Thank you, Danish. Hello, everyone.

On behalf of IIFL Capital, I welcome you all. We have the management of Adani Ports and SEZ Limited represented by Mr.

Ashwani Gupta, Whole-Time Director and CEO; Mr. Krishna Menon, the CFO; Mr.

Niraj Bansal, Head of Ports; Mr. Divyesh Anil Taneja, Head of Logistics; and Mr.

Rahul Agarwal, the Head of Investor Relations and ESG, to discuss the 1Q FY27 results and the outlook going ahead. Without any ado, I will hand over to Mr.

Rahul Agarwal, the Head of Investor Relations and ESG. Over to you, Rahul.

Thank you, Vishal. Thank you, Danish.

Good evening, everyone, and welcome to Adani Ports Q1 FY27 earnings conference call. We will begin this call with opening comments from Ashwani and then open the floor for Q&A.

Thank you. Ashwani, over to you.

Thank you. Good morning, good afternoon, good evening, based on the time zones you are all in.

Thank you for your continued confidence in APSEZ, and thank you for attending this conference. Today we are again here to demonstrate our ongoing confidence in the growth trajectory.

Our resilient and diversified business model continues to deliver very strong growth despite multiple macroeconomic challenges. Quarter one FY27 revenue and EBITDA both grew 19% year-on-year to ₹10,821 crores and ₹6,541 crores, respectively.

The domestic ports business remained a strong growth engine, delivering 12% revenue, 11% EBITDA jump, while maintaining an industry-leading EBITDA margin of 74%. Mundra port made a strong comeback with 7% growth in quarter one, and as outlined in our Ambition 2031, we are rapidly expanding our domestic port capacity to 1 billion metric ton, with major projects underway across ports, including Mundra, Dhamra, Vizhinjam, Ennore, Kattupalli.

International ports, which we were expecting and it was showing a clear growth quarter-on-quarter, but this quarter they delivered a record revenue of ₹1,747 crores, up 80% year-on-year, while EBITDA surged 256%. It is driven by addition of Australian operations, but also a very very robust and strong ramp-up of Colombo Terminal.

Cargo volumes nearly tripled, 22.8 million metric ton from 7.7 million metric ton a year ago. The increasing contribution from high-margin Australian and Colombo operations resulted in a sharp improvement in EBITDA margins to 41.8% compared to 21.1% a year ago.

In logistics, we continue to focus on scaling up our asset-light businesses. Trucking revenue grew 26%, international freight network business revenue grew 28%.

You have seen our FY26 logistics ROCE, which sharply increased to 10%, and we are continuing to focus on increasing returns in this business. The third business, which is marine, the marine revenue increased 67% to ₹901 crores, driven by diverse global fleet of 135 vessels.

We are focused on expanding the global reach of our marine portfolio, recent milestones including our partnership with Oceaneering International to strengthen deepwater engineering and offshore capabilities in Europe, as well as a landmark 10-year contract supporting Argentina's LNG export program. Our growth continues to be underpinned by prudent capital allocation and financial discipline.

Despite sustaining a high growth trajectory, net debt to EBITDA remains healthy at 1.9. S&P Global Ratings upgraded APSEZ to BBB- with a stable outlook, placing us at par with India's sovereign rating, while CARE Ratings and ICRA reaffirmed our highest domestic rating of AAA.

Despite a challenging macroeconomic environment, APSEZ continues to deliver strong growth, underscoring the resilience of our strategy and execution. We remain firmly on track to more than double revenue, EBITDA, and cash flows by FY31.

Our scale and integrated port-logistics-marine network, with 95% of India hinterland coverage, driven by technology-led operations, lean organization, and balance sheet capacity to fund the growth, positions us consistently to deliver 18% to 19% CAGR over coming years. Thank you once again, and we will now take your questions.

Hi. Good evening.

Firstly, congrats on pretty decent set of numbers. Just had a few questions.

If I just look at the details in terms of the volume firstly, domestic volumes still kind of continue to be muted. Ideally this number could have been much better had the volumes in the domestic side could have been better.

Just if you could indicate what's going on there. Specifically, I think Krishnapatnam has seen a big degrowth in this quarter on a YoY basis.

Even in the logistics business, if you can highlight what's been on the volume side, because there also we have seen pretty strong volumes coming off. If you could just indicate this, then I can go to the next question.

As we keep our regular communication, I think it's good to see quarter-on-quarter, but as you know that maritime business is not about 1 month or 2 months or 3 months, it's a complete cycle. As the world was disturbed starting mid of February, some of the aftercurrent came in March, came in April, came in May, and maybe a little bit of it is still continuing.

Now, I can go port by port, for sure, as you correctly said. I think 2% is very, let me say, a very average figure for us.

We would have done it better. Where we would have done it better, whether that was in our hands or it was because of the external circumstances, I think more it was in the external circumstances.

For example, if you remember last year, Mundra was struggling to grow, and the main reason was that one of our customers power plant was almost non-operational throughout the year, and that's why and that plant is only and only dependent on the imported coal. Then, in every quarter, we were explaining, and then now they started, and you see the growth in Mundra.

I think here in Krishnapatnam, a very specific reason: one of our customer plant was shut off, and there was a clear shortfall of the 2 or 2 or 2.5 million metric ton, and their plant has restarted, it will recover. I want to be very transparent saying where there is a real issue and where there is a spot issue for 1 month or 2 months or 3 months.

If you look at all the East Coast belt and if you compare Dhamra, Krishnapatnam, Gangavaram, even Gopalpur, and if you put all these four ports and if you put all the four competition ports, we have gained the market share. Which means we are better than the trade in this all East Coast region, which is the frontier for our growth.

However, one or two ports can have this kind of spot issue, which happened in Krishnapatnam. Then on the container also, maybe that is the question which may come up from others.

Containers also, I think there was a consequence of the disturbance which happened because of the Middle East crisis. Also, we wanted to support the maritime business, we wanted to support our country, and we wanted to support the Middle East by accepting transshipment and keeping the containers because those shipping lines were not taking the containers to the Middle East, right?

