Good evening, everybody. This is Teena from Kotak Se curities. We welcome here today the management of APSEZ for a call on full year results. We have with us Mr. Karan Adani, CEO and Whole-Time Director. Without much delay, I will hand over the floor to Mr. Karan. Over to you, Mr. Karan, now for the call. Good evening, ladies and gentlemen. Welcome to the conference call to discuss quarter four and FY 2021 operational and financial performance of Adani Ports and SEZ Limited. Let me start by giving you an overview. FY 2021 was a year of transformation and consolidation for APSEZ. We have demonstrated our strength once again with the capability to withstand COVID-like disruption. All our ports were operating normally, as port operations were classified as an essential service. During this period, we not only maintained business continuity, but also kept the supply chain running, and stood by our customers to prove as a bankable service provider at all times, ensuring stronger customer relationship and stickiness in cargo, thus gaining the confidence of our customer. This also allowed us an opportunity to revisit our cost and restructure them. We focused on moving from fixed cost to variable cost wherever possible, renegotiated operational contracts by re-engineering, reducing built-in escalation, redeployed manpower and machine. We have also relied on technology for digitalization of processes and improved resource utilization to achieve cost optimization. This had an immediate impact. The EBITDA margins improved by 100 basis points. This EBITDA margin expansion will further continue as we look to expand margins by another 200 to 250 basis points due to an increase in volume in the next few years. The uncertainty and volatility during the period presented us with a transformational opportunity to grow inorganically and complete four large acquisitions. We expanded our footprint in Maharashtra by acquiring Dighi Port. We also acquired Krishnapatnam Port and are in the process of acquiring Gangavaram Port in Andhra Pradesh, the second and third largest minor ports in India. In logistics, we have set up a new vertical of rail track business with the acquisition of Sarguja Rail Corporation. Coming to the key highlights of operational performance in FY 2021. APSEZ handled cargo volumes of 247 million metric ton, a growth of 11% as against a 5% decline registered by all India ports. Our strategy to achieve East Coast-West Coast parity, handle all types of cargo, and diversify cargo mix ensured continuous gain in market share in India. In FY 2021, on a year-on-year basis, APSEZ's overall market share in all India cargo volumes increased by 400 basis points to 25%. Similarly, market share in all India container segment also increased by 500 basis points to 41%. Our cargo continues to be diversified, with dry bulk constituting 44%, container 43%, and liquid cargo, including crude, constituting 13% of total cargo. You may refer to our operational and financial highlights presentation for port and cargo segment-wise breakup. Coming to the recently completed acquisition of Krishnapatnam Port, the port is now fully integrated into APSEZ portfolio, both in terms of operation and financial. We have demonstrated the success of our operating process, which helped KPCL to benchmark each activity to APSEZ standard and resulted EBITDA margin improving from 55% to 71%. The port in H2 FY 2021 handled 20 million tons of cargo. APSEZ also acquired 100% stake in Dighi Port for a total consideration of INR 705 crore through the insolvency and bankruptcy proceeding of NCLT. Dighi Port currently has a capacity of 8 million metric ton and is capable of handling bulk and liquid cargo. In April 2021, Adani Logistics Limited announced a strategic and commercial partnership with e-commerce major Flipkart to strengthen its supply chain infrastructure. As part of this partnership, Adani Logistics Limited will construct a massive 534,000 sq ft of fulfillment center by leveraging state-of-the-art technology in its upcomin g logistics hub in Mumbai. The center will have capacity to house 10 million units of sellers' inventory at any point and will be operational by Q3 of 2022. The center will support market access to several thousands of sellers, MSMEs, and will enhance local employment for the region and create 2,500 direct jobs and thousands of indirect jobs. Just to mention that this is just the start of the partnership, and coming years, we will look at expanding these partnerships into many more similar types of warehouses across India. We have been able to scale up and diversify our railway rolling stock business. The recent changes in the General Purpose Wagon Investment Scheme of Indian Railways have allowed serving our bulk customers not just from ports, but also from the mines. During the year, we were able to add contracts to operate 16 new rakes, transportation of coal and coking coal. APSEZ has successfully bagged a three-year maintenance dredging contract from Deendayal Port Trust through an open tender offer. This is one of the largest dredging contracts awarded by a major port in India, and was earlier being done by one of the big four international dredging cont ractors. Contract is worth INR 350 crores. Let me now take you through cargo volume performance segment first. In coming to container business in FY 2021, APSEZ handled a total container volume of 7.2 million TEUs, a growth of 16%. This was led by Mundra, which grew by 18%, Hazira which grew by 8%, and Ennore, which grew by 53%. Mundra Port continues to handle highest container volume in India, and is now the premier container terminal. In FY 2021, it handled 5.66 million TEUs, which is nearly 1 million TEU more than JNPT, its nearest competition. This is on account of our strategy of partnering with large ship liners of the world through our JVs and continuous gaining of market share through better connectivity in the hinterland. During the period, 10 new container services were added at Mundra, Hazira, and Kattupalli, which will contribute around 800,000 TEUs of container volume on an annualized basis. Coming to dry bulk in FY 2021, total dry bulk volume cargo handled was 110 million metric ton, a growth of 9%. Within this segment, fertilizers grew by 35% and agri products grew by 67%. During FY 2021, we have signed several new contracts at Dhamra Port to handle various cargoes including gypsum, iron ore, and manganese. Dhamra Port will handle an incremental volume of 11 million metric ton on account of these contracts. Coming to liquids in FY 2021, APSEZ handled liquid cargo including crude, of 32 million metric ton, a growth of 2%. As part of our cargo diversification, we added LPG and LNG cargo into our portfolio. This was the first full year of operation for gas business of the APSEZ. In FY 2021, APSEZ handled 810,000 metric ton of LPG and 1.75 million metric ton of LNG during the year. The volume in this segment will continue to grow to cater to the addressable market segment, which is set for growth as a result of government's favorable policy on the gas-based economy. Coming to logistics business, Adani Logistics is continuing with its strategy of expanding logistics footprint across India, building