Ladies and gentlemen, good day and welcome to the Q2 FY 2024 earnings conference call of Gateway Distriparks Limited and Snowman Logistics Limited. This conference call may contain forward-looking statements about the company, which are based on the belief, opinion and expectation of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the 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 then zero on your touchtone phone. Please note that the conference is being recorded. Today on the call we have Mr. Prem Kishan Dass Gupta, Chairman and Managing Director. Mr. Ishaan Gupta, Joint Managing Director. Mr. Samvid Gupta, Joint Managing Director. Mr. Sandeep Kumar Shaw, CFO, 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. Mr. N Balakrishna, CFO, Snowman Logistics Limited. We also have with us Mr. Sikander Yadav, who has been appointed by the board of directors as Chief Financial Officer of Gateway Distriparks Limited, with effect from the opening of the business hour of November 29, 2023. We hope that you had the opportunity to review the financial statement and earning presentation, which have been made available online. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. We'll wait for a moment while the question queue assembles. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants, you may press star and one to ask a question. Ladies and gentlemen. There are more than 20 parties in the conference. Ladies and gentlemen, you may press star and one to ask a question. The first question is from the line of Yash Tanna from ithought PMS. Please go ahead. Yeah. Good afternoon and thank you for the opportunity. My question was relating to Snowman. Hello? Yes, sir, please go ahead. Yeah. My question was relating to Snowman on the transportation side. We have seen the revenues grow by 10%, but on the PBT, I think there has been some drop in the margins. I would like to understand why this has happened, and I'm referring to the results released, the results especially. The second one on the 5PL side. I mean, quarter-on-quarter, we have seen some de-growth where we have been doing very well on this side of the business. For the rest of the year, what is the outlook? What sort of client additions are we targeting or what would be the growth from the existing clients for the rest of the year and probably next year as well? Hi, Yash. This is Sunil. In case of transportation, two major reasons why the EBITDA or gross margin is lesser than the previous quarter. One is the season is little lean. Usually Q2 and Q3 are down in terms of business. Lot of fixed costs still get absorbed during the period. The second reason, we had deployed 50 new trucks by the end of Q1 and beginning of Q2. Which took close to a month for deployment. We have absorbed those costs, the standing cost of those vehicles as well in terms of driver and related costs. That's the main reason. When it comes to this SnowDistribute business, as you know, we have three major clients in this. What we have done, as you can see the growth that we have in terms of the numbers as compared to last year, we have introduced close to 20 new products to our existing clients. There are three ways we are trying to expand this business. One is increasing our basket of supplies through the 5PL services to the existing set of customers. Second is increasing or adding the new locations of these customers. We have added one market for ice cream business, which is in the Punjab as compared to last year. We added 20 new products for our customers, which are IKEA and Taj Hotels. We have three customers in the pipeline which we expect anywhere between three to six months time for it to materialize and come to our numbers. Thank you. All right. Thanks for that. On this transportation side, we said that you have deployed 50 new trucks, and I think trailers also we have deployed. What is the strategy going forward in this transportation side, since earlier, we are doing asset light because we don't have to absorb these costs, right? Now we are putting up upfront investments in this part of the business. What is the capital allocation strategy in the transportation side of the business? Transportation will continue to be asset light only. As you know, we had 300 vehicles which were owned. We have reduced it to 260 now. What we are doing is we are only investing in vehicles which are very special for us and where we have an end-to-end solution to our customers. Otherwise, we are going and leasing. Today we operate around 500 trucks in our business, out of which around 260 are leased. At any point in time, while the 500 will continue to increase, we will have somewhere around 200, 250 owned trucks. We bought these 50 trucks to replace the old ones, which were 10-year-old. These replacements will continue to be owned trucks. Right. The 20 trailers that you'll have bought, the presentation also says, this announces Snowman Logistics's entry into the trailer business. Is this something more differentiated that you are trying to offer? What is this? Yes. This is just an extension. What was happening was from ports to the warehouses, that leg was not attended by us so far. We are exploring that business as well by deploying these trailers, and if we find it attractive, then we will expand on this vertical as well. Right. This will be a CapEx heavy investment. Am I right on that? Being trial, we have invested, but if it works well, then we will also go asset light in this model as well. All right. Got it. Okay. All right, sir. Thank you. Thank you. Dasharath. Thank you. Thank you. Thank you. The next question is from the line of Bhoomika Nair from DAM Capital. Please go ahead. Yes, sir. Good afternoon, sir, and congratulations on a good quarter. Good afternoon, Bhoomika. Good afternoon, sir. This quarter we've seen very strong traction in terms of volumes, both in railways and in the CFS business. If you could just comment on whether this has got to do with the fact that there