Ladies and gentlemen, good day and welcome to the Adani Ports and SEZ's 2Q FY 2025 earnings conference call hosted by Nuvama Institutional Equities. The management is represented by Mr. Ashwani Gupta, whole-time director and CEO, Adani Ports and SEZ; Mr. Pranav Choudhary, CEO, Ports Business, Adani Ports and SEZ; Mr. Divij Taneja, CEO, Adani Logistics; Mr. D. Muthukumaran, CFO, Adani Ports and SEZ; Mr. Rahul Agarwal, Head of Investor Relations and ESG, Adani Ports and SEZ. 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. I now hand the conference over to Mr. Achal Lohade from Nuvama Institutional Equities. Thank you, and over to you, Mr. Lohade.
Thank you. Good evening, everyone, and a very warm welcome to everyone. On behalf of Nuvama Institutional Equities, I'm pleased to welcome you all to the 2Q FY 2025 earnings call of Adani Ports and SEZ. We will begin with the opening remarks from the management, followed by an interactive Q&A session. With this, I hand over the call to Mr. Rahul Agarwal. Thank you. Over to you, Rahul.
Thank you, Achal. Hello, everyone, and a very warm welcome to APSEZ's second quarter earnings call. We will commence this call with Ashwani's opening remarks.
Good evening. Good evening, everyone, and welcome to APSEZ's H1 FY 2025 earnings conference call. During the period, we continued to strengthen our value proposition as an integrated transport utility company with unmatched waterfront to last-mile connectivity solutions. Our cargo volume increased by 9% year-on-year to 220 million metric tons. Despite disruption in Gangavaram and loss in volume in Mundra and Tuna due to inclement weather, we diversified our marine fleet to add a family of 26 offshore support vessels to acquisition of 80% stake in Astro Offshore. Our logistics assets witnessed all-round growth in rigs, MMLPs, warehousing, trucks, and agri-silos. We have recently closed the acquisition of Gopalpur Port. Along with the planned commissioning of the Vizhinjam Port in quarter three, we are on track to deliver our full-year cargo guidance. During quarter two FY 2025, our revenue, EBITDA, and PAT grew by 6%, 13%, and 37%, respectively.
Our H1 FY 2025 revenue, EBITDA, and PAT was up by 13%, 21%, and 42%, respectively. Our net debt to EBITDA stood at 2x. Based on the momentum we see in the business during the first half of the year, we are well-positioned to hit the upper end of our FY 2025 EBITDA guidance. CRISIL assigned AAA rating to our bank facilities and NCDs. India Ratings also upgraded its credit rating to AAA, and we became the first private infrastructure operator in India to be rated AAA by four domestic rating agencies. We thank you, and we now open the forum for Q&A.
Thank you very much. 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 phone. 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 will wait for a moment while the question queue assembles. The first question comes from Parash Jain from HSBC. Please go ahead.
Thank you. And hi, Ashwani. Thanks for your comment. I have two questions. If you can bring all of us up to speed with respect to developments in Sri Lanka, Vizhinjam, your recent acquisitions, and also any incremental color that you can share with Haifa Port, then we'd much appreciate it. Thank you.
Thank you, Parash. Ashwani here. I think the second half, so let me talk about something which is very much limited to the second half, and then I can talk about years to come. In the second half, we finalized our acquisition transaction in Gopalpur. Definitely, we are seeing a tremendous opportunity in Gopalpur. Very soon, we will be disclosing the volume which we did in October, which are encouraging, which means we are getting a good cargo in Gopalpur after we took over. Which means Gopalpur becomes another feather in our cap, and that too capitalizing on the opportunity on natural resources in our east coast. That's the first thing. The second thing is Vizhinjam. Vizhinjam is doing better than what we planned, and we see many shipping lines making calls to our Vizhinjam.
While we are ramping up, while we are learning with our automated terminal, we are improving our efficiency and ready to take more and more vessels as and if they come in. Number three, as we said, that the full operations of the full-length berth is also on track. Which means Vizhinjam is better than the plan in terms of realization of the opportunity. Also, we have already kicked off the second phase or the final phase where we are going to spend INR 20,000 crores, as we announced, on the next expansion of the Vizhinjam. Which means for us, the first phase is done, and now we are switching our gear to the final phase, which is the full development of Vizhinjam. Then I would like to turn to Sri Lanka. We welcomed the vessel having the cranes.
