Thank you, Huda. Good morning, everyone.

Mukesh Saraf here from Avendus Spark. Appreciate everybody logging into this 1Q FY27 earnings call of VRL Logistics.

From the management team, I am pleased to host Mr. Sunil Nalavadi, CFO of VRL Logistics.

I'll now hand over the call to Mr. Nalavadi for his opening remarks, post which we'll take the Q&A.

Over to you, sir.

Thank you, Mr. Mukesh.

Good morning to all participants. I am Sunil Nalavadi, CFO of VRL Logistics.

I welcome all of you once again for the earning conference call for the quarter 1 of financial year 27. On the out- onset, I would like to inform you that we have completed 50 years of service in the logistic industry.

Our promoter, Dr. Vijay Sankeshwar, started this company in the year 1976 with self-driven single vehicle with one route.

Today, the company is operating with 6,000 owned vehicles along with hired vehicles as well. Today, the operations of the company spreads across 23 states and 5 union territories with around 1,300 branch network.

We cater to all the commodity segments with 10 lakh plus customers base. Our vehicles are traveling around 11 11 lakh km on a daily basis to deliver around 12,000 tons of commodities across the nook and corner of this country.

Further, growth of the company was accelerated after Shri Anand Sankeshwar joined as Managing Director. Along with a rich experience and expertise of the promoters, there is an immense contribution from the team VRL, including the experienced staff, drivers, loading unloading staff, etc.

We are very much thankful to all the shareholders who have supported us, and also to the many individuals, institutions who supported us either directly or indirectly during this journey. I hope everyone has had an opportunity to review our press release and the earning presentation, which has been circulated through the exchanges.

To highlight about the financial performance of the company, this financial year started with a new benchmark in performance, with a historic start by achieving the highest-ever profit for the quarter of ₹81 crore. For our business, the current quarter was a very challenging period on account of risks posed by the current geopolitical developments and potential thereof to cause volatility in crude oil prices, which resulted into drastic increase in fuel rates and other input costs.

The fuel is one of the major costs of parts of operation for our business, and the cost is increased due to increase in the fuel rates, and also due to losing the benefit of bulk purchase opportunity during the quarter. The effective decision making and its implementation process of the company proven that the increase in cost has been passed on to the customers without any impact on the growth in volumes.

On year-on-year basis, the revenue of this quarter is increased from ₹751 crore to ₹885 crore, with a growth of around 18%. The growth in revenue is mainly on account of increase in freight rates across all the commodities and geographies, due to which the realization of freight per ton increased by 9% from ₹7,852 per ton to ₹8,546 per ton.

The growth in revenue is also on account of growth in volumes by 9% from 9,35,000 metric tons to 10,19,000 metric tons. The growth in volumes is from enhancement in our branch network in goods transportation business, and year-on-year basis, we added around 108 branches, and we continued our initiative to increase the number of branches in current quarter also, and added around 16 new branches.

Due to the enhancement in our branch network, we also gained with many new customers. We also recovered the tonnage from the lost customers who have discontinued us with us earlier due to freight rate rationalization and discontinuation of some of the contracts due to low margins.

Please note that the lost customers customers are coming back to us with our current freight rate and the current applicable terms. We also gained volumes by addition of new contractual customers during the quarter.

The EBITDA is increased by around 22% from ₹158 crore to ₹193 crore, and percentage to revenue is increased by 71 basis points from 21.1% to 21.8%. We successfully maintained the optimum level of EBITDA in the current quarter despite the challenge on the increase in fuel costs.

The fuel procurement cost per liter is increased from ₹83 to ₹94. However, we mitigated the risk by increasing the freight rates effectively with a growth in volumes.

The volume growth with increased freight rates has resulted into no increase in other costs as a percentage to the revenue, except some increase in vehicle running repair expenses due to increase in driver incentives, and also some increase in vehicle hire charges. The improvement in EBITDA leads to increase in EBIT and PAT margins in the current quarter.

The PAT of the company is increased to ₹81 crore from rupees ₹50 crore, and percentage to revenue is increased to 9% from 6.7%. On a sequential basis, we have seen further improvements in terms of revenue growth and improvements in margins.

The revenue is increased from ₹859 crore to ₹885 crore, and go- growth in revenue is contributed by increase in the freight realization per ton by almost 5%, and there is some constrict in volumes by 1.7 3% in the quarter due to seasonal demand moderation. The EBITDA margin is improved by 36 basis points from 21.4% to 21.8%, mainly driven by increasing in the freight realization.

