Good afternoon, hope I'm audible.

Yeah. This question is related to the Gateway Distriparks.

What we see is that volume for the ICD segment was quite stagnant on a YoY basis. Just wanted your thought on the market share part.

Is it something that market has grown like this and we have maintained our market share because of all this West Asia crisis that has been happening, or we lost something or we gained something? What is your view on this particular thing, and how our volume is expected to behave for, let's say, balance of the fiscal year?

The market share is intact only. The market has degrown in the markets that we operate in.

Basically, it's due to the war situation only that's been going on since April. There's still uncertainty.

In the middle there was a ceasefire, but the attacks started again. It's led to a disruption and everything.

We don't know when it'll clear up, but we're still positive in long term and we're hopeful that for the year we can still close out on double-digit growth.

Got it, sir. On the medium-term perspective, while we have guided for, let's say, 10-15% kind of a growth during last con-calls, how we are confident on that part?

Along with that, how DFC have been panning out which is started from, let's say, last 1.5 month? How we are seeing the change after the connection to the JNPT, and how confident we are of achieving, let's say, double-digit growth?

Is it the market growth, is it some market share improvement for us, is it new ICD which is getting added in near term? How we should look at for this next 2 to 3 years time?

In this

right now it's only dependent on this war situation. Once that clears up, then double digit will be easy to achieve for us.

We had the traction going before April, before February rather, and then after the situation that's when we saw a dip in volumes. When new ICDs come in, that will further add to our growth.

Indore should be operational by 2028. Ankleshwar, they've received their initial customs permission and we should be operational there for EXIM operations by September.

We're looking at new locations as well for both domestic and EXIM. We're positive on the long term.

DFC, I'll just hand it to Rajguru, he can explain on that.

Yeah. The last connection which was pending on the DFC stretch, now it is complete.

In fact, we were the one who started the first double-stack from JNPT towards NCR. Given the situation, it is too early to say because then there was some bad weather conditions at Mumbai.

Because of that, there was some restriction came into effect. We are also waiting and watching, maybe it'll take couple of more months to see the cargo shifting towards JNPT.

Now if we look at after this West Asia crisis, wherein imports dried up in the months of April, May, there has been some improvement on the import side from June, July onwards. We need to see how now Mundra and Pipavav ports, they are going to cope up with the congestion because ultimately, we also experience some congestions at the port and towards major ports.

Eventually JNPT will have that opportunity to get some of the cargo from these ports as well as some conversion from road to rail, but it is very early to say.

Got it, sir. Any updates on the Indore ICD?

We'll be operational by 2028.

On the Jaipur ICD.

I'll just finish on Indore also. One other update was that we've acquired 2.5 more acres, now we're at 26.4 acres roughly.

Construction is ongoing in Indore, we've already awarded some tenders. Due to rains and all, it's a bit slow, but after say September we'll be in full swing construction there.

On Jaipur, there's no update. We've given it in our notes also that the last hearing took place, but another date was given.

It's still listed for final arguments in September now. We're hopeful that it can get closed within a hearing or two.

Got it, sir. Sir, just last one question on the taxation part.

As I understand that reported tax rate has gone up to 25-26%, whereas our tax outgo is still stable at 17-18%. How much this MAT credit would be available for us to continue the 17-18% cash tax outgo, and maybe after 2-3 years or whatever maybe the timeline, by when we'll be paying 25% full tax rate as per your assumptions?

We will be paying at the rate of 18.88% for at least 7-8 years,

because

we have a large amount of accumulated MAT credit which we will be utilizing over the next 7-8 years.

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

Thank you so much.

Just on the taxing also, while it's coming in the books as a 15% decline in PAT, actual cash tax outgo hasn't really changed that much. That's only increased by about maybe 1 or 2 crores compared to last year.

Thanks for that. The first question that I had was what is your exposure to JNPT as in overall volumes that you handle on the rail side?

Currently it's about 5%, but we are hopeful that this will increase going forward, especially as we add Ankleshwar and Indore, both are very dependent on JNPT. Most of their volume is JNPT only.

As those operationalize, our JNPT share should increase. Even without those, in our existing mix also there's an expectation that more volume will shift towards JNPT as the DFC is now operationalized, and shipping lines may take a call, but maybe after this disruption is over.

Understood. While we do not know the specifics of your EBITDA per TEU on the rail side, it seems as if that quantum on the rail side has not been growing and potentially declining.

While you're maintaining your market share, it is coming at lower and lower profitability. Is that assessment right, and what then needs to be done to arrest this again?

It's a function of the volume mix also. Decline in imports and increasing exports while maintaining the same volume would be lower margin for us.

Little bit of that. Port imbalance also, specifically within Mundra and Pipavav has also been there.

