Ladies and gentlemen, good day, welcome to the Gateway Distriparks Limited Q4 FY 2023 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on beliefs, feelings, and expectations of the company as on 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 participants in lines will be in listen-only mode, there will be an opportunity for you to ask questions after the presentation concludes. If you need assistance during the conference call, please signal an operator by pressing star zero on your touch-tone phone. Please note that this conference is being recorded. Today, on the call we have with us Mr. Prem Kishan Dass Gupta, Chairman and Managing Director; Mr. Samvid Gupta, Joint Managing Director; Mr. Samvid Gupta, Joint Managing Director; Mr. Sandeep Shah, Chief Financial Officer; Mr. Rajguru Behgal, President, Rail; Mr. Manoj Singh, President, CFS. I now hand the conference over to Mr. Prem Kishan Dass Gupta. Thank you, over to you, sir. Thank you. Good afternoon, ladies and gentlemen, a warm welcome to all the participants to the post-results earnings call of Gateway Distriparks Limited. We have uploaded our results, press release, investor presentation on the stock exchange and the company's website. I hope you all had an opportunity to go through the same. The company has done well given that the exports have been suffering in the second half of the year. We can see an upward trend in the same starting from the month of March, we are hopeful that going forward we will see growth in our volume and improve efficiency, which were impacted in the last two quarters due to imbalance and lower level setting for our lower exports that will improve in Q3. One thing relevant to note is that we were operating from Punjab Conware CFS, Nhava Sheva for 10 months in the previous year, which is not there in this financial year FY 2023 financials. The like-to-like comparison excluding from Punjab Conware CFS grew by 6.19%, total revenue grew by 10.5%, the total EBITDA grew by 1.2% for the full financial year. Just to compare, the revenue from Punjab Conware operations were INR 89 crores, EBITDA INR 15 crores, after taking into account the lease of INR 30 crores that we had to pay and the depreciation. You can see the increase in the PAT excluding Punjab Conware. In addition, we had a one-time INR 11 crores gain in the previous year, in FY 2022, due to acquisition of two acres of land in Ludhiana zone. We are focusing on increasing our network footprint, and we are actively evaluating new terminals in northern and central India. We welcome any questions or comments that you may have at this time. With that, I hand it over to the moderator for Q&A session. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants with questions, please use handsets for asking your questions. We request participants to limit the questions to 2 participants at a time. Should you have more questions, we request you to join back the question queue. Ladies and gentlemen, we will wait for a moment for the questions to assemble. Participants, if you wish to ask a question, you may please press star 1. The first question is from the line of Mr Kishore from Axis Capital. Please go ahead. Good afternoon. My first question is that the commissioning of- Mr Kishore, your audio is not clear. Can you use the handset mode while speaking and not the speakerphone? Yes. My first question is in relation to commissioning of Kishangarh-Rewari stretch on Western DFC. What is the outlook on Gateway's double stacking volumes for FY 2024, and how many double stacking rakes did you handle in FY 2023? So far this fiscal, what has been the focus? That's the first question. Hi, Rajguru Behgal. I'll start regarding this new section which has been recently commissioned. Basically, this is a Dadri to Rewari section up to New Ateli. The double stacking has already started from Dadri side. We have a terminal at Piyala, Faridabad. OHE work has started, and we are expecting that we will also use this opportunity, to start double stacking from our Faridabad terminal in another three to four months' time. Okay. As you are aware that we have increased the network of the terminals. Right now we are able to do double stacking also out of our Gurgaon terminal. With this section coming up, we will be having twin hubs, one at Gurgaon and one at Faridabad. We will have a network that we can do double stacking at both these locations. Understood. With regards to the double stacking volume, about 40% of the volume was carried on the second stack for this year. What is the outlook for FY 2024 in which state, with all these developments? It depends on the exim balance. With imports improving, we should go back up to at least 50%. Faridabad becoming double stacked and Viramgam Mundra also becoming a double stack route, this number should increase. Okay. My second question is, how is the exim imbalance playing out in other ports and what is the outlook for FY 2024? Also with all the double stacking benefits, do you see that road to rail shift accelerating? Yeah. If we see the overall exim imbalance. If we talk about Mundra, there is this imbalance, yes, there are ports like Nhava where there is more exim balance. It is still in a range of like 57% is import and 43% is export. This is primarily due to the reason that there was a decrease of some 