Ladies and gentlemen, good morning and welcome to the VRL Logistics Q4 FY25 earnings conference call hosted by Motilal Oswal Financial Services Limited. As a reminder, all participant lines will remain 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 the operator by pressing star, then zero on your touch-tone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Alok Deora from Motilal Oswal Financial Services for opening remarks. Please go ahead. Thank you. Good morning, everyone, and welcome to the Q4 FY25 earnings conference call of VRL Logistics. So today we have with us Mr. Sunil Nalavadi, the CFO of the company. I will now hand over the call to Mr. Nalavadi to provide some opening remarks and discuss the performance, and then we can pick up the Q&A session. Thank you, and over to you, sir. Yeah, thank you, Mr. Alok. Good morning to all participants. I'm Sunil Nalavadi, CFO of VRL Logistics Limited. I welcome all of you once again for the earnings conference call for the quarter four of financial year 2025. This is again a strong quarter marked by revenue growth, substantial improvement in profit margins, and robust cash flow. On a year-on-year basis, the revenue of the quarter has increased from INR 772 crores to INR 812 crores, with a growth of around 5%. The growth in revenue is mainly on account of increasing realization of price per ton, increased by around 18% from 6,724 per ton to INR 7,944 per ton. In addition to the price hikes implemented in the earlier quarter of this year, in the current quarter, we further analyzed most of the business transactions or contracts with their contribution to the margins and potential addition to the overall tonnage of the company. In this process, we identified certain low-margin businesses and discontinued such businesses which impacted on the tonnage. In view of the same, we reached a higher EBITDA and EBITDA margins in our business in the current quarter. We reached a volume of around 10,600 metric tons in the current quarter, and the negative growth in tonnage is due to discontinuation of a low-margin business in the current quarter. On a year-on-year basis, we added around 84 branches, and these branches contributed around 1% to the total tonnage. We also closed around 40 branches, considering the potential of these branches' businesses can be served from the adjoining branches. We continued our initiative to increase the number of branches in the current quarter and added around five new branches. Apart from this, 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 and key route mapping to minimize the number of loading and unloadings, which resulted in optimum utilization of our own vehicles and drastic reduction in dependency on the hired vehicles. The EBITDA is increased by around 74% from INR 109 crores to INR 189 crores, and percentage to revenue is increased from 14% to 23%. Further, the margin improvement is also due to good control on fuel expenses, which is a major cost of operation in our business. We further increased the bulk purchase quantity in the current quarter from 31% to 42% of the total quantity consumed. The fuel procurement cost per liter is reduced from INR 87 to INR 84. On an overall basis, the fuel cost as a percentage to the revenue has been reduced from 29% to around 26%. The improvement in operational efficiencies in the current quarter also leads to improvement in EBITDA margins. We saw major efficiency in effective utilization of our own vehicles. This has supported us to have control on the dependency on the hired vehicles, due to which the hire charges have been reduced from 8% to 4% to the revenue. The rest of the expenses, either in line with the revenue or reduced as a percentage to the revenue due to increasing freight realizations. The improvement in EBITDA led to an increase in EBIT and the net profit margins in the current quarter. The net profit of the company has increased from 21 crores to 74 crores in the quarter, and percentage to revenue has increased from 3% to 9%. On a sequential basis, the revenue has decreased from 831 crores to 811 crores. The growth in revenue is impacted due to a decrease in volume by 9% from 11,004 tons to 10,005 metric tons in a quarter. The decrease in volume is on account of discontinuation of low-margin businesses, and due to which the realization has improved by almost 7% from INR 7,390 per ton to INR 7,944 per ton. Due to improvement in realization, the EBITDA margin has improved from 21% to 23% from 172 crores to 189 crores. And the improvement in EBITDA margin is also due to an increase in bulk purchase of fuel quantity from 39% to 41%. However, the purchase cost per liter has increased from INR 83 to INR 84.5 due to an increase in rates by some of the state governments. The overall fuel cost as a percentage to the revenue is reduced from 26% to, again, 25%. And due to further control on the hired vehicles in the current quarter, it also supported the improvement in EBITDA margins by 1%. And the remaining costs were more or less in line with the revenue. On a full-year basis, the revenue has increased from INR 2,909 crores to INR 3,186 crores, and the increase is mainly due to improvement in the realizations. The realizations are improved due to an increase in freight rates from the second quarter of the last year. The thorough analysis of business contracts in terms of margins has discontinued some of