Rationale

The rating action factors in the strong parentage of Paradip International Cargo Terminals Private Limited (PICT/the company) - JM Baxi Ports & Logistics Private Limited {JMBPL, [ICRA]A+ (Stable)/[ICRA]A1}. JMBPL is one of the leading players in the country’s logistics sector and has an established track record across container train operations (CTO), project logistics, freight forwarding and port infrastructure i.e. container/bulk terminals. Additionally, the presence of Hapag-Lloyd AG (HLAG1 ), - one of the largest container handling companies globally, as a strategic investor in the Group with a 49% stake in JMBPPL is expected to provide synergies from the increased cargo flow through the container terminals of the J M Baxi Group on the eastern and western coast of India. The ratings factor in the 30-year concession period for the bulk terminal and the long-tenor debt facility with residual tenor of 15 years. The long-tenor debt has resulted in modest repayment liabilities for the company as it ramps up its operations, thereby keeping the debt servicing metrics healthy. Moreover, the healthy tail period in the concession vis-à-vis the term debt tenor provides financial flexibility. The ratings also factor in the strategic location of the terminal serving a vast hinterland, catering to established steel players and other bulk commodities. Further, rail connectivity to the Paradip port ensures cost-effective logistics between the hinterland and the terminal. In FY2025, the terminal witness 8% YoY growth in bulk volume handled at the terminal while container handling volume nearly double yoy. As a result of the cargo volume growth, the company witnessed improvement in the OPBDITA to Rs. 87.4 crore in FY2025 from Rs. 78.8 crores in FY2024. Going forward a gradual ramp up in the volumes will support the increase in the profits and cash generation, which along with scheduled repayments should result in improved credit profile. The ratings are constrained by PICT’s exposure to the economic cycles and regulatory risks affecting trade volumes. PICT is also exposed to competition from other terminal operators at the Paradip port as well as nearby ports on the eastern coast such as Haldia port, Dhamra port, Kakinada port and Visakhapatnam port.