMLPs. Though the logistics parks take time to develop
fully, investment needs to be done upfront. Hence, the capex intensity will remain
high and revenue will be back-ended, resulting in lower return ratios in the interim
period.
Exhibit 8: Capex intensity to remain high…
Capex (INRb)
10.3 10.1
9.8
Exhibit 9: ...resulting in lower FCF versus historical trend
FCF (INRb)
4.3
4.8
3.3
3.9
3.2
3.2
1.5
5.5
4.3
5.2
5.9
4.6
3.2
2.2
3.1
3.1
2.3
5.3
1.2
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Source: Company, MOSL
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Source: Company, MOSL
March 2015
44

Container Corporation
Exhibit 10: Also, re turn ra tios t o re main u nder p ressure l ed by c apex t owards l ong
gestation MMLPs
57.0
55.0
46.0
42.2
RoE (%)
42.4
RoCE (%)
39.1
33.4
14.5
25.3
22.6
28.7
13.3
33.2
15.2
35.0
15.5
19.4
19.0
16.5
15.8
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
Source: Company, MOSL
Exhibit 11: CCRI’s g ross block will increase rapidly in next few years led by INR60b capex
plan primarily on MMLPs
Gross Block (INRb) - RHS
26%
20%
13%
7%
0%
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14 FY15E
Source: Company, MOSL
3 Yr Gross Block CAGR (%)
100
75
50
25
0
March 2015
45

Container Corporation
Valuation and view
Initiate coverage with Buy, target price of INR1,777
n
n
n
n
n
n
CCRI i s a d irect p lay o n t he u pcoming l arge ra il i nfrastructure ( DFCs), re vival in
economic growth and higher containerization.
Key factors to watch out are (a) EXIM growth trend, (b) expansion of p ort c apacities
(JNPT in the near term) and (b) completion of DFCs.
Key r isks include ( a) lo wer-than-expected G DP growth, ( b) s harp increase in h aulage
rates, (c) delay in DFCs completion and (d) any increase in export-import imbalance.
Given the debt free balance sheet, we expect the dividend payout (currently at 25%)
to increase in the next few years as it nears the end of its ongoing large capex cycle,
which is funded fully through equity.
We v alue C CRI on DFC-based ( WACC 1 1.7%, TG R 5% ) to ar rive at a f air v alue o f
INR1,777/sh implying 19% upside.
The stock trades a t 21x FY 17E EPS of INR71 and has a dividend yield of ~1%. Initiate
coverage with a Buy rating.
Exhibit 12: Concor DCF Valuation Summary - We value Concor at INR1,777
Source: MOSL
March 2015
46

Container Corporation
Exhibit 13: Concor – Key Assumptions
Y/E March
Volumes - TEU
EXIM
Domestic
Total
Volumes YoY Chg (%)
EXIM
Domestic
Total
Realization (INR/TEU)
EXIM
Domestic
Total
EBITDA (INR/TEU)
EXIM
Domestic
Total
FY10
1,882
539
2,421
FY11
2,019
544
2,562
FY12
2,136
468
2,604
FY13
2,152
434
2,586
FY14
2,361
507
2,869
FY15E
2,645
558
3,203
FY16E
2,936
625
3,561
FY17E
3,288
719
4,007
1.5%
18.9%
4.9%
7.2%
0.9%
5.8%
5.8%
-13.9%
1.6%
0.8%
-7.4%
-0.7%
9.7%
17.0%
10.9%
12.0%
10.0%
11.6%
11.0%
12.0%
11.2%
12.0%
15.0%
12.5%
15,399
14,977
15,408
14,820
15,387
15,218
15,293
16,983
15,746
16,449
19,975
17,191
16,473
22,344
17,808
17,050
23,126
18,401
19,181
26,016
20,670
19,181
26,016
20,690
4,565
2,692
4,148
4,633
2,154
4,107
4,605
2,203
4,173
4,552
2,898
4,274
4,394
2,863
4,123
4,518
3,122
4,275
5,083
5,083
3,512
3,512
4,807
4,801
Source: Company, MOSL
March 2015
47