the low-margin businesses in the quarter four. The realization per ton has increased by 10% from INR 6,682 to INR 7,315, and the volumes are maintained at around 4,272,000 metric tons, despite the substantial increase in the realizations. The EBITDA of the company has substantially increased in financial year 25 from INR 414 crores to INR 598 crores, and the EBITDA margins improved from 14% to 19%. The increase in EBITDA is due to an increase in realizations, a decrease in fuel costs, lower hire charges, and control on the remaining expenses, which are more or less in line with the revenue. Due to an increase in EBITDA margins, the net profit of the company has increased from INR 89 crores to INR 183 crores. With the improvement in profitability, our cash generated from the operational activities has increased from INR 409 crores to INR 587 crores. And with having good control on working capital, our post-tax net cash generated from operational activities has been increased from INR 423 crores to INR 558 crores. These cash flows numbers are subject to the Ind AS accounting entries. The strong cash flow is mainly through the internal accruals of the company, which led to robust expansion in the company, robust expansion plans of the company. And the current year's strong cash flows enabled us to make major capital expenditure of around INR 440 crores in a year, including investment in purchase of some of the facilities at Bengaluru, Mysuru, and Mangaluru, along with our routine capital expenditure on the vehicles. The investment in Bengaluru Transshipment Hub is having its own business advantages, with better financial metrics, which have been already shared during our quarter three results. The strong cash flows enabled the company in maintaining an optimum debt-equity ratio of 0.4 times to the equity, with a total net debt as of 31st March of around INR 396 crores. We wish to inform you that there is a considerable improvement in the return metrics as well. The return on capital employed has increased from 10% to 14%, including the lease liability as a capital employed, and the return on equity has increased from 9% to 18%. Considering the improvement in margin and robust cash flows of the company, the board of directors recommended INR 10 per share as a final dividend for the financial year 2025, which is subject to approval from the shareholders in the ensuing board meeting. With this final dividend, the company declared a highest-ever dividend of INR 15 per share, reflecting the company's strong financial performance and commitment to delivering value to the shareholders. Further, our business is a B2B local focus on a less-than-truckload business, with a wide range of customer base of around 9,000 customers, covering a wide range of sectors. Our key strength is having a different mode of collection from the customers, and 85% of our less-than-truckload business is on either paid or to-pay basis, collecting the freight on spot from the customers immediately after the booking or after the completion of the service. Our receivable days from the customers are hardly around 11 to 12 days, which is the lowest in the industry. The company experienced a strong quarter with a robust increase in freight realization and notable improvements in the profit margins, supported by operational efficiencies. Cash flow from operations remained robust and positioning the company well for future growth and investments. With these achievements and positive outlook, we are confident that in maintaining the momentum moving forward. We also would like to emphasize that the reduction in volume is a temporary scenario for a quarter or two, and the growth of the tonnage or tonnage growth will be back as usual, normal from quarter three. That's what we are expecting. Considering the wide range of customers and sectors where we are operating, we are expecting that we will put all our efforts to perform better in the industry. With this, I would conclude my initial remarks. Now, I will request all the participants to question and answer session. Thank you. 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Mukesh Saraf from Avendus Spark. Please go ahead. Yes, so good morning, and thank you for the opportunity. First of all, congratulations on great margin performance. So just on the lines of what you are mentioning with respect to discontinuing some of the low-yielding customers, could you kind of, first of all, help us understand if this activity is done from your side, or is there more such cleanup or discontinuation that we can continue to see going forward? No, most of the activities have been already done. Actually, we started this exercise at the beginning of March itself since most of the agreements are due for the renewals, and even apart from these contractual customers, even some of the commodities also, we have given some special conditions, so considering their contributions and considering the margins in those businesses, we have taken a step to cut down those facilities and, again, pushing for the growth in volumes. Right, right. So just trying to understand that now that you're done with this cleanup, could you kind of help us understand what steps are we taking to get back some of the volume growth back in the system? Because the way I'm seeing, I mean, we've added 84 branches, but these branches have so far yielded just 1% growth in the