Further, our business is a B2B less-than-truckload business with a customer base of 10 lakh plus customers covering with wide range of sectors. Our key strength is having the different mode of collections from customers, and 85% of our less-than-truckload business is on paid and to-pay basis, collecting the freight on spot from the customers immediately after the booking or completion of the service.

Our receivable days from the customer is hardly around 10 to 12 days, and which is lowest in the industry. The higher profits resulted into increase in cash flows from operations.

The cash flow of the company have been effectively utilized for the purpose of capital expenditure to the tune of ₹76 crore in the current quarter, mainly for the purpose of addition of commercial vehicles of ₹18 crore, and ₹49 crore is utilized for the purchase of land and building facilities in the critical locations of our operations. The remaining surplus cash flow resulted into reduction in net debt from ₹440 crore as of 31st March to ₹391 crore as of quarter end.

Considering the substantial improvement in the profits and the free cash flows of the company, the board has approved the buyback of shares by the company to the tune of ₹280 crore, with a per-share value of ₹320, which is much higher than the current market price. The promoters of the company are not participating in this buyback, and this buyback process is subject to the shareholders' approval.

The fleet rationalization continues, with older vehicles being scrapped and utilization of owned assets improving. Around 79% of our fleet is debt-free, and 13% is fully depreciated, providing strong operating leverage.

Our strategic priorities remain unchanged: profitable volume growth, disciplined cost management, and healthy working capital control. Looking ahead, while near-term macro uncertainties persist, we remain optimistic: improving demand conditions, stronger market initiatives, fleet rationalization, and expansion in underpenetrated geographies position which position us well to drive gradual volume recovery while sustaining the profitability.

With this, I would like to conclude initial remarks. Now I request to the participants to open for questions and answers.

Thank you.

Hi, sir. Good morning, and congratulations on really good numbers.

Sir, just had a couple of questions. First is how much price hike we have taken during the quarter?

The blended realization comes to 9%, but in terms of have we taken a proper hike, or it's been more tactical due to or short term in nature due to shortage or diesel cost increase, or is it it's like we have taken a general price increase what's what it is called in the market? Have we taken that kind of price increase which will sustain, or it's more of a short term in nature?

First question is that. Second, on the volume also, despite the low-margin customers being out of the system, volume growth trajectory has been very strong at around 9%.

Just any thoughts on that, how that could shape up going ahead? Was it because of also a low base, or whether this 9% to 10% should be the new normal?

Yeah.

First thing on the freight rates, just I want to give clarity that for Q1 26, our realization was around ₹7,852, and in Q4, we reached to around ₹8,147 per metric ton. During the year, the last financial year, there is an improvement in realization by around 4%, and from Q4 to Q1, last quarter to this quarter, there is an improvement of 5%.

Both put together, there is a 9% growth in the realization. Means, the freight rate hike what we carried out during the current quarter is around 5%, effectively it has been increased in the realization.

See, when the crude oil price started increasing at the beginning of the year, say in the month of April end or beginning of the May, by that time, actually, our bulk purchase has been completely stopped. To pass on that additional cost, we did some rate increase during that time, and subsequently, when government increased the fuel rates, again we carried out some increase in rates.

Effectively, all put together, in a quarter, there is a increase of freight rate by around 5%. This is a sustainable increase in freight rates, and in some of the contractual customers, it is obviously it is related to the fuel price.

Going forward, if any decline in the fuel rates, then obviously, we have to reduce some of the rates, and the effectively the reduction will be in the range of around 2% to 3%, not beyond that.

Okay.

When it comes to what I hope this clarifies about the rate increase. Yes.

Yeah. What you're basically saying is that the ₹8,500 per ton, that should kind of continue.

The growth rate of 9% will go down in terms of growth rate by the end of this year to more like a 4% 5%.

No, only when fuel price will reduce.

Okay. No, 8,100 haina fourth quarter ka, 8,100 pe you have taken around 4% to 5%, right?

Yeah.

Okay. So, 8,500 should be the new

Now, if you assume that if there is no decline in the fuel price going forward, Mhm. so ₹8,546 will continue.

Got it. Got it, sir.

Sure. And Yeah.

