Ladies and gentlemen, good day and welcome to the Gateway Distriparks Limited and Snowman Logistics Limited Q3 FY 2023 earnings conference call. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded. Today on the call, we have Mr. Prem Kishan Dass Gupta, Chairman and Managing Director, Gateway Distriparks Limited, Chairman, Snowman Logistics Limited; Mr. Ishaan Gupta, Joint Managing Director, Gateway Distriparks Limited, Director, Snowman Logistics Limited; Mr. Samvid Gupta, Joint Managing Director, Gateway Distriparks Limited, Director, Snowman Logistics Limited; Mr. Sandeep Shaw, CFS, Gateway Distriparks Limited; Mr. Rajguru Behgal, President, Rail, Gateway Distriparks Limited; Mr. Manoj Singh, President, CFS, Gateway Distriparks Limited; Mr. Sunil Nair, CEO and Director, Snowman Logistics Limited; and Mr. N. Balakrishna, Finance Controller, Snowman Logistics Limited. I now hand the conference over to Mr. Prem Kishan Dass Gupta. Thank you, and over to you, sir. Thank you. Good evening, and a warm welcome to all the participants to the post results earnings call of Gateway Distriparks Limited and Snowman Logistics Limited. We have uploaded our results, press release, and presentation on stock exchange as well as company website. I hope you all had an opportunity to go through the same. Due to global macro and economic situation, there is a dip in the throughput in Q3, particularly in the export direction. For various reasons, the running of the trains to the ICD, because of the network and form, got delayed. The company still continues to show healthy growth of over 15% profit after tax as the company continues to reduce its debt. In Snowman, we are pleased to report that Q3 FY 2023 has been a quarter of outstanding financial performance for our company. Moving forward, we'll be focusing on expanding our capacity and identifying new market opportunities to drive growth. Snowman will be establishing custom-built facilities for multinationals, and we have already started with one in Shoolagiri, Tamil Nadu. There are other locations where the work in progress is there, which will offer a comprehensive range of services including storage, handling, order processing, warehouse management, and secondary transportation. Our strategy at both Gateway and Snowman includes expanding into new industry segments and geographical regions to increase our market share and reach. By executing these efforts effectively, we aim to consistently meet the expectations of our stakeholders and drive long-term value for our shareholders. With that, we would like to open the floor for an interactive question and answer session. We welcome any questions or comments you may have at this time. Thank you, and over to the moderator. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. We request the participants to limit their question to two per participant at a time. Should you have more questions, we request you to get back in the question queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from ICICI Securities. Please go ahead. Good afternoon, everyone. Thanks for taking my question. I have couple of questions. The first one is essentially on the drop in throughput volume, both at CFS and ICD. If it is possible to explain the reason for that, particularly what all factors did contribute to this drop and the outlook going ahead, that would be very helpful. Amit. See, as I mentioned, the exports have dropped considerably. If you look in quarter-over-quarter basis, it is over 15% drop in the volumes of export. Imports have increased a little bit, but what happens is that because of this, our double stack ability comes down. Because of that, the EBITDA per TEU also drops. The volumes are mainly down due to the exports, which we have seen Going down in the last quarter. We have seen some improvement in the current month, this trend is to be seen how it turns out over the period of next two months. We are full and with the addition of Kashipur as you know, we have to maintain the service levels and we have to maintain the timelines because of export and import. Our cost per unit has gone up, and because of that, you can see the drop in the EBITDA. On the CFS side, if you see, we are maintaining the same EBITDA. If you exclude the Punjab Conware, which was there for the full Q3 in 2021. I hope that answers your question. Yeah. EBITDA%, if I look at on overall throughput, it has gone up slightly compared to last quarter. While your volumes have gone down, EBITDA you have gone up actually. double-stacking certainly doesn't explain the whole story. Yeah. Our EBITDA also is roughly the same only, if you look at it. I mean, a little bit here and there, it will depending on the volume mix. It's not a significant growth as such. Yeah. Okay. On net debt to EBITDA, if I look at it, after going down for many subsequent quarters, we have seen that this quarter has seen little bit of an inch up. Is it a temporary thing or there is some working capital build-up or whatever, or is it that it will, I mean, come down again 2.6, 5.67 kind of a level going ahead? Sorry, I didn't understand the question. Which figure are you referring to? The net debt to EBITDA. Net debt to EBITDA. Yeah, no, we're not using any CC limit right now. Net debt to EBITDA, we laid out debt plans. At Kashipur, we only took INR 60 crores debt to finance the transaction. Rest was done through internal accruals. That's the main change that you would have seen in the books on both cash in hand as well as the gross debt that we have. If you look at our net debt, net debt is about INR 349 crores as on date. If you look at net debt to