Lower double stacking, higher underframe, higher empty running, all contributed to a lower rail EBITDA in this quarter. As volume goes back, we expect that this will come back up and get back into the old range that we had.

Also there were impact of fuel and very high minimum wage increases. Just for example, Haryana had an increase by 35% in minimum wages.

We've tried to pass it on to customers, but there's a time lag in that also. Fuel also, most of it we've been able to pass on.

That impact will be more visible in Q2.

Got that. Could you give us a sense of your market shares across the key regions and the double stacking coefficient as to how much has it gone down by over the last couple of quarters?

The market share remains the same trend that we had earlier, it's the same figures we've been reporting. On double stack, basically we're at 39%, it has dipped a bit from last year where we were at 40% to 42% depending on the quarter.

Understood. I guess maybe a last question from my side, as in the CFS business is going nowhere and doesn't benefit from Western DFC getting commissioned.

Is there an endgame in plan because you do share very large land parcel near JNPT and other CFSs?

Can you just repeat the question? You said that it's not connected to DFC, doesn't help, and then the second part was?

I'm just saying the CFS business is expected not to see a positive U-turn because of DFC and the numbers are weak. Is there any thought process of either improving that business or potentially selling land?

Right.

We undertook an exercise, but we didn't get the right valuation. This was about a year and a half ago.

Since then we've not been actively looking cuz we reached about a net debt zero position earlier in the year, then we paid out the special dividend. There's no really compulsion to sell the CFS business.

If some very good deal comes for it, we're still open to it, but we're not actively looking for it out there. It doesn't help with the DFC, but some volume improvements have come in the CFS as well as with this fuel and wage hike, we took a pricing increase.

Little bit margin improvement possibility is also there, which you might see again in Q2.

Got that. Those were questions from my side.

Thank you and all the very best.

Thank you.

You can hear me right now?

Thank you. My question is that what was the trend of volume growth rate in June and July month which will explain us the industry situation?

June was similar only. Even July is similar.

We can't give specifics cuz this is a Q1 call and being listed we have that restriction, but broadly the trend remains the same. Market share remains intact.

Arrivals have been good, but actually July volumes got impacted because of the weather. There was a lot of restrictions on double stacking and even operations at the port were both congested as well as restricted.

There were one or two days and then again it operates, then one or two days again they take restrictions. All the CTOs have faced that during July.

Okay. Then

what brings you confidence that your volume growth rate will pick up once some uncertainties in the global political situation is over?

The pipeline is there, plus we're focusing on domestic as well as Ankleshwar operationalizing by Q2, that'll all add into our volumes. I gave the caveat also that this is subject to global macros.

Understood. Can you give some color on Ankleshwar, how it will increase the volumes for you and how can it add to EBITDA?

It's going to be a new EXIM location for us, right now it's served by only one ICD which is full, everything excess we would be in a position to cater to it and bring it to the ICD operating out of there. That'll be a direct addition to our revenue and EBITDA by adding more volume.

How much is Ankleshwar volume right now?

Right now it's zero that EXIM has not started, it will only start by end of September.

No, I'm asking the other ICD which is operating.

That would be doing about 5,000 TEUs is our estimate, but that data is not public.

Okay. What is our estimate that we can do?

It takes time to ramp up cuz you have to add some shipping line BL points and everything, but we also estimate that say within 3-4 years we should be doing a similar number.

Okay. Got it.

I'll come back in the queue. Thank you.

Thank you.

Hello. Hi.

I wanted to know that besides the existing land bank which we have, what would be the approximate market value of that land bank as of today? Going forward over the next 3 or 4 years, where do you see the growth coming from apart from the ICD Indore and the ramp-up of ICD Jaipur, Indore, and Ankleshwar ramp-up?

We don't keep assessing our land on market value cuz we're not in the real estate business, but that being said we do have rough ideas and people do approach us for purchase of land. It's very high compared to the book cost if you look at it.

Just for example, our Garhi land, it's about 85-90 acres. That would be valued, there's residential towers coming near us and all, so that would be valued anywhere outright purchase at 25-30 crores per acre.

If you become a builder and do it, I'm sure you can plot it and sell it at exponentially higher than that. Our overall land bank is about 475 acres across India in prime locations.

Some are industrial locations, some are port leases, but most of it is freehold. The value is there.

The growth part, you mentioned the three locations. That plus we're looking at more locations as well as increasing our domestic presence.

Right now domestic we'd be doing only about 500 containers a month roughly. We could be increasing that to a lot higher when we have more of our network in place.

Okay. Another thing is that in India apart from Container Corporation competition, CCI would be the biggest player, right?

CONCOR is the biggest.

CONCOR. Fine.

Thank you.