We are looking for further improvement in this ₹8,546 in coming quarters. The reason is the increase in freight rates what we did, these are all increased in the mid of the quarter.

Okay.

On a full-year quarter basis, if there is no fuel rate change in the next quarter, if there is no decline, then this ₹8,546 will further improve in the quarter 2.

Okay. Like, ₹50, ₹100 also.

Yes.

Okay. Got it.

Got it. Please on the volume side, if you can indicate what actually happened there.

The volume side, see basically, one is there are we are opening the branches. See, we guided around 6% to 7% increase in volumes we are expecting for a full-year basis, but we performed around 9% growth in the volumes in the current quarter.

That additional 2% to 3% again actually we gained out of the customers who have we lost some of the customers, but we got a additional tonnage. Also we got the additional tonnage from the new customers.

Otherwise, based on our branch network expansion and all, our expectation was around 6% to 7%. That additional 2% is because of recovery from the lost customers and as well as some of the gain from the new customers.

For the full-year basis, what should be the sustainable volume? Because we'd also go in second half with a slightly higher base.

The full-year number should be more like a 6% 7% only?

No, full-year basis, now the expectation will be around 8%.

8%. Got it.

Yes.

Got it. Just last question, sir.

What's the capex number estimated, because now we are also announcing a buyback also. Any sense on the capex, because we will be requiring funds for that as well?

Just I want to clarify on the funds requirement. See, currently, we are doing the cash profit the free cash flows in the company is at least around ₹120 crore to ₹130 crore in a quarter.

On a full-year basis, definitely, this will be in the range of around ₹480 crore to ₹500 crore. Out of this ₹500 crore, the capex will be around say ₹220 crore to ₹240 crore roughly on a full-year basis.

Remaining amount will be utilized for this buyback.

Got it.

Even if we do around ₹250 crore or ₹240 crore capex plus buyback, because of our good cash flows, the debt level will not increase. The debt level will continue at a existing level itself.

There are some time fluctuation, but at the end of the year, definitely, it will reach again at the same level of debt what we are having today.

Got it. Capex will be for the truck additions only?

Trucks and some of the properties which are in the pipeline.

Okay.

In the current quarter, we spent around ₹18 crore on the vehicles and around ₹49 crore on the properties. On the properties, we may invest around ₹150 crore, ₹160 crore, and on the vehicles, remaining around ₹100 crore.

Okay. When you say property, you Or

around ₹80 crore.

yeah, when you say property, you mean the asset which you're currently maybe renting out, the hubs and warehouse, that you will kind of the sorting space you would now kind of own it and manage it?

Mainly the sorting centers. In the presentation also, we have given, see out of the 50 transshipment what we are having today, almost around 12 to 13 hubs are we converted into own hubs.

The own properties. We identified another three, four critical premises where, actually, we are going to invest.

Got it, sir.

Got it. yeah, I think that's all, sir.

thank you, and all the best, sir.

Thank you.

Good morning, sir, and thank you for the opportunity. Sir, congrats on great results.

Just wanted to double-click on the volume growth. Now, you did mention that some of your customers have come back, right, and in this quarter.

Can you give us some sense on qualitative comments on how what was the reason they came back and if you can further break up the volume growth, if you want to do it probably by new customer versus old customer or region-wise growth, it will be very helpful with respect to to identify what are the key drivers for your overall growth. Yeah.

Now,

see the year-on-year percentage just about new customers addition. Some of the customers we lost also, but overall about new customer addition is almost around 20%.

That is a additional tonnage, and we lost around some 16%, 17% of the tonnage because of some of the lost customers. There is an improvement in the existing customers by almost 6%.

The difference is, see out of the 9%, around 6% contribution from the existing customers and around 3% is on account of new customers, the net of the new customers. It may be because of branch addition, it may be because of increase in geographies, so many reasons.

That's one. Second thing about geographically, see most again South is contributing the major tonnage in our case.

South on a year-on-year basis, we grown by around 5%, which is contributing almost around 42% to the tonnage. That has been grown by around 5%.

The West region, which is contributing around 25% to the total tonnage, which has grown by around 15%. The North is contributing around 21%, grown by around 10%.

Remaining is around 10% contribution, which has grown almost around 22% to 25%, especially the Eastern and North-Eastern sectors, where actually we focused more on our new branches and all, and also base is small as of today. There is overall the 10% contribution which is growing at almost around 25%.

