After recording sequential growth month-on-month (m-o-m) in the past few months, container traffic slowed in February, dropping 8.7% m-o-m across India’s major ports.
This is in line with the historical trend of sluggish growth seen during February, followed by a much steeper sequential growth in March. However, for FY10 year-to-date (YTD), container volumes were up 2.8% year-on-year (y-o-y) across major ports. Correspondingly, aggregate cargo volumes grew by a marginal 1.4%, significantly lower than the growth of 13.2% and 8.2% recorded in January and December, respectively.
Container volumes slumped 8.7% m-o-m across India’s major ports during February, a month historically noted for its dawdling growth rates. This drop is partly attributed to lower cargo offtake that, as per historical trends, typically picks up sharply in March. Nevertheless, on a y-o-y basis, a low base effect boosted volumes by 24.6% y-o-y in February, thus helping maintain healthy y-o-y growth levels of January (31%) and December (26%).
Container volumes at Jawaharlal Nehru Port Trust (JNPT) grew by 27.6% y-o-y in February, against around 30% and 22% y-o-y in the past two months, respectively. However, on a sequential basis, container volumes at the port dropped by 9.1% m-o-m in February in sync with falling volumes across major ports. This was against a growth of 1.4% in January and around 8% m-o-m in December. During April-February 2010, container volumes grew by 2.8% y-o-y across major ports; in comparison, JNPT trailed at 1.6% while Chennai forged ahead with a growth of 4.7% during the same period.
Aggregate cargo volumes registered a growth of 1.4% in February against 13.2% in January and 8.2% y-o-y in December. In FY10 YTD, overall volumes grew around 5.5% y-o-y as other cargo volumes jumped 21.6% y-o-y and container and iron ore shipments surged by 7% and 5.8%, respectively. During the April 2009-February 2010 period, aggregate cargo volumes at Paradip and Mormugao ports grew 26% and 15.3% y-o-y, respectively, while at Kolkata they were down by 16.3% y-o-y.
Although growth in February was a tad lower than that in the previous months, container volumes are expected to rebound strongly in March. Moreover, with YTD container volume growth across major ports at 2.7% y-o-y, the overall trend for container volumes remains positive. A low base effect of the year-ago period is also likely to support volume growth ahead. We, therefore, maintain our positive stance on logistics players and reaffirm our hold rating on Container Corp. of India Ltd and buy rating on Gateway Distriparks Ltd.