Thank you.

Another just a follow-up question. Your book says that you have contingent liabilities of ₹6,000 crores.

How much of it is formality based in terms of giving bank deposits, a bank guarantee, and how much of it is related to performance which can actually culminate into a liability in future?

Almost 95% of that amount are bonds given to government authorities, mainly customs. That is because we hold cargo which are bonded in nature.

It's not really a contingent liability in the sense that there is some claim which will come up or something like that. The bulk of it is of that nature.

Okay. On the land bank, all of that land bank exists in Gateway Distriparks, right?

None of it is leasehold or anything of that sort?

No, some are port leases, some is a long-term CIDCO lease in Bombay. Most of it is freehold.

Kashipur is in a entity that we acquired, but it's Gateway only. Kerala is in a JV which we have 60%.

Going by what you said, a single property itself, if we apply a conservative market value to it, itself would be worth around ₹2,000 crores or something.

It could be more, but yeah, we're not really here to speculate on real estate.

Thank you.

Hi, I hope I'm audible.

Yeah.

Yeah. A couple of questions in regard to Snowman.

Just wanted to check how much pricing benefit across the warehousing space we have been able to get across in this quarter, and is there any scheduled hikes which are planned across this year?

In terms of percentage, I cannot say right away, but in a range between 5% to 7% on an average is what we have got from most of the customers. That's what I can tell you.

Are there any discussions for a further pricing hike, or that will remain the constant for this throughout this year?

No, see, there are a constant revisions which moves on, because some of the customers were onboarded in a month of January, someone must have been onboarded in a month of June. Subsequently as the renewals will come, the pricing negotiation will happen.

We will continue at the same similar price pattern as there had been a steep hike in labor as well, and those are also getting corrected subsequently along with the fuel.

Secondly, sir, with respect to the contributions coming out from the 5PL, can you just discuss on the overall contribution coming out from the segments, and also on the profitability aspect?

It's again a mixed blend because if we talk about 5PL, typically the service margin remains between 5% to 6%. Other than that, it helps us gain more volumes in our warehousing and distribution, which is transportation services, and the blended margin stays there for those particular units.

During the quarter, what kind of a contribution would have come in from the 5PL segment then?

5PL has seen a hike of around-

6%.

6% on

year

on year, I would say. That is an addition only on the distribution part of it.

Other than that, it has contributed in warehousing and transportation as well simultaneously.

Right. Sir, how much kind of a capex will be doing across the Snowman space alone, and what will be the approximate pallet additions which we are looking for this year as well as for the next year?

This year, Pune will be up in another couple of months, and post that Patna is gonna come up. This year we'll see around 24,000 additional pallets by end of this year, and subsequently similar numbers is what we are planning for subsequent years.

Sir, anything with respect to the guidance for this year as well as for the next year as to any forward-looking number which you can possibly elaborate on?

We're looking at growth of say 10% to 15% on top line, and it'll be across all the segments.

Right. Across the 5PL segments, have we seen any customer or additions across this quarter?

Not in quarter one, but discussions are still on. We may see some new names coming up by quarter three or quarter four.

Right. Just a last bit, can you just elaborate on with respect to the competitive intensity across the warehousing space, how it has been, and like we said we have done a 5% to 7% kind of pricing negotiation, but still with respect to the transition from the unorganized to organized, how this transition is taking place across?

See,

in general the transition is there from unorganized to organized, which will continue to happen. If you see in Mumbai itself with the new FSSAI Commissioner, a lot of changes have happened in last two, three days itself.

We are keeping a close eye on how the things are developing, from where our customer is coming, and do we have space, and it depends on the requirement of the customer and how do we meet his requirements.

That's it from my side, sir. Thanks for answering all.

Am I audible? Yeah.

Hi. Thank you for the opportunity.

Sorry if I'm repeating the question. Sir, if you could talk a little bit about in terms of the DFC, given now JNPT is connected, how do you see it changing the way your business has been for the ICD piece?

It is an advantage, but we've mentioned in previous calls also, we have to wait for what the shipping lines will do to know what will happen exactly. We do anticipate some shift back to JNPT as shipping lines have indicated they prefer a single dip rather than a double dip on one coast in one country.

It's a wait and watch kind of thing and we don't expect an overnight shift of volumes from a road to rail kind of thing happening. Every year maybe 1%, 1% to 2% incrementally can happen.

Long term it's a good positive development for us.

In terms of the total volume, how much is double-dipped in your estimate at Mundra-Pipavav combined?

We wouldn't have access to that data.

Understood. Secondly, currently I presume there is very negligible volume which comes from JNPT for us.

One, how difficult or easy is to start at JNPT? Secondly, does it change the economics for you in terms of per unit margin?