tonnage. So what steps can we take to get back, say, single-digit, high single-digit volume growth? Yeah, basically, we want to concentrate more on a healthy growth in the volumes. That's our primary objective as of today. And to increase the tonnage, definitely, again, we are putting more concentration on the increasing branches also. We are planning to add, again, 80-100 branches in the next financial year as well. And the branches which have been already opened in last year and prior to that, again, we will put emphasis to increase tonnage from those B.R. Ops. But yeah, I mean, finally, you might be dependent on the general economic activity. And I think in the last few quarters, you have mentioned that that hasn't been great. So if the activity doesn't improve on the ground, is there anything that we could do, say, any new segments, any new geographies, any new services that we might want to kind of provide from our side? What can we do to revive some of this growth? Yeah, obviously, on the geography front, as you are aware, actually, in most cases, new branches are opening in the untapped market. There, actually, we are expecting some good contributions from the volumes. And even in the current year, if you see, the eastern sector has performed very well. So again, that concentration of the untapped market is going to be continued. But as you said, the overall economic conditions, again, it is not up to the mark as of now. So considering those developments, our tonnage growth will be dependent on the coming days. Right. So just lastly, if the tonnage growth remains weak and if competition kind of obviously, you're competing with unorganized operators. So if competition keeps their pricing low and our tonnage remains weak, will we kind of go back to some kind of pricing cards to get back some volumes, or are we okay with, again, another year of, say, flat or weak tonnage while we'll continue to maintain this kind of pricing and will not go back into those low-margin businesses again? Yeah, considering all the aspects, actually, we did this rationalization in the freight rates. So definitely, we will maintain these rates going forward. And see, this rationalization has been done, keeping the competitiveness in the particular sectors at particular route. So keeping in mind all the aspects, actually, we did this exercise, and we will continue these rates. All right, all right. Understood. Great. So thank you so much and all the best. Yeah, thanks. Thank you. The next question comes from the line of Pranay Roop Chatterjee from Burman Capital Management. Please go ahead. Thanks. Good morning, everyone. Am I audible? Yeah, yeah. Please tell me. My first question is on the wider demand. You were touching upon it in the previous answer. So keeping aside the impact of voluntary client attrition, if I may call it that, keeping aside that, in your existing clients, let's say, who were with you even one year back, two years back, in those clients, are you seeing a general sentiment of demand coming back, volumes increasing? Is there even early signs of something like that happening where we can confidently say most of the sector is going to grow upcoming years? Are we there yet, or we still have to wait and watch? The contribution from the existing customers is very nominal growth. It is in the range of around hardly 2%-3%. But in the current scenario, what happened since we tried to maintain the relation and we took stick on to our pricing terms, so intentionally, actually, we closed some of the low-margin businesses, discontinued, and among these customers, again, they are approaching with our pricing terms and all, so going forward, see, we may not get the equivalent volumes, but at least we'll get some volumes from such customers. So my question was more on the wider market sentiment with the context of consumption categories being sort of muted for the last year and a half. So any sense even give us looking beyond your? Yeah, that growth is a very low single-digit number. It's hardly in the range of around 2% to 3%. Got it. And my last question is on pricing. So obviously, you have already commented that you will try to maintain the current prices. My question is, incrementally, FY 2026, 2027, and beyond, basis your latest contract structures, how can you increase pricing further? I'm not saying you will, but what are the occasions? Is it linked to 100% of all your contracts across clients linked to input prices like fuel, or you can take voluntary price hikes as well, probably like you did in January last year? So how should we think of price hikes and when it might happen in future? Yeah, see, always our price increase is depending on the margins. If you see the rate increase, what we did in the end of quarter one or beginning of the quarter two in FY25, it was completely based on our margin structure. The margins have been dipped in quarter one only because of increase in the cost. So apart from the fuel cost, there are many expenses, say, like employee cost and even the toll charges across the country. And many governments have been increased, especially in Karnataka and some of the states. They increased the permit fees on the vehicle. Vehicle tax rates have been increased. So considering these aspects in the industry itself, actually, we are the first movers on the rate hikes. Even on the future dates, depending on our cost structure, we