multi-modal logistics park, warehousing, rail, and distribution network to be the leading integrated logistics service provider in India. As you are aware, Adani Logistics currently operates 61 rakes on the Indian railway network and includes container, auto, grain, and bulk rakes under the General Purpose Wagon Investment Scheme. GPWIS is on a growth trajectory and handled 4.4 million metric ton in FY 2021 versus 2.7 million metric ton in FY 2020, a growth of 61%. We will continue to add new rakes next year under GPWIS to handle increased volume of bulk commodities for its customers in the power and mining sector. On auto logistics, ALL is growing its handling and transportation of automotive on north-south circuit and is operating two AFTO rakes from Patna to Bangalore. ALL has emerged as a successful bidder and received letter of award from DFCCIL for the development of freight terminals with exclusive station connectivity across eight locations. The eight locations are New Palghar, New Sanjali, New Dadri, New Chhavapir, New Bhimsen, New Golwad, New Gothangam, and New Phulera on Western DFC and Eastern DFC. Once developed, these terminals on Western DFC will have direct DFC corridor connectivity and will help in faster and efficient cargo movement, leveraging the advantage of double stack container rake movement. Currently, ALL has five logistics parks and two logistics parks under development at Nagpur and Mundra. ALL has already signed MOU with B Medical Systems for leasing of a newly developed warehouse of 56,000 sq ft at Mundra Logistics Park. Coming to the operations of Adani Agri Logistics, it is slated to achieve COD of Tatija project with 50,000 metric ton storage capacity in quarter one of FY 2022. Currently, AALL has five silos units under various stages of development. Before discussing financial numbers, let me give you a brief on the latest acquisition and situation in Myanmar. In March 2021, we announced our intent to acquire 89.6% stake in Ganga varam Port in two tranches. We have received approval from the Competition Commission of India for acquisition of the majority stake in Gangavaram Port in April 2021 and completed the first tranche of acquiring 31.5% stake from Warburg Pincus and expect to complete the second tranche of acquiring 58.1% from the existing promoters by quarter four of FY 2022. We expect a cargo volume of 10 million metric ton in quarter four FY 2022 from this port. Simultaneously, we had announced acquiring 100% stake in SRCPL, as it is related party transaction, necessary steps have been initiated as enumerated in our related party transaction policy, and expect this to be completed in Q3 of FY 2022. In April 2021, we have also announced the acquisition of Balance 25% stake in Krishnapatnam Port from the outgoing promoter at a value of INR 2,800 crore. With this, KPCL will become a wholly owned subsidiary of APSEZ. We expect this transaction to be completed in Q1 of FY 2022. In April 2021, we have also been able to take another milestone step in our international journey by foraying into the container terminal in Colombo Port. This provides APSEZ to offer one more gateway to shipping lines and other potential port customers across South Asian waters, benefiting both India and Sri Lanka. All these acquisitions are part of our strategy to increase our hinterland reach and to achieve East Coast, West Coast parity and bring customers to our port gate. As you are aware, all these acquisitions are value accretive to our shareholders from day one. Coming to Myanmar, first and foremost, we would like to say that we completely condemn the violence which has happened in the country, the blatant violation of human rights. Coming to our project, as you are all aware, that we entered in Myanmar in May 2019. We had got all the approvals through democratically elected government over there, which is Myanmar Investment Commission. As part of the deal, we had entered into a land lease agreement with Myanmar Economic Corporation, which we had disclosed to all the stakeholders, including the government over there, including the stock market over here, and all the analysts as well as investors. With the recent violence in Myanmar and the military coup, there is uncertainty, and post that, United States has also imposed sanctions on certain individuals as well as entities. One of the entities under which the sanction has been given is Myanmar Economic Corporation. We just want to reiterate that before our last financial transaction with MEC has been in 2020, and post the coup, as well as post the sanctions, we do not have any transactions, and we do not plan to have any transactions, financial transactions. Given that we have zero tolerance policies on sanctions and to make sure that there is no contravention of the U.S. and other sanctions, we are approaching OFAC proactively. We have retained a U.S.-based counsel, Morrison Foerster, who specialize in sanctions and OFAC related matters. We will update all the stakeholders once we have a clear view from OFAC. In a scenario wherein Myanmar is classified as a sanctioned country under OFAC, or if OFAC opines that we have violated the current sanction, the company has plans to abandon the project and will write down the investment in the project in full. The write down will not materially impact the balance sheet as it is equivalent to about 1.3% of the total asset of APSEZ. Just to reiterate that so far, we have invested approximately $130 million, and by the time the Phase 1, which will be completed, which is in June of 2021, the total investment would be around $180 million-$190 million. Coming to the key financial numbers. Coming to the financial results of FY 2021, happy to share that even during these arduous time, we could achieve all our guidance in terms of cargo volume, revenue, EBITDA margin and free cash flow. While total operating revenue grew by 6% from INR 11,873 crores in FY 2020 to INR 12,550 crores in FY 2021. Port revenues increased by 12% from INR 9,613 crores to INR 10,739 crores due to an 11% increase in cargo volume. APSEZ, during FY 2021, earned Forex revenue of USD 474 million compared to USD 430 million in FY 2020, on increase of 10%, which is on account of higher container volume, which grew by 16%. Interest charged in FY 2021 was higher at INR 2,255 crore compared to INR 1,813 crore in FY 2020, due to additional debt of USD 750 million raised for acquisition of KPCL and other CapEx requirement. However, the average cost of borrowing has come down from 6.9% to 6.7% due to new issuance and refinancing of USD 500 million at a lower coupon of 3.1% compared to 3.95%. During the year, we have been able to reduce the trade receivables from INR 2,589 crore to INR 2,386 crore, resulting in a reduction of DSO from 82- 69 days. Receivables from Adani Power and Adani Enterprises has been steadily coming down every year and currently stands at INR 305 crores and INR 66 crores respectively, an aggregate reduction of 37% on a year-on-year basis. During FY 2021, the company has generated INR 5,800 crores of free cash from operations after adjusting for working capital changes, CapEx, and net interest cost. This is against INR 3,942 crores generated in FY 2020. Our net debt to