Container Corporation
Company description
n
n
n
n
Container Corporation (CCRI), a Navratna company from July 2014, was
incorporated in 1988 and started operation in November 1989 by taking over
seven ICDs from Indian Railways. CCRI is a public sector company with the
government’s holding of 61.8%.
Over the years, it has grown the operations to 63 ICDs which include 13 export-
import depots, 15 exclusive domestic depots and 35 terminals (operates as
domestic and international terminals). To support its operation, CCRI owns 275
rakes, 12,251 wagons and ~21,000 containers.
Given the high inter-dependence of shipping lines and freight aggregators, CCRI
has formed several JVs with its customers (GDL/Allcargo), port operators (APM/
DPI), road haulers (TCI), air cargo (HALCON/GVK) and shipping lines (Maersk) to
aid its business. CCRI is investing to set up multi-modal logistics parks along the
upcoming DFCs.
Company earns its revenue from container rail transport (EXIM and domestic),
port terminal operations and warehousing.
Exhibit 14: CCRI increased its owned containers by 7% CAGR in the last 10 years
CCRI owned containers (TEUs)
18,680
12,812 13,517 13,576
15,754 15,579 16,109
20,984
11,745
10,771 10,874
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
Source: Company, MOSL
Exhibit 15: CCRI’s high speed wagons increased at 13% CAGR since FY04
High Speed Wagons (BLC/BLL)
9,816
8,421
1,699
6,722
8,117
8,837
9,309
9,631
10,413 10,754
1,699
Other wagons
Total
11,770 12,111
1,357
1,357
7,582
6,012
2,976
2,841
3,171
FY04
4,606
FY05
7,762
2,650
5,112
FY06
8,577
2,650
10,988
10,194 10,666
1,357
1,357 1,357
5,927
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
Source: Company, MOSL
March 2015
48

Container Corporation
Exhibit 16: CCRI has several JVs and certain subsidiaries to exploit synergies
JV/Subsidiary Name
JV's at Dadri CFS/ICD
1
Star Track Terminals
2
Albatross Inland Ports
3
CMA-CGM Logistics Park (Dadri)
4
Hind CONCOR Terminals (Dadri) *
5
Allcargo Logistics Park
JV's at Port Terminals
6
Gateway Terminals India
7
India Gateway Terminal
Other Diversified JV's
8
TCI-CONCOR Multimodal Solutions
Concor
Stake (%)
49%
49%
49%
49%
49%
26%
15%
49%
Operating Area
Details
CFS at Dadri, U.P.
CFS at Dadri, U.P.
CFS at Dadri, U.P.
CFS at Dadri, U.P.
CFS at Dadri, U.P.
3rd berth at JN Port, Mumbai
Container Terminals at Cochin
JV with APM Terminals India Pvt. Ltd.
(formerly known as Maersk India Pvt. Ltd.)
JV with Transworld group of Companies
JV with Ameya Logistics Pvt. Ltd.
JV with Hind Terminals Pvt. Ltd.
JV with Allcargo Global Logistics Ltd.
JV with APM Terminals Mauritius Ltd.
JV with Dubai Port International
To establish logistics freight terminals JV with TCI
and provide integrated logistics
services across the country.
For operations of existing rail/road
container terminal at Garhi Harsaru,
Gurgaon (Haryana)
Management and operation of rail
container terminal at Birgunj
An air cargo complex & ICD at Ozar
airport, Nasik.
JV with Gateway Rail Freight Ltd.
9
Container Gateway
49%
10
Himalayan Terminals
11
HALCON
Subsidiaries
12
Fresh & Healthy Enterprises
13
CONCOR Air
14
SIDCUL CONCOR Infra Company
40%
50%
JV with Nepalese Enterprises & Transworld
group of companies
A business arrangement with Hindustan
Aeronautics Ltd.
100%
100%
74%
15
Punjab Logistics Infrastructure
51%
*Voluntary winding up under process
Cold chain logistics
Run cargo terminal at Mumbai Airport
To develop logistics parks at
JV with SIIDCUL (State Infrastructure &
Pantnagar and Haridwar.
Industrial Development Corporation of
Uttrakhand).
Develop MMLP at Kila Raipur
JV with Punjab State Container &
Warehousing Corporation Limited
(CONWARE).
Source: Company, MOSL
March 2015
49