We kept the containers, we created land in Mundra away from the port, we kept the containers to support the industry. Definitely now when those containers are going back, those are transshipment, definitely the whole capacity of Mundra is being utilized.

Even then, I think in EXIM, we have increased our market share to 5.9% we have shown the growth. Yes, I would say that April, May, June, and especially April and May, is not the right month where we can really do the apple-to-apple comparison.

Spot issues in Krishnapatnam and in the container in Mundra. Rest all, I would say, whether it is liquid or it is transshipment in Vizhinjam or Ennore or Kattupalli or it is liquid in Hazira, I think everything is in our expectation.

Sure. Just one more question.

There have been news articles floating today on the acquisition of ABP UK port. Just any comment on there?

Are we evaluating or any movement there, or it's completely baseless? Any comments you would like to make here because that's a pretty big port, and the investment also, which is indicated in terms of valuation, all those numbers are pretty large.

Just your comments on that would be helpful.

Oh, I think at first, let's be very very straight and clear. We don't comment on speculation and the rumor, and I repeat that and emphasize on that.

Then, in every analyst conference, in every investors meeting, in every customers meeting, we have been communicating that we are studying, exploring the opportunities of M&As, which includes international expansion. This is the second statement which we have been always saying.

It's not today, which we have been always saying. Why?

Because we believe the way our balance sheet is structured today, the way we will have the cash in the next 5 years, the way we will be deploying the capital for the organic growth, we have enough opportunities to go for inorganic growth through a meaningful M&A. That's why we keep on evaluating the assets around the world.

Now the third thing, which is also very consistent, which I am saying in every conference, that there are the rules/playground to do an international acquisition. Why?

Because last 2.5 years, I've been asked this question that how is your international performance? Whether you will be able to match with the domestic performance or not?

This quarter has demonstrated that we can operate international businesses also with the same Adani DNA to bring the performance. That's the third thing.

Now, what is the playground for the international acquisition? I repeat once again.

The first rule is the asset should bring contribution to the top line and the bottom line both. Once again I repeat, top line and bottom line both.

That is what. That's why the greenfield is the second priority.

The first priority is the existing business because I start getting the return from the first day, and this is not India, this is overseas, and that's why I have to be dependent on the business over there and the management team over there. That's the first rule.

The second rule is my balance sheet is very much structured, and I think everybody is recognizing that, in terms of exposure to the foreign currency. Whether it is US dollar or it is now Australian dollar or it is Israeli shekel or it is something else.

Now definitely why the rating agencies are considering as one of the factor for us that after having the Australian assets, which are revenue-generating and profit-generating assets, these are in hard currencies, the returns are in hard currencies, and that's why we have a sustainable growth. Similarly, if my balance sheet is structured with three or four hard currencies, definitely it will help me in having a more confidence in the balance sheet.

That's why that gives my second rule is the country we want to go in, we want to have the local financing in that currency. That's the second rule.

First, it should bring contribution to top line and bottom line; second, it should be financed in local currency; and the third is the return from that asset should be at or more than the average APSEZ. Of course, we can talk about currency depreciation, we can talk about rate of growth, we can talk about cost of capital, considering all, it should be at or more than APSEZ.

This is what we proved in Australia acquisition: number one, top line and bottom line; number two, the local financing; number three is the thing which I just said; and four, we should have the local partner, but that is depending on the asset we will go or not go. Once again I repeat, we are studying a lot of assets around the world because it's high time for us to plan the APSEZ next step in terms of expansion.

However, those assets will be only acquired if those are meaningful and ticking all these three boxes which I just said.

Sure. Thanks for the elaborate answer.

You might not want to comment on individual transaction or opportunity, but are we looking at this kind of size of investment if there is an opportunity coming up nearly a sort of a ₹60,000, ₹70,000 crore kind of a size at one particular port or one particular opportunity, or do we want to go little like how we have done previously, it's been at a much smaller size and scale, and then we have eventually scaled up there?

We will evaluate from all perspective. At the end, whatsoever is the size, it should be at and more than the return which we are getting on average APSEZ.

Got it, sir. That's all from my side.

Thank you, and all the best.

Yeah.

Thanks, sir, for the opportunity. I would say quite a strong performance on the EBITDA front.

My first question is, you see, sir, when I look at your other income for Q1 of FY27, it seems to be quite higher than what it was in, let's say, the comparable quarter last year. Is there some elements that are there, or can we get something like what should be the underlying level of other incomes?

That's the first question, if you can explain on that.

Sure, Priyankar.

I can take that. Priyankar, basically, see, in this first quarter, we had dividend that was declared by our JV companies, CT3 and CT4, right?

That is to the tune of roughly about ₹518 crores, that is the APSEZ share. Now basically, when that happens, the income is appropriated out of the PAT.

You will actually notice in the JV line, the JV line actually below EBITDA shows a loss, and that contra entry appears in the other income. There's another income component of ₹853 crores, which includes ₹518 crores, which is the dividend income that we have received from these two JVs, right?

It's just a contra entry. The dividend for last year was actually declared in Q2.

You will see a similar phenomenon appearing in Q2 of the last financial year, but not in Q1. Therefore, when you compare year-on-year, you will see that aberration.

It's basically that contra entry where the profit from the JV has been removed out of the EBITDA below the EBITDA line, and therefore it comes in the other income line.

Would it be right to say that, let's say, you have ₹853 crores and if I remove this ₹518 crores, roughly ₹335 crores, that's the steady-state other income, at least comparable number?

That is correct. The ₹335 crores will be the steady-state other income.

The JV figure, if I kind of add back that ₹518 crores, the JV performance number would be ₹230 crores, 230 for this particular quarter, compared to 157 in the previous year.

That's very clear. That clarifies.

I understand that there was a significant increase in transshipment, particularly in this particular quarter. You have already given the reasons why let's say there were some significant jump-ups in Mundra in particular.

If you can throw some color before the conflict in your containers, what would be the typical share of transshipment and what it was in, let's say, Q1? Also because you had stored these containers for a prolonged period of time, is there some storage income or let's say more specifically some storage EBITDA that would have come into this Q1 numbers?