EBITDA has come back to the expected range of three to 3.5 x on March 2021 and stands at 3.3 x. All our credit ratios are within the expected range and are a testimony to the disciplined capital management policy of the company. Coming to the guidance of FY 2022, based on our internal estimates, we project cargo volume for FY 2022 to be in the range of 310 million tons-320 million metric tons, which includes 10 million metric tons for Gangavaram Port in Quarter Four of FY 2022. Consolidated revenue to be in the range of INR 16,000 crore-INR 16,800 crore, and consolidated EBITDA to be in the range of INR 10,200 crore-INR 10,700 crore. Port revenues during the same period to be in the range of INR 13,000 crore-INR 14,000 crore. Logistics business to generate a revenue between INR 1,400 crore-INR 1,500 crore. SEZ and port-led development income to be around INR 600 crore. Port EBITDA margins to improve by 100 basis points and be between 71%-71.5%. CapEx for the period to be in the range of INR 3,100 crore-INR 3,500 crore. This includes CapEx for logistics business of INR 800 crore-INR 1,000 crore. With all this, we expect our free cash flow to be in the range of INR 5,500 crore to INR 6,000 crore and result in a net debt to EBITDA of between 3x- 3.5 x. The board has recommended a dividend of 20% of PAT for the year, which is as per the dividend distribution and shareholder return policy. To conclude, FY 2021 has been a transformational year for APSEZ. Some of the key decisions we took this year have set the foundation for the coming decade. The recent acquisition and focus on increasing the hinterland reach of our existing ports will enable further consolidation and improve our market share. With the initiatives taken in the logistics business, it is set to grow at a phenomenal rate in the years ahead, thus setting the path in the right direction to take APSEZ from a port company to a transport utility company, delivering full logistics solution to our customers. We will continue to focus on cost optimization to improve our margins, practice prudent capital management policy to maintain our investment grade rating, use cash frugally and responsibly to ensure adequate liquidity. With all this, APSEZ is well on its course to become a truly integrated transport and logistics utility and achieve 500 million metric ton of cargo throughput and ROCE to be in excess of 20% in FY 2025. With this, we can open the lines for question and answer. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of A tul Tiwari from Citigroup. Please go ahead. Yes, thanks a lot. Congratulations on yet another strong set of numbers. Just one question on Dighi Port, now that it is part of the portfolio. How should we think about its volume buildup over the next one or two years, what kind of, say, EBITDA or EBITDA per ton we can look forward to? We did see your press release talking about INR 10,000 crore of CapEx at Dighi to position it as an alternative to JNPT. Could you throw some light on that aspect as well? Thanks, Atul. I think right now, for the coming one or two years, on a short-term basis, Dighi has a capacity of 8 million tons. We've just started the work in terms of cleaning up and to augment the current capacity. I think for the next two years, I can say that the expected volume would be, for the first year, around 3 million tons-4 million tons, the next year would be around 6 million tons-7 million tons. The margins right now to be in the range of 50%-60%. EBITDA margin. I think as we start this year as well as start the project, I think the project will take at least two and half to three years to complete to increase the capacity from 8 million tons to 20 million tons. The idea is to diversify the portfolio over there, to handle liquid. There's a good potential of liquid business container and bulk business as well. The other big part of the CapEx, which will go in Dighi is also the connectivity. The railway line which will connect the port to the main interline. On a short-term basis, I would say that this year we are targeting around 3.5 million tons - 4 million tons, and next year would be around 6 million tons- 6.5 million tons. This will be primarily bulk cargo, 3 million- 6 million ton over the next one, two years, or it's container also? Sorry, can you repeat that? My question was on the mix of this cargo at Dighi Port, this 3 million tons and 6 million tons over the next one or two years. This is container or bulk? What kind of cargo? This will be predominantly bulk and liquid right now. Today, there is no container facility over there. We are working in terms of to convert one of the existing berths into container, which will take at least 24 months. On a near-term basis, this volume is predominantly only bulk and liquid. Okay. Thanks a lot. Thank you. The next question will be from the line of Pulkit Patni from Goldman Sachs. Please go ahead. Thanks a lot for taking my questions. I have two bookkeeping questions. Firstly, on this guidance of margins to be an improvement of 150 basis points. Now I understand that the port margins also includes the margins which come from the rail assets which are associated with those ports, and you will be splitting those assets out into a separate subsidiary. When we look at the guidance, is this guidance X of that or does it include those rail assets? If you were to split that out, then how should we look at margins for the port business excluding the rail subsidiaries associated with those assets? That would be my first question. Sure. The margins on the rail assets are in the same range. It's around 69%- 70%, which is same as a normal port operation margin. Regardless of whether we restructure them, the port margins will not change, and our guidance does not change that. Got it, Karan. The reason I'm asking, for example, Sarguja has a margin of 87%, but you're saying that the other rail assets are in the 69%-70% margin range, right? Yeah. The other rail assets are in the range of 70% because they are under a different scheme of Indian Railways. Okay. Understood. Thanks for that. My second question is on harbor services. While we had volume growth, harbor services revenue declined. I understand this is because it did not include Krishnapatnam. How should we look at harbor services revenue and margins for the next year, two years, in terms of our modeling? Give us one minute. Let me just check. This has predominantly happened because of upsizing of ships. Because the volume increases, we have handled more larger ships. If you would see that ship counts have come down compared to the volume, what we did last year. Okay. I think the way to look at it is, it is not to be linked with the volume, but rather to be linked with the number of ships and the size of the ships. Okay. Got it. That makes sense. Thank you so much. Thank you. The next question is from the line of Mohit Kumar from DAM Capital. Please go ahead. Yes, sir. Good evening. Congratulations on remarkable performance in a very challenging year. Sir, my two questions are, what is the kind of organic growth you're building in? My question is excluding KPCL kind of cargo we are looking at. What is the broad outlook on cargo-wise volumes in the sense container while