Cranes are being installed while I'm speaking, and Sri Lanka is also very much on track to start the operations next year in quarter four. We already started seeing a lot of leads from our customers to start talking about how they want to use our Colombo terminal. That's number three. Number four, we acquired Astro, and we completed the transaction last week, so which means Astro is another feather in our cap, especially on the marine business. In Astro also, while we acquired, we were also acquiring more offshore vessels, and we see the new contracts which are coming up on the offshores. Number five, surprisingly, Haifa is working 24 by 7. Very busy port at this moment. I had the opportunity to visit Haifa three weeks before to say thank you to the team who are working under tough circumstances.
I personally visited Haifa Port, and I was surprised to see the overflowing cargo of the cars. Obviously, the business mix has changed, and more and more the car cargoes are arriving because of the South Israeli port not allowed to have the automotive cargoes, especially the cars which come from east, especially Japan and Korea and China, so these all car cargoes are resulting in getting into our Haifa Port, so which means all the four ports are doing extremely well, and then number five, Tanzania. As we are speaking, Tanzania is also getting into a ramp-up phase, and Tanzania is also doing good. That's all, I think, all the five ports which are either acquired as brownfield or started as greenfield, the status as of today.
That's incredibly helpful, Ashwani. Thanks a lot, and have a good evening.
Thank you. The next question comes from Asmeeta Sidhu from MetLife Investment Management. Please go ahead.
Hi. Thank you, Management, for the call today. I just have a question regarding the recent labor strikes we've seen in the U.S. regarding the ports. Was there any implications that were seen from the ports under Adani, or would there have been any implications should the strikes have gone on longer than the three days? Thank you.
To answer to your question very precisely, no, it does not have any impact on us.
All right. Thank you very much.
Thank you.
Thank you. The next question comes from Mr. Achal Lohade from Nuvama. Please go ahead, sir.
Yeah. Thank you for the opportunity, sir. Just a couple of questions from my end. First, with respect to Gangavaram Port, in the past quarter, the run rate was between 8 million tons- 10 million tons, while we have seen first quarter was impacted. Second quarter, we have seen the number at around 6.8. So how do you see this in coming quarters? Do we see absolute normalization, or it's going to take some more time? And also, if you could comment on the margin profile going forward.
Yeah. So talking about the overall business, of course, there is always a tendency to look quarter-over-quarter. But maritime is a business which is, of course, quarter-over-quarter, but also it is to be seen on annual and two-years and three-years basis. I think quarter-over-quarter, we may have opportunities. We may have challenges. In the first half, we saw a challenge with the Gangavaram. We saw Tuna. We saw Mundra. Just last week, we are out from the cyclone Dana, especially in Tamil Nadu. So these kinds of things keep on coming, keep on going, and we have to be just resilient and agile to take care of these challenges.
Having said that, as I said before, the second half is doing, first of all, from the cargo viewpoint, with all these agro commodities, with all these fertilizer commodities which are coming now in the second half, in addition to container cargo, in addition to many other cargoes, and Gopalpur, Vizhinjam, all these coming in addition, definitely we see a good traction in the second half of this year. So now, when we look at a little bit mid to long term, this year also, this half year also, we grew almost double than what India grew, right? So which means in the future, we target to do that. How we can do that? If we all believe in the India growth story, which we do believe in, is more focusing on infrastructure, which is primarily cement and steel, we take care of that.
Number two, industrialization, which is container. We do roughly one out of two containers in India. Number three, energy. Whether it is renewable energy or thermal energy, whether it is coal or it is solar panels or windmills, we do it. And last but not the least, food and fertilizer, we do it, so as Adani Ports and Logistics, these four key pillars of India growth story are 100% linked to us, because of which we are confident that with our 15 strategic assets in India and four strategic assets overseas, we are going to capitalize these opportunities, so what I would say, quarter-over-quarter, first half to second half, in short term, definitely we see the growth, but more than that, in mid to long term, we are gearing up to capitalize all these opportunities. On the margins, Muthu, you would like to say something?
Again, yeah, I think you asked, I guess, two-part questions. The first one is around Gangavaram, and the second part is around the company as a whole. So you would have seen that company as a whole this year, port margin is 72.5%, which actually is upper end of what we have been achieving and more than what we have done in quarter one as well. So as far as Gangavaram is concerned, Gangavaram is also fast recovering in terms of volume. As you quoted the numbers correctly, we are only sort of 22% down compared to the previous year in quarter two. And in quarter three and quarter four, we will make up, specifically in Gangavaram. And company as a whole, as we have been trying to highlight, we are running ahead of the estimates.
Got it. And since we're on the quarter numbers, in terms of realization, particularly for the couple of ports, Dahej and Hazira, we've seen that their realizations are actually down almost in teens on a YoY basis. Is there any particular reason in terms of cargo or anything we should highlight?