All put together, the overall growth is around 9%.

Understood. Given that growth is coming in more from the newer geographies, has there been also an increase with respect to the lead's distance between the two destinations?

Because the overall realization increase, if there is any increase because of NTKM going up, some color on that also will be helpful. Yeah.

Definitely, because of this new geographies which we are opening, especially in the Eastern and North-East sector, see obviously, the distance lead distance is will increase, and that will impact on even the realization improvement.

In the previous quarter, on a sequential basis, you have not seen any big change with respect to the NTKM or lead distance, average lead distance, right? No,

the current overall contributions of the new branch is it's not beyond around 2% to 3%. On a overall basis, it will not be a major impact.

Understood. One question on the margin side of things.

We've seen that Karnataka has implemented the minimum wage, and so was there any impact in the first quarter to that degree, and is there any impact on operations per se because of this?

No, I am not clear about it. Will you repeat your question, please?

We heard that there's a minimum wage impact, especially which was likely to be impacted in implemented in Karnataka. Have you seen any impact in this quarter from that?

No, basically that rule has not yet come. Actually, many the trade unions and everyone has approached to the court to hold that particular bill.

It is not effectively started yet. In our case, the impact will not be much.

The reason is we're already paying a good amount of salaries, more than minimum wages to the employees.

Understood.

Only thing, some statutory contribution percentage may increase, but overall, the salary structure or impact on the salary will not be much.

Got it, sir. With respect to inflationary increase on other aspects, of course, fuel cost is one big impact.

Any other cost items wherein there is a one-off element or something which you've witnessed in the first quarter?

No such cost. Basically, there are two additional costs which has increased.

One is the vehicle running cost, which has increased on account of the driver incentive always we keep on paying good amount of incentive to the drivers to see that the utilization levels are up to the mark. Because the number of vehicles have been reduced, most of the vehicles have been scrapped in the last year as well as in this quarter compared to increase in tonnage versus what the capacity is available with us, we felt some shortage in capacity.

Because of that, we engaged outside vehicles, there is increase in lorry hire charges also.

Got it.

Apart from these costs, there are no major things. Sir.

Thank you very much for answering. I'll get back in the queue.

Yeah.

Hi, sir. Thanks for the opportunity.

Congratulations on great set of numbers. Sir, the question is more on the long-term basis.

What we see in the VRL Logistics is that earlier, let's say one or two year back, we were morely a volume-led company rather than a profit-led or, let's say, value-led company. Eventually, we have changed our stance, and we have started increasing our price.

We have started charging for some services which we were not charging. We have started passing on all the cost increases, and that has impacted our volume.

Now, even at this higher prices, our volumes are largely back. The question would be let's say for next 5 to 7 years timeline, how do we see our strategy?

We will be value-led, or we'll be balancing both of this, or our focus would be on the profitability? Probably at what juncture you believe that this price hike might stop and will not be able to, let's say, grow the volume because of the price hikes?

If let's say our strategy is this, what kind of margins that we will eventually target in this particular environment? Because our assessment was that this quarter might be impacted because of the higher fuel cost, and of course, the bulk procurement has already increased before the retail pricing.

Despite that, the numbers were really great. How do we see next 5 years panning out in terms of pricing and the volume, and what eventually led to the you can say increase in the confidence regarding the price increase, which is eventually leading to this kind of consistent profitability growth?

Yeah.

Basically, on the freight rates are concerned, see the rate freight rates rationalization and withdrawal of low-margin business, all these exercise we completed in the last year itself. Whatever, the realizations are improved in the current quarter, this is mainly on account of increase in the fuel rate.

Because of that, we passed it on to the customers, and see the customers' acceptance level is very high, and it's all because of the good service what we are providing to the customers. Second thing, on the volume side, yes, we are carrying, a lot of activities, basically the opening of branches.

Just about 2 years back, our number of branches were hardly around 900 to 950 branches. Now, we almost reached to around 1,300 branches.

Basically, we are expanding on the geography side, and today the every new branch, actually the break-even period is very low. Earlier, it used to take at least around 9 to 9 months to 1 year.

Now, in 5 to 6 months, actually the branches are reaching to the break-even. The only reason is these branches are connecting with rest of the network what we are having in India.

That's the reason if any branch opened, say especially in Agartala or somewhere in North-East or any remote places, all branches will support to that branch either in terms of booking or delivery. That's the reason the network advantage actually it is carrying out, and it is helping us to grow volumes further.

