Ladies and gentlemen, good day and welcome to VRL Logistics Limited Q3 FY25 earnings conference call hosted by Motilal Oswal Financial Services Limited. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Alok Deora from Motilal Oswal. Thank you and over to you, Mr. Deora. Thank you. Good morning, everyone, and welcome to the Q3 FY25 earnings conference call of VRL Logistics. So today we have with us Mr. Sunil Nalavadi, the CFO of the company. So I'll now hand over the call to Mr. Nalavadi to give some opening remarks and discuss on the performance, and then we can take up the Q&A session. Thank you, and over to you, sir. Yeah, thank you, Alok ji. Good morning to all participants. I'm Sunil Nalavadi, CFO of VRL Logistics. I welcome all of you once again for the earnings call for the quarter three of financial year 2025. This is sequentially a very strong quarter marked by substantial revenue growth, improved profit margin, and robust cash flows. Demonstrating efficient implementation of increasing freight rates, control on cost, and strategic execution in many aspects by the management of the company. As communicated during the last call about the increase in freight rates, we have successfully implemented the freight rates like across all sectors and geography. This exercise has resulted in bringing back our operational margins at optimum level, along with maintaining growth in volumes. Apart from the increase in freight rates, the management of the company undertook many steps to control the key operational costs, such as increasing the quantity of bulk purchase of fuel directly from the refineries at lower cost than the market value, key route mapping to minimize reaches of consignments to multiple transshipment hubs before reaching to the end destination, which resulted in increasing efficiency in the movement of consignment, increasing kilometers of the owned vehicles, minimizing loading and unloading expenses, and minimizing the dependency of the hired vehicles, etc. Due to these steps, we reached one of the highest-ever EBITDA margins in the current quarter. On a year-on-year basis, the revenue of this quarter has increased from INR 739 crores to INR 831 crores, with a growth rate of around 12%. The growth in revenue is mainly on account of increasing freight rates across all the sectors and geographies in June 2024, due to which the realization of freight per ton increased by around 11% from INR 6,670 per ton to INR 7,390 per ton. The growth in revenue is also on account of growth in volume by almost 1%, from 1,091,000 metric tons to 1,104,000 metric tons in the quarter. The growth in volume is from enhancement in our branch network in goods transport business. Year-on-year basis, we added around 60 branches, and we continued our initiative to increase the number of branches in the current quarter and added around 10 new branches. The EBITDA has increased by around 78% from INR 97 crores to INR 172 crores, and percentage to revenue has increased from 13% to almost around 21%. We reached EBITDA at optimal level again, and this is mainly on account of increasing freight rates by passing all incremental costs which were impacting our margins in the past. Further, the margin improvement is also due to good control on fuel expenses, which is a major part of operations in our business. We further increased the bulk purchase quantity in the current quarter from 22% to almost around close to 40% of the total quantity consumed. The fuel procurement cost per liter has reduced from INR 89 to almost INR 84, and on an overall basis, the fuel cost as a percentage to the revenue has reduced from 30% to 26% in spite of increasing quantity consumed. The improvement in the operational efficiency in the current quarter also leads to improvement in EBITDA margins. We saw major efficiency in improvement in vehicle utilization by improvement in kilometers per vehicle, increase in turnaround time of the vehicle, and load factor carrying by each vehicle. This has supported us to reduce the dependency on the hired vehicles, due to which the lorry service has decreased from 7% to 5% of the revenue, even no addition of owned vehicle capacity. The rest of the expenses, even though increased in absolute terms, the percentage to the revenue has reduced due to increasing freight realizations. The improvement in EBITDA leads to increasing EBIT and PAT margins in the current quarter. The profit of the company has increased from around INR 13 crores to close to around INR 60 crores, and percentage to revenue has increased from 1.8% to 7% in the current quarter. On a sequential basis, we have seen further improvement in terms of revenue growth and improvement in the margins. The revenue has increased from INR 802 crores to INR 830 crores, and the growth in revenue is contributed by increasing freight rates, and realizations have improved from INR 7,241 per ton to INR 7,390 per ton. It has increased by almost 2%, with a growth in volume by around 1%. The EBITDA margins also improved from 16% to 21%, mainly driven by increase in the freight realization, decrease in fuel cost due to lower procurement cost on account of increase in bulk purchase from the refineries, and improvement in efficiency due to route mapping, control on hired vehicles, etc. Further reduction of fixed expenses, such as employee cost as a percentage to the revenue, also reduced due to improvement in realization, and on account of that, EBITDA margins have improved. With this, we reached a revenue of around INR 2,375 crores for the first nine months for the financial year 2025, with a growth of around 11% on a year-on-year