So considering the number that you are quoting, I may have to check and come back to you separately because I don't see that actually in my sheet and in whatever we have disclosed. Do you have a page number reference that you can give as to where you are reading this?
Basically, revenue and dividing by the volume to arrive at the realization. And if I could quote the realization, the realization for Hazira is about 699. Dahej is 620.
Maybe we can.
We'll take it offline. No problem.
Yeah, we can do it offline, but it's actually gone up, right? It's actually gone up.
Yeah, I'll come back to you. Let me take it offline. And just last question, if I could with respect to.
Sorry, just to close out.
Yeah.
Sorry, just to close out on that, based on publicly published numbers that we have given out to you also, if you do the division, it should show that actually in both places, we have gone up by at least, I mean, in double digits, not gone down. But we can take it offline.
Sure, sure. My bad. Actually, it is pertaining to Gangavaram, where the realization is lower, but I'll take it offline. The rail volume is up about 4% for the quarter. So how do you see? You have said the overall logistics has done extremely well for the quarter as well. But particularly on the rail volume, container rail volumes, if you could throw some light as to how we have versus the peers and the outlook.
Yeah, I did it this side. So what we have started doing new is we have aggressively started moving from road to rail, and this is reflected in the numbers that you're seeing. This is specifically coming in from the Mundra belt. We have taken a lot of cargo that was traditionally moving by road, and we put them onto our domestic boxes and pushed them across. Yeah, and I'm very glad that you have recognized it because in every quarterly call, people have many questions on logistics, and in every quarterly call, we have been saying that our next focus is logistics, to start with group logistics because we have so many group transportation from cement to energy to everything.
So just to give you figures because you talked about the competition, in the first half, the number one logistics player, who is our main competitor, grew 6%, whereas our rail volumes increased 11%, and as Mr. Divij has explained, with our new strategy, our competitor, domestic volume increased by 15% year-on-year, whereas ALL, Adani Logistics volume, increased by 47% year-on-year, so which means the strategy which we explained about last mile connectivity, which is connecting rail, road, ICDs with the ports, has started working, and we will see the traction in the coming months because of evolution and execution of our strategy. Thank you.
Thank you so much, sir. I'll fall back in the queue. Thank you.
Gaurav, just to close out on your previous query, in this particular quarter, our revenue per MMT was 535, and corresponding quarter last year, it was 515. So we've seen an increase in our overall realization on a year-on-year basis.
Sure, sure. Noted. Thank you.
Thank you. The next question comes from Priyankar Biswas from BNP Paribas. Excellent. Please go ahead.
Thanks for the opportunity, sir. So my first question is, since Tanzania has been integrated, it seems, can you give us an idea of, let's say, the quarterly volume, revenue, and profitability of this asset? That's the first one.
Okay. Can you ask me the question, please?
So for Tanzania, I am asking for what was the volumes, the revenues, and the profitability for this asset in this quarter?
We actually give only the volume, and the volume for this quarter is actually 3 million tons, roughly. I mean, approximately.
Okay, so you do not provide the revenues and profitability for this asset, if I understand it right?
Not right now, Priyankar.
Okay. The other question is, since this just came up in the previous question, you highlighted that the Gopalpur Port has some impact of, let's say, cyclone Dana because of the landfall that it met close to Gopalpur. So what can be the kind of impact, or how much time would it take for us to come back to a relatively normal level of operations, if I may ask?
So the impact was for four and a half hours, and there was no physical damage, and there was no human impact. So four and a half hours already we have recovered. So absolutely, the port is running in a great condition now.
And one more question that I have is this pertains to Gangavaram. What we understand is that the Essar Steel plant that supports some of our volumes over there, that is facing a significant working capital crisis because of which it's almost kind of non-functional. So any idea when these volumes have come back, or what is the stage of negotiations at this there, I mean, so that our volumes can ramp up?
See, as you know, this has been the historical situation as far as the particular plant is concerned. This is not the first time they are actually facing the working capital crunch, but they actually come out pretty quickly as well, usually in a matter of a month or two. So we expect that actually we will, I mean, they will, and oftentimes they also get the support sort of from the government and other people concerned banking, etc. So they come back pretty quickly. So we expect that this time also, they are nearly there, and they should come back soon.
Priyanka, just to put things into context, the proportion of cargo from RINL S teel related to the overall cargo in Gangavaram is just about 10%. It's not very material contribution.
Can you repeat that? You said 10% of the.
Yeah, of the Gangavaram port.
Okay, okay, okay. If I can just squeeze one more in, so I understand that we have been developing LNG-related assets as well. So how are we in terms of utilization of these assets, let's say, in the, let's say, comparison with the prime competitor in the country?