was a railway disruption in Q1. Is there some spillover benefit which has come through in Q2? If you can also talk about commentary and outlook for the second half on how you're seeing the volume stacking up, et cetera. If you can just comment about the terminals and Kashipur, how it is shaping up and what is the volume contribution from there. Hi, Samvid here. We expect a similar trajectory going forward for the second half as well. This quarter had a little bit of spillover from Q1 after the cyclones. Some of those volumes were also transported by road because the porters didn't want to wait for their cargo to be delivered because there was a backlog. Some of it came to us, some went to road. We expect a similar number going forward. Kashipur continues to do above 3,000 per month, but that market is dependent on waste paper a lot in import. Q3 normally all the paper mills go for shutdowns for maintenance. Maybe in Q3 we might see a small dip in imports there. Other than that, it's doing well, and we'll continue doing as per projections. Okay. How has the rail EBITDA per TEU and CFS EBITDA per TEU panned out this quarter? Rail is similar at INR 9,000 only. CFS saw a slight decline. That's at about INR 1,800. Okay. Recently when Indian Railways has announced this busy season surcharge, are we kind of passing that on? Have we started taking price hikes, et cetera, for the same? If you can just comment about what has been the double stacking and with the Dadri bit commissioning, has that helped us in any manner? Or any other qualitative comments in terms of improvement in EBITDA to you? Yeah. The busy season surcharge was levied on 30th September with effect from 1st October. There might be a slight delay in some contracts where we have to give a notice, but it'll be fully passed on to customers. By November, it'll be fully passed on to all customers. Dadri double stacking doesn't affect us because the terminal is more further east from our locations where we double stack out there. The same alignment continues for us in Faridabad and Gurgaon. Faridabad double stack work is on, and that should be there in Q4. It's already connected to DFC, so that is out of the way. Okay. If I may just squeeze in another question on terms of new terminals, CapEx, et cetera, that we are looking at, and also our thoughts on the high-speed rakes. Yeah. We're still looking at two locations in the immediate term, but we haven't finalized the location yet. We've scouted some land options, but until it's clarified where they are, we won't be announcing them. On the high-speed rakes, we have signed up for three more rakes, which will start deliveries within this month. By end of March, we should have three more rakes added to our fleet, and these will be the high capacity, high-speed wagons. Okay, great. I'll come back in the question queue. Thank you. Okay. Thank you. The next question is from the line of Aditya Makharia from HDFC. Please go ahead. Yeah. Hi. Congrats on a good set of numbers. I was wondering on the railway side, have you gained market share from competition? It's a similar market share going on in NCR. We're still at about 17%. Ludhiana, we've actually lost a little bit of market share. That's because now there's a new ICD that's running full-fledged operations. Overall, our volume is still going up if you look at all terminals. We're happy with where we are. Other thing, Ludhiana, because it is import heavy. We have been abandoning the spot business because it increases our imbalance because our ports are already inbound. In case we carry more imports than we would like to, we're forced to. Okay. Just a second question. There was some news article suggesting that Container Corp is giving up some amount of land at TKD because the LLS charges are going higher. Will that benefit us in a material way? Not really, because TKD volumes over time have gone down. They're probably using less capacity of the yard. They can give up that surplus land. It won't make a difference to us. Okay. Last question, just update on the DFC. When will the route, at least the Gujarat leg be completed? Does that then benefit you even for traffic which goes down to JNPT? Hi, Rajguru this side. Regarding western DFC corridor, 70% is already commissioned. We are already using the DFC to the extent of around 800 kilometers. The stretch between Rewari and Sanand. Our trains which are going towards Mundra and Pipavav, they are already using this corridor. The second stretch which was commissioned was between Rewari and Dadri. That was basically for Dadri. Now the remaining stretch between Sanand and JNPT, which is close to 550 kilometers, out of which there have been two stretches, very small stretches which have been commissioned. There is no point commissioning few stretches unless and until the entire stretch is completed, which is now left around 450 kilometers. As per DFCCIL official stance, they are saying that they are going to complete it by 31st of March, but we are expecting that it might further get delayed because there is some work which is yet to be completed between a couple of stretches. Okay. Got it. Thanks. Thank you. The next question is from the line of Achal Lohade from JM Financial. Please go ahead. Good evening, team. Can you help us with the Absolute Rail and CFS EBITDA? Because I presume EBITDA per TEU what you mentioned includes other income. Is it possible to know the EBITDA without other income, sir? Other income is only INR 2.8 crores. It's hardly any effect this quarter. Broadly you can just reduce a couple of hundred, if you use. Okay. Yeah. Okay. Got it. The second question I had, is it possible to get some sense in terms of offer first half volumes, how much was actually destined for Mundra, Pipavav, and JNPT? About 95%. Yeah. About 90%-95% is for Mundra, Pipavav. Only 5%-10% is for JNPT. Right. Within Mundra, Pipavav, what would that split be? 65 Mundra, 30 Pipavav, five JNPT. You can take that as your average. Understood. Has