Yeah. In quarter one, there is no storage income.

As I said, we followed the guideline that we have to support the industry by providing, extending the storage thing because of the congestion and the disturbance. However, we have refrigerated transshipment.

For sure, if I am providing the electricity to the refrigerator container, I have to charge. I will be very very honest with you.

Yes, there were charges which came in, for example, refrigerated containers, for example, lift-on lift-off, because that is where I'm burning my fuel, I'm burning my manpower. When it comes to storage, as you know that we extended the free storage so that the trade can get the help.

It was...

Please go on.

If I understand, essentially for ancillary services only it was charged, not storage.

More or less where we were incurring the cost by providing the emergency services, obviously we were charging it. Where we thought we have to just put it on the storage on the ground, we were not.

The free storage was extended. Right, Rahul, how much we extended?

45 days. You can see the trade advisory, we circulated in public.

Okay. Then,

answering to your question, and this is also very important because the question may come up from the other colleagues. In Mundra, typically the transshipment is 23%, whereas in quarter one FY27, it went up to 27%.

This was mainly because of that. Our competitor nearly doubled or 2.5 times the transshipment because of the capacity or the space available.

We focused on the shipments where on one side we can contribute to the trade, but on the other side we should not lose on the revenue because our main revenue, as comes from the EXIM percentage. Yes, sir.

Sir, because you have delivered ₹6,500 crores of EBITDA, even within this challenging quarter, if I take even this run rate ₹6,500 crores, you are anyway reaching ₹26,000 broad ballpark, the quarterly into four. Is there any chance would you want to revisit your EBITDA guidance which already is 25 to 26?

See,

the point is there's so much uncertainties because of geopolitical situation and so on and so on. Now you have monsoon season in somewhere, monsoon is more, somewhere monsoon is less.

I think we want to see how this quarter goes, and then after half-yearly, we will have a discussion on that. Today, what we are focusing on are the three things: first, we are maximizing the opportunity using this challenge which exists, of course we are very sorry for the people who are affected because of this disturbance, but on the business front, we are maximizing the opportunities, as I said, whether it is refrigerated container and blah blah blah; the second is we are really minimizing the risk by doing a very systematic planning of our business, our ports, as you know that our all ports are integrated, which means we can do a very fine balance between East Coast, West Coast, and the South Coast, provided it suits to the customer; and the third thing which we are doing and which we have accelerated more than before is execution of the capacity expansion.

Because we do believe that in next 5 years, there are very less capacities which are being created in India. With the trade growth which we are seeing because of the policy reforms, we see that trade will grow and India may be requiring more capacities than planned.

That's why, whether it is Mundra, or it is Dhamra, or it is Kattupalli, or it is Hazira, we are really pushing the execution of our project. These are the three priorities which we have kept, so that we will be maximizing quarter two.

Then in first half, we will see where we land in terms of EBITDA. Then, sir, we will come back and share with you what do we do with the full year guidance.

Sir. That's very comprehensive.

If I may just squeeze last one in, you had already spoken about your philosophy on M&A. In case if you have to go for very large ticket size M&As, as Alok was asking previously, adding on to that, what would be your thresholds for net debt to EBITDA, up to what level you're comfortable for a large M&A?

Because today you are at two. See,

yeah, let me put it in a different way. I'm not talking about any particular asset, right?

When we acquired Krishnapatnam, the EBITDA was 20%, 21%. Today it is 74% or 70 higher 70s.

When we acquired Karaikal, it was, I don't know, mid-20s and early 30s, today it is more than 60, 50, whatsoever it is. You look at Mundra, the return on capital in the first or second year was negative, today it is crossing 38, 39, 40.

Port business is a business, that's why the concession agreements are 30 years, 70 years, 99 years, and it's a long-term business, and you know better than me. If we are acquiring any M&A, whether it was Australia, or it was the Astro Offshore, which we did last year, you would have seen that we have a full confidence in how we will maximize the return on the investment.

If today the asset value is ₹100, we will evaluate ₹100 not at ₹100, we will evaluate ₹100 or $100 depending on what return it will give me in 5 years, 7 years in terms of that currency, and then compare that currency with the Indian currency, and then see what is the absolute amount of rate of return I'm getting on that asset. That's the basic philosophy.

Now the next question comes, what will be the net debt to EBITDA? Today I am at 1.9.

If I do nothing, if my only capability and capacity to invest in the organic growth, I will be negative in 5 years. Should I consider what I'm going to spend to buy a asset tomorrow morning, or should I consider that the asset which I'm buying, how much return it will give me after 5 years, that will help me in keeping the growth for the future and having a healthy net debt to EBITDA?

That is something which is the thing which we have to consider that the value of asset is not about the value of asset today, the value of asset is what return it will generate for me considering the power of my balance sheet in the next 5 to 7 years.

That was quite clear. That was all from my side.

Last question also, the value of asset can also be determined by how we position that asset, right? One of the things, as you would have seen, in Sri Lanka, we have a partner.

In Israel, we have a partner. Let's not start debating on what should be the ticket size.

For me, ticket size is the consequence of a asset which will give me maximum business return on the asset. Then I will decide how to address the ticket size because I have the confidence in the power of my balance sheet, because in 5 years I will be close to zero net debt to EBITDA if I do nothing.

Yes,

yes. Essentially you would want a strong partner as well typically in foreign assets usually.

It depends on the country to country. It depends.

Like

in Sri Lanka, we have Sri Lankan partner; in Israel, we have Israeli partner, because India is us, we know how to manage. When you go to the countries, you have unions.

In our Haifa port, we have eight unions. Definitely to have local management team driven by APSEZ leader, CEO and CFO, board managed by us, but the real day-to-day operations left to the management team and the partner to manage the relationship, that's always is the business module.

Sir. Thank you for that comprehensive answer.

My pleasure.

Sir. Thanks a lot and congrats on pretty good set of numbers.