Sorry, in comparison to? What is the last part of the question?
The main competitor in the country.
The LNG terminal, you are asking?
LNG, yes, yes, yes.
See, LNG, the production ramp-up is happening, or rather the utilization ramp-up is happening as planned. You're talking about Gangavaram. And in any case, what we have there is actually a take-or-pay contract.
Okay. Okay, sir. That's all from my side.
Thank you.
Thank you. The next question comes from Alok Deora from Motilal Oswal. Please go ahead.
Hi sir, good evening and congratulations on a very good set of numbers. Sir, just wanted to understand this volume guidance we have maintained for the full year. So based on the kind of subdued volumes in some of the months in the first half, so it's a pretty tall ask for the second half. So how confident we are on this volume guidance? Is there some color on that?
Yeah. I think, as I think I said before, containers, we are very much confident. The agro and fertilizers are coming back with the opening up of things, so we are very confident. In addition to that, we have Gopalpur and Tanzania and so on, which are in addition. So that's why we re-emphasize today our guidance, where the volume between 460-4 80, we are very much confident of achieving that.
Sure. And sir, this logistics business, we have done pretty well on the growth side, but the margins have kind of still been lower than what we were doing last year. So just wanted some understanding on that because, I mean, as we scale up margins, we would expect it to slightly be better or equal to what we were doing previously. So how are we seeing the margins here, or it's more of a support play to the ports' business, and so margins really don't matter much in that sense.
So we explained in the previous quarter as to why the margins had been going down, and we also mentioned at that point in time, we could see that in quarter two, the margins should actually show you the increasing trend. So this quarter, we are talking about a margin of 27% as opposed to 25%. I think you're comparing with the Q2 of the previous year, and this particular hit on margin on a couple of items, to name out one, busy season surcharge, started in Q3 and Q4 of the last year.
So therefore, actually, in short, the margins are coming back, and we expect the margin to stabilize to the levels that we actually have seen in the past in the coming quarters. We've been able to pass on, in short, we've been able to pass on the cost increases to the customer. We have done it over a period of time. We haven't done it on day one, but as of today, all the cost increases have actually been passed on. So you will see that the margins come back to the same level as previous years.
Sure. That's helpful. That's all from my side. Thank you and all the best, sir.
Thank you.
Thank you. The next question comes from Ketan Jain from Avendus Spark. Please go ahead.
Thank you, sir. So my first question is on the growth in volumes. What were the key drivers for our volumes for this quarter, especially container and at Mundra and Dhamra?
Yeah. So the main growth pillar in this quarter was container. The ports in first half, Mundra grew by 17.6%, Karaikal grew by 6.5%, Ennore grew by 36.3%, Kattupalli grew. So you can see the container handling ports grew much. And then most important, Dhamra, because of the natural minerals and the coal, grew by 18.6%. So it's a very well-balanced between West Coast, South Coast, and the East Coast, driven by containers and the dry cargo. And we do believe that this is going to continue because Gopalpur has already started contributing significantly from October. Thank you.
Okay. Also for the coal volumes, is it because more of an inland shipment? Is it because of that?
I think most important is if you look at all India growth, coking volume has been flat in the first half, whereas the imported thermal coal has grown by 4.8%, but coastal coal has only grown by 2%, which is very marginal. So it looks to be this kind of story, but at the end, this is what is the all India cargo. In all this cargo, we have captured the market share, so we have grown our market share in this, and that's where we are pitching. The only commodity which has degrown at all India level is the iron ore, which has gone down by 10.2%, all India level, and the fertilizer, which has gone down by 24.1%. So that is something which is all India cargo, which has gone down.
Iron ore, because of the international pricing, as we all know, and fertilizer, which are very much linked to the government opening of the tenders. For the fertilizers, now we see the opening of the tenders, so the cargo has already started coming in in the month of October. In iron ore, Krishnapatnam has got a challenge because of the logistics costs, but now Dhamra and Gopalpur is capturing the iron ore because of the competitive logistics costs. So that's why even if all India volume is down on iron ore and the fertilizer, we are going to pick up in the second half of this year.
Okay. Understood. So my last question is on capacity expansion. What can we expect in the next three to five years' expansion in the current domestic ports? Where are you looking to expand? Where is the higher demand relatively?
So as you can see in our presentation, we have a very good balance between business commodity mix and the business asset mix, which means across the 7,500 km of coastline, we have the ports, as you know. But because we handle container, dry, and liquid, all the commodities, so we can easily absorb the risk, and we can maximize the opportunity. This is what we have been doing. Now, moving forward, as I said before, India-driven.