that changed materially over last two, three, four years? Mundra's volumes have gone up slightly more than Pipavav's. JNPT also was maybe at about 15%, which has now come down further. Okay. Understood. The second question I had with respect to the volumes. If we look at the volumes, QOQ, the Indian Railways has seen a 14, 15% kind of a jump. We have grown by about 12%. Is Ludhiana the only factor which is playing out here in terms of the slightly lower than the Railways volume growth? First of all, is that a right way of looking at the aggregate industry growth number? The 14% is for containerized volume that Railways released the data or you're referring to? Yeah, EXIM. Indian Railways EXIM volumes in million tons. It can depend all across India they're talking about, there are routes where we don't ply our trains. We have to look at the market growth and then the market share. Our market growth in NCR was at about 8%, whereas our terminal study, for example, grew at double that. Faridabad saw some decline. Overall, it balances out, and that's why our market share hasn't changed. It's still at 17%. Overall volumes for us are at 12% growth, which we expect to stay going forward. Right. When you said you looking at maintaining what you have done already, is that in absolute number or is that the growth number you've hinted at 12% volume growth for the second half? 12% year-on-year. Basically H2 versus last year H2. Okay. Understood. About this busy season surcharge, what is the extent and what is the visibility here? Is that only for a few months or is it around the year effectively? Is that a haulage price increase the Railways have taken? They've done it for nine out of 12 months, effectively it's there throughout. The association and industry is taking it up because it increases the cost of logistics for the end customer. With the shift from road to rail that everyone wants to happen, this is a step in the opposite direction. For now, it's there to stay. Right. The rationale is to cover the increase in cost or is there any congestion for which they are charging the premium? The situation hasn't changed in terms of congestion, I think it's just for railways to get an avenue to increase their revenue. Got it. Can you help us understand in terms of the CapEx, what should we budget for FY 2024, 2025, and 2026? For next 24 months, we have about INR 300 crore, still the same guidance that we're giving. INR 100 crore each for two new locations. Balance is for completing Jaipur and vehicle replacement and some equipment replacement. What is the expectation on Jaipur? By when do you think it will commission and what scale up can we look at? We're expecting to be operational in Q1 next year. There are some delays in local permissions due to the elections coming up. Q1 we should be operational and we're looking at a four to five-year payback over there. Got it. Just one more question. Sorry, I'm kind of going back to the industry number. Is it possible to get some sense in terms of the total size of the market, how much of that already on rail, how much is potentially can come into rail because of the DFC? It's very hard because the data is a bit scattered and unorganized. We have to rely on external reports because there's no central mechanism to track this. Any guesstimate you would have, Sumit? Road to rail shift will be very gradual, maybe 1, 2% incremental year-on-year. We have to look at the overall macros that will take place on the GDP as well as exports coming back. That should help train balance factor also. Yeah, again, it's hard to put a number on it, what we can see incremental because of DFC on this. Got it. If I may ask a couple of more with respect to double stacking, if you can help us understand what was the ratio in 2Q and vis-à-vis last year. We're at about 36%. Last year it used to be more, it was at about 43% last year. This reduction would be because of the imbalance. Is that so? Yeah. On the export side, there's reduced double stacking happening. Right. Would you be able to tell us the mix? What is the mix of imports and export in this quarter and last year same quarter? About 68/42 in favor of imports. Last year it was maybe 52/48 kind of numbers. Okay. Understood. Just last question with respect to the pricing. You said that you're going to pass on the entire cost inflation with respect to this busy season surcharge. Is that the case even with the others? What is the absolute increase in the pricing here per TEU? It's 10%. Our average revenue per TEU is about 35,000. Depending on the weight mix, the type of container, and also it really varies on distance Anywhere from INR 2,000 to even INR 5,000 in some cases per container. Yeah, it will be fully passed on. If others have also done or planning for. Everyone's passing it on but with different dates. Understood. Thank you so much. I'll fall back in the queue for further questions. Thank you. Thank you. Thank you. Next question is from the line of Harsh from Dimensional Securities. Please go ahead. Hi. Good afternoon, sir. The question is for Snowman Logistics. What will be the increase in realization for this quarter in the warehousing business? On year-over-year basis. Yeah. Hi, this is Sunil here. As I told last quarter, every year in the month of March, April, our contracts get renewed. We had a price increase between 5%-6%. When we take on a company-level average, because we have added a lot of dry warehouses recently, the average may not show that. When we look at temperature-controlled yield versus the dry yield, you see that trend of anywhere between 5%-6%. Okay. Thanks for the clarification, that was the next part of my question. Our blended realization looks flattish if I look at last six or seven quarters number. On like-to-like basis, if we compare only the cold chain realization, you say it would be better by 5%-6%, right? Only for cold chain. That should be anywhere around 5%, if we say only cold chain, ASP. Maybe we