With respect to the strategy of the company is concerned, yes, we are going to increase our network further. That is giving us further confidence to increase in the volume.

That's the reason we are guiding. See, last in last call, actually, I guided around 6% to 7% volume growth.

Considering the present scenario present volume growth what we are seeing, and now on a full-year basis, we are expecting around 8%. Considering these activities, even for next 3 to 4 years, we can expect a volume growth in the range of around 7% to 8% based on the activities what we are carrying today.

About the freight increase is concerned, now the all exercise, rectification, all activities have been done. The freight realization improvement or any change will depend on change in the cost.

Accordingly, we will modify the rate, and we will go ahead. Because of these reasons, increase in volume of around 6% 7% going forward in next 3, 4 years plus passing on the increasing cost to the customers definitely will support us to maintain the existing operating profits.

That EBITDA level of around 20% 21% is maintainable even for next 3 to 4 years.

Got it, sir. Sir, on the capex part, sometimes back, we've announced for a large truck acquisition, and now we are doing limited truck acquisition, and we are also doing some of the things on the third-party trucks.

How do we see existing capacity manage the volumes, let's say 10% increase in the volume from here on, our existing capacity can be managed those things, or any broad number that you can say key we are utilizing 100% of the trucks or, let's say, whatever additional volume we would be taking, we would be requiring the truck capex? How do we see that particular thing panning out?

This is from the view point of the capex part as well as along with the capacity utilization part.

Now the existing capacity is fully we are utilizing at a optimum level. Now, whatever new quantity we are expecting, the growth in the tonnage, definitely, we have to add a capacity.

That much of additional capex needs to be incurred. Otherwise, we have to engage the outside vehicles.

Got it, sir. Sir, from the next 3 years perspective, of course, our volume growth will be similar to, let's say, what our capex will be very similar to our volume growth, but apart from that the trucking capex, are we looking at any larger capex, like say buying out anything very large which we have done in the FY26, something similar to that, or will it be just a normal capex standard going forward, and we'll be generating good you can say free cash flow for the upcoming years?

As I said about the capex, around ₹200 crore, ₹240 crore every year capex will be there. It is a mix of vehicles and the properties.

The vehicle will be around ₹120 around ₹120 crore, ₹140 crore, and remaining will be some adding of some properties.

Got it, sir. That's it from myself.

Thank you so much, sir. Yeah.

Thank you for the opportunity. My first question is why are we utilizing our cash surplus for a buyback and not for further debt repayment, which might reduce our interest cost and further help the bottom line?

My second question is what part of our business is contributed

Is it better now?

What part of our business is contributed by large e-commerce players, and what is the outlook for this business for the rest of the year? Thank you, that's all from my side.

Sure. See, about buyback of shares, see every year, we are paying rewarding to the shareholders basically in terms of dividend, and historically, also we did around three times we did a buyback activity as well.

Now, considering reward to the shareholders, instead of dividend what we were paying, see last year, we paid almost around ₹175 crore dividend, the cash outflow to the shareholders in the last year. Now, instead of that, actually, we are doing buyback in this year.

That's one. The debt level, see it's a very nominal debt level what we are having today.

At least with a hardly around 0.3 times of the debt-equity ratio. This kind of a debt level has to be continued considering the growth and other aspects of the company.

As I said about the free cash flow and other things, even if we do buyback and capital expenditure, the year-end debt what we are posting will not be increased from the current level. On the e-commerce side, we do not have any e-commerce business.

See, there are some materials which are flowing to e-commerce channel might be moving through us, but we ourselves are not doing any e-commerce activities. Thank you.

Okay.

Hello?

Hi. Good morning, sir.

First of all, Good morning. buyback.

Just want to know that as ₹280 crore buyback, right? Sir,

how

bank balance with respect to 31st March balance balance sheet, how we will arrive, right, at ₹280 crore? Or we will reach that amount by October 30?

See

based on the, further shareholder approval, then once we decide on that particular date, that amount will be parked separately for the buyback activities.

Okay. In future 3 months, it will be parked, right?

Something like that.

It's already there are some surplus amount which is available in the company, and subsequently, whatever internal accruals will come, that has to will be earmarked separately for the buyback funding.

Okay. Got it, sir.

Thank you. Sir, one more question, sir.