basis, with a net profit close to around INR 109 crores, which is almost more than the full-year profit of the last financial year. Further, our business is a B2B focus. Our business is a B2B focus Our business is a B2B focus LTL business, with a customer base of around 9,000,000 customers covering a wide range of sectors. Our key strength is having a different mode of collection from the customers, and the presence of our LTL business is on paid and to-pay basis, collecting freight on the spot from the customers immediately after the booking or after the completion of the service. Our receivables days from the customer are hardly around 11-12 days, which is the lowest in the industry as compared to other operators. Considering the improvement in turnaround time of the vehicles and control on usage of hired vehicles, we moved slower on vehicle CAPEX during the quarter and invested around INR 10 crores. During this nine-month period, including the current quarter, we did major investments in land and building properties to effect investment of our cash flows for the future growth. As we briefed about the investment in Bengaluru Transport Hub facilities during the previous call, we have completed the transaction in the last quarter with a total investment of around INR 231 crores, the same was funded by low-cost debt at 8.6%, and we borrowed INR 185 crores for this investment, and the remaining amount is funded through internal accruals. The total area of the property is around 112,000 square meters, which is almost around 27 acres, consisting of a ready-made warehouse spread in 482,000 square meters. And the immediate financial benefits for these transactions are: one is the reduction in annual rent by almost around 15 crores. Rental expenses have been reduced, and we are getting a third-party rental income of around 1.5 crores in a year. And we kept some deposit, around 9 crores deposit we kept with the earlier owner that has been realized now. And moreover, during this last 10 to 12 years in the lease period, we invested a lot of facilities over these assets, like internal road work, fuel station, weighbridge, solar installation, etc. And around 3.5 crores outstanding amount of those assets also became our own assets as of now. Because of this, the ROU, the right-of-use assets and lease liabilities, which are accounted under Ind AS 116, which has been reduced, the ROU is reduced by around 27 crores, and the lease liabilities are reduced by around 29 crores. Out of the total investment of around 214 crores, around 178 crores is related to the land value itself, which is non-depreciable even for the future period, so there will not be depreciation costs related to this investment. One of the key factors is about the low-cost debt we borrowed at 8.6%. If we calculate the total interest payable on this loan amount, which is lesser than what the rent we used to pay on this facility. Apart from these investments, we also invested around 43 crores in Bengaluru to expand our existing transshipment facilities, and in Mysuru also, we invested around 21 crores. Due to the above effects, the net debt of the company reached around INR 469 crores. But considering our good cash flows, which we are earning almost around INR 90-INR 100 crores in a quarter, we will use these cash flows for repayment of debt in the future period, and we are expecting drastic reduction in the debt level in coming quarters. Experiencing this strong financial performance of the company, and we are expecting similar performance in the coming quarters with a growth in revenue as well as profitability, definitely we can deliver strong financial results in the coming quarter as well. With this brief introduction, now I request participants to go for question and answer session. Thank you. We will now begin the question and answer session. Anyone wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Amit Dixit with ICICI Securities. Please go ahead. Yeah, hi. Good morning, everyone, and thanks for the opportunity. Congratulations for a very strong performance in a very testing quarter for your peers. A couple of questions from my side. The first one is we saw, of course, the realization picking up significantly as highlighted by you during the last call. My question is, is the entire price hike being absorbed in the market, and whether there are a few areas where you expect that realization can further go up during the next quarter? And also, on the volume front, we saw that growth was a little bit slower. Is it expected to pick up in H2 or in Q4? This is my first question. About the increase in rates, yes, we covered almost all areas. Now, in the new structure, what we did basically, we simplified our rate structure. Earlier, we used to charge one of the basic freight. Along with that, we used to collect other charges. Now, we simplified very much on the freight structure. One is we used to collect additional toll charges, additional freight on value from the customers, and we used to collect some door delivery charges as per the fixed formula and all. Now, what we did basically, we simplified these charges and we added in the freight rate so that we can communicate to the customers very clearly that this is inclusive of all these expenses, and this is the total chargeable freight to the customers. So that because of the simplicity, the customers are understanding very quickly about our rate, and it is becoming very easy for us to convince the customers about the increase in the rates. Now, earlier, we were having a lot of terms and conditions also to the customers, say around 35-40 conditions depending on the