will take a call on the increase in rate. Got it. Thanks a lot, sir. I'll I'll get back to you. Yeah, thank you. Thank you. The next question comes from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead. Yeah, good morning, sir. Thank you for the opportunity. Sir, first thing, in terms of the volumes, what you mentioned is that you have let go of the low-margin segment. So was it for the entire quarter? You said we've discontinued only from early March. So if you could give us a sense as to what was the contribution of this particular segment from a full-year perspective in the past? No, basically, we started this exercise in mid-February, and we analyzed all the contracts, and subsequently, we informed to the customers that considering the existing price versus what the rationale and how much they are contributing to the overall volumes, we informed to the customers, and we informed our new rate structures also, so whoever actually not accepted, we discontinued such business from the March. Okay. So that means their contribution was there in January and February? Yeah, the moment it started in February, actually, they even shifted to some of the other operators. Okay. So which means it started from February itself, and March got accentuated, and by March end, you're fully done with that segment. Is that understanding right? Yes, yes. Okay. Now, if I were to ask you in terms of like-for-like growth, if you remove that customer segment or that particular segment from the base quarter as well and for the entire quarter in March, what would it look like? Would that be flattish? Would that be a growth, or would that still be a decline? No, without this exercise, we were expecting a decline of around 2%-3% in tonnage. Okay. So is it fair to say that the core business, the core segment, still seeing a decline? Is that understanding right? Yeah, definitely in the range of around 2%-3%. Okay, and when you say we are looking for growth, how do we look at any particular segment geography? Because you did mention about the branch addition, but we have seen the branch addition in the past hasn't really contributed a lot, so how do we see that? What will drive the growth? So basically, overall, economic sentiments are weak in the country. And if you take the realistic volume growth, even from the existing customers, it's not up to the mark. So with this, actually, we are putting all our efforts to gather or acquire more and more customers. And especially, we opened more of our branches in the untapped market. Okay, okay. So that brings me to the next question. And these branches what we've opened, these are all the contribution is small branches. See, initially, we cannot expect a good number of volume from these branches. But over a period of, say, two to three years, definitely, we can develop a good base of volume from these branches. Okay. And if I were to ask you, sir, the branches what you opened, say, three years back, what is their contribution now? Is that 15%, 20%, 25%, or it's still 5%-10%? Yeah, three years back, and accumulatively, if you take the new branches, contribution is at least around 8%-10% of the total volume. Okay, okay. Understood. See, just around three years back, we were having around 930, 940 branches. Now we reached almost around 1,251 branches. So the additional branches contribution is at least around 8%-10% of the total volume as of today. Understood, understood. Sir, in terms of the when you said the realization growth is not up to the mark from existing customer, what do you mean? You've taken a, if I remember right, 6%-8% price hike, right? So if you could elaborate a little bit on this particular statement. Yeah. See, basically, what we did, we increased the rate by almost around 8-10% in the beginning of quarter two in the FY25. And during that exercise, actually, for a non-contractual customer, so we increased our card rate. And considering some of the commodities also, we were given a condition. Those conditions have been continued. And for contractual customers, what we did, actually, we increased the rate as and when those quotations or agreements are due for renewal. Since most of the agreements are due for renewal in the month of March, and before renewal also, what we did, we decided in the month of February that we analyze each and every business transactions. Either it may be the commodity transactions or some of the contractual customers where exactly the relation is there. And we did some modification. Just to give you an example, even in the cloth commodities also, see, we were not having any agreement with such customers. But earlier, we used to give some free storage facility to them for at least around 30 days, 60 days, 90 days in some of the sectors. But considering the increase in the rent, considering the cost of that particular space, we reduced those number of days. Even such decisions have been impacted to some extent on the volumes. And now, on a contractual customer, on the rate front, actually, we clearly said that these are the well-studied structure of rates what we defined. And these are all substantiated with the customers that why we are putting the new rates, considering cost of operation, considering that particular route, storage facility, so many factors. So, with that, even if such kind of explanations with some of the customers are not accepting, we have voluntarily discontinued