Container Corporation
Exhibit 17: CCRI’s current terminal network
CENTRAL
Maharashtra
Chhattishgarh
MP
EASTERN
West Bengal
Bihar
Odisha
Jharkhand
Chhattishgarh
Assam
NORTHERN
Delhi
UP
Haryana
Punjab
Rajasthan
Himachal Pradesh
NORTH CENTRAL
UP
Total
5
3
1
1
9
4
1
2
1
1
16
3
1
4
4
4
1
6
4
2- Tughlakabad (Delhi)
3- Babarpur (Panipat)
4- Dhandharikalan (Ludhiana)
10- Moradabad
11- Sonepat, 12- Rewari,
13- Ballabhgarh
14- Dhappar
15- Kanakpura (Jaipur),
16- Bhagat ki Kothi (Jodhpur)
17- Baddi#
18-Dadri (Greater Noida) ,
19- Agra, 20- Kanpur,
21- Madho Singh (Mirazpur)
22- Malanpur (Gwalior)
23- Ravtha Road (Kota)
5- Khodiyar (Ahemdabad), 6-
Chhanni(Vadodara)
7- Milavattan (Tuticorin), 8- Irugur
(Coimbatore), 9- Tiruppur, 10-
Harbour of Madras (Chennai)
24- Vadodara, 25- Gandhidham,
26- Ankleshwar
27- Tondiarpet (Chennai),
28- Kudal Nagar (Madurai)
29- Whitefield (Bangalore)
30- Cochin
31- Sanathnagar (Hyderabad),
32- Vishakhapatnam,
33- Desur (Belgam)
11- Pithampur (Indore), 12-
Ratlam
13- New Mulund (Mumbai)
12- Nagulapally (Hyderabad), 13-
Guntur
10- Sabarmati (Ahemdabad)
5- Majerhat (Kolkata),
6 - Haldia
7- Balasore
8- Tatanagar (Jamshedpur)
9- Amingaon
5- Okhla (Delhi)
1- Shalimar (Kolkata),
2 - Durgapur
3- Fatuha (Patna)
4- Rourkela
Only EXIM
1- Daulatabad (Aurangabad)
EXIM + Domestic
1- Nagpur, 2- Bhusawal
3- Raipur
4- Mandideep (Bhopal)
Only Domestic
6- Phillaur (Ludhiana),7- Suranassi
8- Khemli (Udaipur), 9- Kathuwas
Uttarakhand
M.P.
Rajasthan
NORTH WESTERN
Gujarat, Diu
SOUTHERN
Tamilnadu
1
1
6
6
9
7
11-Salem Market
Karnataka
Kerala
SOUTH CENTRAL
Andhra Pradesh /
Telangana
Karnataka
WESTERN
MP
Maharashtra
Goa
Total Terminals
1
1
5
4
1
7
2
5
34- Chinchwad (Pune),
35- Dronagiri Node (Mumbai)
35
14- Turbhe (Mumbai), 15- Miraj
63
13
15
Source: Company, MOSL
March 2015
50

Container Corporation
Exhibit 18: CCRI’s terminal network
Source: Company, MOSL
March 2015
51

Container Corporation
Financials & valuations (Consolidated)
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Current Tax
Deferred Tax
Tax Rate (%)
Less: Mionrity Interest
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY10
37,306
8.1
27,711
74.3
9,595
25.7
1,388
8,208
39
1,812
9,980
0
9,980
2,033
171
22.1
0
7,776
7,776
-0.2
20.8
FY11
38,992
4.5
28,836
74.0
10,156
26.0
1,489
8,667
49
1,971
10,589
0
10,589
1,647
179
17.2
0
8,764
8,764
12.7
22.5
FY12
41,009
5.2
30,776
75.0
10,232
25.0
1,621
8,611
54
3,135
11,692
0
11,692
2,884
152
26.0
0
8,657
8,657
-1.2