products. Now, even those terms and conditions have been brought down around 10-12 conditions. So because of this, now our team is able to convince the customers about our new rate structure, and even the customers are accepting our convincing about why we increased the rates. So because of this reason, this rate increase is a sustainable model, and the relations will continue even in the future. When it comes to the freight volumes, yes, whenever we take a rate hike, a little bit disturbance will be there in the market. But in our view, since we have increased the rates in two quarters back, in the June 2024 itself, now most of the customers have been accepted, and now it is stabilized. So considering this fact, going forward, in Q4, actually, we can maintain the volume with a similar growth of around 1 or 2% or lower single digit, but overall revenue growth will be there in the range of around 12%-13%. But when it comes to, say, about Q1 or Q2 of the next financial year, again, we can expect the volume growth in the range of at least around 8%-10%. And moreover, now what is happening because of, as I said, we brought a lot of efficiency in the route mapping and other things, our service has become very fast, and people, our customers are acknowledging our service that it is very fast now. Another major change or difference between other competitors to us is about the safety of the consignment. Since we are using our own vehicles across all the routes, and our claim ratio, if you take a damage or theft ratio, it is very, very minimum as compared to other operators. That's the reason the trust or reliability with us, the customers, is very high. So with this backup, we are very confident that, again, volume growth will reach around 8%-10% from Q2 or Q3 of next financial year. Wonderful, sir. Thanks a lot for the elaborate explanation. The second question is the transshipment hub and the warehouse in Bengaluru. While you have. Sorry for interrupting. Can you please come in the range because your voice is breaking? Yeah. Is it better now? Yes, please go ahead. Hello? Yeah, sure. So second question from the Bengaluru hub. So while you have highlighted the financial benefits very aptly in your PPT and prepared remarks, is it possible to also give some qualitative or quantitative aspects of the operational benefits that we will get from this hub? Yeah. Basically, even those operational benefits also mentioned in the slide. Basically, now we are having a workshop facility over there, which we are doing only some repairs and maintenance, which are very minimum activities what we are handling today. Since that property has been converted into own property, then we wish to create a satellite workshop over there so that even it will handle some major repairs and maintenance to avoid vehicle bring back to Hubballi for major maintenance. So it will give a lot of maintenance on the spot to the vehicles because the majority of the vehicles are reaching to this hub for distribution across south. Moreover, we are providing them in vertical storage stacks also. Currently, what is happening, because of the rental premises, we cannot do any internal structures over there. Now, considering our own facilities, then definitely we wish to create some vertical stacking. And because of that, the additional space will be created. Now, the sq ft area for that entire warehouse is around 5 lakh sq ft area. With this vertical stacking, again, the total storage area will be automatically increased without further investment in the warehouses. And moreover, currently, the labor work what we are doing, it is completely some forklifts and other machineries are using, and we are using manual methods predominantly. Now, again, we can bring out a lot of machinery installations, the conveyor belts and all installations that again bring back efficiency in the loading and unloading pattern. Again, it may reduce the overall hamali charges or loading and unloading charges going forward. And moreover, the biggest advantage of this property is about the solar panels. Currently, the existing owner earlier, he was not permitted us to install the solar facility over there. Now, the entire roof, actually, we can use for solar implementation of the solar panels, and we can generate good electricity for our forklifts and other equipments what we are using. Moreover, some of the smaller EVs or electric vehicles also using for local delivery, even we can create a charging facility over there by using the solar energy. Moreover, currently, again, there is some empty space also, like parking space and all. Again, effectively, we can use this space to give further benefit in our future operations. Great, sir. Very clear. Thanks a lot and all the best. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Lokesh Maru with Nippon India Mutual Fund. Please go ahead. Thank you for taking my question. Congratulations, sir, on excellent set of results. Two, three points from my side. The first one being, this year, we have taken steep hikes in realization rate for the last two quarters since last two quarters. And as we enter next year, you already highlighted in your comments that realization hike is going to be sustainable every year. But if you could throw some color that if our expectation on volume front is 8%-10%, same time next year, do you think we'll be able to achieve that 13%-14% revenue growth, even 5% extra hike, or next year should be the one where we work only with volume growth per se, in your opinion? Yeah. Basically, we are expecting the revenue growth in the range of around 12%-13% even in the next financial year, which