Sir, my first question is on domestic port business. Your volumes grew 2%, but your revenue was 11%, 12% growth.

What were the levers which you used to drive this kind of revenue and EBITDA growth?

You're talking about domestic?

Yeah. Domestic port business, sir.

Yeah. Krishna, you want to answer?

Sure. Fundamentally, there were two, three things.

One, we had the movement wherever the fuel surcharge was there, we passed that on. We also ensured that the product mix and the volume Yeah.

Basically, if we look at the main driver for the revenue increase is coming from our performance on managing the mix, which was the consequence of the disturbance of Middle East crisis. Which means we had, for example, if you see our liquid, liquid went up much more than the dry cargo.

As you know that we have a better realization on liquid and lesser on the coal. Same thing is with the container business, as I just said before, where we had the premium charges for providing the premium services/emergency services, even after giving 45 days of free storage.

That is something which came in. The third thing is coming by focusing on the associate business services.

We introduced the associate business services in complimentary to the port handling charges, which were making customers much more comfort in having that. Those kind of associated business services also came into the picture.

I would say our endeavor to focus on revenue per ton by maximizing the performance and keeping the cost almost flat net of inflation is giving us a EBITDA which is at 74%. We have been demonstrating it quarter-on-quarter.

Great, sir. Very clear.

Sir, my second question is on logistics business. While obviously business has shown improvement in ROCE, now in double digits, but over past few quarters the top line growth has been pretty muted.

Do we expect acceleration in that growth in foreseeable future, or now business is kind of mature and probably the growth

No, no, no, no, no. I don't think.

See, we have four quadrant in the logistics business, right, and as we always explain. We have rail and ICD, which is asset-heavy business.

We have trucking business, which is asset-light. We have international freight network business, which is asset-zero.

We have EXIM business, which is asset-light. April, May, June, there was, as we all know, disturbance in the trade.

All India just grew by close to 3%, which used to be like 6%, 7%, 8%, right? When you look at our ICD structure, let me say 2,000 to 3,000 containers of Morbi was almost zero because the whole Morbi tile export was zero because of the LPG shortage, right?

This is a reality, this is a fact. Then if you look at Tumb, which is a big ICD, you will see that because the container freight went up, the shipping lines or/customers started shifting from container to bulk cargo.

Then when it was coming as bulk cargo, it was coming to Hazira and not coming to Nhava Sheva and then the Tumb. To answer to your question, I think we have a great opportunity in front of us, not only in EXIM, but also in domestic.

We were waiting for a lot of shipping lines to start opening up their BL to our new ICDs, whether it is Malur, or Kila Raipur, or Kishangarh, or Patli. I think our main performance where we expect in the next quarter or this quarter is Patli and Tumb and Virochannagar.

I would say that we said that four of our major ICDs should hit 80% of utilization, and we are still not there, and that's where I do believe that there is an opportunity.

Great, sir. Thank you.

Thanks a lot.

Thanks for the opportunity. The first question that I had for the management is again linked to acquisitions.

The context is that you were able to acquire India assets at 10 to 12 times EV/EBITDA also because a lot of value addition could have happened, but then there was also the case of you selling Whampoa at a fairly high, high-teens EV/EBITDA in the future because it was an asset on the platter for the person investing inside. As you see through opportunities globally, where do you see these opportunities coming inside from a bucketing perspective?

In the first kind, wherein a lot of value addition can happen and you can get it cheap, or in the second kind, wherein basically these are assets that are being run fairly well and the value addition potential could be limited, you have to pay a lot more?

See, APSEZ, and I think under the visionary leadership of our Chairman, we have more than thousands of example where people thought it cannot be done, and we proved it and we did it. The recent one is our international business, where our EBITDA jumped by 256%, the logistics business, where now the ROCE is 10%, right?

The point is we must think of mid-, long-term on any asset which is ports, because a maritime industry. It's not a consumer industry where I will get the return tomorrow morning.

The strategy should be the first thing is the assets location should be strategically located on the trade route. Now how many trade routes we have?

We have one trade route East to West, there we already have now Australia, India, Africa, and Israel. We talk about IMEC.

Already some of the routes have already started, not in the name of IMEC, but we see clearly a trade going on that. Then another route is North to South, Panama, where we are not interested and we are not ready to go there.

Then the third route comes is the Mediterranean, which is again taking care of one-third of the global route. The point is first we have to see the location of the asset; second, what we have to see is the return on asset, which will be determined by how much revenue we can generate by having the extra cargo.

How extra cargo can come? We have a global relationship with the shipping lines, which serve us in Tanzania, which serve us in Haifa, which serve us in Australia, which serves us in 15 ports in India.

That kind of alliance which we have with the shipping lines is an distinct advantage, that's number two. Number three is that all over the world, the ports are operated as terminal operator, and terminal operator do not give the right realization on the asset.

What gives us realization in India? Because we manage the whole ecosystem.

What is the ecosystem? Ecosystem is all about providing the marine services, ecosystem is providing the railway services, ecosystem is a warehousing.

If you see our results of quarter one, if the volume grew by 2%, why we grew 12% EBITDA? This is only because we are focusing not only on volume.

That's where I've been saying that APSEZ has been positioned as integrated transport company where we are creating more and more value for the customer without a direct link with the volume. If we are able to copy-paste this example in the asset which we are going to acquire in the country, definitely there's a huge scope of improvement.

Last but not the least, and this I have been saying again and again, we cannot compare percentage of EBITDA in India versus another country because we have to take care in the factor is the cost of capital, the inflation, and the currency depreciation. If you do that, we explained very clearly in case of Australian asset acquisition that even if we bought it at a multiple of 17 at that time, but if you take out all the currency depreciation, cost of capital, and so on, it would have landed up with a 13 or 14 multiple.

That's why you see that how much return we are getting from this asset. I can assure you, whatsoever asset we will buy, whatsoever asset we will acquire around the world, especially either it is in Mediterranean or it is on the East to West corridor, we will talk about once again these four rules: the first rule is country is geopolitically and macroeconomically strong; number two, it contributes to our top line and bottom line; number three is we will be able to have the local financing, especially because of our investment ratings; and last but not the least, that the return from this asset in mid- to long-term is at or more than APSEZ.