such quantities. By and large, all these customer negotiation is done? Sorry? Just a follow-up, and I'll follow back in the queue. Sir, by and large, all the customer negotiations are done, or it's still going on? Like 80%, 90% is done, or? Yeah, most of the negotiations and the rate structure exercise, rationalization of the rates, that exercise has been already completed. Done. Sure, sir. Thank you. I'll fall back in the queue for follow-up. Thank you. Yes. Thank you. The next question comes from the line of Rahul Agarwal from Bandhan AMC. Please go ahead. Rahul, if you can please unmute your line and ask your question. Hello. Yes, yes, yes, sir. Yes, yes. So Sunilji, the customers that we have discontinued, is this how many would be the ones we would have acquired maybe last one, two years, and how many would be our old customers wherein we know there will be no turnaround? No, most of these customers are old customers because whatever the new agreements we entered after the rate hike, actually, we entered most of the agreements with increased rates only. So some of the customers are old customers with us. Broadly, is it dominating which sector? Not specifically sector. These are all mixed with all the sectors, and as I said, even the changing of policy in some of the textile materials also impacted. It is contribution in all the sectors, not precisely particular sector, but most of the sectors are related to hardware and electronic items, such commodities, even FMCG goods. Okay. The second question from my side is for FY26, when you mentioned that Q4 of this also, you would have grown at volumes at -2% or -3%. So for this year, should we consider that maybe 2%-3% volume regrowth, 6%-7% realization growth, and a margin at the current levels? Is that a good outcome that we should work with? Yeah, on a full-year basis, yes. See, initial first two quarters, we were having a more visibility as of today, and we can give more clarity after the quarter two. But broadly, this type of margins, which is like 20% plus, is that something which we have historically not seen to sustain? At least it sustains for a quarter or two, but for the longer term, it doesn't sustain. So how do you view that? Is it that we have now sustainably reached 20% plus kind of margins, or do you think there could be volatility in that also? No, at least around 19%-20%, that's what we are expecting to maintain. But more clarity will be given after the quarter two. But initially, the quarter one and quarter two, there will be a dip in the volumes, but they'll be more or less maintaining the margins. Okay, okay. Sure. Thanks a lot and all the best to you, sir. Yeah, thank you. Thank you. The next question comes from the line of Harish Shah from REERA Holdings. Please go ahead. Yeah, hi. Good morning, sir. So my question is more from, yeah, from competition point of view. When I look at the listed peers who are also into partial truckload business, now they witnessed almost 19% volume growth in this quarter for this particular segment. And then when I look at their yield per kg, it comes to almost around INR 11, whereas we are somewhere around INR 8. So just wanted to understand why we are seeing 11% volume decline. The other listed peer is seeing volume growth of almost 19%, and they are also doing better realization per tonnage. Just wanted to understand this difference between our approach. No, the realization, it depends on route also. Since we are having a lot of this entire state movements as well, where the realization is less. In the sense, margins will remain the same, but since the distance is less, the overall realization will look lesser than those operators. But most of their route structure is always the long-haul operators. That's a key difference. And so, how would you explain the discrepancy between because they are at 19% volume growth, we are at 11% decline, which would mean that they have taken a significant amount of market share, plus they have also reported very good profitability in this quarter? So, just wanted to understand on that. Yeah, this volume decline, intentionally, we have decided, and we analyzed some of the context, as I said, and we voluntarily decided to discontinue such business because of the low margins. Okay, okay. Understood. Okay. Thank you so much. Yeah. Thank you. The next question comes from the line of Raghav from Aequitas Investments. Please go ahead. Good morning, sir. I just had one small question. What are the sectors that have contributed to growth in this quarter specifically? Sorry? What are the particular sectors which we have catered to which have contributed to some growth in this quarter specifically? There are no specific ones. One is the sector-wide growth at which we are not depending on any particular sector. Since most of the sectors have been impacted on the tonnage because of discontinuation of some of the businesses. Right. I ask this question because normally, we depend more upon FMCG kind of movement. But because that was muted, I wanted to gauge an understanding which sector has contributed to some growth in this quarter and which we can foresee for the next few quarters to grow. No, basically, in that case, sector-wide contribution from each, if you take, it is not considerable in our case. So cloth and textile is contributing major commodity. And again, in that also, we did an 8% negative growth. And next comes to agriculture and food products. Again, that has grown negative by around 6%. Like that, in metal and hardware, the growth is minus by almost around 13% quarter on quarter. Got it. Got it. Great, sir. Thank you so much, sir. Yeah, thanks. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. We take the next question from the line of Alok Deora from Motilal Oswal Financial Services Limited. Please go ahead. Yes, sir. Just wanted to understand. After all these adjustments, we'll see volume growth under pressure for 1H at least of FY26. So if we look at the full year, what kind of volumes we could end up with, what could be the realization like? Because the price hike benefit will go out after the first quarter. And some realization benefit will be there because of this restructuring which you have done on the individual accounts. And secondly, what would be the sustainable margins ahead? Because we did 20% this quarter. So FY26, if I want to sum up into volume growth realization and margins, then what it would look like? Now, since this rationalization exercise has been done in the last quarter, so this negative growth, year-on-year negative growth will continue at least for the first two quarters, and we can see some improvement in tonnage from quarter three onward. Since quarter four tonnage has already dipped, we may show some good growth in quarter four. On a full-year basis, again, the more clarity will come after quarter one or quarter two, so depending on how the customer approach and all, actually, we can give more clarity, and with the realization is concerned, we would like to maintain the existing realizations throughout the year. So you mean 8% realization could be there for next year for FY 26? Yeah, realization around 6% take up, 6%-7%. Sure. And what about margin, sir? This 23% margin which will be there in fourth quarter, how that could shape up in next year considering the volume trajectory and realization, everything? See, volume is, again, the quarter one, it will be maintained around at a good margin. But subsequently, what will happen, again, we have to consider some increment to the employee cost and other things. So based on that, the margin should be depending on these cost structures. Any guidance you want to give? Could it be like 20% range for the margin for this year? That guidance can be. More clarity will come at least after quarter two. Sure. Got it. Got it. Yeah. Yeah, I think that's from my side too. Thank you. Thank you. The next question comes from the line of Krupas hankar from Avendus Spark. Please go ahead. Yeah, thank you for the opportunity. Sir, one question from my side. Given that we are anticipating the weakness in the tonnage, just wanted to get your sense around the CapEx number for the next year. While you did allude that scrappage of old vehicles will be quite limited going ahead, but we have seen close to about 300-plus vehicles getting scraped in FY25. Just wanted to get a sense on how do you see FY26 on your fleet procurement as well as if any CapEx towards network, like buying a hub or expanding your network, etc.? Yeah, considering our good cash flows, again, the investment in vehicles will be in the range of around INR 140-INR 150 crores that will be there. And most of these capex will be for the replacement and with some minimal addition in the capacity. And apart from that, considering again good cash flows and lower debt level, again, we are looking for investment in some of the properties, around one or two properties. So far, what I can see is that you've taken Bengaluru, Mysuru, Mangaluru, and Ahmedabad. Any specific areas where you can highlight? Is it increasing your capacities in the north and the east market because there is a growing demand over there, or is it the existing markets where you're trying to expand based on demand? See, there are some exercises going on in Kolkata. Actually, we are doing some exercises, and in Pune also, we are searching some property. In Salem, we are searching property, but nothing has been crystallized as of today, but definitely there will be one or two property additions there in the next year. Got it. Got it. That's broadly from my side. Thank you. Thank you. Thank you. The next question comes from the line of Jainam Shah from Equirus Securities. Please go ahead. Yeah, hi sir. Am I clearly audible? Yes, sir. Please tell me. Yeah. Sir, just wanted to understand one part. As you are saying that our 85% of the customers are to-pay or paid customers, so the rest 15% are our contractual customers, correct? Yes. So sir, just wanted to understand on this part. As you are saying that we have started taking contract-by-contract rate revision, and that's where our realization has increased and tonnage has dropped. But if we see on a YoY basis, our tonnage has dropped around 10% plus. And if we see 2%-3% is something that we are expecting, then balance 7% is because of this contractual customer maybe not giving us business going forward. So out of 15%, 7% volume growth, does it mean that we have lost 40%-50% business from our contractual customers? Because to-pay and paid customers, there will not be any contracts and we'll be getting it at branches only. No, that understanding is totally wrong. As I said, it is not only contractual customers. Even some of the business transactions, in the sense, we have given certain concessions to