will be the combination of the increase in the realization as well as the volume. See, how it will happen is in the current quarter, we did a revenue growth of, say, around 12% year-on-year basis. In this, majority of the contribution is coming from increase in the realization, the increase in the freight, and around 1% is coming on account of increase in the volumes. In Q4 also, Q4 and next year quarter one, the similar trend will come. The realization contribution will be very high in the overall revenue growth, and the volume growth contribution will be in the range of lower single digit. But by that time, our rates will be stabilized in the market, and actually, we can convince more and more customers, even we are doing aggressive marketing. And because of simplification of the rates, we are expecting that the acceptance from the even new customers will be very high. So with that hope, actually, we are expecting that even in Q2 and Q3, our growth will be in the range of, again, around 12%-13% in the overall revenue. So again, a key driver which you mentioned was route optimization and the speed that we have achieved now, the turnaround times and deliveries. If you could help understand, was this like a year-long process, the result of which we are seeing now, or was it strategic which happened last quarter, and operationally, what has changed per se? Yeah, it is a continuous process. See, we cannot define any timeline for this. So the reason what I'm saying here is, depending on the loads or tonnage availability in each area, accordingly, we design the route. See, for example, to give one example, even I have mentioned in the presentation also, we shifted our Ahmedabad transshipment location from old premises to the new locations. Earlier, we used to operate with two warehouses. Now, we shifted to 4 lakh sq ft single warehouse. Here, what actually we did, the entire movement of goods from Rajasthan, Punjab, Jammu and Kashmir, and some part of the Delhi and Jalandhar, Himachal Pradesh and all, earlier, most of the consignments used to go to either Ambala transshipment hub or to the Delhi transshipment hub for further movement. Now, what we are doing, instead of, say, for example, if material is moving from, say, Jammu to Coimbatore, earlier, Jammu material used to come to Ambala, Ambala to, say, Bengaluru transshipment, Bengaluru to, again, Coimbatore. Now, what will happen? That material directly will come to Ahmedabad and go to Coimbatore. So almost we are avoiding one or two transshipment hubs in most of the routes wherever we are getting good volumes. So this exercise will continue, and even we are analyzing in such a way that wherever two transshipment hubs are there, we are restricting to one. And wherever the booking branches itself are contributing very high volume, then directly that material will go to the delivery station rather than reaching to any transshipment hubs. So because of these initiatives, the vehicle turnaround time, the inflation levels are increasing. Understood, sir. Thank you so much for that. Just a few more questions if I can take. Two, three things. One is, what is our savings per liter compared to retail because of our 40% direct procurement? That is one. Number two, number of branch additions has been lower for the year, for the nine months, compared to what we planned out for the start of the year. If you could throw some light on that. And number three, on CAPEX side, CAPEX for this year has been very heavy on CAPEX rate. So some guidance on FY26 would help. That's all from my side. Thanks. One is the difference between the retail and the bulk purchase is almost around INR 5-INR 6 rupees now, and because of the lower crude oil price. And again, the bulk purchase price changes every day. So depending on that moment, this savings also varies. And about the branch expansion, we are considering, see, every quarter, again, we are planning at least around 20-25 new branches. So that effort or that process will continue even for the next year. So on a full year basis, definitely, we can open around 80-100 branches even in the next financial year. And when it comes to the capital expenditure, see, currently, this year, the majority of the investment in this land and building in three locations, because of that, the CapEx is increased. But the normal CAPEX on the vehicles will be in the range of at least around INR 150-160 crores even in the next financial year. Thank you, sir. Yeah. Thank you. Next question comes from the line of Mukesh Saraf with Avendus Spark. Please go ahead. Yes, sir. Good morning and thank you for the opportunity. Congratulations on a great set of numbers. Firstly, again, going back to the volume versus pricing, so you did mention that the second half next year, you will start seeing some volume growth. Based on that, basically, these customers who have right now kind of not engaging with VRL, they have gone back to, say, unorganized kind of operators, or what has happened there, sir, because of the price hike that you have done? Yeah, temporarily for us, actually, they shift to the other operator, either it may be organized or unorganized. Predominantly, the unorganized people. Because the good thing here is since our network is expanded across all the country and many remote places also, we are having branches. Most of these organized players, actually, they do not have a reach to the remote places. So even in our rate increase, we did in such a way that wherever our service level is very high, wherever our network is very reachable to the end users. So based on that, actually, we did an increase in the rates. So