Hope it answers the question, sir.

That's the only question from my side, and answered very, very well. Thank you.

Thank you.

Good evening, sir. Thank you for the opportunity.

Thanks for the clarification on the acquisition thought process. The question I had was you mentioned about Mundra port, container more of transshipment, almost 4 percentage point higher than usual, right?

Theoretically, for a transshipment cargo, the realization actually will be lower, right? How this delta in terms of realization what we see is largely on account of this extra charges or extra income in the quarter?

How do we see that in terms of sustainability?

Yeah. No, thank you.

Thank you for that. See, what we have to see, if you see our volume of container handled in April and May, you will see that volumes are not as average we do in Mundra.

Like in Mundra, we do roughly 740 to 750,000, right? If you look at April and May, we even didn't touch 700 or we were very close to 700, right?

Now this shortfall was definitely, as I said before, because we were providing services to support the maritime and the country. However, the more the vessel remains at the jetty, then naturally the charges are applicable.

It's not that we were charging extra charges, it is just by the tariff that if vessel, instead of 3 hours, is standing there for 8 hours, definitely there will be additional charges which will be charged. That's why we did not went to the extreme, because for us the volume and the revenue should be balanced.

That's why our transshipment ratio in quarter one 27 was roughly 20 27%, which is roughly 23% to 24%, whereas our competitors nearly doubled or 2.5 times. That's why we keep a very strict discipline between the ratio of EXIM and transshipment.

Whatsoever transshipment was increased was recovered in the revenue because of the additional charges, because of the reason I explained just now.

Got it. Just a clarification, in the guidance we have removed the line on the CapEx.

Any particular reason if you want to clarify, sir?

Achal, we do not report balance sheet in the first quarter, right? Therefore, we will report the CapEx number in the second quarter.

That'll be in consistent with our balance sheet disclosure that we will make in the second quarter. It's in line with the guidance.

It is actually slightly ahead of the guidance at this point.

I think the question is, yes, we keep the guidance for CapEx also, even if the reality is we are ahead because of the reason I just explained before.

Got it. Just a clarification, sorry, I'm harping on this Mundra question.

What's the capacity utilization for container in Mundra in 1Q?

We are getting very close.

Okay. When is the next capacity addition happening, sir, if you could clarify?

That's my last question.

In this calendar year, very soon.

Got it. Thank you so much, sir.

Those are my questions. Thank you, sir.

Thank you.

Thank you.

Thank you, and hello, Ashwani and team. I have two questions.

In fact, on the overseas M&A, it has been well explained. Ashwani, can you give us a sense with a series of FTAs that India has signed, do you finally see India's EXIM growth over a medium term change gear, or you think that 6% EXIM growth plus minus what India has been delivering in the past decade or two would be the trend?

Any thoughts that you get from that? Secondly is with respect to your overseas, I fully understand the return part, but is it fair to say that growth profile may not be as attractive as the portfolio that you operate in India?

Maybe your thoughts on these two. Thank you.

Yeah. No, thank you.

Thank you, Parash, and thank you for the great question. See, I would say since 15th of February, it is difficult to say that what is the impact of which, right?

I don't know whether in last 4 months we are able to do that, but I think what we have for sure started seeing is increase in ro-ro out of India, which is exports of automotive cars. I'm giving you some examples, and maybe, Parash, we can have more deep dive as my team will get into more analysis from now.

We have started seeing exports of four-wheelers, we have started seeing exports of two-wheeler, we have even started seeing exports to Europe, and I think this is because of the FTA. Reversely, we have started seeing the prices of imported cars, especially from UK, have come down in India.

This is also because of the FTA. Definitely there's a topic going on between the billions of pounds/euros of trade, and I do believe that Europe, including UK, has come up more stronger and more united what we see as a business, and definitely with a complimentary feature of signing FTAs, it will help.

Now how much it will help, once we know that all these variables which we see every morning, if they are gone, we will be able to see that what is the impact which we will see, Parash, to be honest with you. Yes, we have started seeing some impact or some incremental trade because of this FTA to start with UK/Europe.

The second thing, I think the question is, and I really want to have these discussion, how do we define rate of growth? Do we define the rate of growth in a country where inflation is 7%, 8%, and we know what is the category of the inflation, whether it is a food inflation, or it is a oil inflation, or it is a industry inflation, I don't know how we define the inflation in one country.

In a country where 7% inflation is mainly governed by the oil import, and then we say that GDP is 7%, and then we say that trade is growing at 6% to 7%, I will grow at 12% to 13% where my cost of debt capital is X. We compare that basket with a basket where the inflation is 1% or 1.5%, cost of capital is minus something, and the rate of growth is 1%, 2%, 3%, but a guaranteed growth, no geopolitical impact, no macroeconomics history, stable currency,

and rupee

is depreciating, has been depreciating, and will depreciate. I think we have to compare both the baskets, and this is what exactly, Parash, we did for Australia, and this is what we are going to do whenever we have the opportunity to decide on any international asset.

Once again, greenfield is the second priority for us because very difficult to predict 10 years from now, but yes, existing business, it will be easier for us because we will have more grip on the business. That's the box which we want to take before we decide.

Is it fair to say that it predominantly will be container focused or you're not shy away from multi-cargo terminals?

See, we would look for a port ecosystem which is giving us a gateway to the trade of the country and a gateway to the energy transition of the country.

Okay. That's fair.

Just one one final question, because looking at your first quarter performance, particularly international terminal, I know you don't disclose ROCE on a quarterly basis, is it fair to say that they are moving all north and probably international portfolio would have moved to double-digit ROCE? Any color you can share on the ROCE of different businesses in this quarter if it's handy?

We don't calculate actually return on capital employed on quarter basis, but it's moving in the right direction. I think in first half, we will be able to share with you.

Lovely. Thank you so much, and all the best.

Thank you, Parash.