will see if we can get back to you with the separate segment-wise numbers, temperature-controlled versus the dry. The blended EBITDA percentage will be down because our earnings are cold and dry both. In absolute terms, the EBITDA will increase. The revenue will also increase, but percentage-wise, we might see a drop, which actually is not a drop, because both our revenues and margins in cold and dry are well expected lines. Got it. Sir, if I look at the return on capital employed for our warehousing business, we have improved marginally. We are at maybe around 9%-10%. Just wanted to understand, is this the peak ROCE for this business given that we are already at 91% capacity utilization, or is there any further scope whether we can get to that 14%-15% kind of mark? If yes, what would be the levers for that? See, ROCE, when we calculate today, it is at the company level. Whereas most of our overheads, whether it is IT or people overheads are invested for almost double the size of the capacity that we have today. We are looking at it from a long-term perspective, but if we go at a unit level, the unit level ROCE will be somewhere around 15%-18%. For warehousing. What will be the levers to achieve that 15% ROCE? At company level, the main thing would be to increase capacity and optimize the overheads as much as possible, and some correction in pricing, which we are doing to the extent of 5% year-on-year, while our input inflation is anywhere between 3%-3.5%. These two things will drive the ROCE in coming years. Okay. In the cold chain warehousing space, what is the industry scenario like? Because during COVID, maybe there was some sort of consolidation happening throughout the industry. Many unorganized sector went out of the business. Right now, what is the competition and industry scenario like? There is a small amount of investments coming in. One or two warehouses are being invested by regional operators. That is continuing. From a demand side, we see good demand. Particularly the top three segments, which are dairy, ice cream, QSR, and ready-to-eat food, they are showing quite promising volume growth. While there are capacities coming, demand also is there. We are also aligning our investments accordingly. Okay. Understood. Thank you so much. Thank you. Thank you. The next question is from the line of Rupesh Shankar from Avendus Spark. Please go ahead. Hi, good evening, and thank you for the opportunity. My first question is on the rail side of things. Just wanted to get a sense on the underlying market. Given that the commentary of growth in second half is about 12%. Just wanted to understand, given the slowing exports as well as, or someone had mentioned with respect to key sectors witnessing slowdown on the import side as well, what is driving confidence of a 12% growth in the second half? That would be my first question. Yeah. Hi, Rajguru here. In Q2, there has been some uptick on the export volumes, particular in NCR region. If you look at our Gurgaon terminal, there has been some good movement of export of auto, which has taken place in their business. Plus, there is also some growth in the reefer exports, which has led to some growth on the export side. On the import side, there has been, again, because of the robust demand of auto, there has been good growth in scrap polymers and electronic items. These are the major items which led to growth in Q2. Right. Going ahead, do you believe that, given the growth which is there, or weakness which is there in exports, do you see that imbalance getting skewed in more in favor of imports and so that can have a toll on our profitability? What we are looking at, if you look at our October numbers there, as Mr. Gupta mentioned, that due to the maintenance and plant shutdown planned in the month of October, November, there will be some downward trend on the import side. We are expecting that in the month of December, things should improve. With the improvement in imports and as well as exports, we are expecting that our volumes on the both sides should improve. Historically, also, we have done good volumes in the month of December. That should cater to whatever the downward trend we have seen in the two months. That should be taken care of by the good volumes of December, what we are expecting. Understood. With respect to your profitability on the rail side of things, we still are on course to achieve the INR 10,000 EBITDA. That is the target, right? Is there any change in that? That guideline stays the same, but that will only come in after Jaipur-Faridabad being double stacked and JNPT also being double stacked. Understood. Last one, if I may. Just wanted to get a sense that given the commissioning of Dadri to the Rewari piece of DFC, has there been any change with respect to how trade has behaved with respect to movement of goods? Meaning, any underlying change wherein goods were coming to Rewari and then moving on the DFC, versus right now moving from Dadri itself. This will just be an operational cost advantage for CONCOR where now they can directly double stack from Dadri instead of hubbing it at Kathuwas earlier. In terms of competition with us, Dadri is a different catchment area which we don't really compete with. Right. It doesn't make a difference to our business. Okay. Thank you. Thanks for answering my question. Thank you. The next question is from the line of Abhijit Mitra from Aionios Alpha Investment Management. Please go ahead. Thanks for taking my question. Abhijit, can you please switch to the handset? Your voice is very low. I think it should be better now. Please go ahead. Regarding the rail volumes and overall volume guidance of 12%, as we can see, last year, we had a very weak base in Q3 because of one of track laying works with almost 3,500 TEUs which were lying at the port. The 12% volume growth guidance that you are sort of giving, it sort of takes that into consideration as well, or how to look at it? There was a slight dip there. We're