certain commodities. Just I gave an example of textile. We were giving a lot of these storage facilities, even 60 days, 90 days free storage. We got to cut down some of the storage facilities, and in some of the goods, actually, we are not collecting the additional charges like the loading and unloading charges we used to collect. Some of the statutory charges we used to collect, we are collecting from the normal transaction, but we have given concession to certain customers, so those concessions have been withdrawn, even for the non-contractual customers. So sir, assuming that this customer that we have taken back all these facilities would have been core customers for us, given that we have given them this kind of facilities only when we would have expected those overall industry or those customers to give us more and more volumes going forward, does it not going to impact our volumes drastically over the next few quarters? No, that exercise has been done, and already the tonnage has been stabilized as of now and these are voluntarily, intentionally, we decided to withdraw those facilities, considering very low margin from those sectors. Got it, sir. And the facilities that we would have withdrawn, let's say for warehousing, we would have been giving for three months. Now we are giving for, let's say, one month or only. So those facilities have also been given back to the, let's say, vendor or anyone, or we are still holding those facilities and cost is still incurring on that? So those, again, the discontinuation of certain godowns and all, that exercise has been done. And moreover, these facilities or concessions are in line with other operators in the industry. That is another strength. So actually, nothing of these concessions are provided by the other operators in the industry. See, just to give some clarity on the textile, most of the textile business, actually, other than the organized players, they are depending on the unorganized service providers. And those operators actually are not giving facility what we are giving. So considering these factual things, we are hoping that, again, those customers will come back to us. Got it. And sir, just last one thing. As you said earlier that we have taken 6% freight, and rest of the realization increase is mainly because of the other cost which is being built up in our billing part. So fair to assume that that particular thing will continue going forward as well as when other cost increases will, of course, pass it on, but our normal freight rate will be the same going forward. Yeah. Okay, sir. Thank you so much. That's it for now, sir. Thank you. The next question comes from the line of Anshul Agrawal from Emkay Global. Please go ahead. Hi, thank you for the opportunity. Hope I'm audible. Yes, sir. Please tell me. So my question is on this bulk procurement of fuel. We have already reached 41% of our consumption. Do we have levers to further improve this number, say about 50% or so? Yeah, we are already consuming at an optimum level, but we are putting our own effort to see. Currently, we are operating with seven own petrol pumps. Now we may add another one or two going forward. But again, it all depends on the volume in that particular area. So there will not be substantial improvement in these numbers, but at least 41% plus can be maintained. Okay. And secondly, on external lorry hire charges, now with volumes being rationalized, if that is how I can put it, external lorry hire charges have also been optimized. With the increase in volumes, if at all they were to come in from H2, would these external lorry hire charges also bump up? No, we are expecting there will not be much increase in the outside vehicles because some of the tonnage has been already now decreased. But considering the capacity of what we are having as of today, there will not be major increase in the lorry hire charges, even though tonnage will increase from Q3 onwards. Okay. We expect lorry hire charges to be at around this 4%-4.5% mark on sales. Yes. Got it. Just one last question on volume, sir, if any. Any lead indicators that we may be on the lookout to expect volume growth coming in since H2? Would it continue to be better monsoons in the southern region or any such lead indicators that you would want us to track to see if H2 sees volume growth? See, one thing I would like to mention here that we will put all our effort to increase the business. Wherever opportunities are there, actually, we wish to put an effort and grab such businesses. But ultimately, it should be healthy business. That's what our motto is as of today. And considering the good economic conditions you've turned out after the quarter one quarter to good monsoon, what you are mentioning, and some good industrial growth, definitely that will support and definitely we can accumulate those volumes going forward. But about the exact growth in the volumes and how it will be turned out, more clarity we can give after the quarter two. Great. Thank you, sir. All the very best. Thank you. Thank you. We take the next question from the line of Sandesh Shetty from HSBC Securities. Please go ahead. Hello, sir. Am I audible? Yes, sir. Please tell me. Sir, you mentioned regarding CapEx that you will be looking at around INR 140-INR 150 crores in vehicle procurement, and you're also looking at investment in certain properties. So, sir, ballpark, what would be