EBITDA, if we take the annual thing, it will be below one. No, the question was that if I look at quarter-on-quarter, after dropping for several quarters, it has gone up, I mean, 2.88 from 0.67. While I understood that the target is to maintain it at 0.65. The question was whether it's a temporary phenomenon we expect it to normalize, or is it the level that we are going to see below one, but at around 0.9 or something? Yeah. It is say, on an annual basis, net debt to EBITDA will be around one only. Like I explained, this is because we used internal accruals, that decreased our cash, we increased our debt to fund the Kashipur transaction. That's the main change, it is normalized. Outlook on net debt to EBITDA hasn't changed. Okay, great. Thank you, and all the best. Thank you. Anyone who wish to ask a question at this time, please press star and one. The next question is on the line of Veena Kodre from Jefferies. Please go ahead. Hi. Sir, just wanted to understand, in the industry, are you seeing competitive intensity increasing? Like we've been reading that, I mean, you don't need to mention any specific name on the competition side, but for example, we've been reading that Adani Group's is box and container looking to enter into logistics in a bigger way, and a couple of other industry players are also entering in. Are you seeing this in competitive intensity or not really? No, it's the same as earlier, so no change on that side. There have been no new entrants in the picture. Basically, the drop in our volumes is, as I explained, the drop in exports, which we hope that it will pick up. Kashipur, this will be first full month of operation. This quarter, we will have volumes added to our total throughput on the ICD side. I don't think that there's a intensity in the competition, and this competition was always there. We haven't seen anyone, I mean, to the best of our knowledge, we don't see any intensity in the competition that any new further locations or any further products coming up online. Okay. Sir, lastly, I know the DFC, I mean, the railway ministry is best placed to answer this, but just in general, are you hearing any dates from the commissioning of that Dadri-Rewari stretch at all of the DFC? See, Dadri-Rewari, there was a trial that they said, the full construction is yet to be done. It is a matter of, we don't have a timeline yet. No. Rewari to Dadri, 2023 end is what we're looking at. That's the rough timeline. For the rest of the section, will take longer all the way to JNPT. That will take a couple of years, probably. Yeah, JNPT will take time. I mean, Mundra to Rewari for that. Rewari to Mundra is done, right? Basically, it's Dadri-Rewari that's left. I mean, Mundra at the top. It's done till Sanand. Beyond that, it connects to the port via non-DFC right now. Essentially, yeah Dadri to Mundra will then be connected by end of the year. There is a new development. Earlier, the trains that we used to send on the DFC, it used to connect from New Ateli, now they have developed a stretch of around 40 km, so that is a shorter distance to our terminal. Now the DFC starts from New Rewari section. That is one development. Second is that earlier when we used to send the trains double stacking via Viramgam, which we used to double stack till 800 km. We were going only after that to Pipavav. Now there were two over bridges, so they are increasing the height of those over bridges. By May, Viramgam to Mundra will also be double stacked. That will help in improving our double stack performance also. Okay, understood. Thank you. Thank you. The next question is on the line of Deepak Krishnan from Macquarie. Please go ahead. Yeah. Sir, thank you for the opportunity. Maybe just a follow-up from the previous question as well. When you said the competitive intensity is not increasing in the market, if you look at rail tonnage volume on a year-over-year basis is up 5%. We see that both you and CONCOR have seen close to about 10% decline on a year-over-year basis in terms of TEUs. Anything specific that is happening? Like is one player disproportionately gaining share or any competitive change that is taking place in the industry specifically? Yeah, I do, Deepak. The tonnage which you are referring to, that is bulk commodities- No, I'm just talking about end-to-end container tonnage. End-to-end container tonnage has no meaning because there's no such formula to convert a 20 feet or 40 feet container into a tonnage. We have been saying that for long, but somehow, some agencies convert that into tonnage, and that does not reflect the true picture because the container can be 10 tons, 12 tons, or it can be 30 tons. How do we take the average? Even we don't have that calculation. We always talk in terms of a 20 feet and a 40 feet container. That is what we report also, and that is what we talk about also, the number of TEUs handled by us in the ICD business or the CFS business. Sure, sir. Maybe just in terms of, maybe 6 months now, we have the Rewari to Sanand or Kalindi equivalent working. We've really not seen any modal share gain towards rail in a big way. How do you look at it maybe from a shorter term perspective as well as a longer term perspective? When do you really see modal share shift towards rail really picking up? There has been a shift in the last 2 years. In the last 3, 6 months, nothing major like that, and it's not measured that frequently also. Overall, if you see since the start of COVID, there has been a significant shift. The next level will come when it's connected all the way to JNPT. When the full DFC is operational basically, that's when the next