container looks good? I think there is a concern on the bulk side and coal side given the COVID. That's my first question. Okay. Maybe you can complete. I'll answer all of them then. Secondly, sir, what is the status of DFC connection? I believe there's a line which is still to be completely electrified, I think there's also a doubling work which is still going on. When do you expect this line to commercialize and DFC to start contributing to our volumes? What is the current rail coefficient, and what is the kind of improvement do you expect? Let me answer your second one first. Sorry. On DFC, as per the latest schedule, we expect DFC to be connected by October of this year to Mundra. Today, our current rail coefficient in Mundra is around 32% of the container volume. As DFC comes into play, I think this coefficient will keep increasing, but I think it will increase gradually because there will be a shift of road to rail which will happen with the better operational efficiency. I think our view is that there is another 4%-5% growth that we can do on the rail coefficient. Apart from the volume growth, we expect the rail coefficient to be around 36%-38% of our total volume in Mundra. Just coming to guidance, we are assuming that the country's GDP will be growing at around 11% and India trade will be growing around 9%-10%. That's how we have looked at ours from a top-down perspective. If I remove Krishnapatnam, the number that we are looking at is around 200 and Sorry, just give me one second. Without KPCL, it would be around 280 million tons, is what we would expect. If I made a broad diversification would be remaining the same, so container would be around 41% of our basket. Bulk will be around 44%, and liquid crude and gas would take up remaining part of our portfolio. The reason why our bulk is increasing or we are remaining stable is because KPCL last year was only half year projection that we have taken in. This year we are taking full year volume and as you know in KPCL, almost 80% of the volume is tied up on a long-term basis and it's predominantly bulk volume. The second is the 10 million ton that we will be adding in Gangavaram in quarter four. Again, Gangavaram is a bulk port and they don't handle any containers. These are the two reasons. Then obviously the natural growth that we are seeing in Dhamra with the expansion coming to an end, and the natural increase that we will see in Dhamra Port because of the hinterland growth over there. One more question if I may squeeze in, sir. Have you taken any tariff hike in April, and what would be that number? Yeah. Anything in the range of 2.5%-3% on a per ton basis, that continues. A lot of those contracts have been executed and some of them are in the midst of execution, but 2.5%-3% on a per ton basis. Thank you, sir. Best of luck. Thank you. Thank you. The next question is from the line of Ashish Shah from Centrum Broking. Please go ahead. Yeah. Good evening, Karan. First question is on the Sri Lanka investment that you spoke about. If you can just briefly highlight what is the kind of investment that you are looking at, time frames. Just one question that I had is with respect to your Sri Lanka investment and the Vizhinjam project, which is under construction. My thought was that when we were looking at Vizhinjam, the rationale was that we would probably try to take a lot of transshipment cargo from Colombo into Vizhinjam. How does the Sri Lanka investment tie up with this particular aspect? Can you just throw some light. Sure. The Sri Lanka investment, we are investing in Colombo. It's a west coast terminal. It is under a joint venture where we have two partners, where APSEZ is holding 51%, John Keells is holding 38%, and then SLPA, that is Sri Lanka Ports Authority, is holding the balance part. The total project cost is in the range of $300 million-$350 million. Our part would be around $150 million-$170 million, is what our commitment would be. It would be done in two phases. Eventually, with both phases completed, the terminal will have a capacity of 3.5 million TEUs, and it will be done in two phases of almost 1.5 million and then further. The way we look at between Sri Lanka and Vizhinjam is actually a complementary rather than as a competition, because we would then be able to control price on both ends, and especially on the transshipment side where we do expect that there is a lot of price war which happens. We do believe that having control on both sides, we will be able to, one, A, control the price, and second, also the natural growth which is happening in Colombo apart from the Indian cargo. Indian subcontinent cargo is quite a lot. To cater to that growth, we do believe that there is enough room for both to continue and both the ports to flourish. Sure. Just on the same thing, what is the time frame for this investment to be made? When do we start? What's the kind of cargo that you look at initially when you commence the terminal? Yeah. We've just signed the BOT agreement, it gives us six months from first of May to finish the financial closure, then we start the construction. Construction is anything between 24-36 months. As I said, the initial first phase capacity is 1.5 million TEU, we would be looking at least on the first year, to have at least 50%-60% of capacity tied up. Sure. On Myanmar, we said that we invested about $130 odd million. Will we continue investing through the period where we decide what to do, or we can say we restricted at this point? Are there any penalties for getting out of the contract? I mean, when we say that we abandon the investment, would it have any contractual penalties to be honored if we do that? No, there are no contractual penalties if we do not honor, and we can exit out because this will fall under the clause of political force majeure. Yes, today also we are continuing to invest because as I said that we expect the terminal to be completed, Phase 1 to be completed by June. We have approximately 350 people working at site as on date as we talk. I think it's a matter of we are very confident that we will not fall under the sanction, but as a measure of good order, we are taking this route to be extra cautious. The project continues. We are going with the assumption that the project continues with the current course of action. Sure. Thanks. I'll come back. Thank you. Operator. The next question is from the line of Priy ankar Bisw as from Nomura. Please go ahead. Good evening, Karan. My first question is regarding your volumes, volume guidance rather. What I observe is that is the second half of FY 2021, which includes Krishnapatnam. The company has done something like 149 million tons of volumes. If we go even by that run rate, we should be ideally reaching 300 million tons even without any major growth. On top of that, if you put 10 million tons from Gangavaram, that is where your guidance levels are. Are we saying that there may not be additional growth or is it a more conservative guidance you are giving at this point of time? That's the first question. Yeah. As I said that last year as a country we had a degrowth. When I talk about 11% growth, we have to keep in mind that we are coming from a year of degrowth. In essence, if you compare it