Ladies and gentlemen, the line for the management has been disconnected. Please stay connected while we reconnect the management. Ladies and gentlemen, the line for the management has been reconnected, so please go ahead.
Yeah, I was in between of the answers. So having said that, we are increasing our capacity. Hello?
Hello?
Yes, sir.
We are increasing our capacity almost everywhere. Mundra, Hazira, then Kattupalli, then Dhamra. Now, Gopalpur, we have just acquired, so we are not. We are just refurbishing some of the equipment. Krishnapatnam, Gangavaram, I think everywhere somewhere we are doing something because we know that we have to prepare ourselves with the growth, which will be two times than the India growth. As we speak, we are investing in the capacity.
As we have explained in our financial discipline, we have enough cash being generated from the operations to fund our mid- to long-term capacity. This capacity, number one, is to sustain the current assets. Number two, to invest in the technology, which is the digital platform we have developed end-to-end. Number three, in the greenfield projects in the future. So to answer to your question, we keep on investing in increasing our capacity. Hope it answers your question. Thank you.
Yes. Sir, is it possible to quantify any expansions, any plans you have, any quantification in terms of capacity in million terms?
See, I think there are multiple ways in which we can answer this question. First, one detail that we give every year at the beginning of the year is broadly the CapEx plan that we have by port, which is there in the investor deck, where we are talking about in this particular year, we are talking about in Mundra, equipment for T3 to expand the capacity. The South Port rail bridge, which is a CRS, material handling system for a new customer. In Gangavaram, we are doing yard mechanization, and we are actually importing new GSUs , two trains. In Dhamra, we are doing railway doubling and berth construction. We're giving details of specific Capex plan by port in the investor presentation.
In terms of the berth capacity itself, we see I can tell you now in sort of year by year a block of, let's say, five years, where we see actually berth will sort of expand in capacity across almost all our ports. So it's only a question of which one comes when, but on an overall basis, we'll be investing across all our major ports. And if you want to give an order in the next sort of round of expansion, we are talking about potentially a container terminal in Mundra. We're talking about a multi-purpose terminal in Dhamra. And as you know, our VLCC terminal in Mundra is sort of getting commissioned soon. Our Vizhinjam port is getting commissioned soon. Sri Lanka will be getting commissioned this year. So yeah, these are the upcoming commissionings and ongoing expansions.
Understood, sir. Thank you. That's all from my side.
Thank you. The next question comes from Aditya Mongia from Kotak Securities. Please go ahead.
Thank you for the opportunity. I just want to check if I'm audible to you all.
Yes, sir. Please go ahead.
Thank you. The first question that I had was more on the logistics part, specifically rail logistics. I wanted to get a sense of across our MMLPs, where are we getting a lot more market share, gaining market share in this business? And what is driving that market share kind of improvement? Is it pricing? Is it service levels? What is it?
Yeah. Hi, Aditya. So the market share that we are getting into is not from any other MMLP. This is primarily a conversion from road into rail. As you're aware, with the DFC coming in, the ability to double stack is increasing. So comparable to the road, as the distance gets larger, we're able to double stack and eat into those markets.
Aditya, if you're going to have a follow-on question, could you be slightly away from the mic? We're a little too close.
Sure. So the second question that I had was this observation that there is a line item in the cash flow statement talking about payments made for acquisition of subsidiaries. This is about INR 850 crores, and the first half was, I think, at INR 2,400 crores last year. I think last year it was suggested that this is more linked to acquisition of land parcels. Wanted to get a sense of if there are similar kind of acquisitions this year, where is the money being invested inside?
See, I think you're talking about the number, which is INR 835 crores in the cash flow statement. As we have mentioned there, it is for two purposes. One is acquisition of Tanzania, and the other is acquisition of various land parcels. I may have to zoom out a little bit to explain this context. You may recall when we actually talked about the logistics strategy. We said that actually ahead of the market, in anticipation of our new facilities coming in, we are acquiring land across length and breadth of the country, where we have mapped out MMLP and ICDs are coming up and warehouses are coming up.
This follows the detailed study in our strategy as to where there is a market, and clearly, the existing industrial clusters is what we have assumed. We have not assumed any new industrial clusters in the geography coming up. So our expansion plans in MMLPs and warehouse and ICDs are in and around the existing industrial clusters. You might remember that actually we have been commissioning MMLPs in the recent past, Nagpur, Virochannagar. We are working on various other across the country, so we are buying land across. And the land will get bought usually anywhere between two to three quarters of giving land advance.
I would suggest that these several new subsidiaries that have been added in this quarter are also linked to this kind of endeavor. Is that a fair assessment of things?