level of growth will come from shift from road to rail. Maybe any outlook that you would want to share for FY 2023 or FY 2024 in terms of rail volumes? For the current year, we're looking at at least matching last year with a slight growth because of Kashipur. Going forward, earlier we had given a guidance of about the high, around 18%. We revised that to slightly lower. We'll wait another quarter before giving a full proper guidance for next year. Sure. Those are my questions. Thank you for the opportunity. Thank you. The next question is on the line of Achal Lohade from JM Financial. Please go ahead. Yeah, thank you for the opportunity. Sorry if I'm kind of asking this question. You said that basically the rail volume decline- Can you use the handset, please? The voice is not very clear. Yeah. Is it better now? Yeah, much better. Please go ahead. Yeah, sorry. Thank you for the opportunity. My question was with respect to rail volumes. Unlike in the past, this is the first time we are seeing a drop in the rail volumes for us. As you said, the tonnage in the railway wagon tonnage doesn't really matter. Is it possible to know how the railways container volume has been in terms of TEUs, how that growth or decline could be? What I'm trying to assess is that have we gained, maintained, or lost market share on a year-over-year basis for 3Q? Our market share is not lost. Overall rail volumes have been flat. Overall, also, if you look at our market share, it's grown on a nine-month compared to nine-month basis. NCR, we're at about 16%. I think we used to be at 12% about a year and a half ago. Ludhiana, we're at about 35%, and this is after a fifth ICD has also come in. Market share is doing well. It's just a macroeconomic situation with the decline in exports in a big way, and also slower running of trains, which was there in December. Just for example, our pendencies at the port have piled up so much because our double stack and hubbing operations were reduced due to the track work. We have about 3,000, 3,500 just lying at the port right now. If I get you right, you're saying basically the double stack got impacted, which resulted into higher pendency, which had an impact on the volume handled being lower in 3Q. The market share, what you gave on- Along with the overall dip in export. Overall dip. Correct. The market share what you gave for nine months, can it be possible to know for third quarter specifically for NCR and Ludhiana? We had similar numbers. In terms of QOQ, flat or YOY? Overall basis, our market share is in NCR continues to be about 16%, and in Ludhiana, it continues to be 35%. It remains the same almost Q on Q. Understood. If you could talk about the EBITDA for these two segments, because I see that we have not disclosed that in the presentation this time, while we had disclosed in the second quarter and we disclosed first quarter. Can we just have some clarity as to how you want to present this on a consistent basis, please? We didn't give it in the second quarter also. I think we stopped splitting EBITDA this financial year. If you just look at the historical trend, we're saying along the same lines of where CFS is around INR 2,200 and rail is close to INR 9,000. That same trend is carrying on right now. Understood. With respect to the pricing, how the pricing situation has been in NCR and Ludhiana markets? Have you seen any drop in the realization, any increase in the realization? How the competitive intensity is shaping up, given we are hearing that one of your large competitors is talking about introducing schemes. Ashok is right. Ludhiana market has now got interesting because of this coming of investment of Tata Steel in Ludhiana. With this, what has happened is there is an increase in import of scrap in Ludhiana market, resulting which we have also gained a good market share in terms of imports. Some of the shipping lines which they were importing to other ICDs, due to increase in the volume, we have started getting a good market share in that. That is one interesting fact which has happened, and we are expecting this scrap market to remain stable for another three months' time. This should help in not only gaining our market share in the import segment, but also in the export segment as well in Ludhiana. Right. In terms of pricing and the empty handling, any comment on the same? Empty handling, that is because as you know that railways has withdrawn the discount which they were giving in running the empty containers. We are tying up with the shipping lines, so we are also working on some cabotage model wherein we will try and reduce that cost. We are also creating some space wherein we can store shipping line empty so that they can use them for the exports. Our focus is also in that area. Okay. You had talked about 18% volume growth for the rail segment, including Kashipur. Any comment on the CFS in terms of the volume and the margins for FY 2024? Yes. No. CFS is expected to remain flat. There is a slight growth if you look at the numbers without Punjab Conware. What we've been reporting for the last few quarters will be the CFS numbers going forward also. Got it. On a blended basis, we should look at further improvement in the margins given higher growth in the rail business. Is that a fair assessment? Yeah. For the third quarter, we were at around INR 5,400, excluding the other income. That should keep on inching up. Yeah. Our target is INR 6,000. Target is INR 6,000. Understood. This target is for FY 2024 or the longer target? There's no specific timeline to it. It's just we're doing everything we can to reach that number as soon as