considering these facts and considering the temporary shift of these customers, even in some of the customers, they are already saying that they have already acquired billion service induct. See, some customers' feedback is in such a way that we are unable to trace our consignment in other transport to kindly book our consignment and source whatever rate it is. That kind of feedback also we are getting from the customers. Moreover, because of the number of branches widely spread in our case, we are not collecting additional outer delivery area charges from that, ODA charges from the customers. So our rates are fixed from branch to branch. So that it is very easy to accept from the customer side that they already know that what is the transport or logistic cost in VRL. But in our other cases, what will happen at the final billing, they charge ODA and other charges, which they cannot assume at the time of booking. So these are the differences. Got it. Got it. And I mean, in terms of management strategy, I mean, this is a situation where you might have to cut back on some prices. If, say, I mean, basically, you have in the last couple of years also taken price hikes, but we haven't seen this kind of a margin improvement because you mentioned in the past that the entire pricing has not been absorbed by the customers. This time, maybe you have enforced it a bit more. But how much does the management, how long are you willing to go without, say, volume growth? Are you willing to go with 1% volume growth for a longer time this time? Or if, say, volume growth doesn't come in, you will be forced to cut prices? No, our strategy is very clear. Actually, see, we are expecting that based on whatever feedback we are getting from the ground, we are expecting that the revenue growth will be in the range of around 12%-13%, again, which will be the combination of volume and the freight rates. So initially, the volume contribution will be lower, but as and when we cross another one or two quarters, again, the volume growth will be picked up very high. That's what we are expecting. And we are expecting that the margin maintenance, see, currently, we reached around 21% EBITDA level, but going forward, definitely around 18% of the EBITDA range, around 18% we can maintain. Got it. Got it. And secondly, fleet addition, I mean, we have seen that you have scrapped more trucks than you have added in the last two quarters. So actually, the total fleet that you have net addition has been negative this last two quarters. Any sense on that? I mean, is it because temporarily you are going to see lower volumes and you want to increase your own vehicle running that you're not adding trucks right now? No, again, temporarily, this one makes a change in the mix, and moreover, now what we are doing is so some of the vehicles which are closer to the 15 years and all, and which are very high capacity, like 28 tons and all. So we have scrapped some of those vehicles and added with the vehicles which are in the range of around 20 tons, 24 tons, which are more suitable across all routes. That's the reason that overall the tonnage capacity has been a little bit impacted, but because in terms of the number of vehicles, actually, we added more vehicles. Around 300 vehicles have been added in the nine months, and we scrapped hardly around 200. Because of change in the vehicle capacity, that overall the tonnage capacity is a little bit impacted, but even going forward, the vehicle addition plan will continue. Depending on the load factor, see, again, the plan of vehicle addition is it's a continuous exercise. See, depending on the load factor in each transshipment hub, we take a stock and we decide to add the vehicles. Okay. Okay. Okay. So based on that, we are expecting that around INR 150-160 crores CAPEX, anyway, it will be there even for the next year only for the addition of the vehicles. Okay. And, sir, every quarter, you do mention the amount of tonnage that the new branches have given you. This time, you have not. And we have seen only 1% growth. So can we assume the new branches also have not seen volume growth, or is it that the existing branches have seen a significant decline and the new branches have just offset that? No. New branch, again, the contribution is in the range of around 3% or so to the total tonnage. Thank you. Mr. Saraf, please rejoin the queue for more questions. Next question comes from the line of Harsh with RARE Enterprises. Please go ahead. Mr. Saraf, please go ahead. Yes, sorry. Good morning, sir. So my question is again on the volume growth side. So if I look at last five years, we have grown our volume at around 8% figure. And during the same period, our branch addition has almost been at a similar rate from 822, almost 1250 branches where we are today. So is it fair to assume that volume growth is only subject to branch addition and there won't be any like LTL or as we call it, as an agent protect? Would there be any organic growth in the existing branches that we have or have we reached a sort of saturation point on that front? Well, volume growth, obviously, it's more contribution from the existing market alone. See, the new branches, actually, we have taken the initiative to open new branches in the potential area that is giving additional contribution to the volume. But if you see overall market trend, see, even on the MSME sectors, for example, which is major contribution to our overall tonnage, that segment is suffering very high. And we are hoping that even in the current budget, the more trust has been given to MSME sectors and the rural economy and agriculture sector. So even