10%-20% in export side. This year, what we are anticipating is that now ultimately the export is going to come back to its original number and this imbalance is going to get reduced. With the help of Kashipur, we are also able to source some of the empties, going towards Nhava. We are looking this financial year on a positive outlook that this balance will get reduced. On the other part of the question, which was in relation to road to rail shift. I mean, with all these higher levels of double stacking, if some road to rail shift happens, is there competition from road actually? No, road to rail will take a long time. It's a gradual shift. Like we've maintained before, the long-term target over the next 10 to 15 years will jump up from, say, the current numbers of 30% to 40, 45%. It's not going to be an overnight shift. Some big portion will come to a shift when DFCs will be commissioned for the DFCs. One last point. For exim ICD rail container business, what is the overall growth expected in FY 2024? Given that you added fresh capacity, what is the outlook for CFO? That would be my last question. Sorry if it was unclear, but I think you're asking about growth rates. We're looking at double-digit growth for the rail side. CFS side, we're expecting flat, maybe a marginal one, 2% growth. Okay. Thank you. Sure. Thank you. The next question is from the line of Amit Dixit from ICICI Securities. Please go ahead. Good evening, everyone, thanks for taking my question. I have two questions. The first one is that we were targeting an EBITDA of INR 6,000 per TEU. If I see in this quarter, our EBITDA per TEU has dropped QOQ. First of all, what are the factors resulting in this drop? Is the target of INR 6,000 per TEU, has it been kicked out? Have we moved the timelines, or when the company expects to complete INR 6,000? I'm not sure which numbers you're referring to. On Q4, our EBITDA per TEU is coming to INR 5,975, if we include other income as well. It's an increase from last quarter. No, I'm not including the other income. Even without other income, our blended EBITDA per TEU is coming to almost INR 5,600, whereas last quarter it was closer to INR 5,100, INR 5,200. When are we going to hit that INR 6,000 number? I mean, will we hit this in the five months or sometime? Basically what has happened is due to imbalance between import and export, there was under train running or carrying empty containers. The double stacking was affected. All these network lesser margin. With the ports now coming back and the imbalance being reduced, and hopefully it will catch up when the volumes further increase. We will be there. Basically, our target is INR 1,000 per TEU in the rail business and roughly around INR 2,000 in the CFS business. The second question is essentially on Kashipur ICD. How is that shaping up? What kind of volumes we could get this quarter? What is the target for this year based to the fit around what we have been targeting from the fixed term point of view per month kind of volume. Kashipur, there has been now upward trend. If we look at the quarter four, our market share in the Uttarakhand belt, it has risen from 25% to 32%. We are able to attract new business from our competition ICDs. Earlier, we were doing on an average 2,500 TEUs per month from Kashipur, but now going for like in March, we did close to 3,000. This quarter, we are expecting that at a run rate of 4,000 TEUs per month, we should be able to do close to 50,000 per year from Kashipur side. And another two years' time, that rate will be 6,000 per month. We increase it at 72,000 per annum after three years. Sir. Thank you so much for the lovely answer. The next question is from Bhoomika Nair of DAM Capital. Please go ahead. Yeah. Hey, sir, just wanted to get some more clarity on the empty running and double stacking, et cetera, because it appears that the rail TEU has actually declined on a quarter-on-quarter basis. Or is it really that the CFS is seeing a sharper decline on a blended basis, there is a bit of a decline. Could you just elaborate a little more on the details for the same? Yeah. The CFS side has taken a hit as volumes have gone down and fixed costs are stable over there, whereas rail, it's more on a variable basis depending on rail haulage being the main cost. Actually, if you start to see on the rail side has gone up this quarter compared to last quarter. In March, we handled the highest ever throughput that we did in the rail vertical this week. The rail segment is doing well. Sir, would it be fair to state that CFS would have gone down to 1,500, 1,700, because otherwise it wouldn't make sense. That's the kind of decline the CFS has faced. Yeah, that is correct, Bhoomika. The CFS side is somewhere around 1,500, 1,700. Okay. Broadly, what would be, sir, the TEU for rail on a broader aspect? Without other income, it's about 9,700 for this quarter. With other income, it's 10,500. Okay. Now, just because both volumes and trades, et cetera, have been a little weak over the last couple of months, have you started seeing any improvement? What is the kind of visibility that you're seeing from the client side in terms of exports, the imbalance kind of improving? You mentioned it was 57% import and 43% export. How is the trend looking going forward? Bhoomika, so what we have seen is that import is