The container segment market growth at 4 percent is much slower than anticipated. This is because trade in Asia and America has decelerated. Hence, the first and second quarters of FY24 are expected to be challenging for Gujarat Pipavav Port due to low demand. Girish Aggarwal, Managing Director of Gujarat Pipavav Port, in an interaction with CNBC-TV18, said: "Ocean freight rates have declined 40 to 70 percent".

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Gujarat Pipavav Port posted a mixed set of numbers in the fourth quarter of the financial year 2022-23 with revenues improving 7 percent year on year to Rs 234 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) was flat at Rs 130 crore and the EBITDA margin declined to 55.4 percent versus 58.2 percent in the same quarter of last year.

Aggarwal said the margin decline was owing to the maintenance work ongoing in the fourth quarter, which is carried out once every two years. The net profit jumped 31 percent to Rs 97 crore. The company has recommended a final dividend of Rs 3.40 per share.

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Trades in Asia and America have decelerated. Within India as well, trade is low, says Aggarwal. But is expected to improve in the second half of FY23.

The Roll-On, Roll-Off (RoRo) business of Gujarat Pipavav Port is a growth driver for the company. For the fourth quarter, this segment witnessed a jump in volumes to 14,000 units from 6,000 units year on year. The company added new customers in the RoRo business and the outlook for this business segment is positive with 50 percent growth expected in FY24.

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Aggarwal says there are no expectations of price hikes in the first and second quarters of FY24, but the focus is on customer acquisitions.

Container business growth is expected at 10-12 percent in a soft demand environment, while the liquid segment may grow 25-30 percent in FY24.

For FY24, the company expects 5 to 7 percent revenue growth. In FY23, the company revenues grew 24 percent to Rs 917 crore. The stock closed the day with a nearly 3 percent loss on the exchanges on May 25.

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(Edited by : Vahishta Unwalla)