just looking at the whole half, because even last year, Q3 volumes went into Q4. If you just look at H2 on H2, 12% is okay. Got it. If you look at it, Q4 last year was significantly higher than Q3, so it evened out. Got it. In terms of Jaipur, just to be sure, if I heard it right, you said that you'll get the volume rolling in from Q1 of FY 2025. Is that right? Yes. Q1, it will become operational, and it'll take about six months to ramp up volumes over there. H2 of FY 2025 is when we should start seeing proper volume and revenue coming in from Jaipur. Okay, got it. That is all from my side. Thanks. Thank you. The next question is from the line of Priya from Equitas Investment. Please go ahead. Thank you for giving me the opportunity. Congratulations on good volume numbers. My first question is in regards to Kashipur. What kind of revenue are we looking from Kashipur in this quarter? Overall, we have to look at Kashipur not as a standalone entity. Kashipur rail business is being done from the Gateway Distriparks entity. The ICD business is still under Kashipur entity as we acquired it. Eventually we have plans to merge it. We are doing at about 3,000 TUs per month over there. An average revenue per TU is about INR 40,000. Okay. We were expecting it to reach around 6,000 TUs per month. When do we see this happening? That is a very long-term guidance that we have given. We had crossed 4,000 in one month, including empties. The 6,000 TUs was just to show the market potential, and that we can eventually get there in three years. Okay. It will take around three years to reach 6,000 now. Yeah. Technically, we can increase our volumes right now, but it's at the cost of imbalance. It's already import heavy dominant, we don't want to take further imports. We'll keep that in mind while growing our volumes. Okay. Do we have competition there in Kashipur? Just like you said, in other, Ludhiana, you are seeing some competition. There are three terminals there right now, including us, and a fourth one is under construction. Okay. Do you think that the incremental volume would be easy to reach at the full potential? Yeah. We are on track and we are already doing more than what we had initially thought within this year itself. We should see the same trend continuing. Okay. By the year-end, do we see the 3,000 mark going upwards or more or less it will be consolidated at 3,000 level? Sorry, by year-end, you're asking what to do? Do we have a milestone-based target for Kashipur that we want to increase it forward, or for the year-end, we are more or less feeling it will be consolidated at 3,000 a month average. You say 3,000 to 3,500 monthly average will be there until the export situation improves. Once that improves, then we can start taking on more imports as well, and go into 4,000-5,000 range maybe next year. Okay. in terms of logistics- I'm sorry, Priya. Your voice is not audible. Can you speak it louder or come closer to the handset? Priya? As the current participant voice is not audible, we will now move to the next question, which is from the line of Rohit from Samatva Investment. Please go ahead. Yeah. Good afternoon, and thank you for the opportunity. My question is on Snowman Logistics. Firstly, I would like to know the Amazon Fresh part of the business that we have. What are we exactly doing for them? Is it only cold chain, or does that also include the warehousing part of the business, or the dry warehousing part of the business? Yeah. Hi. What we do for them is a fulfillment center, which includes frozen, chilled, as well as dry, and it also includes fresh fruits and vegetables where we do sorting, grading, and packing for them. Complete end-to-end activities in the fulfillment center. We have four such fulfillment centers operational as of now. Delhi, Bombay, Pune, and Ahmedabad. Got it. Sorry, I ask you because Amazon, I was reading somewhere, Amazon Fresh, they're on an expansion spree all over India. Are we the only player who's handling it for them, or what will be our market share that we have with Amazon there? There are two ways Amazon does their groceries and fresh fruits and vegetables. One is hyperlocal, where they have tied up with the supermarket chains. There we have no role to play. The second one is the product which moves through the fulfillment center to their spokes and from there they home deliver. Wherever it is through fulfillment center, we are their partners, and as of now, it's only with us. Got it. Okay. My second question would be on the transportation part of the business. Could you explain how SnowServ works? Because that's the profitable part of the segment. How are we differentiating ourselves with our competitors through SnowServ, and what will be the revenues, if you can give me that number for SnowServ? Sorry, you said transportation or SnowServ? SnowServ. SnowServ comes under, we give our platform to the various fleet owners, right? The SnowServ platform. Okay. That's not SnowServ, it is SnowLink. SnowLink. Sorry. Yeah. SnowLink. Sorry. Yeah. SnowLink is a technology platform where we help various transport operators to come on board with us, we use their trucks to serve our customers. Of course. What would be the revenues from that segment? The current run rate of revenue is close to INR 50 crore per annum. Okay. From this technology platform. Okay, great. Sir, thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Amit Dixit from ICICI Securities. Please go ahead. Yeah. Thanks for taking my questions. Congratulations for a good set of numbers. I had a couple of questions. The first one is that you indicated earlier that the CapEx for next 24 months is expected to be INR 300 odd crore. Do we expect CapEx to be much higher in H2? If so, what is the number that you would like to guide? That is part A of the question. Part B is that if you can split this INR 300 crore into the CapEx for rakes and for terminals, because I guess that two more terminals you are looking at