with FY 2019, the growth would be approximately 4%-5% on a country level. The reason we have given this guidance of 310 million tons-320 million tons is predominantly because there is uncertainty even today. Looking at how we see situations evolving, as of now, we are very confident that we can achieve this volume. Maybe in October half year, looking at how the six months have gone, we can revise that estimate. Right now, this is what we are confident of. Karan, if I heard it correctly, you said that excluding this Krishnapatnam, the volume is 280 million tons, right? Yes, that's right. We have already done something like that for half year of this FY 2021. Shouldn't we be seeing some sort of growth from there? Sorry, can you say that question again with KP sales? I am saying from Krishnapatnam. I think in this year you had roughly 20 million tons, right? From Krishnapatnam. Yes, that's right. This year. That is for the half year. Ideally, even if we have the same amount of volumes without any growth, we can possibly be doing 40 million tons for Krishnapatnam for the whole year in FY 2022, even without any growth. When you said about the guidance to a question from another participant, you said ex of Krishnapatnam, the volume will probably be around 280 million tons. Ideally, this Krishnapatnam should be adding at least 20 million tons extra. Somehow, this number doesn't tie up. That's what I was trying to clarify. Hello. Hello, sir. Sorry. If we look at even the existing quarter, right, excluding KPCL, we've done 63 million tons in quarter four. Even if I take that growth, even if you take Q3 also, Q3 we have done 66 million tons, and in Q4, we have done 63 million tons. On existing portfolio, we have taken, without KPCL. If I take that, it would be anything between 252 million tons - 260 million tons is what the current run rate would be. What we are talking is on 260 million tons, another 20 million tons. That is 280 million tons. Incremental. Yeah. Then we have KPCL on top of that. Gangavaram. Then Gangavaram as well. Yes. Karan, the final question from my side. This is regarding Myanmar. Yeah. What I see from the media, especially like ABC News, they seem to have made quite an extensive reporting on this, maybe probably making an issue out of this. They refer to UN Human Rights Council fact-finding report, et cetera, like that. What we observe is that there are other Indian companies including our big IT major mentioned as well. What is it that APSEZ has been particularly been singled out for? Can you throw some color on that Dow Jones took such an action? I think two things. One is if you see the ABC report, it has predominantly come out of Australia, and that's because they're trying to malign the group now that the Australia project is full swing and they don't have any other aspect to attack the group. That's why they are trying to find and trying to connect kind of baseless things from one to another. That's how if you see the report also, which has come out, it has come out from the NGOs from Australia. Even on the Dow Jones side, we believe that, and we are very clear on this, that they have only taken one side of the story. They have not taken a holistic approach, and they have not taken into account a lot of other things that the group and the company is planning to do. Just to give you example, we have a commitment to be carbon neutral by 2025. No other port company globally has given that kind of commitment. When we look at these things, we do believe that we have been wronged by Dow Jones on this thing. That's okay. We are going to be engaging with them proactively, and we will rectify the situation in next 12 months. This has predominantly come out of Australia and vested interest groups who are trying to find something or the other on the group to make sure that they keep the Australia project on hold. It's more about getting back on the Carmichael project rather than specifically Myanmar. Trying to hit the group on that. Yeah, that's right. Okay. That's very clear. Thank you, Karan. Thank you. The next que stion is from the line of Parash Jain from HSBC. Please go ahead. Yeah. Thank you. Hey, Karan. Hope you and all of colleagues and friends are doing great. Just thank you for all the philanthropy that you and your group are undertaking. I have few questions, and I don't know how many I can ask, but feel free to ignore whatever you don't think I can respond to. My first question is more on when we talk about your next year's volume guidance, I am just wondering that the recent wave, did it have a knock-on effect on your growth forecast that you would have thought six weeks back? My second question is, when we talk about the CapEx numbers excluding logistics business, can you help us visualize what kind of capacity, metric ton kind of, are we penciling in against whatever INR 2,300 crore, INR 2,400 crore of CapEx? My third question is, with Sri Lanka Terminal on track, is it fair to assume that next logical step for the group would be to solve the connectivity bottleneck, i.e., if the feeder connectivity is one of the bottlenecks for the coastal cargo in India, is there an opportunity or is there a prospect where the group can look into investing into the feeder network or get into a long-term charter to solve that problem for your customer? Lastly, just on the Dow Jones recent commentary on the group. You have partially explained that, but how do you think it will pan out, and where do you think that they misinterpreted it or you need to do more to resolve that issue and get back on track? Thank you. Thanks, Parash. Looking at the second wave, based on that itself we have given a guidance. Our guidance is keeping that in mind, not just second wave, but even second and third wave. Our assumption is that there won't be a nationwide lockdown, but there could be mini lockdowns which could happen, and that's how we are looking at the volume of 310 million tons- 320 million tons. If things improve, in October, obviously we can revise this guidance. We are seeing a little bit of effect of it in the month of April also. If you see on a month-on-month basis, we had a little bit of reduction, that's predominantly because of the current wave which is happening. To answer your second question on the CapEx number on the ports, with this CapEx, we would be adding approximately 60 million tons of new capacity. This is predominantly in Dhamra, in Dighi, in Krishnapatnam, and towards the completion of Vizhinjam Port. These are the places where the majority of the CapEx is going in terms of the expansion. To answer your third question on Sri Lanka, no, we will not be getting into shipping business. What we will be doing is work with some of the feedering lines or The line for the management is disconnected. Kindly stay on line till I reconnect them. Ladies and gentlemen, we have the management line reconnected to the call. Thank you, and over to you, sir. Yeah, apologies for the disconnection. I think answering the third question, which is on the feedering network and whether we would be investing into feeders, answer is no. What we would be doing though is if we do believe that this becomes a bottleneck, we have enough relationships with the shipping