Thank you, sir. Congratulations, Ashwani and to the entire team.

Hi. Just a couple of questions.

One on the Vizhinjam transaction that you announced a couple of weeks ago. Obviously, extremely interesting and exciting transaction.

What I wanted to know is, could that serve as a template for you as you look to sort of internationalize the ports business overall? See,

we don't define a policy for the partnership. I think what we really define is why we need partnership and what is the win-win solution for the partner and us.

Depending on that, we go for partnerships, right? On the Vizhinjam, definitely, after getting into partnership with MSC, we bring in number one, a lot of synergies because we have one in Mundra, we have one in Ennore, and now we get into Vizhinjam.

Of course, they are our global partner when it comes to the thing. Having said that, we have with CMA CGM, we have it with the others also.

Now why we went for this partnership, which is equity partnership with MSC in Vizhinjam, because we believe that in 1 year Vizhinjam is becoming a gateway to open up the economy in Kerala because this is the largest investment in that state, right? Very soon, we will be starting the EXIM business.

This is transshipment business today, but as we have been talking it right from the first day that this port needs EXIM business because we know that the maximum realization comes from the EXIM business. EXIM business also creates additional opportunities because the rail project has been approved, the highways have been approved, definitely the logistics parks will come in, and the whole state will start getting developed.

All the catchment area, whether it is Kerala or it is surrounding Kerala, Coimbatore, textile export, handicraft export, everything will start moving through the Vizhinjam, which goes by truck today from that state to Nhava Sheva, and then it is exported. Imagine a truck taking the export from that place to Nhava Sheva.

Now we have to accelerate our CapEx, but on the other side we have to have a confidence in the future business. On the other side, we want to keep this port open for everyone.

There is no exclusivity if we are getting into a partnership with one partner. Which means if MSC is our partner, equity partner in this port, the port is run by Adani, there is no change in the operational structure, in the decisions which we have to take on the CapEx, in the decisions which we have to take on the growth, the window person for the government, everything remains the Adani, the CEO remains Adani, the CFO remains Adani.

The second thing is there is no exclusivity, which means MSC can bring the ship, Maersk can bring the ship, CMA CGM can bring the ship, and we open this economy with a much more wider horizon. As for Vizhinjam, we already announced LNG bunkering, and there are many more things which will be coming.

The power of getting a partnership is to get into a win-win solution, which should contribute to each other, but also to contribute to the economy of the state and then the country.

That's helpful, Ashwani, as always. The other question I had was obviously there's a lot going on between the international business.

We saw margins obviously pop off at 42%, and then you have marine economics, and when I look at that margin, it was closer to 36%. Now obviously, a lot of moving pieces in both those segments, but from our perspective, if you can just help us understand how we should think about margins in the short to intermediate term.

Now clearly, you've laid out long-term margins for us in terms of 2031 targets, but maybe if you can just help us understand how we think about margins in those two segments in the short to intermediate term because of all the different moving pieces that you have.

Thanks, Manish, for that. Look, if you look at marine, our margins used to be higher earlier, right, before the whole Middle East situation actually sprang up.

We used to be somewhere in the mid-50s, right? Now due to certain disturbances in the local area, our margin has been impacted, which we think as the situation resolves over time, we will trend back to normal, right?

Steady-state margins for us in marine, given the operations that we have had in India and Middle East and Africa, tend to be around that 55% type of a number. We are looking to expand marine operations beyond these geographies, as you would have seen we've done a deal recently in Latin America, we've done a deal recently in Europe.

Some of these vessels are newer category of vessels that we are also evaluating. In due course, we will share more information on how the margin profile of the marine business will shape up relative to some of these newer category of vessels that we are sort of going into.

For now, assuming the situation normalizes, we should be trending towards that 55% type of a number. This quarter also you would have seen that marine is up sequentially, where the maximum brunt of the Middle East impact was witnessed in the previous quarter.

Now international ports, again, four different ports, these are all four different geographies. Margins are closer to optimum, let's say, in Australia.

Australia historically operates around the 65% type of a number, and we're starting to kind of be closer to the numbers, but in the next 2 or 3 years, we have multiple rate revisions that are also coming up. There will be an impact of that.

Colombo is still ramping up, but doing good on margins, with greater volumes, we could see some impact of operating leverage. Israel is where the swing factor could be, right?

Israel right now the margins are reasonably low given the macro situation. The wild swing factor for us in the international operation could come based on how the situation normalizes in Israel, right, because the realization numbers in Israel are fairly high.

On a per-ton basis, our realization in Israel tends to be four times of what we do in India, right? That could be a swing factor, which could then determine how international port margin could shape up in the future.

That's super helpful, Rahul. Then just on logistics, you'd mentioned volumes, rail volumes were down 19% in fiscal 1Q.

Have we seen somewhat of a stabilization so far this quarter? Yeah.

Hi, Manish. We've seen a recovery, and there are like Ashwani said, some cargoes that have shifted from containers to breakbulk.

There are some cargoes just because they're sensitive to logistics cost, especially on the water, they've just not come into India. That little bit of stabilization is being seen, and the numbers are starting to sort of recover there.

Okay. Wonderful.

Thank you so much. Good luck, and we'll keep up with the progress.

Thank you.

Good evening. My first question is on the impact of the Gulf crisis on our businesses.

It was well covered, especially on Mundra and logistics. However, can you highlight how it is impacting positively the Colombo and Vizhinjam port operations, and negatively the Haifa operations?

I think plus minus zero. Because you have more opportunities and you have also risk.

The cargo like waste paper, metal scrap, which used to come, and bauxite, which used to come from Middle East, is zero. Indian cement industry will not close, they have found the new sources to get the bauxite.

It was just a disturbance between 2 to 3 months, and now I think supply chain has redefined themselves and finding the route. Same is the case with the crude oil.

You can see the growth in liquid which we have, especially in Hazira. You will see that it has started picking up.

For me, and this, even if today the disturbance is going on, but there is no disturbance in accepting the transshipment containers which were bound for Middle East, right? What happened in February, March, April was there was no acceptance of the containers at Middle East, and they were coming to Mundra.