Sorry, we could not hear the question. Could you repeat, please?
No, sir. I think let's move on to the next question. I hope I'm audible to you still. This Tanzania 3 million tons, is this part of the volume numbers for this quarter for you? And B, what will be the Gopalpur contribution as well as the Vizhinjam and the Colombo contribution for second half as well?
Yeah. So yes, 3 million is part of the 220 that you actually see for the half year. And as far as the Gopalpur is concerned, at the time of acquisition, we have actually told you what the sort of broad numbers of the past is. We will actually see that the numbers of Gopalpur will be along the lines that we presented during the acquisition, which is anywhere between 800,000 ton- 1 million ton per annum.
The Vizhinjam run rate should be around 50,000 TEUs-60,000 TEUs a month.
Thank you. The line for the current participant has been dropped from the queue, so we'll move on to the next question. The next question comes from Nidhesh from ICICI Securities. Please go ahead. Nidhesh, your line is unmuted. Please proceed with your question. As there is no response from the line of the current participant, we'll move on to the next question. The next question comes from Bharanidhar Vijayakumar from Avendus Spark. Please go ahead.
Yeah. Good evening. Am I audible?
Yes, sir. Please go ahead.
Yeah. So, you mentioned about higher rail volumes for logistics business this quarter. So, can you highlight the rail coefficient in major container ports like Mundra and Hazira and others in this particular first half compared to the same period first half last year?
32%. So roughly at Mundra, 32% as of this year. This includes both the import and the export volumes. Import is slightly higher at about 46%, but it averages out to 32%.
Yeah. So how much would it have been last year, sir, same time?
It would be roughly around 31% last year.
Okay. So like that, can you say in which other ports that rail coefficient has increased?
We expect rail coefficient to increase in Dhamra, where we are actually sort of putting a double line. The rest of the ports, actually, as you know, our rail evacuation at this point in time is not directly owned by us. These are the two which are important.
Okay. My second question is on this particular quarter's performance on volume. So we have seen strong volume growth in coal and in ports like Mundra, Krishnapatnam, Dhamra. And this is in light of the overall economy seeing some slowdown, like even power generation was slower. There has been some slowdown in other parts of the economy. So in that light, it is definitely a very good performance. I heard you mention that we have done well because we have also taken market share or market share has increased. But can you spend some more time on specifically what is driving this good volume growth in Mundra, in coal, in Dhamra, in Krishnapatnam?
Okay. No, I think I tried to answer your question that the India growth is being driven by infrastructure, energy, industrialization, and industrialization that, too, medium to high-end capital-intensive industrialization and the food and fertilizers. There could be a shift in the trend of each of the commodity, but at the end, because we are into all these four pillars, we are capitalizing all the four pillars.
So even if the iron ore volume, all India level went down, fertilizer didn't come up, but on the other side, the agri volumes, especially pulses and sugar, they grow by 32% all India volume, right? When we look at iron and steel, all India grew by 6%. When we look at cement, it grew by 3.9%. When we look at POL products, they are grown by 3.9%. LPG, LNG grew by 15.5%. So what I'm trying to and the container volumes grew by 12.3%, out of which we grew much more, and that's where it is. So transshipment volume in India grew by 63.4%, and now with Vizhinjam, we will get there also.
So what I'm trying to tell you here is that we are getting more market share because of our asset and because of our competitiveness from each of the commodities, which is growing either marginal or exponential. And that is a result of that we grew our market share from 26.4% to 27.3% in the H1 FY 2025, which is comprising of all the commodities, but also which is comprising of all the ports, all the major ports in West, East, and South Coast.
So I got it. So if I may squeeze in one last question. So our ports EBITDA margins have grown from 71.5% to 72.3%. I think some EBITDA 80 basis points increase. Anything specific driving this? Because is this driven by realization increase?
So basically, in our ports, what is most important is operational efficiency. But also what is also important is the commodity mix. So more and more, we are growing in containers. Definitely, we have overall EBITDA margin, which is better because containers gives us a good return. So that's a combination of operational efficiency, but also that we are doing more container mix in our portfolio.
Sure. Thank you so much. All the very best.
Thank you.
Thank you. The next question comes from Sumit Kishore from Axis Capital. Please go ahead.
Good evening, and thanks for the opportunity. My first question is that if I look at the domestic port EBITDA per ton versus international port EBITDA per ton, domestic port EBITDA per ton is significantly higher, so could you just explain what is the dynamics here? I understand it's not like for the high, but given the EBITDA margins for even Tanzania included, now have not materially changed the profile. What are your thoughts going forward? Would this be the new normal?