lines and we can work out a sort of a strategic alliance to give priori ty to some of the shipping lines to create that network to make sure that all our port capacity is being augmented. Okay. To answer your fourth question on the Dow Jones, first let me answer what better we need to do. I think what we need to do is explain our position better. I will admit that maybe we have not done a great job in terms of explaining it to them. That is one area which we do believe that we can do better and explain to them. I think the knock-on effect, we don't personally see that this will continue because as I mentioned, Parash, that we are going to be engaging with them in the coming few weeks. We are very confident that this decision will be changed in their next review, which will be in 12 months time. Perfect. Thank you so much, Karan. Have a wonderful day. Yeah. Thank you. Thank you. Participants who ask a question, you may press star and one now. The next question is from the line of Vibhor Singhal from Phillip Capital. Please go ahead. Yeah. Hi. Good evening, guys. Thanks for taking my question. Karan, my question was just on the logistics guidance that we have seen. Firstly, just to understand, the new track management services company, ATMSPL that we are forming, that will be a part of the Adani Logistics business. Am I right about that? No, it will be part of APSEZ, not Adani Logistics. Not Adani Logistics. When we are giving the guidance for Adani Logistics revenue to be in the range of INR 1,400 crore-INR 1,500 crore. This does not include the revenue from the track management? No, it does not include anything from track management. What it includes is the agri business, the AALL business, the rake movement under the GPWIS scheme, the container movement that we do, and the ICD business and the warehousing business. The warehousing. I think that is the exact profile of the business right now as well. We are looking at around 57% growth, which is completely organic. There is no element of acquisition in that, right? No acquisition. This is only purely organic. Purely organic. Could you just throw some light as to why is it that we are expecting such a big jump in the logistics revenue next year? If I were to, let's say, just ask you to basically give us a slightly longer-term kind of an horizon, what is the kind of growth rate that we could expect in years beyond that? Not a quantification number, let's say just a kind of a broad range that we could be looking at beyond FY 2022 as well. Yeah, sure. I think, let me answer why we are seeing a 53% of the growth that we are looking at this year. Let me start with GPWIS. On the GPWIS, as you know, we are doubling our volume this year based on the contracts that we have signed in the previous year. We are adding another 16 rakes. There will be automatically 100% growth in that business. On the container side, we do expect market share to increase to almost 13% from the current 11% on the pan-India basis. We are starting some of the new locations. We are starting our business. Like Nagpur, we will be starting in the second half. We are starting in Bangalore as well. I mean, Bangalore, we are ramping up. Some of the new locations which had started last year, we are ramping up, and that's the reason why we expect volumes to increase and the revenue to increase. The third is on the AALL. We expect, by end of this financial year, at least three new sites to be operationalized. The first site will be operationalized in Q1, and then correspondingly, we expect by end of this financial year, a total of three sites will be operational. That will also add revenue and volume to the business. The last is on the warehousing front. Last year, we have completed almost 150,000 sq ft of warehousing, which are completely sold out. That is an additional revenue which will be coming. All of that combined, that's the kind of growth that we are looking at. My second part about the longer-term growth rate that you can look at for the business. I think longer term, as I told you that we are very bullish on this part of the business. Longer term, it's very hard to give guidance in terms of, because there are a lot of moving parts even, because if CONCOR acquisition does materialize, then it's a very different ball game that we are talking about. I can tell you that we are very bullish on the warehousing business. Our target is 30 million sq ft of warehousing to be done in the next five years. On GPWIS, we want to expand this business quite rapidly, and we don't see too many bottlenecks in expanding that because not a lot of infrastructure is required. On the container side, if CONCOR comes into play, then it's a very different ball game. If CONCOR doesn't materialize, we have a different game plan, alternate game plan, which we are working on. Eventually our goal is this business to be approximately 20%-25% of APSEZ's balance sheet in the coming five years. Right. Sure. Just a last question, if I could squeeze in. In terms of the NCC revenue that we are looking for around INR 600 crore next year, is it going to be predominantly Mundra again, or do we expect some contribution coming in from maybe Krishnapatnam or Nhava Sheva? No, this is Mundra itself. These are some of the contracts that we are in the verge of signing. Sure. Great. Thanks for taking my questions, and I wish you all the best. Thank you. Thank you. The next question is from the line of Amish Shah from Bank of America Securities. Please go ahead. Yeah. Good evening, and thanks for the opportunity, Karan. Most of my questions are answered. I have a few questions from a long-term perspective. The first one is that under Sarguja Rail, it's mentioned that the plan is to take PPP projects for railways. I just wanted to understand what kind of railway projects could this be, meaning will they complement our existing ports and their connectivity, or could this be the futuristic DFC projects that are planned on PPP model as well? That's the first question. The second, I just wanted to again understand this Colombo West International Terminal not cannibalizing with Vizhinjam. Put it differently, the first phase of Colombo West International Terminal and Vizhinjam put together will be about 2.7 million TEU. Just for understanding, is it possible to give what could be the utilization of this combined capacity of 2.7 once the first phase of both of these is operational? The final question is, there is a plan to develop a pretty large port called Vadhavan in Maharashtra. This is a futuristic thing, but just wanted to understand is our Dighi Port plan large enough to compete with Vadhavan port, or it will be much smaller in comparison to Vadhavan? Thanks, Karan. Thanks. I think let me answer your first question that is on the PPP projects on railway. I think these are on both sides. These are on DFC as well as some of the critical strategic connectivities which could help in swinging customers, some of the key customers from competing ports to our ports. It could also be giving an edge to move some of the volumes which are moving by rail to move them into coastal route. These are some of the projects that we are looking at. These are backed by freight that we are confident that