possible. Understood. Thank you so much. I'll come back in the queue. Thanks. Thank you. The next question is on the line of Rohit from Progressive Shares. Please go ahead. Hi, sir. Our question related to Snowman. First, with the BDP partnership, what sort of revenue do you anticipate and what sort of margins are you expecting from this business? Hi, this is Sunil here. With the BDP, we are setting up a best-in-class chemical handling warehouse, which is around 55,000 sq ft warehouse in Shoolagiri, near Bangalore. We expect the warehousing plus transportation. We will be storing as well as we'll be distributing these chemicals within the radius of 300 km from the warehouse. Both put together, we are expecting around INR 12 crore of top line per annum from this business with a 12% margin. Okay. Any particular guidance that you would like to share on a blended basis? Will you be able to maintain the normal range of 20%-22% EBITDA margin? Yes. As you know, we had started distribution business as well last quarter onwards. The mix that we have today, we believe the similar mix will continue to grow, and anywhere upwards of 20% is what we are expecting in the coming quarter also. Okay. Any price hikes that you're taking during the quarter under review? Price hike usually happens in the Q1 where the agreements are due for renewal. Last year overall, if we compare Q on Q, we have a 7% price increase, ASP increase, average sales price increase over last year same quarter. Once this renewal is due, from March onwards, we start discussing with the customers. We are expecting more or less similar increase in the ASP for next year as well. Can you share the ASP currently? Yeah, sure. Our ASP current is INR 1,521 per pallet per month. Okay. Per month. Okay. Last question related to the net debt. What is that number and what is the comfortable debt equity that you're looking at? Hi, N. Balakrishna here. Net debt of the company right now is INR 86.57 crore. Debt equity ratio, we are at 0.25. Okay. I'll follow up in this. Thank you. Thanks a lot. Thank you. The next question is from the line of Harsh Shah from Dimensional Securities. Please go ahead. Hi, my question is for Snowman. In the trading and distribution business, the margins on Q3 which we have seen jump from around 4.6% to 7.1% on net debt basis. What will be the sustainable margin in this business? See, that is because of the mix change. We have only three clients now, and the three clients with different margins. So depending on the volume, it changes, but we are looking at 5% margin on an average basis as we scale up this business. Sir, currently we have a revenue of 25% from trading and distribution. If I talk about Q3, you said that you will maintain similar mix. Is that right? This revenue will stay 25%? Yes, it will remain 25% or it will grow. Earlier in the previous quarter, we were talking about aggressive growth in the trading and distribution segment. We were targeting somewhere close to maybe INR 500 crore, INR 600 crore, if I'm not wrong. No, I have no idea on these numbers. You'll have to take it up with somebody. If we talk about growth, what kind of growth are we expecting in this business? As I said last time, we are just setting up things and we have migrated to an ERP system which takes care of this kind of business as well. We are putting the commercial processes in place. We are expecting anywhere to the extent of 40%-50% growth year-on-year in this slow distribution volume. Okay. For our warehousing business, I believe this quarter on YOY basis, we saw a decline in the pallet. Can you specifically what would that number be? Decline in pallets, which pallets? Warehousing. No, there is no decline. Q3 over Q3. Q3 over Q3, there is an increase in pallet. How much increase that is? One sec. Can I get back to you in a couple of minutes? Sure. That's fine. That was my last question. Thank you. The next question is from the line of Yash Tanna from ithoughtPMS. Please go ahead. Yeah, hi. Good afternoon. We have seen about 13% degrowth in TEUs, this is rail TEUs, quarter-on-quarter, while the realizations have actually improved 11%. What explains this? This is basically change in volume mix. That's the main difference that you can see these variations quarter-on-quarter. Import normally has better pricing and imports have grown, whereas exports have declined. That would explain why revenue per TEU might be higher. Oh, okay. All right. Does this mean that EBITDA per TEU would also be higher? It's along the same trend. While imports are better, our imbalance has increased, so the cost of imbalance is negating that increase in margin for the import leg. Right. That's why maybe the margins on a blended basis are flat. Right. Oh, all right. You mentioned that exports are weak, and I couldn't get you what trend you spoke about in December, January. How is it picking up, or how are you seeing the market share of same exports? It's still subdued only. Even in January, we haven't seen any signs of exports picking up yet. Hopefully after this quarter, we should see some growth again. All right. On Snowman, one question. Are you giving any guidance on the blended business? What will be the revenue or margin guidance, and could you break it up by volume and price hike? We will continue to have the existing ratio of Q3 ratio to be there in Q4 as well. As I said, from a pricing point of view, we will be able to comment only in the first quarter of next financial year. That's the time we close agreements with our customers. All right. The Q3 momentum will be maintained in Q4. I was actually asking more from a full year