Right now it's about 5% of our business, but it's very easy for us to just increase services. We can shift, we've added more trains also.

Plus with Ankleshwar we have a bigger advantage compared to others that we can just hub it there. What we used to do at Viramgam earlier, we're doing it here now, and it's more advantageous.

When Ankleshwar will have EXIM, then we'll run mixed trains of using that as a hub, the Ankleshwar imports plus our northern imports. We can run all sorts of combinations which other people can't.

We have to wait and see how it kind of grows into that.

In terms of per unit margins, will it be higher, lower, and from a customer perspective will it be a lower cost or it will be higher cost?

On current pricing, it'll be higher cost for inland to the north-

I'll just pause in thanks if you could answer, sir.

Can you hear me?

I can hear you, sir. Yeah.

As

I was saying, in current pricing JNPT is more expensive for northern India because of the extra distance. There have been talks maybe that they'll come out with some special haulage, but there's nothing confirmed on it yet.

That being said, it's up to the shipping line if they're only going to call on Bombay for a particular shipping line route, then the customer won't have a choice. JNPT sea freight will also have to be compared, the customer on an end-to-end basis might actually save something even if his inland cost goes up.

For us, the revenue per TEU would be higher on JNPT on current pricing, and then slightly the EBITDA will also be higher, just as a function of distance.

Fair point. Just last question if I may, of the total north cargo, how much is coming to JNPT in your opinion, sir, road plus rail put together?

Very hard to again put a figure cuz the road data is not accessible, but we'd say about 10%, 15%. NCR if you look at it is a anywhere from 1 to 1.3 lakh per month TEU market.

That would be more. Ludhiana is a bit more catered towards Mundra-Pipavav.

There are other markets and I was explaining earlier on call that Indore and Ankleshwar we'll have advantage for JNPT cuz those markets are primarily for JNPT and not for the Gujarat ports.

Got it. Thank you so much.

Thank you.

I think one question has come in, we can take.

Hi. Thanks for the opportunity.

This is Koundinya from Jefferies. Couple of questions.

You did indicate that there are some talks about special haulage charge for JNPT. Can you elaborate a bit, please, what is it that is being discussed out there?

We don't have any inside, but it's just industry rumors that it's on everyone's wish list, but there's nothing concrete that anything has come on this.

Potentially lower haulage charge, is that what you mean?

Don't take our quote for it, we don't know if it's going to happen or not.

Sure. Understood.

Then you are mentioning that shipping lines are indicating that they prefer a single dip than double dip. Are you indicating that more volumes can move to JNPT?

If so, is it from something like a Pipavav Port or a Mundra Port? What is it that you are gathering from the street if you can help us understand that?

That's the indication we've gotten, but everyone's still in an exploratory stage. No decision has been taken on that yet.

Basically instead of the Gujarat ports that they'll do it from here.

Understood. Then when you're also mentioning about from a total cost of logistics JNPT may work better despite higher hinterland, can you help us understand a little bit of math here?

How does that work and where is the complete advantage for more volumes to flow through from JNPT?

Hi. If we look at the distance, one of the disadvantage like you were also telling that it is a distance, there is a six slabs higher compared to Mundra.

Which makes it slightly expensive as far as the rail haulage is concerned. Again, there has been requests that if Indian Railways can rationalize some of that haulage specially on the JNPT, but that is a matter of questions whether it is going to happen or not.

Having said that, there are other opportunities also, because a lot of domestic cargo which is flowing from Mundra to North and hinterland, so that has not started from JNPT. In fact they will have to give some special permission by Indian customs, JNPT is already in touch.

Maybe they will come up with some kind of arrangement wherein they will promote some domestic business from JNPT. Plus if you look at all the ports, their rail coefficient is very low, which is between 14% to 15%.

They also have this internal mandate how to increase the rail share. They are also in touch with various shipping line and giving them a competitive port THC charges, so that shipping lines are able to take a call between Mundra and JNPT wherever there is a disadvantage.

They will be trying to pass on some advantage. Again, having said that, this is very early days, we have to wait for another, say, couple of months before we will see actual ramp-up on the rail volumes at JNPT.

Sir, but with the terminals, especially with something like a JNPT Port privatized, how easy is it to provide these additional discounts to shipping lines?

It all depends on the shipping line interest that whether they want to do a single dip, double dip, what is their proportion of cargo which is hinterland based and which is based near the seaport. There are multiple factors.

Ultimately shipping lines are the ones who are going to decide. It is not some customer is fine.

Again, if you look at the congestion which often happens at Mundra, this is an advantage of JNPT that if they are going to come up with some special incentives to the shipping lines, they might be able to convince them to call some of the vessels.

Understood, sir. Thank you very much.