could be moved by us or could be transferred by us. On the Colombo Container Terminal and including with Vizhinjam, I think we do expect both assets put together. In the first year, we would be running at 60%-65% capacity utilization. The way we look at it is, eventually, one of the shipping lines will take a bet in Vizhinjam and the other one would look at Colombo. I think that's how we look at it. In Colombo, if you see, there are four large shipping lines which operate, that is Maersk, CMA, MSC, and COSCO. Today, other than Maersk, the other three players do not have any sort of home base terminal. We do believe that we have a good chance with both these terminals. We would be able to rope in two players into our terminal. Coming to Vadhavan, in my view Vadhavan is a futuristic development. We don't know when it is going to happen. Regardless of that, I think Dighi is going to be a full-fledged multi-product port. We are not looking at just container, but we do see there is a huge potential for liquid, bulk, LNG, and container. I think that's how we look at. We would be focusing more on diversification and creating a true multi-product port for the state of Maharashtra, which today, all said and done, it's not there. We are very confident that regardless of Vadhavan we would be able to compete and we would be able to grow Dighi quite significantly. Got it. Karan, just a couple of quick follow-ups to each of these questions. Since you said that under railways it could be DFC and some of the port connectivity projects. The port connectivity projects, I'm assuming, has a potential of adding to the revenues within a couple of years or three-year timeframe. DFC projects are obviously going to be much longer. Without getting into specifics, do you see there are opportunities for acquisitions to be made for rail assets that connect to the port? That was first. No. Let me just answer that. Today there is no acquisition opportunity because there is no private player out there who is owning railway assets. It's all Indian Railways who own the assets. Okay. All the projects will be like greenfield, whichever you plan to get in. Okay. From a Colombo and Vizhinjam perspective, given that both of these will be transshipment ports, so assuming that the tariffs there will be lower and therefore margins should be around the 60% range as compared to 70%+ that we do at other ports. Is that a fair assumption? Yes, you are right. It would be in the range of 60%-65%. Okay. All right. Very clear. Thank you, Karan. Thank you. The next question is from the line of Girish Achhipalia from Morgan Stanley. Please go ahead. Thanks, Karan, for the opportunity. I had a few questions. The first one was on the terminals. I probably missed a little bit on that. You said that there are eight terminals that you're planning to build on the DFC. Would this be competing directly with head-on with CONCOR? What would be the CapEx plan of this expansion and capacity? That's first. The second one was just around Gangavaram. How are you planning to pay them? Because we've just said that INR 3,604 crore. Is it an all-cash deal or partly by shares? Any decision has been taken on that? The third one was on Flipkart. How big is this as an annualized opportunity, in terms of is it take or pay, if you can provide any color here? Are you already in negotiation with other similar contracts? Fourth one was just on Rail Track. On capital employed in your current five-year projections, what kind of balance sheet or capital employed are you forecasting for the Rail Track that you'd be adding in the next five years? Let me just answer the first two ones. On the eight terminals, when we looked at bidding these terminals out on DFC, these are the terminals where we see CONCOR doing the maximum volume. This is a part of to at least get an opportunity to position ourselves close to CONCOR, and to be able to have at least a facility around that. Most of the terminals that you see are where we see the maximum volume potential. The CapEx over there, Phase 1 is approximately INR 100 crore-INR 150 crores per terminal, is what we are looking at. Once the volume ramps up, we would be plowing that back into the asset to keep growing the asset. That's the initial CapEx that we are looking at. On Gangavaram, we are still working with the promoters to see how we will be doing the deal. As you know, the government of AP also has a stake in Gangavaram Port, approximately 10.4%. We are in talks with government of Andhra Pradesh. If GoAP does decide to sell its stake on a cash deal, then we would be looking at merger of Gangavaram Port with APSEZ, and so the existing promoter, that is Raju, will be getting shares of APSEZ. If GoAP does not decide to sell its stake, then we would be going back to the drawing board to see what is the most tax-efficient way of doing the transaction. We have kept all our options, looking at both either a cash or the stock deal on Gangavaram. Sorry, your third question was on Flipkart opportunity? Yeah Sorry. On Flipkart, as you know, what we have a contract is a 15-year take-or-pay contract over there. The annual revenue that we expect over there is around INR 15 crore-INR 16 crore to start with day one, with an escalation built in of 3.5% every year. We look at, there is a huge opportunity to do similar things. As I said that we would be looking at this year, we are working on transactions. We would be closing with another e-commerce players as well as industrial players. This year, our target is to sign similar contracts worth almost 2 million sq ft. The idea is that in next five years to take it up to 30 million sq ft in terms of the total capacity. All of these contracts that we do is on take-or-pay basis. Sorry, this will be on Nagpur, a multimodal park that you are already working on, or this will be anywhere in the country? No, these are all over India. This will be in Ahmedabad, in Mundra, in Chennai, Bangalore, Hyderabad, Mumbai, Calcutta, NCR. Predominantly, these are the places where 90% of the warehousing happens. Okay. Last one was just on capital employed for Rail Track, if you have any color right now for a long-term perspective. You're asking for going forward new CapEx in Rail Track or? Yeah. The capital employed that can happen in Rail Track, new projects that you bid for. We've identified ports and logistics, and Rail Track is also a third vertical. Just want to understand, how will cash flows be deployed in these three verticals. Rail Track, will it become a bigger vertical than logistics as well, or will it be at a certain level of balance sheet only? I think we look at it more strategically. Depending on the opportunity, we would be looking at developing some of these assets. Just to give you example like in SRCPL, we would be investing another INR 1,000 crore in the coming five years to expand that capacity. Same way, depending on the opportunity arising, we are working on the rail track business for getting the rail connectivity into Kattupalli. We are working on getting connectivity at Dighi and in Hazira. Even just these three ports put together, we would be looking at a CapEx outlay of around approximately INR 3,000 crore, just for these three projects, other than