As sir, DFC is coming up, right, Western DFC and EDFC. Sir, can this be a headwind, or it will be complementary to our LCL business in future?

Yeah.

Currently, see our collaboration with railway is not much as of today, but considering we are continuously interacting with the Ministry of Railways, and even they are calling for a meeting of all transporters across India. Now, we already completed around four to five meetings with them.

In any opportunity, basically what they are proposing, in their existing network or existing infrastructure, they wish to provide some of the earmarked location to the transporters. Say, for example, they have already started from say Surat to Jharkhand, some place they have created a facility.

They want to supply all this textile material what this Surat material they are moving, it has to be through rail. Even we are continuously interacting with them, and if it is a beneficial to us, definitely we wish to engage with them along with our activities or along with our transportation.

At the end of the day, it should be cost effective, and it should be beneficial to the customers also.

Basically, our truck can ply on the Indian Railway network, and then it will be complementary, something like that, if something works out in future, right? Something like that.

Now, what the hub-and-spoke what we are talking about, the hub facility, actually, they want to facilitate in their premises so that whatever the local hub-to-spoke, the transporter will provide the service, but hub-to-hub, the railway will handle the commodities.

Okay. Sir, one sir, just the lease payment, right, in our cash flow statement, so that is we pay that amount to the lessor, that amount, and we get the trucks, right?

Something like that, you entered into?

No, it is on the premises where we are operating. See, we are having a 1,300 branches.

See, out of 1,300, around 40, 50 locations, we are having our own premises, but all rest of the premises, we are operating through leased premises. The rental payment what we are making payment to the lessors, based on that, the lease liability has been created in the books.

Okay. So

That is in compliance with Indian Accounting Standard 116.

Okay. Basically, majority it's an rental for the premises, right, or transshipment hub, whatever on the lease?

Yeah.

Okay. Thank you, sir, and thank you for the buyback.

Thank you.

Hi, am I audible?

Yes, sir, please.

Hi, thank you for the opportunity. On the previous participant's question, you had mentioned that once the DFC the hub-to-hub will be handled mostly by the railways and from the hub to the customer location is where the road transporters will be handling that part of the volume.

Just trying to understand, will this impact our margins in anyway because the lead distances which we were doing earlier, that will reduce over time, and so that can have a negative effect not only on our total volumes, but also on margins? Is that reading correct?

No, it is incorrect. The reason is we are accepting goods from the customer from booking point to delivery point, end point.

The arrangement with railways and other things, it is our internal arrangements for the movement of the goods, but nothing to do with the customer.

All right, makes sense. Also on the And

currently, what DFC is handling, it is all the big freight they are handling. Say, movement of iron ore, something like that, which is not relevant as of today.

What the railways proposing, actually they want to integrate Indian the road network with railways. These are very very very initial stage as of today.

Just they are doing on a sample basis in some routes. If it is beneficial, even we are fine with it.

We wish to, work with railways if it is beneficial both to the transporter as well as to the customer.

Got it. Just to follow up on this, suppose we do a Ro-Ro service, which is roll-on/roll-off with the railways, does that impact our volume?

Will that be a deflationary impact on the revenue because you'll have to pass on some of the benefits in terms of vehicle running costs, etc.? If we in the future do a roll-on/roll-off service with the Indian Railways, will that impact revenues?

Just your thoughts on the same.

No, see it will not be much impact. The reason is, again, the cost will be more or less in a similar way, but only what advantage will be there, it will be a dedicated route or something like that.

That may bring some kind of turn turnaround time improvement, something like that. Ultimately, see there are a lot of inflations which are happening, just like a fuel price and other costs, even the rental cost, labor cost, everything is increasing.

Impact of these efficiencies and all will not be much more higher.

Makes sense. Also you said you stopped bulk purchases of fuel from the fuel pump directly.

Just trying to what was the reason for the same? Going ahead, will we benefit from the same?

Yes. See, bulk purchase is directly related to the crude oil price.

It has nothing to do with a government price what they are supplying to is announcing the consumer price. Bulk purchase is directly linked with the crude oil, and whenever crude oil price changes, accordingly, the bulk price will change.

Now, currently, say for example, the normal diesel is available at around ₹95 in one location. The bulk purchase price is at least around ₹15 more than the normal price.