from these sectors, we are getting good volumes, and we are expecting that because of these government initiatives, we may get good volumes. So it is not basically from the increase in the branches, but even from the existing areas, also overall contribution is coming. Means we are seeing some growth. In the future, what will happen since because of the government initiative and because once the rate increase is stabilized, from Q2 onwards, the next financial year, again, we are expecting growth in all the areas, all the geographies. So if I have to ask it the other way, if you stop expanding new branches at 12.50 and say you keep your branches same for the next two years, do you still expect that you can see volume growth from these existing branches only? No, I'm not getting your question, please. No, my question is, hypothetically, if we assume that we don't add any new branches, we are at 12.50 branches today, and say for next two years, we don't add any number of branches, will we still be able to grow our volume? Yeah, definitely. Definitely, we are still able to grow volume. Because what will happen, the recently added branches in the last two to three years, those growth will be very high in the coming days. Those are all new geographies where actually we added. Those contributions will be more. And apart from that, even the contribution from the existing branches, the existing market also, our existing customers, depending on the growth in GDP, again, it will contribute addition to the volumes. Okay. And this last question is on the margin. So this quarter has been, I mean, it would be like highest ever margin that we have ever clocked at 20%. And since you have taken the price hike, you said you have introduced a lot of efficiencies in your businesses, and you're also expecting volume growth going ahead. So is it fair to assume that this 20% kind of a number could be sustainable going ahead? No, already communicated the sustainable EBITDA margin will be around 18%. 18%. Okay. Okay. Sure. Sure. Thank you. Thank you very much. With the growth in the top line of around 12%-13%. Okay. Understood. Understood. Okay. Thank you. That is on my side. Thank you. Thank you. Next question comes from the line of Rohit with Samarthya Investment Advisors. Please go ahead. Good morning, sir. Thank you for the opportunity, so I just have one question. How much is the express part or the door-to-door delivery part of our entire business? See, we do not have an express, but we are having a door-to-door service. Out of our total volumes, almost around 34%-35% of the volumes are door-to-door delivery. Okay. And sir, the price hike is? In this, again, the major contribution is coming from the contractual customers, the account quality customers, what we call around 15%-16% of the total volume. It is completely door-to-door and door delivery. These price hikes that you have taken since June, you were able to pass it on even for this door-to-door service. Am I right? Yeah, to some of the customers because most of these contracts are due for the renewal from the month of April, and in the current quarter, actually, we are interacting with these customers to renew the agreement. There actually, we can see some additional realizations in the current quarter, but anyway, see, wherever, again, some overall factor, it may not boost more into the realization. Got it, sir. Thank you so much, sir, and all the best. Thank you. Yeah, thank you. Thank you. Next question comes from the line of Ankita Shah with Elara Capital. Please go ahead. Yeah. Hi, sir. Congratulations on a very good set of numbers. Yeah, thank you. This vehicle addition for next year will continue to be in the similar range going forward? Yeah, around INR 150-160 crores, sir. Both Both are indicated that kind of a CAPEX we do even next year. But that would include branch additions also, right? So the number of vehicle additions would be how much? No, for branch addition, there is no capital to capital expenditure. It's all only we open a branch and we engage with we open branches in the lease premises. So most of those expenses are charged to P&L account only. But only on CAPEX is on the vehicle side. So we can assume around 200 odd vehicles approximately that could be added? Yeah. Each vehicle cost will be around INR 40 lakhs. So total investment will be around INR 150-160 crores. Around INR 200 lakhs is what we are expecting. Yes. Yeah. Got it. Got it. Also, sir, on the biodiesel consumption, which is high this quarter, is it likely to continue at this level? No, biodiesel is not there, madam. Actually, we are not at all purchasing any biodiesel. This is the bulk purchase fuel has been. Bulk purchase fuel. Which we are purchasing. Will that continue? Yes, it will continue. And now what happened, compared to retail price versus the bulk purchase price, the gap is very high now. That's why the benefit is coming. But the bulk purchase is purely depending on the crude oil price, and that price changes every day depending on the crude oil prices. Okay. So as long as that gap is there? Yes. As long as that premium will continue, then this quantity will continue, and it may increase a little bit also. Got it. And also, last question, have you gained market share? And do you have any numbers around market share number? On the overall business side, yes. Some of the products actually we gained. And basically, again, it is out of the GST compliances because of increase in the compliances because the government is further going to send them this verification of the transactions. And again, the one good development what the government