SRCPL and other projects under the PPP. The idea is we would look at the volume potential and the kind of returns that we can generate. We are very confident that some of these assets, some of these lines can generate in excess of 18% IRR. Thank you so much. Very clear. Thank you. Thank you. The next question is from the line of Venugopal Garre from Bernstein. Please go ahead. Hi. Thanks a lot for the opportunity. Just a few couple of questions, Karan. Firstly, on the Kattupalli business, just want to check, there is usually fairly large volatility in terms of margins. If I were to just look at Q4, there is a substantial decline on a QoQ basis. Could we just explain the driver for that? Also, Adani Logistics, you mentioned about moving away from these low margin contracts. Is there any pricing pressure going on in logistics because we still see margins sequentially being lower. Could we just also highlight on this? This is my first question. Venu, on the logistics you are seeing margins being lower is predominantly because of utilization being lower. I think as we keep growing and our volumes keep increasing, we would see these margins coming back. On Kattupalli, just give me one second on Kattupalli. I'll just open it. On Kattupalli, what we have had is our container has dropped on year-on-year basis and even on quarter-on-quarter basis, our volume has been down by 11% on the container. What has picked up is our liquid business. That's why you would have seen the margin changing over that percentage. I think on a yearly basis, I think we would be going forward about 60%. Also we had a one-time R&M expense in quarter four. That's the reason for the aberration. Okay. Karan, secondly, I just wanted to check on this Colombo-Vizhinjam sort of link. You mentioned that eventually you could capture both sides of the flows, so you should probably be able to also better manage the pricing part of it. Could we just elaborate this a bit more? More importantly, given that from a timeframe perspective, I think Vizhinjam is going to still take time for you to sort of commission, right? How different are the commissioning timelines for this? Also from a synergy point of view, how does the transshipment flow work for you? Yes. I think if you see on the transshipment side the alternative for Colombo is Vizhinjam. Now having position on both sides, as I said that three shipping lines are looking for a home base in this region, and we can't ignore this region because it's an established center both Colombo as well as and when Vizhinjam comes in, including Vizhinjam. We look at both as an extension of each other. That's why we do believe that having control on both sides we will be able to maintain the pricing rather than getting into the price war. Just to give you example, if West Coast Terminal was developed by not Adani then there would be a price war between Vizhinjam and the third party. Now with us being there on both sides we will be able to control pricing across the board. That's what I meant to say. Vizhinjam we expect Phase 1 to be completed by March 2023, is what we expect. Colombo would be coming around the same time. Maybe five, six months here and there, it would be around the same time. Okay, got it. Karan, if I may ask one to last questions actually. Yeah. One is on the slowdown perspective I think April you did mention that there were sort of early signs in terms of impact. Given that COVID has intensified further, I'm sure that from a forward calls perspective you have an idea of how things are shaping up, right? Especially more so in the near term because there's always a lag impact, right? What are the areas that you're actually seeing if at all any incremental slowdown or is it like it doesn't matter that the volume front, bulk or container or whatever is still going to be fine even at this level of COVID intensity? The reason I'm asking is because your overall GDP growth that you worked with is 11%, which doesn't really factor in the COVID impact. Near term is probably I'm more focused on it is answer is to what is the extent of impact. Yeah. So far we are not seeing any impact in terms of bookings or production levels or PLF levels at the power plant or in the steel plants. Actually we are seeing a growth in these sectors. I think what you will see is due to the second wave you will see certain pockets where there would be a disruption on the logistics side because of lockdown. I think now countries well geared up when we went through the first lockdown both the company as well as country is geared up in terms of we know what to do if a lockdown happens in certain parts of the country. I think those uncertainties are not there. We are not seeing on a near-term basis any reduction in terms of canceling or cancellation of bookings or anything like that. I think it's just we are a little cautious in terms of how do we see on a medium-term basis. That's it. Sure. Thanks a lot, Karan. Actually I have one to more questions. I think it will be a lot so I'll probably take that offline. Thanks. No worries. Thank you. Due to the time constraint, we'll be taking the last question for today, which will be from the line of Prateek Kumar from Antique Stock Broking. Please go ahead. Yeah. Good evening, Karan. I have three questions. Firstly, does the volume guidance include the Myanmar volumes which you earlier expecting for FY 2022? Yes. There is a volume of 100,000 TEUs in that, so approximately 1.4 million tons. 100,000 TEUs, 1.4 million tons. Only 1.4 million tons. Secondly, now with the revised CapEx of INR 3,100-INR 3,500 crores, this includes a much larger CapEx on logistics. This will be more similar range we can expect for future years as well on this range of CapEx, because they are very aggressively putting warehousing and logistics. That CapEx will remain at INR 1,000 crores an overall number? Yes. Right now I'm going with the assumption that CONCOR is not happening, that's why I'm giving you guidance of INR 1,000 crore every year. If CONCOR does happen, we have to relook at these numbers because it would be creating capacity unnecessary for us. Right now, with the assumption that CONCOR is not happening, yes, INR 1,000 crore is the right number. The total number for INR 3,100-INR 3,500, this will be a total number as well. We reduced this number to around INR 2,000 crores for 2021. I think I would not take INR 3,100-INR 3,500 on a long term. It's just that this year we have certain capacities which we had kept on hold last year, which are coming in. I think once those capacities come in, on an average, INR 2,500 crore is a good number on the port side. Okay. Just one last question. This issue of INR 1 crore shares to Warburg Pincus, is it reflected in FY 2021 close balance sheet? No. The transaction has happened in April, so it has not been reflected in the balance sheet. Thank you. That's it from my side, and all the best. Thank you. I would now like to hand the conference over to Ms. Teena Virmani for closing comments. Thank you, Karan, for your time, and thank you participants for participating in the call. Thank you. The IR team is available if anybody has any questions that we would like to answer. Thank you, everybody. Thank you on behalf of.