In this scenario, we cannot buy the bulk purchase or buy from the refinery. Now, what it is happening, the government is subsidizing the difference amount and supplying to the consumers.

Got it.

When crude oil price comes down, at that moment, again this bulk purchase will come down. If at least around ₹2 to ₹3 lesser than the consumer's price, definitely, again, we start consuming the bulk consumption from the refineries.

Makes sense. Also on the crude oil part, whenever that comes to an end and the oil prices fall back to the normal levels, what kind of a price realization cut will we have to take, assuming a normal scenario?

See,

assume that now the government has increased almost around ₹8 to ₹9 in fuel price, right, in this situation. Now, because of that, our increase is around 4%.

Now, tomorrow, assume that there is a decrease of ₹4 in fuel price, then obviously there will be impact of around 2% in the pricing.

Got it. Makes sense.

Also, one last question. Volume growth that you mentioned of 9%, is that continuing into Q2?

Are you seeing that continuing, or is there some headwinds on that?

July, we already performed around 9% growth in the tonnage, and we are expecting similar growth at least around on a full-quarter basis, 9% growth is possible.

Oh, that's very nice. Just one last question, if I may ask.

The FCF that you had mentioned is about, OCF is around ₹500 crore to ₹600 crore, and since the majority of your branch expansions are done, and also vehicles have may have a lot of vehicles have already been added, just trying to understand, will buybacks be more consistent going ahead, or are we planning some major capex down the line that, you may have to put in some for that? Just your thoughts on the same.

No, but

reward to the shareholder will continue every year, either in a way of buyback or the dividend.

Got it. Thank you, and wishing you all the very best.

Thank you.

Good morning. Thanks for the opportunity.

Sir, I wanted to understand that road transport is mix of maybe unorganized and organized sector. Now looking at the industry that we cater to, what could be the mix of unorganized and unorganized players in the industry?

Even today, the area where we are operating, at least around 70% of the contribution is coming from unorganized operators. Around 30% of the industry is from the organized players.

Got it. Sir, do we see any kind of concentration in the coming years wherein we could see some kind of mergers or takeovers with the companies having good reach just to us?

No, we do not have any such plans. We basically, our operating systems, the kind of business how we developed is totally different from the operators in India.

That's the reason we are going more aggressively on the branch expansion and geographically expansion rather than looking for any acquisitions. We do not have some good opportunities which will match with our business operations.

We did that exercise, but unfortunately, the matching is very difficult.

That gives a good sense. Now concluding from what I can figure out is now since we won't go for inorganic growth in the coming years, the large part of capital structuring would be rewarding the shareholders one, and secondly, growing our branch networks in the places where we aren't much penetrated into.

Yes.

Okay. Also, if I may put in the last question.

Sir, South that as you mentioned contributes around 40 42%. Do we see more headroom in there?

Are we present all over the region, or we still have a lot of headroom going forward?

South see, we started our business from South, so that obviously we are having more contribution from South because we have we are already established brand in Southern market. Now, we wish to replicate the similar model in rest of the regions.

In the Western part, we established good. It is almost now it is contributing 25%.

North also some good contribution. Still we need to achieve a lot in these regions.

South, whatever we did, we wish to replicate in rest of the regions going forward.

That gives And last question, to extend this, but this agriculture and industry that we cater to is also a good contributor to our revenues and the volumes. The recent El Niño impact on all that we are seeing or these uncertainties in the rainfall, is that impacting the volumes in that industry and being set off by some other, or we are seeing normal growth in there?

See,

the agriculture sector is contributing around 10% to 11% to the total volumes, which includes everything: see, fertilizers, the agro equipments, all put together. Currently, there are no much impact, but considering the lower monsoon, it may little bit impact in the coming quarter.

Again, that can be of by Yeah.

Since that's the reason, even though say 9% we grown in the tonnage, on a full-year basis, we are expecting, all put together, all factor put together, we are expecting around 8% growth in tonnage.

That gives a lot of sense. Thank you very much, and all the best for the future.

Thank you.

Once again, thanks to all participants. Really, there was good interaction.

Definitely, there is a very clear visibility on the volume growth. On a full-year basis, we are expecting around 8% volume growth.

The realization, we have already did a good work, and these realization, there will be further improvement in the coming quarter because in between we did. All put together, we will definitely have a good revenue growth in the coming quarters with a maintenance of existing profitability margins.

With this, I wish to conclude this call. Thank you.