developing very soon. Yeah. The two new terminals will be INR 100 crore each. If you remove that and the balance, we will spend about INR 40-45 crore on Jaipur. That will come entirely in H2 this year. We've already done it in October, about INR 30 crore CapEx on vehicle fleet replacement, which was aging 15 years, and balance will be for maintenance and small upgradation at our existing terminals. H2 should be around INR 70 crores, that means INR 30 crores that you have done for this fleet and INR 40 odd crores for Jaipur. Yeah. Plus 10 maybe. Okay. The second question is, some of your peers have indicated that they are going to pass on the cost benefit that you get in double stacking to the end customers. Are we also thinking on the similar lines or our better, let's say, last mile, first mile connectivity or other value-added services more than suffice for that? Yeah. We've been double stacking since 2010, 2011. Basically in our pricing only, we build it in to an overall level of discount that we can go to, but we don't offer a specific discount for double stack. In fact, no one in the market is really doing an offering, a specific double stack rate because you can't guarantee if their container will go on the lower stack or upper stack. It's just a blended discount that we end up passing it. One more thing which you asked in the previous question, just to clarify, rakes we haven't bought them, we've leased them, so there's no CapEx on the rakes. Okay, sure. Great. Thanks, and all the best. Thanks. Thank you. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead. Thanks for taking my question. My first question is on depreciation in first half of the year. It seems to be down 8% year on year. Is there any specific explanation for that? Basically, 2007 some of the rakes I'm sorry to interrupt, sir. life is over for 15 years. I'm sorry to interrupt, sir. Can you please come closer to the speaker? Can you hear me? Yes, sir. Please go ahead. We have taken rakes in 2007, 2008. For that entire asset period of 15 years got over in first 6 months. Sorry for the interruption, sir. Your voice is still not clear, sir. I'll take it. We had some rakes which we purchased in 2007. The life as per the schedule and income tax is over for depreciation after 15 years. Those are no longer being depreciated as they're at zero value. That reduction has come in. This is more like the recurring number. Sorry, I cannot understand what you are saying. Yeah. This is the recurring number here on. From this case. Yeah. Okay. The second question is, around the double stacking. We heard that CONCOR mention on their call that their Q2 rakes double stacks saw an increase of almost 60% on a year-on-year basis. For the first half, double stacking was up more than 30% for them. Just wanted to understand your experience where the volume of cargo carried by Gateway has actually seen a reduction in double stacking. How do we reconcile the two? It's been a reduction for us because on the export side, we're double stacking less and it's increased for CONCOR because Dadri got double stacked and they do about 20,000 containers a month from there, that is an added boost for them. Okay. Once this Faridabad is double stacked for you, what would be the sort of delta in volumes that you would see in terms of double stack rakes? About 10% of our volume comes from Faridabad, most of that can then be double stacked. Okay. Finally, if I had to think about your volume growth in Q2 on an organic basis, is it the right way to look at X of Kashipur because Kashipur was not in the base last year. If I exclude the 9,000 odd TUs that you would have done in Q2 for Kashipur, volume growth would be in low single digits. Is that the right way to look at numbers and why is it so low as compared to, say, the sector at large, where rail exam volumes have grown in double digits and even CONCOR has seen almost 13%-14% growth? CONCOR's EXIM volume growth year-over-year for this quarter was 3.5% only. Handling volume, they report originating volumes which were up almost 14%-15%. Is that including domestic or is that excluding? No, excluding domestic. Okay. I'll double-check on that. Yeah, basically Kashipur has aided the growth, because of our hub-and-spoke and network advantage, we are able to offer better rates at Kashipur, and that's why we've seen a volume growth even within Kashipur compared to before we took over. Other locations, like we mentioned, Ludhiana is down, Garhi is going up, and Faridabad is also slightly down. We have to look at it overall mix basis because then we can accordingly price to the customers. Right. At the beginning of the year, the impression that we had was that Kashipur is like an inorganic addition, and it is not there in previous year numbers. It will help push up growth. The organic growth will get pushed up because of Kashipur, that does not seem to be the case, which is why I asked the question. Yeah. Other existing locations haven't grown as much as Kashipur has, obviously. Got it. In case of Jaipur coming in next year, in H2, what kind of monthly run rate do you expect from Jaipur after it runs? Next year, second half, we will probably exit at anywhere around 1,000 to 1,500 TEUs. Long term, we should see 3,000 to 4,000 TEUs out of this location. Okay. Those are my questions, sir. Thank you. Thank you. The next question is from the line of Priya Mehta from Equitas Investment. Please go ahead. Thank you for my follow-up question. My question is in regards to double stacking. Could you help us understand the dynamics of it, that what happens to the realization and your margins when you double stack? You said that we can do double stacking in JNPT and Faridabad. JNPT, I understand it will happen when the DFC will get complete. When will Faridabad happen, and what incremental benefit would we get out of it? That's my first question, second question is the rakes which we are buying, which we are leasing, basically the three rakes. How would