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Port sector players to see healthy growth in cargo: Icra

PTI:  July 28, 2017

New Delhi: Port sector players will continue to experience healthy growth in cargo in the near term, rating agency Icra said today.

Over the medium to long term, cargo growth is expected to gain further traction driven by domestic requirements of coal for power and other sectors, crude oil, for meeting domestic petroleum requirements and containers, given the cost and logistical advantages associated with containerisation, it said in a statement.

"Port sector players will continue to experience healthy growth in cargo in the near term, albeit somewhat lower compared to the recent fiscals, as revival in iron ore exports and pick up in POL (petroleum, oil and lubricants) volumes as well as impetus for coastal shipping will be partially offset by lower coal imports following the increase in coal production by Coal India Ltd," said K Ravichandran, Senior Vice-President and Group Head, Corporate Ratings, Icra.

Moreover, cash accruals of the players will be supported by steadily rising handling rates, barring the projects where the tariff setting process is mired in litigations, he said.

During FY17, cargo throughput at major ports registered a 6.8 per cent growth to 648 MT as against 606 MT recorded in the previous fiscal.

The uptick was supported by 164 per cent growth in iron ore cargo volumes (50 MT against 19 MT) supported by a resumption of mining operations in Goa, Karnataka and Odisha as well as growth in POL and liquids (8 per cent) and other cargo categories (10 per cent).

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.