the full year CapEx for what you're expecting for FY26? And will it be similar for FY27? No, these property CapEx actually we cannot define as of today. So basically, definitely we are having a surplus cash flow, and we wish to invest these surplus cash flows in good facilities considering the long-term benefits. But again, defining the exact amount as of today is as in when the transactions are crystallized, we can give those numbers. But for the timing, any surplus funds will be used for the reduction in the debt. Okay. And And sir, also, can you further explain what are the steps you are taking to expand your footprint in the north region? Because now that you have rationalized on the customers, can you further elaborate on that? What steps are you taking with respect to geographical expansion to drive volume growth? We are expanding our branch network over there. And moreover, we are highly marketing on some of the commodities which are geographically contributing. Like, as we said, in the northeast sector, earlier we used to depend only on the commodities which are consuming to the northeast. Now, actually, we are concentrating on the products like tea powder and tea products. Even we have analyzed those things, and we have identified the customers, and we have already finalized the rate structure with them. So we are expecting some growth from such products. Like that, actually, wherever we go to the regional places, one is the product we analyze in that market, which are the product potential products which we can add into our services. So based on that, actually, we identify the customers and increase the tonnage. Okay, sir. That's it from my side. Thank you, sir. Thank you. Ladies and gentlemen, we take the last question from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead. Yeah. Thank you for the opportunity. Sir, if I understand what you're saying, essentially you're saying we want to sustain this margin. So margin is our core focus. Have I understood right? Like 18%-20% margin? Yeah. Actually, we want to concentrate on the healthy business. See, margin, again, as I said, there are some employee cost is going to increase going forward. And there may be changes in certain cost structure, but realization will be maintained. Sorry, I'm more asking from a thought process or strategy perspective from next one, two, three year perspective. If I see earlier we did pick up this low margin business, pushed volumes, obviously had some impact on the margin, but we were growing the volumes. Now, today we have decided that we will focus on the healthy volume, profitability, so to say. And that I'm just curious to know, is that a number 18%-20% range? Is that a ROCE you have in mind when you decide what pricing you should offer, whether to take that volume or not to take that volume? No, now this first quarter, definitely there will be good EBITDA margin. So, similar to quarter four because there are no major change in the cost structure. From the quarter two onwards, there may be change in certain percentage in employee cost because it is due for increment. So based on these changes in the cost structure, our EBITDA margin will depend. But however, the realization per ton will be maintained. Okay. Understood, and can you talk? More clarity will come on the margin again after quarter two. Sure. Ladies and gentlemen, we take the next question from the line of Nishant Chowhan from Geojit BNP Paribas. Please go ahead. Hi sir, am I audible? Yes, sir. Please speak. Yeah. So my question is typically only on the staff cost. So if I notice probably over the last four years, our employee costs have been growing by something around 16% CAGR while our revenues are growing by 12%-13% CAGR. And also our employee costs as a percentage of revenues has been increasing to almost say 15% over the last four years. So going ahead, I mean, if we are in a particular scenario where the volumes are not going to be strong enough, and if we continue to grow employee cost by say similar rate, don't you think that would have a negative impact? How much negative impact would that have on our margins? Yeah, definitely that will have an impact on the margins, but ultimately, we have to give increment to the employees also, and last, the regular increase, whatever happened, these are all increased because of some internal promotions and some of the shift of employees to the newer geography. That's the reason, but as a regular process, actually, we are considering the increase in the employee cost in the second quarter. Okay. And sir, what would be the nature of these employee costs? Are they more fixed cost or are they in some way correlated to the? Yeah, employee cost is fixed in nature. Other than drivers, rest of all employee cost is fixed in nature. Okay. Understood, sir. Thank you so much. Thank you. Ladies and gentlemen, with that, we conclude the question and answer session. I now hand the conference over to the management for their closing comments. Yeah, thank you each and everyone. Basically, there are a lot of questions on the volumes and profitability numbers. So considering the rationalization exercise what we did, we can give more clarity on these numbers once we complete either quarter two or quarter one or quarter two. So with that, actually, we wish to conclude this call. Thank you. Thank you. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.