it benefit in terms of realization with Rupal basically? Hi. In double stacking, what happens is that the container which we load onto the upper stack, we pay only 50% of the haulage to Indian Railways. That is the advantage of double stacking. How do we do it? In the sense, right now, we are doing it at Garhi Harsaru. Faridabad, we are expecting that we are going to do it another 3 months' time. That is what Railways has given us an indication because there is some OHE construction is pending, which we are expecting. What we do is, apart from Mundra and Pipavav volumes, which we double stack from Garhi Harsaru, we also carry the JNPT volumes through our Viramgam terminal at Ahmedabad. That is a stretch of around 850 kilometers from Garhi to Viramgam. We double stack it. From there, we send it a single stack to JNPT. That is how, as of now, we are doing double stacking. In terms of the kind of rakes, the weight capacity you are asking. Right now we are having rakes which are having a capacity of 68 metric ton. Lower and upper deck put together, we can load up to 68 metric ton. The new rakes which we have ordered on a long-term lease, they can carry as high as 81 ton. That will increase not only the loadability of the rake, but also increase the double stack capacity of the rakes also. Because there are heavyweight containers, like scrap and all, which are already 26 and 28 tons. If you load 2 scrap containers, already they cross that particular limit. Once these new rakes are with us, we should be able to do more double stacking. That is the advantage we'll be having. In terms of any numbers, could you help us with in a hypothetical situation, it works at full capacity, how much would it yield, the rake? It's hard to say. It depends on the volume mix, what routes we apply it on. Generally, if you see what our existing numbers are, the revenue per train per month is roughly INR 3.5 crores. We can expect to add that. Okay. How much TEUs will this add? Anywhere from 4,000 to 5,000. Per month? This is the capacity that will get added by these three trains coming in. Okay. Got it. I think that's it from my side. Thank you. Thank you. The next question is from the line of Aditya Mongia from Kotak Securities. Please go ahead. Thank you for the opportunity. My first question was more on pricing and margin for the sector. From what I kind of understand, Adani Logistics has been aggressive on pricing for some time and as we've been in interaction with CONCOR, suggested they will not fully pass on the busy season surcharge to customers. They've also said that their own margins are pretty high. Are you seeing any pricing moves that are making you a bit wary on the margins for the sector? That was my first question. General pricing discounts has been happening for some time. It's an overall market thing depending on where. Ludhiana right now, there are rates that are being cut by our competition, but we haven't offered those type of discounts yet. In terms of the busy season surcharge, we have acceptance from most of our customers already. About 90% is done, so it will be passed on at cost. Okay. No such indications coming to you wherein the margins can come under pressure? Nothing significant to report, really. Understood. The second question that I had was on your comment that DFC in the company's way of thinking, would probably add one, maybe two percentage points of growth. Okay. This again, I just wanted to kind of get a sense as to what are the imponderables that you are looking towards when you are coming to this kind of an assessment, or what are the problems in shifting from road to rail at a faster pace than this? In terms of road to rail, if you look at our specific sector for container only, we have already in NCR reached a level of 70%-80%. When Indian Railways says the entire number is at, say, 25%-30%, they're counting cargo that can't be converted to containers also. They're counting small distance, also domestic also. Everything coming under that scope is that 25%-30%. For our specific sector, the growth will be much lesser in terms of shift of road to rail because a lot of it has already happened. Understood. The other question that I had was, again, your comment on JNPT, wherein you basically said that the share of revenues has actually declined over time for you. I would have thought that Viramgam would have helped you in improving your share. That was one disconnect I had. Post DFC commissioning, would anything change from your perspective as to the share of JNPT in your own numbers? Yeah. Viramgam helps us optimize our cost out of JNPT, but ultimately it's the end customer's decision which port to use. Peoples in North India have preferred to use the Gujarat ports over JNPT because of distance, time, and cost. It's not our decision as such. Going forward, when DFC is connected, we do think that some shipping lines would prefer calling on one port rather than two or three on the western side. There could be a shift back to JNPT, but we'll have to see how that plays out. Again, it's not in our hands. It's depending on the shipping line routes. Understood. The last question from my side. Your CAPEX, even on a three-year basis, is probably more than the EBITDA that you generate in a single year, and your leverage is not very high. What is the kind of capital allocation or maybe dividend distribution policy that you would want to kind of guide the investors towards? Yes. We'll continue paying the dividends that historically we've paid every year. We've in fact increased it last year, and we hope to increase it going forward as well. After taking care of all our CapEx and debt repayment requirements, you would have seen we've also increased our stake in Snowman over the last couple of quarters. That's one avenue that could be done as well. Understood. Those were my questions. Thanks a lot for your answers. Thank you. Okay. Thank you. Thank you. The next question is from the line of Jahnavi Shah from XIA