has done now, even the whatever invoices we are raising today, that charge or liability will automatically come at the return. Not only the e-invoices, they are fixing the liability also. So because of that, the compliances are further increased. And we are expecting that, again, because of this, the new customer may be added to our fold. Okay. And number of unique customers is around 9 lakhs or has that? Yeah, around 9 lakh customers we are having as of now. And gradually it is increasing. Got it. Got it. Great point, sir. Okay. Thank you so much. Thank you much. Thank you. Next question comes from the line of Ankur Kumar with Alpha Capital. Please go ahead. Hello, sir. Congrats for a very good set of numbers. Thank you, sir. I wanted to understand regarding your say, as in we did 20% margin this quarter, but you are guiding that sustainable should be around 18%. But given we have taken so much price hikes and the customers have also accepted it, why are we expecting our margins to reduce on that concern? No, basically, see, as I said, the major contribution of around 2%-3% is coming on account of the fuel charge, sir, because of the fuel efficiency. Because the bulk purchase, what we are buying, that gap is almost around INR 6-INR 7 as of now. So if at all any changes into these rates, then it will directly impact on the margins. Because of that reason, on a sustainable basis, around 18% is maintainable. That's what I said. So for FY26, we should work with the assumption of 18%? Yeah. Got it. Sir, what are the CAPEX plans for this full year as well next year? In the current quarter, again, there will be lower in vehicle CAPEX. But next year, on a full year basis, around INR 150-160 crores, what I said. Why, again, the vehicle CAPEX always is linked to our tonnage. So we analyze the movement in tonnage and engagement of the outside vehicles periodically. Accordingly, we decide the number of vehicles which needs to be added. Since the tonnage is almost around only 1 or 2% growth, then because of that, again, addition will be slower. But once again, it is a normalized growth will come, say, again, the CAPEX will be added. So sir, in terms of our total vehicles, what will be our roughly utilization rates at which we will be working right now? See, hub to hub operation always is operating with full capacity. See, there out of 6,100 vehicles, hardly hub to spoke we are using around 1,000, 1,100 vehicles. But remaining all vehicles are operating between the hubs. There the utilization is fully at 100%. One more development, what we are doing in the current quarter is, even earlier we were not monitoring the vehicle utilization between hub to spoke. Now we are creating a mechanism in our system that even the utilization of the local vehicle should be optimum. That excess is also going on. We are unable to quantify exactly what it is the savings. But definitely there will be savings in that front as well. Sure, sir. Thank you and all those. Thank you. Thank you. Next question comes from the line of Sandesh Shetty with HSBC Securities. Please go ahead. Hello. Good morning, sir. Am I audible? Yeah, good morning, sir. Please tell me. Sir, just wanted to check on the additional CAPEX that you incurred because of investing into Bengaluru facility, Bengaluru-Mysuru and Bengaluru facility. So sir, if you can give us the breakup, how the CAPEX is spread, and also the increase in debt. So how much of debt has come because of this investment? And how do you progressively plan to reduce this debt? Is it a two or three-year plan? How do you plan to reduce your debt? That would be my first question. See, on Bengaluru property, out of INR 214 crores investment, we borrowed INR 185 crores. And which is repayable over one year monetary amount is that and nine years repayment. And the cost of the debt is around 8.6%. And normally in all our cases, most of the cases actually we prepay the debt. There is no pre-closure service in any of our loan agreements. So because of strong cash flows, we may repay this loan much prior to the tenure what the bank has offered. And similarly for Bengaluru property also, total investment we did around INR 42 crores. And for that also, we borrowed some amount. And going forward, again, it will be repaid. See, currently the net debt is around INR 465-470 crores. See, basically our repayment plan is every quarter we are generating almost around INR 90-100 crore free cash flows. So over and above CAPEX, definitely these cash flows will be used for repayment of debt only. So considering this fact, the debt level will come down drastically in the coming period. Okay. And sir, second question is on the lorry hire charges that have come down around 2 percentage points. Do you think that this is sustainable over long period because of the route optimization and everything? Or it can again come up? Sustainable, we may see further improvement in dependency on the lorry hire. But this is a sustainable savings. Okay. Thank you, sir. Those were my questions and all the very best. Thank you. Thank you. Next question comes from the line of Vikas Khatri with Aviral. Please go ahead. Good morning, sir. First, congratulations on wonderful results. My question is regarding you mentioned that our benchmark damage and freight are lower than industry or other players. So what's the delta over there? Second question related to it, if our damages are lower, safety is higher, and with a dense branch network, are we able to attract more loads from the organized express player like Gati-KWE, TCI Express? Yeah. Basically, see, our services again, in the door-to-door service, definitely we are