perspective, if possible. We'll talk about it in the coming quarter by the time we finish our budgeting process and all. Sure. Thank you. Those are my questions. Thank you. Thank you. Next question is from the line of Atul Dewani from Citi. Please go ahead. Yes, sir. Sir, in the last conference call, you did talk about adding new rakes on the lease basis. I think you alluded to taking delivery of three rakes per year going ahead. Given the fact that we are now entering a phase of slowdown, and while all of us hope and wish that things recover very quickly, but we don't know, because the global recession may continue for some time. Is there any rethink on that in terms of increasing the capacity on the rake side? No, we'll definitely add to our fleet because of our expansion of network. Kashipur and Jaipur being added, we will need more trains. Three is definitely on the cards. Then we'll take a call after that because these are available on at least six months notice, so we can accordingly change our plan if we need to reduce our outlook. Okay. Thank you. Thank you. Thanks. Thank you. A reminder to our participants, please press star and 1 to ask a question. The next question is from the line of Jay Shah from Capitalmind PMS. Please go ahead. Hello. This is for the Gateway team. Actually, we had spoken about even looking at the automotive sector for onboarding them as and how the BFC gets operationalized. Have you started looking or onboarding any customers from the auto sector, like for the double stacking or even for the normal stacking? We already work with auto companies. Maruti is one of our largest customers. We work with a few others also in auto ancillary. This is on the container side. For the finished vehicle side, it is a separate license, AFTO license it's called. That's a more longer term thing that we might have. We don't have plans to start finished vehicle auto rakes anytime soon. That's it from my side, and all the best for the future. Thank you. Thank you. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead. Thanks for the opportunity. On the last conference call, you had mentioned that rail volume growth is expected to touch high teen in next fiscal as volumes from Kashipur get added for the full fiscal and Jaipur for part of the year. How is that outlook looking like? You had said that revenue growth for FY 2023 is likely to be 67%, now that you have a disappointment on export volumes in Q3. How would you review the growth for the balance fiscal and next fiscal? For the rest of this year, we'll be looking at similar to last year's numbers. Earlier in the call, we said we'll still take some time to evaluate as the macroeconomic situation has changed quite a bit in the last three to six months. By next quarter, we'll give a guidance for next financial year. Kashipur this quarter, we'll get the full benefit of it. Those volumes will get added. Jaipur, we're hoping it's operational by end of this calendar year. Okay. The full benefit from Kashipur will just offset the decline that you have seen there. Because you're saying you are expecting numbers similar to last fiscal year. Yeah. Something like that. Maybe slight growth because of it Just to understand in terms of the mix that you have on import and export, was it like in Q3, you said that there was a steep decline in exports. What percentage impact on the decline was because of this track work and fog-related issue, which is slowing down some of the trains, just to segregate that portion which can come back on track and is not due to macroeconomic factors. Yeah. Roughly our mix used to be a typical mix of 50/50. Now our mix is something like 60% imports, 40% exports. That's been the shift. The second part of your question, if I understood correctly, you're asking what is the impact of the fog and the slow running? Yeah. If you need to segregate that, what is attributable to macroeconomy and what is attributable to such issues? Yeah. Say about seven, 8%, we could have been better throughput if the entire hubbing and double stacking and faster running of trains was there. Got it. Thank you. Thanks. Thank you. The next question is from the line of Bharat Sheth from Quest Investment Advisors. Please go ahead. Hi, sir. Thanks for the opportunity, sir. One question. Several North Indian companies who are evaluating sending their goods to South India by using Mundra Pipavav and then by sea freight. Are we getting any kind of those volume? No, we aren't into coastal shipping. Once in a while, we do some domestic movement between Mundra Pipavav, JNPT ports with our ICDs and maybe someone else who's into that uses our service, but we don't know whether it's for coastal or not. We're just moving it from ICD to port. Do you see any potential further in it? Any potential for what? Yeah. Sorry, I didn't get your question. Any potential for this rail container movement from, say, North India to the Pipavav or Mundra, whether they will be used for coastal or they may use for export also. Right now the Indian Railways network is not good enough to have that movement, because the running time is very slow. Whether it is from Mundra to South or the coastal or from North to South, this domestic business, while there might be requirement, but the pricing and the turnaround of the asset is not good. We have been watching it, and we will keep an eye on it, but right now we don't have any plans to go into that sort of domestic movement. Even with DFC who are working in full play, don't you think that turnaround time has improved? No, DFC will be only from the hinterland to Mundra, Pipavav and Nhava Sheva on the western