India. Please go ahead. Yes. Can you hear me? No, ma'am. Yeah. Hi. Good evening. First, my question is with respect to we've seen good growth in volume, but we have seen slight Sorry, we can't understand your question. We can't hear you properly. Hello. Is it better now? Yes, ma'am. Please go ahead. My first question is with respect to EBITDA margins. We've seen good growth in volume, but there has been a slight EBITDA contraction. How do we look at it? For the forward, like H2, what kind of EBITDA margins should we look at? It's been a very slight drop, but that really depends and keeps varying month to month, quarter to quarter, depending on the mix of volumes. We expect a similar number for second half also. Until the export situation improves, we don't see an improvement happening. The second question was with respect to the two new terminals that we were planning to look out for. Any update on that? We're still finalizing. Once we acquire the land, we'll be disclosing to the public of those locations. Any specific timeline on when shall that come across? No, we don't want to comment on that. We'll only do it once it happens. Okay. The third question with respect to Faridabad double stacking. Is there a delay or what is the situation over there? The work is done by railway contractors, not by us, so it's not in our hands exactly. The work is happening, but it's expected to finish in Q4. Okay, I think it was expected by October, if I'm not wrong. Yeah. Yeah. It's dependent on the railway work. Okay. That's it. Thank you. Thank you. The next question is from the line of Rishabh Somani from Arth India Ventures. Please go ahead. Hi. Good evening. Thank you for the opportunity. My question is for Snowman Logistics operations. What kind of growth are we expecting on the top line and the bottom line going forward, and what would be the key drivers behind it? Hi. As you see, we had started SnowDistribute business last year, and for last financial year, it was a nine-month business, and this year it is full. We are expecting anywhere around 15%-20% growth coming over last year in terms of revenue because of addition of this business. Since we are investing in expansion in Kolkata, Lucknow and Bhubaneswar, these facilities will be up only by the end of this year or beginning of next financial year. For SnowDistribute? No, that's about the SnowPreserve, which is the warehousing business. Okay. The revenue from those facilities will come only next financial year. Okay. Can you break down the revenue growth in terms of the segment and the margins that we're looking to sustain in the future? Whatever is the trend today, the same percentages of EBITDA margins will continue from a percentage point of view. Okay. As I said, we are expecting a 20% growth over last year in terms of revenue. Across all segments? Across all segments, yes. Will this mostly be led by 5PL or are we expecting 20% in each of them? No, as I said, it is across all segments, so 5PL may be slightly more, but we are expecting all the segments to contribute. All right. Thank you so much. Thank you. Thank you. The next question is from the line of Yash Tanna from iThought PMS. Please go ahead. Yeah, thank you for the follow-up, sir. My question is again regarding Snowman. What is the utilization levels of the warehouses that you might have opened in the last, let's say, six months or the last two or three quarters? If you could help me with that number. We are at about 75% at Siliguri, and we are at about 50% in Coimbatore. That is basically seasonal. This is the lean season for that region, and typically it would go up to 75%-80% in a month's time. Right. There is one dry warehouse which we had leased a few months back to get into a dry business, that is 100% utilized now. It is dedicated to a single client. This is the Pune warehouse? Sorry, I missed it. No, it is at Haryana. Near Gurgaon. Okay. The Pune warehouse that we commissioned, I think, last quarter or something? No, that's a dry warehouse that we have leased. It's dedicated warehouse for a client, so it's 100% utilized. Okay, got it. Sir, you spoke about company level ROCE improvement, and you spoke about the drivers for the same. I missed that part. If you could please repeat that, and also, on the 5PL side and the transportation side, these are more ROCE accretive businesses. Are we expecting a higher growth from them, or are we expecting a similar growth? Because in that sense, if the profitability mix is not changing, how are we expecting the overall ROCE improvement to come in? See, there are three, four drivers to this. One is we going asset-light in both warehousing as well as in transportation. This we expect to help us improve our company level ROC, which is typically the SnowLink, as well as the SnowDistribute, which is a distribution business, 5PL business, where the CapEx deployment is negligible. The second thing is, the overall pricing correction that we are driving, where we expect price correction to happen to the extent of 5%-6% every year, as against our inflation of 3.5%. The third thing is overall optimizing our overheads, which are there in terms of people, and the technology where the investments have already gone in. We have geared up for almost double the revenue that we want to achieve. Right. Any number that we're targeting, let's say in the next two years? Next? In the next one or two years, any number that we're targeting? We are working out our next three-year business plan. Maybe by the next call, we will be able to share some numbers with you. That's great, sir. Thank you and best of luck. Thank you so much. Thank you. Thank you very much, ladies and gentlemen. That was the last question for today. Participants who miss out due to time constraint, they can reach out to the management and SGA for Gateway Distriparks or Churchgate Partners for Snowman Logistics. With that, we conclude this conference. Thank you for joining us, and you may now disconnect your line.