the-- because India is now the real consumption story import is robust, and if we look at the pendencies at all the gateway ports, so they are very healthy. Regarding exports, we are seeing some green shoots now, especially in NCR belt, there is some 10% increase we are seeing on a month-to-month basis in April, May. We are expecting that this export should also start growing at other locations. If we look at NCR, yes, the volumes for export have started growing. Okay. With Kashipur now starting to come in, we had about 3,000 TEUs in the month of March. We'll probably scale up to 4,000 in April, May, et cetera. How is this going to fit in terms of the double stack and the margin profile? We use our available slot. These containers from Kashipur come to Rewari, and from there we are sending it as double stack similarly on the import side, it comes to Rewari, and from there we send it on single stack trains to Kashipur. It will help in double stacking and also faster the operations. I would like to add another point here. If we look at the composition of business at Kashipur, we have more 40 feet containers, like 70% of the business is of 40 feet containers. That gives us more flexibility of more double stacking there. Okay. From the angle of 40% of the volume going on the second stack, what can this possibly increase to as we move forward with this Kashipur kind of having more amount of this 40 feet TEUs? The target is to go up to 50% right now in the immediate term. Once the new wagon comes in, it can go even higher. In instance, and this would help in terms of ensuring that our EBITDA per TEU kind of out year moves upwards of INR 10,000 without the other income as we move forward. Would that be a fair assessment? Yeah. The INR 10,000 per TEU, actually, if the export side becomes okay, then we hit that without the new wagon also. Okay. Is it possible to get the empty running charges for this quarter and for the full year? It's not handy right now, but we'll share that data with you. Okay, sure. Thank you, and wish you all the best. Thank you. Thank you. The next question is from the line of Achal Lohani from JM Financial. Please go ahead. Yeah. Good afternoon. Thank you for the opportunity. My first question is, if you look at the Indian Railways volume for the fourth quarter, it is up 7% on a YY basis. While we are, if I strip out the Kashipur number, it's probably a decline of as much percentage term. Can you help us understand how do we explain this? Is there a market share loss? Is it at certain location Indian Railways is doing more volumes? Any further clarity you can provide, sir. Indian Railways volumes include bulk also. It's not just limited to containers. I think- No, sorry. I'm interrupting. I'm talking about 7% exim growth for Indian Railways for containers. Okay. This will be over also what our ICDs are located in. We can talk more like NCR market share. We have the number in front of us. NCR market share, market has only grown by 2%, whereas we had grown by 4%-5%. In Ludhiana also, we have grown by 6%, and we are able to retain our market share of 31%. Sorry, sir, are you talking about fourth quarter or full year, sir? Fourth quarter, right? I assume. I'm talking about full year. Right. Okay. You're saying 31% market share in Ludhiana you have maintained. Yeah. 17% in NCR. 17%. It's also maintained. There is no market share loss? No. Ludhiana, what is the market growth? You said NCR market growth is 2%. How much would that be for Ludhiana? Ludhiana, we have grown by 6%. The market growth, sir? Market growth has been less than 6%, like it is between four to five. Broadly, I mean, since we maintain the market share, Ludhiana market has grown in a similar way. That's why we're stuck at 31, 32%. Right. That's okay. Actually, because exports dropped heavily in Ludhiana region and imports were more. One was there was an imbalance, and at some point of time, we didn't entertain the new customers who wanted to use our ICD because that would have created more imbalance. Imports have surged there quite a bit, whereas exports have taken a big hit in that region. Understood. When you say, sir, we didn't allow customers to use our ICD, is that like we are not doing the rail transportation but only the terminal handling? Have I understood? No. I mean, see, we have our regular customers, our shipping lines, and our long-term customers. Beyond that, we accommodated some more business which was coming from, say, other shipping lines. It was more or less like a spot business. We did some, but at some point we had to refuse. Whether they came by road or some other operator carried it, that's a different thing. We could have increased our volumes, but then it would have been, the cost was something very high for empty running back to the port. Right. Understood. Sir, if you don't mind, can you help us with the EBITDA per TEU? I'm seeing the total EBITDA for the quarter is INR 93 crores, excluding the other income. The EBITDA per TEU is INR 5,100. If I put INR 9,700, which you mentioned without other income, the EBITDA per TEU for CFS is just INR 300. If you could just give the absolute EBITDA per TEU, sir, or absolute EBITDA for CFS and Rail. Once again. Including other income, Rail is at about INR 90 and CFS is at INR 14. Other income is not exactly split vertical-wise. Things