Now that is not the case, right? That's why when we will announce the figures of July, you will see that the port is very normal and working in a normal condition with a normal mix.

Opportunities I would say which we see that as always when there is a crisis, people start thinking of planning a risk mitigation at corporate level. Definitely there are discussions going on whether to have additional hubs of shipping in India in addition to Dubai or there should be a regional hub.

I think those kind of discussions have started, nothing has materialized yet, but I think we will see that in the future. The second thing which I said before is Europe/UK has come up more stronger and united, and that will also be reflected in the trade which we are seeing now and which we will see in the near future.

Actually, I was trying to understand the positive impact of this crisis on Vizhinjam and Colombo. If you can talk about that.

See, there is no crisis impact in Colombo, right? Because the country needs roughly 9 million TEUs of capacity, and the whole country is only 8 million TEUs of capacity.

The moment we started phase one, it was not because of crisis, it is not because of the neighboring port, the whole country needed those shipments, and we filled our port quickly. Now because we did a very efficient and effective ramp-up, we pushed the phase two, and phase two we will be starting in October.

I'm pretty sure that even phase two, we will book it as soon as possible, unless until when the whole Sri Lanka will have a capacity of roughly 12 to 13 million, which will only happen after start of the East Terminal. I think for 2, 3, 4 years, it is just the natural demand of the country which is filling the capacity of CWIT.

Vizhinjam is another example, and that's why we still have only one shipping line which is maximum acquiring the shipments to Vizhinjam because we don't have capacity, and that's why we are pushing the phase two, because that's the demand of the country. 76% of the transshipment terminal bound for India are transshipped outside India, which is additional cost and additional time.

Every shipping line which considers that transshipment is a cost for them look for a better cost option. For them, Vizhinjam is a better cost option because it falls on the international trade, and it is just 10 miles 10 miles away from the international water.

What Vizhinjam is attracting, what Colombo is attracting is pure performance as well as the capacity requirement. What Mundra attracted in transshipment was because of the disturbance of the Middle East.

In Ennore and Kattupalli, no impact because of capacity, no impact because of Middle East, it's a normal trade, because the maximum trade which comes in Kattupalli and Ennore is China and so on and the East part of the world. They are running as normal as before.

Does it make sense?

Yes, great. When it comes to Vizhinjam, what is the status of the cash from MSC?

Would it come in at any point in time, or would it come in during the CapEx that would happen gradually?

Bharani, as we mentioned in our press release on Vizhinjam, this transaction is subject to regulatory and other approvals, right? Cash flow transfers can happen only after that.

Sure. My final question is on the average realizations per ton or per TEU, as the case may be, say in first quarter of this year, let's say in liquid, coal, container, transshipment, other dry bulk separately, and how it has grown on a year-on-year basis?

We've always had this trend of year-on-year increase in realization, and that, as Ashwani explained, is the combination of various value-added services, plus we tend to have our usual rate revisions that we kind of go through, plus there's some advantages on the currency side as well. Taking all of that into account, what has happened in this quarter is the proportion of container and liquid as a proportion to the aggregate domestic cargo has increased by about 300 basis points, and that has also had a product mix positive impact on the overall realization, right, because commodities like container, for example, are impacted by currency as well, right?

Across commodities, in general, we have seen a uptick in the realization on a per-unit basis, be it container, liquid, or dry. Obviously, the delta has been higher in the case of container, and liquid in general tends to be one of our more profitable cargo categories any which ways, right?

Across the board, we've generally seen an uptick in realization.

I'll take this offline. I wanted actually the rupees per ton number.

Final question, if I can squeeze in, can you give a quantum of brownfield port expansions port-wise, how much it would happen and by what time?

Meaning in Dhamra and Mundra?

We have given that in our Ambition 2031, port by port, how much capacity we are increasing.

Bharani, Ambition 2031 deck actually has a slide where just after we've elaborated our FY31 targets, we've actually given a port-by-port incremental capacity build-out plan. It is page 23 of our Ambition deck, where you will see we've constructed a waterfall chart, which bridges the gap between the current capacity and the 1 billion metric ton capacity that we're looking to kind of build out in the next 5 years, where you'll get a good sense of which ports we are targeting and within those ports which commodities we are targeting.

Sure. Thank you so much, and all the best.

Thank you.

Sir, thank you for taking my questions. Sir, as I look at our Q1 FY27 numbers, about a quarter of our revenue now comes from international, which is marine and international ports.

Based on all the planned M&A, etc., is there a upper limit that you have in mind that this is the kind of proportion of our revenue from international that is the top that we are okay with, or that number could be much higher?

First is return on capital employed is the priority for me, where-so-ever is the business. Our capital allocation is very strict, very disciplined.

Just before we showed this Ambition 2031, the four growth pillars of India have been mapped with the trade, trade has been mapped with the commodities, and commodities have been mapped with our ports, and ports have been mapped with our expansion plan. We have a very logical way of doing the capacity planning and the capital allocation.

As you would have seen that in next 5 years, we have not put the CapEx in the international ports because we want to maximize the utilization of the existing assets, whether it is Tanzania, or Haifa, or Australia, or Colombo. We have a very disciplined and strict capital allocation plan.

Mix will be the consequence and not the objective, and it will be the consequence of a healthy business return.

Sure. Any asset that we acquire has to meet the consolidated APSEZ ROCE, which as of FY26 was 16%, that would be the right assumption?

I would again try to repeat four points. Number one, geopolitically and macroeconomically stable country.

Number two, top-line and bottom-line contribution. Number three, local financing, because I want to have the cost of capital of that country where I'm going to incur the cost and have the revenue.

The return should be at or more than the average of APSEZ after adjusting all the financial parameters comparable to each other, including currency depreciation, rate of growth, inflation, cost of capital, and so on and so on. Exactly what we demonstrated in the acquisition of Australia.

Got it, sir. Sir, my second question is on Mundra concession.

Any update there?