having some of the very good customers who are there. See, totally we are having around 1,200-1,500 very strong corporates. Actually, we are servicing them. And most of these customers, the first step will come about the safety of the commodities. So because of our own vehicle, because of the covered vehicle, because of the trained drivers in our operations, the claim ratio is very low. And even we are carrying some of the very valuable commodities also, which are so easy to pilfer or anything. Say like cashew nuts or even the black pepper, all these materials. So most of the customers are with us on these commodities. What's the difference in damage ratio and benchmark? See, damage ratio in our P&L itself, we are showing it as a separate line item. The overall claim, including whatever fire incident, etc., in a year, it is not crossing even two and up to three crores out of 3,000 crores turnover, what we are handling, which is lowest. Yeah. Thank you. Thank you. Next question comes from the line of Anshul Agrawal with Emkay. Please go ahead. Hi. Thank you for the opportunity. So my first question is on. Sure. My first question is on pricing. Am I audible? Yeah, yeah. Please tell me. Great. So my first question is on pricing, sir. Our pricing strategy earlier used to be that we used to have certain discounts on the new branches. Is that continuing? Yes, yes. Wherever our structure has been settled with that, wherever there are no return loads and all, there actually there will be lesser price. It is not that actually from-to rates will be same. For example, we opened this Northeast area. To Northeast area our rates are high compared to the rates from Northeast area to rest of India. Got it. So the discounting strategy to attract volumes at new branches, that remains the same, if I got this correct? Yeah, it was there earlier also, and it will continue now also. Got it. Second question is on the bulk procurement of fuel. As a proportion of our total fuel requirement, how higher can we grow? Can we go to, say, 50%? Yeah. Now it is a 40% level we are using. See, every average, our daily consumption is around 3 lakh liters of fuel. Out of that 40%, we are directly using from the refinery. And we are expecting that it is at a peak level, but there is still scope to increase around another 3%-5%. Okay, and what proportion of our existing fleet would be older than, say, 15 years now? 15 years, around, say, 700 vehicles. But out of total capacity we take, say, around 6%-7% of the capacity is older by 15 years. Got it. Thanks. Just to follow up on that, sir, you mentioned that we'll expend about INR 160-odd crores on vehicle CAPEX next year. That will be roughly a gross addition of 400-odd vehicles, right? And we'll say scrap another 100, 200. So net additions will continue to be around 200, 250 vehicles. Is that math correct? Yes. Yeah. Great. Thank you. That's it from my side. All the very best. Thank you. Thank you. Next question comes from the line of Vikram Suryavanshi with PhillipCapital (India) Pvt. Ltd. Please go ahead. Yeah. Good morning, sir. What is the current turnover limit for e-invoice now? E-invoice again is INR five crores now. Okay. And in terms of, I think most questions are answered, so just to get sense on how is our EV addition in last mile basically? No. Currently, see, we are doing a lot of exercise with OEMs on the EV front. Once they create a sustainable model, then we are going to add. So still that product has not come into the market. We are awaiting. Okay. And any thoughts on LNG trucks basically for long-haul and our? Yeah. We are putting efforts in all the angles. But wherever it will fit to our model, then definitely once the acceptable model comes, then definitely we are the first people to invest on the vehicles. Understood. Okay. Thank you. Thank you. Next question comes from the line of Rajashree Maitra with Equirus Securities. Please go ahead. Yes, sir. Thanks for the opportunity. So my question is on employee cost. So any plans on salary hikes going forward? So when and what kind of a hike is expected? Yeah. That's my question. No. Currently, that plan is not there. It may come there about Diwali season or something. During Diwali period or something, we may think about it. Okay. And how much? Whether it will be like a 5-10% hike, 5% hike, or a 10% plus kind of hike? No. We are not about anything on that front as of now, and moreover, on the routine basis, we promote a lot of people, and continuously, even if it is on actual terms, around one and up to two crores, salary cost is increasing. But these costs will not these promoted people within a one-year period and all will continue as it is, so these people will not come again for an incremental list. Thank you. Thanks, sir. Thank you. Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments. Yeah. Thank you, all participants. Thanks for your questions. And hope that I replied it properly. If any clarification or anything directly, you can call me. And as I said, definitely we are having one of the best quarters now in terms of financial performance. And we are expecting that similar performance will continue even going forward on a sustainable basis. And currently, the debt level is high because of our good investment for the future growth in terms of properties. And considering our cash flows, again, the level of debt will come drastically in the coming quarter. That's what we are expecting. With this, actually, I wish to thank everyone and conclude this call. Thank you. Thank you. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you for joining us. You may now disconnect the lines.