Sure. Actually, it's a very good question because India is a homogeneous market, and all the investment that we make outside India, the market is a bit heterogeneous. It's not exactly sort of comparable, and what is important, instead of just giving the metric of EBITDA per ton, what is important is actually what is our value creation journey, and are we tracking the value creation journey? So we would urge that actually you look at that, and EBITDA per ton is not comparable.
Could you give us a metric on ROC?
Oh, ROE? ROC, we have 15% return on equity in Indian rupee term as the threshold.
Okay, so international, although it's early days yet for Hazira and Tanzania, but they are above this threshold.
Yeah, yeah. Tanzania is above the threshold. It's a mature market and mature port, and in times to come, we may embark on an expansion journey, so at that time, you need to actually wait for fruition of the KPIC, but as far as Sri Lanka, also you'll be able to see it in the next couple of years. We are on that journey, so yeah, I mean, you have to actually see it at the right point in time. As we ramp up and complete the ramping up, you'll be able to see the return.
Sure. My second question is on the SEZ and port development business. We have seen revenue of only INR 170 million for the quarter. I mean, my question is, with so much SEZ development over the years, why isn't there recurring income from lease rentals above a certain threshold on a quarterly basis? So just more for my understanding, why isn't there a recurring lease income?
We have actually spoken about this in the past. What we want to highlight here is that actually it is not quarter by quarter comparable number. What is important is the fact that we have a land bank in the ports that we have actually talked about in the presentation. We have it in multiple ports, and we will, over a long period of time, unlock value from here. And it will not be uniform quarter on quarter. You will see that in some quarters, it spikes up, and in other quarters, it remains subdued.
No, sir, I completely appreciate that. But so are the contracts not structured with some periodic payment on a rental basis as well, or because that used to happen in the past? So is there some change in how contracts are structured?
Oh, it's a good question. Actually, I could have answered it earlier itself. Point taken. Actually, what you see in this quarter, there is no one-off income. So all these in this quarter is coming from the fixed contract. So if there are no new contracts, this money will keep flowing for the next many years to come.
Sure. Thank you so much, and wish you all the best.
Thank you. The next question comes from Jinesh Kothari from Elara Capital. Please go ahead.
Hi, am I audible?
Yeah, Jinesh, go ahead.
Yeah. Thank you. Congratulations for those set of numbers. I had one question regarding our logistics rail volume. So you mentioned in your commentary that there is a shift happening from road to rail. But if I see for the particular quarter, the volume numbers are a mere growth of 4%. So was there any particular commodity that affected this growth in our rail TEU volumes, or was it something cyclical in nature? So I just wanted some insight on that part.
Yeah. So the main commodity that we have gone after is agri-based commodities. So this is primarily a domestic play. So while you look at the number as, say, 4%, the circuits are being established as we speak, and the number is bound to increase after that. But to answer your question specifically, it's conversion of road cargo specifically on agri and both on inbound and outbound.
All right, and I just wanted to get a sense on the CapEx part, so out of the total guidance that we have highlighted for the year, so how much CapEx that we incurred in the first half and the balance that we are aiming in the second half?
Yeah. The amount of CapEx that we have spent in the first half is close to INR 4,400 crores, and the guidance stands. We are anticipating that we will spend the rest of it in the next two quarters.
All right, and just to squeeze in last one question. The volume, you highlighted some of the avenues that you are aiming that will compensate the volume growth and reach our guidance. So just a ballpark number, if you can provide like Vizhinjam, Gopalpur, and Tanzania in the second half, how likely or how is the quantum of volume that we are aiming from those three, four ports that we are looking to add in the second half?
See, we told you actually the sources of volume increase in the second half will happen from both the buckets. Number one, the new ports that we have added in the portfolio, either M&A or greenfield, and the second bucket being ramp-up of volume in existing ports. As to your question on the first bucket, Gopalpur, we told you 800,000- 1 lakh is what, sorry, 800,000- 1 million is what we anticipate in monthly volume, and Vizhinjam, actually, Rahul mentioned sort of, let's say, 50,000 TEUs, which is approximately 750,000 tons per month of volume, and Tanzania, we told you 3 million for this quarter, so it's a reasonably representative number, so that is actually the volume increase sort of from these three new additions that we see.
And Colombo will most likely be commissioned towards the end of the year, so we will probably not have much to be contributed from Colombo in this. And the balance that sort of we expect volume ramp-up is across ports, but fundamentally led by Mundra, Gangavaram, and Dhamra maintaining its course. And a little bit pickup in Krishnapatnam. So these are the four ports that we expect volume drivers to come from.
Sure. Sure. That was helpful. That's all from me. Thank you so much, and happy Diwali.