like interest income and all other, and some write-backs also. That's why we are looking it at, with the other income included, our blended thing is coming to INR 5,975 on an EBITDA of INR 104 crores. Okay. And the split- Sorry. Split of that INR 104 crores, and if we just allocate the TEUs to EBITDA, I mean, it's coming 10,500 to rail and 1,600 to CFS. Understood. I see that the other income was significantly large in this quarter compared to 2023. You mentioned some write back or something. Can you please clarify on that? Is there any one-off effect? There were some provisions made in the previous quarter, and we collected some amounts and there were some reversals of expenses which were not incurred in those quarters. That is the write back. How much would that quantum be, sir? Around INR 10 crores. Understood. Sir, if you could talk about in terms of the pricing scenario, how is the pricing scenario in the pockets where we are operating in? In terms of competitive intensity, are you seeing the competition giving higher discounts or rebates and putting pressure on the price? See, competition was always there and it still continues. We see that more on the CFS side than on the rail side, because rail side location and the services and the long-term contracts help in retaining the business and continuing the business without we don't have to discount every now and then. More or less, it is the CFS which where the margins are being compromised. Got it. Sir, if I may ask just one macro question. In terms of the market size, can you help us in terms of the million CUs in the Northwest market where the DFC is actually located, and within that, if you could split the in terms of NCR, Ludhiana, and the rest? We have these figures, Rajguru will share with you separately, because that's a long list of all the ICDs and people use NCR or in Ludhiana. Sure, sir. I'll reach out to you. Thank you so much. I'll come back in the queue. Thank you. The next question is from the line of Abhishek from BNP Paribas. Please go ahead. Yeah, hi. I just wanted to check on the CapEx side how much will be given for? Your voice is not clear. Can you please use phone? Yeah, I just The line with Abhishek has dropped off. We will move on to the next question. That is from the line of Gaurav Gandhi from Glory Wealth Management. Please go ahead. Yes. Hi, sir. Just one question. If you look at the notes, those that we had issued are amounting to almost INR 160 crore and the MEIS benefits in dispute amount to almost INR 170 crore. Can you share what can be the impact of all this that we issued, if anything material? Before FTRs, what was the thing you said? The MEIS benefits in dispute, I mean, the Commissioner has given us a so-called notice, the Commissioner of Customs, Mumbai Customs, regarding INR 122 crore and in CFS business also, there are certain issued MEIS benefits during 2017 to 2018 of around INR 69 crore. Can you throw some light on these issues, if anything material impact this has on our P&L? No, there is no material impact on our P&L because here government has under FTR 15, DGFT has issued certificate to our rail vertical and CFS vertical, not to us, but up to other players also, which we have encashed it when we got the certificate in the respective financial year in 2019, 2020, and all that. After that, DGFT issued a so-called notice to us and to other players also in rail and CFS vertical about questioning about this eligibility of the thing, which we have taken our opinions from our lawyers. We are on a very strong thing. That's why we are fighting against this so-called and filing our reply at appropriate forum. On that front. Yeah. See, just to add, between MEIS scheme was taken away and all our MEIS applications were processed before that and we got the scrips. After that, we have not applied because, I mean, since it was withdrawn in the project, we were not entitled after that. Prior to that, whatever was there, it was as per government policy and as per rules and guidelines, and it was not for just one year. I mean, we had applied for three different financial years, and we got it that time. Okay. All right. Thank you. Thank you. The next question is the line of Krupashankar NJ from Gateway Distriparks. Please go ahead. Good evening, and thank you for the opportunity. My first question is on the share side. While the previous fiscal year for the NCR market has grown at a run rate of about 36%, and also the Ludhiana market, it was growing at what, 5%-6% last year. When I look at the underlying growth, which is your JNPT. All of them should be higher than the 5% at least. Also Indian Railways share going up. Where exactly are the volumes going from these ports to? JNPT port, majority of the volume is for the Maharashtra region, which goes by road. Similarly, from Mundra, a lot of it goes by road for local Gujarat market. Pipava is more on the rail side, but that also has its local volume. Apart from NCR and Ludhiana, these ports are also servicing the likes of Kanpur, Indore, Raipur, Bangalore, Hyderabad. It's evenly distributed across the country. I do understand that, NCR and Ludhiana, I think these are the two biggest rail markets in the country. If rail is growing at 7% and these markets are sub 7%, then there should be almost a 10%-15% growth in other markets. Is