side. It is not going to be from north to south or from west to south or east to south. Those circuits, I don't know what, those DFC ways are a long way. Sir, I'm not talking for this DFC circuit. Sir, I'm talking, I mean, using DFC and taking it to the port and they move it through by coastal to South India. It is possible, I think people just normally send it by road, because once the container goes there from Mundra to, say, Cochin, for example, there's hardly any return cargo. People don't prefer the coastal shipping route right now. There are some movements happening. I understood your question now. There are movements happening in that from north to the western ports and from there on the coastal vessels. We studied that in detail, and we don't have any interest in doing that. Okay. Thank you. Thank you. The next question is from the line of Bharti Sawant from Mirae Asset. Please go ahead. Hello, am I audible? Yes. Yeah. Please go ahead. You're audible. Yeah. Thank you for taking my question. My question pertains to the discussion that we already had with regards to volume decline that we saw in the rail business. Can you just explain what kind of volume growth would we have witnessed on the import side, and what is the impact on the export side? Yeah, just one second. Imports are more or less the same, say, slight single-digit growth, exports have seen a decline of 15%-20%. Okay. Is the track issue now sorted, which impacted because you also mentioned that because of the track issues, your overall volumes have declined by about 8%. Had this not been there, you would have been more like flattish compared to last year. Yeah. Track work is complete now. Effectively Q4, because you are guiding for a flattish year-over-year growth in FY 2023 full, which indicates roughly 13% decline for Q4 compared to the run rate of 90,000 odd TEUs for Q4 of last year. If the track work is complete, are we expecting significant weakness in the extant volumes, extant trades? See, right now it cannot be said for sure. This year the Chinese New Year is now on 22nd of January. The imports will also slow down in the next two to three weeks. Thereafter the pipeline looks good. On the export side, we are not seeing much improvement, though if you compare on a month-to-month basis between December and January, there is a growth of 5%. After having gone down by 15%-20%, 5% growth is welcome, but we cannot say for sure how it will take shape in the next months or what will be the total impact in the quarter. There is more to the weakness. It's not just a track issue which is impacting the export leg, but there are more of an overall weakness which is impacting the volumes for us. The track issue will clear the pendency which is at the ports. Exports, if they keep on going like in January that will add to our volumes. Imports, right now they are good. The arrivals are good, but they will slow down in the next two, three weeks. Again, after that, there are signs of, or we have the visibility that until end of March, the imports will also grow. To give you a certain figure, it is not possible right now, but we will be having higher volumes because of clearance of pendency, because of some uptake in both export side and import side. We can only hope for better things to prevail the present macroeconomic situation. Let us see how the budget comes out, because a lot of export and import will also depend on the budget announcement. Understood. Just two more questions from my side, one on the Kashipur and Jaipur. What is the annualized volume contribution we are expecting from Kashipur terminal in the next financial year, once fully operational? Once Jaipur is operational, what could be the volume contribution that can come from that terminal? Kashipur about 3,000 a month, say 36,000 for the year. Jaipur will take more time since it's a greenfield project. There's a process of shipping lines opening their BL point. They have to start positioning their empties. It's a slower ramp-up. This financial year, we can pretty much say no volume from Jaipur. Kashipur is already doing roughly 3,000 TEUs a month. The full impact will come next year in FY 2024 from Kashipur, which is what we are saying is 36,000 TEUs per annum. Jaipur, we expect to start by Q3 of this year, which will be Q3 of FY 2024. It will be a slow start to build up the volume. We cannot say it will be a significant contribution for FY 2024. For FY 2025, there will definitely be additional loads from Kashipur as well as Jaipur, apart from our existing terminals. Last question on the rail margins. The rail EBITDA per TEU historically over past two years specifically, we have been doing about INR 9,000 per TEU or in excess of that. With Kashipur and Jaipur, do we expect to continue with this trend rates or would there be some dilution? Temporarily there might be some dilution because to place the empties for imports or to vacate the empty containers from the terminal. These costs would have been in Kashipur we are sure that this, there might be some additional cost. From Q1 next year we will be able to have similar kind or even higher margins. Once the volumes are established, that will help us in double stacking from Ghaziabad through to all the ports. Bringing in on single stack from Kashipur to Delhi and then sending it out to the ports. Similarly, on Jaipur, whenever it comes in, it is already on the double stack route. It will only add to our double stack percentage that we normally have. Leaving from Delhi, it can be topped up from Jaipur and sent to the ports. What is the potential EBITDA improvement one can look from a three to