Cargo firms like CCI, Allcargo, Blue dart perform even amid economic slump

Mumbai: In transportation - rail, road and air - it is not the glamorous passenger business that makes money. Moving cargo is where the profits are. In the last three years, as the economy lurched from one crisis to another and aviation companies took a beating, the goods transporters have defied conventional wisdom and performed better on a host of parameters, a study by the Economic Times Intelligence Group (ETIG) shows.
They had better margins, earned better return on capital and have posted a decent growth in net profit than the passenger transport sector, showing that goods transportation is probably more profitable than the volatile, service-oriented passenger transport business.
Take for example financials for the year ended March 2011. While all airlines posted a 20%-plus growth in revenue, their profits were severely battered. Jet Airways posted net loss of 86 crore, while Kingfisher's net loss was 1,027 crore. Goods carriers, on the other hand, did a much better job.
Container Corporation of India posted 11.35% rise in net profit, Gati's profit rose 48.42%, while profits at Blue Dart Express jumped 54.8%. Jet earned a margin of 11.24% compared with Container Corp's 31.15% for that year. The cargo companies also were able to use their capital more effectively. Allcargo's return on capital employed was 17.5% for the March 2011, compared with SpiceJet's 13.41%. Blue Dart's ROCE was much higher at 28.2%.
17/01/12 Economic Times

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Categories: Cargo Jan 2012