my understanding correct? Yeah. We've also had growth, so it's not that we haven't had growth. No, I'm not denying that at all. Of course. I'm just focusing on an industry standpoint. It's quite perplexing to see that rails as a whole, the volume growth has been happening in all other sectors barring the top two sectors of rail, at least. That's what I was wondering. Sure. It is happening on a pan-India basis. Also, I don't know this 7% Indian Railways figure, whether it includes domestic or not also. Going strictly by the port volumes, you can't measure the trade volumes. There's a difference there. If the port is growing, it doesn't necessarily mean that all that is going to rail. Sure. The second question is on the 360. Of course, Jaipur is expected to come on stream. Any timelines on when is it expected to come on? The activity disparities in Jaipur as well as how do you expect things to scale for this, given that it would be the second year entering that market. Just some light on it and final 360 growth for FY 2024, if you have any, from the numbers. Yeah. Jaipur will come by the end of this financial year. Right now there's one ICD there. The second one will be starting very soon, and will be the third ICD there. The total market size is anywhere from 10,000 to 12,000 TEUs, and it's growing quite fast. Earlier when we had announced, there would be only two ICDs. Now considering three, we at least expect to take a third of the market share within two, three years of being operational. Kashipur, as you're seeing, it was already up and running. Jaipur will take a bit more time to develop and grow as shipping line mentioned there, building partnerships, we need to present over there from scratch. The fact is that this is on the double stack route, the location that we have. From Rewari, we can operate with the volumes in both the directions, both in the port. It is nice with the double stacking operation. On the CapEx side you had mentioned, about INR 300 crore CapEx is planned for this year and next year combined, which will include new locations and also upgradation of existing terminals as well as Jaipur and replacement in our ICDs. [inaudible] is still not on your plans. Sorry, can you understand that? The recondition plans are still not part of the CapEx which you have outlined so far for the next three years. We'll be going on a lease model for the recondition, we have three rakes planned for this financial year. Got it. Thank you, Krupashankar. Thank you. Thank you. The next question is from the line of Achal Lohani from JM Financial. Please go ahead. Yeah, thank you for the opportunity, sir. Just wanted to check, now the merger is done, is there any synergy benefit you would be able to talk about now? What has driven this in terms of the benefits? There are a lot of software benefits which we can't really quantify, but it's a leaner management team. It's better negotiation with shipping lines, freight owners. Customers and vendors are common for both the groups. We have a centralized office now, whereas we had two offices earlier. A lot of compliance related issues are much smoother now. Those are the main benefits. Then having a larger balance sheet improves credit rating. Cash flows are also within one company, so that makes it much easier for us. Even the usage of money due to cost saving in the parent company. We can see that benefit also in the financials. Understood. Sir, just with respect to Kashipur ICD, would it be possible to get some more understanding in terms of the EBITDA per TEU for Kashipur? It would be higher than the blended average, right? Given the higher rates. Yeah. It's slightly higher, but not that much different from our EBITDA per TEU. Understood. All right. I think that's about it from me. Thank you. Thanks. Thank you. The next question is from the line of Atul Tiwari from Citi. Please go ahead. Yes. Hello. Sir, your audio is not clear. Can you use the handset mode while speaking? Sir, it's sounding a little distant. Yeah. Is it better now? Much better, sir. Thank you. Thank you. Just to understand the EBITDA in the rail and CFS business in Q4. You said that it is INR 9,700 in the rail business and about INR 1,500-INR 1,700 in the CFS business, right? Right. When I do the calculation, I get a number which is much higher. The total is around, it must have INR 94 crore, which is your reported EBITDA, except other income. I think it is better to just focus it on including other income because all this is related to the business, only things like auction income and some write-backs of provision. We will just rework the excluding other income number. It seems the sheet I have in front of me might have those figures. It will not be too different. If you look at the overall EBITDA for the quarter, it is INR 104 crore roughly. On that, if you take INR 10,500 for rail and INR 1,600 for CFS, then those numbers are fine. Including other income, it will be slightly lesser than what we were saying right now. Okay. Got it. Thank you. Thank you. Ladies and gentlemen, that was our last question for today. Participants, I must now due to time constraints on behalf of the management and SGA, on behalf also of Gateway Distriparks Limited, I conclude this conference call. Thank you for joining us. You may now disconnect your lines. Thank you.