five-year perspective once these terminals are operational and even DFC is operational? We are aiming at INR 10,000 per TEU. Okay. This is with DFC, right? DFC and terminal. Yeah, this is with DFC and including our two terminals. Macro seeing some improvement. Understood. That answers my questions. Thank you. Thank you. Thank you. Next question is from the line of Rahul Chandran from Suniti Securities. Please go ahead. Hello everyone. Am I audible? Yeah. We can hear you. Yes, you are on the complete. Yeah. My question is again pertaining to the EBITDA to you as per the previous release. I wanted to gauge the DFC is operational from quite some time. We don't see any increase in the EBITDA TTM because this quarter on I thought that we had an increase in realization, we would have a growth in the EBITDA TTM, but as said by Ishaan Gupta, it's in the same range. You can guide us with certain things like when will it be on an incremental side? After this I have one more question. Basically, there are some factors, one of the biggest factor is the imbalance between import and export during this quarter. Otherwise, we had already turned 9,500 [inaudible] per TEU, we are trying to get back to that with our new terminals. My target is 10,000 per TEU. One of the things we have not mentioned, apart from slow movement due to track work and all that, is that we had some acquisition expenses which were incurred and which were booked during Q3. That brings us down the EBITDA a little bit. We'll definitely be there at 9,500 very soon. Okay. The second question is that you are planning two more ICDs, as you had written in your press release. Have you identified any places for those, or are you still looking out for those things? We're still finalizing, our strategy is to increase as much along the Western DFC. Okay. It might not be directly on the DFC, but it'll get connected to the Western DFC through one of our hubs. Okay. Perfect. Yeah. You answered my question. Thank you. Thank you. Next question is a follow-up question from the line of Yash Tanna from ithoughtPMS. Please go ahead. Yeah. Hi. My question is on the movement business. Hello, am I audible? Yes, you are. On the distribution business, what kind of return ratios are we looking at? If you could also highlight what kind of opportunity do we have in this business? You have mentioned that we are the first one in the country to do this 5PL sort of a thing in cold chain. Yash, I have not understood the question with respect to return ratio. If you are asking about the margins, I can say that at a gross level, it is around 10% margin and at a net level, 4%-5% margin is what we are commanding now, and this is to be maintained as we grow. Okay. On the size of opportunity, if you can highlight a little bit on the 5PL side. Size is very difficult to estimate. This is one of the most wanted services that the industry were looking for, and this is a very well-known model globally. There are companies which are as big as 2 lakh crore of Indian rupees turnover in U.S., which are running similar business model. In India, it is a new thing, and we are very specific to food. There is no research work as of now to quantify the market size. All right. Thank you. I can say that we do hold inventory of close to INR 12,000 crore worth of inventory in our cold storages. We are just trying to speak to those potential customers who would value the value add that we can offer in this model. Maybe in couple of quarters down the line, we'll be able to have some estimate on this. Yeah. Got it. Thank you. There was a question earlier which we had parked because I didn't have the information handy. The built pallets, we built 3.34 lakh pallet positions in Q3 this year as compared to 2.87 lakh pallet position last year Q3, an increase of 16% pallet positions. Thank you. The next question is a follow-up question from the line of Achal Lohade from JM Financial. Please go ahead. Achal Lohade, if you may please go ahead with your question. Thank you for the follow-up opportunity. You have mentioned 3,000 per month kind of a volume from Kashipur ICD. Is it possible to know what is the broad market share? What is driving the growth? What is the market share we are talking about there? Hi, Rajguru Behgal. If we talk about the overall market catchment of Kashipur, we are looking at the volumes of apart from the 3,000, which approximately we'll be doing, we'll be targeting the volumes of Moradabad, which is doing around 6,000 containers, and then Pantnagar ICD, which is doing around 2,000. 8,000-10,000 is the target catchment we are looking at. In addition to that, we have mapped some of the customers which are going as far as Dadri. If we put it all together, the size is between 12,000-15,000, which we'll be targeting. We are expecting that we should be able to onboard many customers because when we have started our services, there is lot of excitement in the trade and there have been many queries which are pouring in because many of the customers which are having their units near our existing terminals like Gurgaon and Ludhiana. They also have their suppliers and OEMs, and they know our company, and they were waiting for these services, especially for the JNPT and Pipavav services, which were not prevalent in this area. We are the ones who have already started these services from that location and we are very confident that we should be able to gain a sizable market share in that catchment. If I understand you correctly, sir, what you're saying, that 3,000 is a base volume on top of that. The entire market size in and around Kashipur ICD is somewhere around 