Before Mundra concession, we should hear Pipavav concession because they are before us in 2028. I think discussions are going on, and when it will be officialized, definitely we will be disclosing to you.

It will be on same lines as what it'll be for Pipavav and Mundra will be

It's too early for me to say it will be same line or not, but we have to wait for the results. Once again, what is Mundra's competitiveness today?

Mundra's competitiveness is its scale and efficiency. Whatsoever will be the conditions, definitely everybody would like to keep the scale and the efficiency, which will result in the competitiveness of Mundra as compared to the competitor port.

Got it, sir. Thank you.

Those were my questions.

Thank you.

Hi, sir. Thanks for the opportunity.

Sorry for harping a bit on the international ports side. Just trying to understand, in the Ambition 2031 plan, you did speak about 20% ROCE at the APSEZ consolidated level, right?

Whatever port that you acquire on the international side, will it still be within this guideline from the ROCE trajectory, one? Two, if I were to look at the commodity mix or the synergies with respect to existing portfolio, right?

Like for instance Australia, we understand coal, India imports a large amount of coal out there. How do you look at any incremental growth opportunities on the international side from that standpoint as you look at an integrated transport utility eventually?

If you can speak a bit on that, please.

If you look at slide 26 on our Ambition 2031, we are saying that we will give average of 1% ROCE increase at consolidated level, right? Definitely we are trying for that, and we are delivering it quarter-on-quarter.

This is consolidated, which means it has got domestic ports, international ports, logistics, logistics again the four business pillars, marine, in marine also we have three business pillars, and then we have this special economic zone specific business. When we are acquiring any asset, whether it is in India or in internationally, we will put it in the playground, and the playground could be within 5 years and could be more than 5 years.

That is a discussion which we will do when we will decide for the asset acquisition. As we said, our job is to provide incremental ROCE every year on consolidated basis.

Sir, sorry for harping a bit on that. Hypothetically if there was an asset that which you feel is meaningful from a 10-year perspective, but would dilute this 20% ROCE target by FY31, would that still be okay with the company, or No,

no, it's too early to say because 20% is not the only indicator, right? You have many more indicators, how you fund that asset, how you structure that asset, what is the value of the asset.

I think we will see, as once again, the whole playground, as I said before, the four or five rules, to decide where we land.

Sure, sir. Sir, if you can also comment a bit on what are the kind of commodities that you look at when you acquire a new port, and maybe the synergies with respect to your existing portfolio as you look at APSEZ as an integrated transport utility?

At first we are looking at the port ecosystem before looking at the commodity. Because as I said before, operating just one terminal will not give us enough scale to get into a new country and start the operations.

We are looking at the ecosystem where we can create more and more value, like Mundra, like we are doing now in Dhamra, like we will start in Krishnapatnam. We want to look at the asset which will give us an opportunity to create the ecosystem, whether it is warehouse, whether it is logistics, whether it is marine, whether it is energy transition, and so on and so on.

Got it, sir. Sir, my second question is on logistics.

Obviously, for past couple of quarters, it looks like you are scaling down, if that was the appropriate word to use, because the numbers are relatively lower when compared to industry growth. Is it something that you're recalibrating your strategy and trying to be a bit more focused, or is there something going behind the headline numbers that we see?

If you can help us understand that bit better, please.

Which commodity was that?

Logistics.

Logistics, especially the container rail movement.

Sure. I'll take that.

Just to sort of give clarity, we're looking at a complete integrated play. What you may not actually see in the logistics P&L will feature in the ports P&L.

For example, when cargo moved from containers of Nhava Sheva into Tumb into breakbulk into Hazira, so that in some form is covered under the APSEZ entire P&L balance sheets. It doesn't feature exclusively in logistics, but the integrated play is starting to come.

Whenever we talk to customers, right, they're talking to one single window, be it on the asset-heavy or on the asset-light or asset-right ecosystems. Now in terms of pure play, what we're looking to do is stick to this theme and keep growing on this theme, rather than sort of just try capture cargo and spurts because then that is not sustainable.

Got it, sir. Sir, if I may ask you, what percent of port volumes today at your domestic ports are enabled from your logistics ecosystem, and if you are speaking about say an 850 million ton kind of target from your domestic ports by 2030, what would that number be?

What are your ambitions out there like? See,

Koundinya, it can only go up, right? Because as you cover the sector, you understand that the rail coefficient in India is not at its optimized best.

What we are looking to do is to be able to model our services in a way that we can gradually not just increase the rail coefficient across our ports, but also increase our market share within that higher rail coefficient number, right? While logistics is still an nascent business in our scheme of things, but rest assured, the number can only go up from here.

Okay.

Sure, Rahul. Lastly, if I may squeeze in one more question, right, this quarter obviously on the domestic port side it's been driven by realizations than volumes obviously for various factors which are outside the control of anyone, right?

Now post maybe July, you did allude to the fact that things have normalized. How are the things shaping up now if you can break that up between say volume and pricing or ancillary services driven, how are the things shaping?

If you can provide a little bit color on that, please. No,

no, thank you. I think this quarter also, there's a slow start of the trade, even in July.

I think the whole country's maritime business is linked to the trade. We have to really keep watching how the Indian trade is growing.

As I said, in last quarter, India trade grew only by 3%. You can imagine that what are the challenges our country is facing in terms of the trade growth.

Those are the numbers which are numbers, and we have to believe in those numbers. In July also, we see a little bit better situation than the last quarter, but it is not normal.

This is the reason that this quarter also, even if quarter one was exceeding our expectations because of the execution of the strategies we put in place in the month of March, but in this quarter also we want to watch and maximize the opportunity, minimize the risk, and after first half, we will come back to you and tell you based on the first half growth of the country, then the trade, and then our business. I think we have to be in wait-and-watch situation for another 2 months.

Sure, sir. Thank you very much, and all the best.

Thank you.

Thank you, everybody, for participating and taking us through your queries. We have tried to answer all of the questions, but should you have any follow-up queries or points to discuss, please feel free to reach out to the IR function.

We'll be happy to connect. Thank you, and we look forward to the next earnings.

Thank you.