20,000 TEUs per month. Is that a fair assumption? Of that, we currently have a share of 3,000 TEUs. Is that right understanding? It's about, say, 18,000 TEUs roughly, including road movement, which comes to cities in the NCR region, like Dadri, like Guru just mentioned. Some of it is going directly to the port or coming directly from the port to these locations because of not so reliable services. We are going to offer a product where we will have the deliveries or evacuation by our standards so that the customers get their deliveries on time, both on the export and import side. That is what we are targeting, that first target would be people who are moving by road, whether via NCR region or directly to the ports. That will be easy to get. Then, of course, once people see the service levels, definitely the terminal will attract the volumes itself. Understood. 18,000 is basically the total size which includes the road. Exactly. As of now, how much of this is coming on rail at present? Would that be 10%, 20%, 30%? Say about 10,000. 10K by rail as of now. Understood. 10,000 at Kashipur. Including 3K of Kashipur. When you're guiding for 3,000 per month for FY 2024, you're not assuming any scale-up for these. Have I got it right? Yes. We're giving this as the base volume because of the overall market scenario. Once that improves, our guidance for this will also improve. Is it possible to give some sense in terms of how competitive rail would be compared to road, given its long lead for JNPT and Mundra? Is there any scope to improve the per TEU margins there in Kashipur? Per TEU margin will be roughly the same only because there are two other terminals also and that's CONCOR. Maybe some scope, slight improvement because NCR has many more terminals compared to this region. There is scope to offer a better service level compared to roads, especially for the JNPT and Pipavav region, which right now wasn't being serviced by the earlier CTOs here. Understood. Just a clarification, when we talk about rail volumes, it includes the laden plus empty, right? Yes. We are talking about only laden. 10,000 is laden. No, in general, not specifically for Kashipur. When we report the volumes, that is laden plus empty, right? Yes. For both rail and the CFS business. Yes. Got it. If you could give some sense about the CapEx for FY 2023 and FY 2024 and in which areas? Jaipur ICD is continuing. Kashipur, more or less everything's done. There'll be some minor improvements we'll be doing there. Jaipur total is an INR 90 crore project, out of which INR 30 crore was for the land, and say we've spent about INR five crore, INR 10 crore already. That's the plan for, say, the next six to nine months. As and when we add other ICDs like this, we were talking about that will add incrementally in the mix. Rakes will be on lease, most probably, but we can look at buying them also. That depends on if we do that, then that automatically gets added to CapEx. Right. Still, if you can give some ballpark number, FY 2023, how much have we spent in nine months and how much would we spend in total for a full year in FY 2024? A ballpark number would do, excluding the two potential terminals, what we are talking about. Yeah. Other than Kashipur, we've spent about INR 50 crore in nine months. Then we will be spending maybe another INR 20 crore within this financial year. Next financial year, you can assume probably about INR 75 crore CapEx. Which will take care of the Kashipur, which take care of this [inaudible] as well as the other maintenance captives, excluding the two potential locations that you're talking about. Possibly buying the rigs now, because really the asset which is depreciated over 15 years, though the life is 25-30 years. Interest rates have come down, even though, gone up in the last two couple of quarters. Still, if you add interest and depreciation, it will be almost equal to the lease. This asset remains with you, for almost 25-30 years. Whereas, interest will be for seven years. Then the depreciation is over 15 years. After that, whatever next 10-15 years, the rigs are, there'll be no cost. We are evaluating that, and we might get into buying some rigs. Right now we have 21 owned rigs and 10 leased rigs. We keep a mix and match, and keep on changing the tech. With the change in technology, we'll be getting the upgraded versions of the same with high speed and high loadability. That is a continuous process, and which we'll keep on doing. Just so that you know, the first rig that we ever purchased 15-16 years back is still running and in good condition, and it will run for another good 10 years. It's worth examining whether we should buy or whether we should lease it. Is the availability of rig is a challenge in terms of buying or leasing or not really? No, it's not a challenge. There is some talk that the leases are not available or there's a shortage of rigs. Nothing like that. The lead time is there, anywhere between six to eight months or nine months maximum. Rigs are available. Understood. I know you have clarified in the past, we're not looking at any domestic business, right? We are fully on export side. Yeah. Just little bit within our terminal, if something comes and if we have the spare capacity, we'll do it. Domestic is a more longer term thing we're looking at. Once our network is more presented, more retail, domestic makes sense. Understood. Thank you and wish you all the best. Thank you. Thank you. Ladies and gentlemen, that will be our last question for today. On behalf of Gateway Distriparks Limited and Snowman Logistics Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.