Thank you. To you too.
Thank you. The next follow-up question comes from Nidhi Shah from ICICI Securities. Please go ahead.
Hi. Thank you so much for taking my question. So firstly, I wanted to ask on the ABPO. So this quarter, we are seeing that the revenues are much, much lower. Is this primarily because this was planned by the company, or is this something that just happened this quarter?
Sorry, which one? Which business is that?
ABPO business. We are seeing that the revenues are much lower compared to last quarter. What is the reason for that? Is that a planned move?
Sorry, that particular word is not clear.
ABPO.
What exactly are you referring, ma'am?
I am referring to the ABPO business. Basically, it's called out in your slide separately.
Could you give us a slide reference number, ma'am?
Yes. One second. In the meantime, if I could just ask you another question while I look for it. So as we know that the Vadhavan Port is coming up in Maharashtra as well as the Murbe Port, do we see that these ports will bring some competition in terms of containers for Hazira and Dahej Port? And also, I understand that Mundra is much further away, but they all share the same hinterland. So do we expect some kind of competition once these ports come up?
So competition is always good, but you know that all India capacity is being increasing. So by 2047, India is looking for 10 billion in terms of capacity. So anyhow, when Vadhavan will come in, it will give us more opportunity to capture more market share. That's what we are looking in Vadhavan. And Vadhavan is also an opportunity for us, not a risk for us.
All right. And to come back to the first question.
Yes, please.
Yeah. Just to come back to the first question, in the apologies, instead of ABPO, I meant to say SEZ and port development.
Port development. That's the same thing that we spoke about, which is SEZ income, which actually we spoke in the last question. So we have two types of income from.
All right. All right.
Yeah, yeah. So we have two types of income coming from there. One is annuity type of income, which is lease rental. We told you that this year or this quarter, we only have annuity. So therefore, this is the minimum income that we will get. And every time we complete a development of a port and do a transaction, you will have one-off port development income.
All right. All right. Thank you.
Actually, we just wanted to bring this yeah. You want to take one more question? Okay. So can we take one more question?
Thank you. Next question comes from Luke Chua from Pictet Asset Management. Please go ahead.
Hi. Good evening. First of all, congratulations on your good performance. Happy Diwali and thank you for the last question for myself. Just one thing. I want to check. In the presentation and the release, there was something that I wanted to look at was your net debt to EBITDA. It was number two in one of the presentations, but in the release statement, it was on the TTM, it was 2.2x, right, and you guided 2.2x, 2.5x forward-looking, and if I take your excellent EBITDA at, you call it, INR 18,000 crores and above, and your CapEx, as you said earlier, of INR 11,000 crores and above, you would draw a lot of free cash, so if that is correct, then are you not going to use the money to delever further? Or the cash would become just dividends going up further? Thank you very much.
Sure. Yes, actually, the September net debt leverage number is 2. And we anticipate at the end of the year, this number will be in the broader region that we have guided, which is 2.2-2.5, fundamentally because two events that have already happened as we report, but post-September, in the month of October, is the acquisition completion of Gopalpur and the acquisition completion of Astro. And as you might have observed in this conversation a few moments ago, our CapEx for the next half is going to be more in the region of INR 6,500 crores. So given a higher utilization in H2, we estimate the EBITDA range to be in 2.2-2.5.
No, thank you. I mean, understood. But then it seems that if your cash flow conversion is as high as I think the most previous year, you should draw a lot of cash. But did I miss something here? Because your CapEx is going to be INR 11,000 crores-INR 12,000 crores, correct?
Yes, yes. No, so in case if our cash conversion is small, we have just said that actually our long-term target for debt is 2.5 leverage. So we will take appropriate actions.
Understood.
It's not based on one quarter, but it has to be probably seen consistently over a few quarters before we can take action in terms of equity adjustment, dividend, or buyback, etc.
Okay. Understood, so you're saying it's more of a medium-term target there. Thank you very much, and yeah.
That's correct. It cannot be based on one single quarter number. It will have to be sustained over a period of time, and then we would actually watch it and then obviously calibrate to two and a half long-term target based on the expansion plans and acquisition plans that we come up with. Good. So that's very much.
Okay. That's good. Thank you. Yeah. Thank you.
Yeah. Thank you very much. Thanks for the participation. It is particularly appreciated in light of the fact that the festival season has already started. Happy Dhanteras to all of you. Happy Diwali to all of you. We hope actually you have a good festival. Please do reach out to us, particularly Rahul Agarwal. He's the contact point. We'll be very happy to answer any questions that we have not answered now, and we've seen that there are some questions coming up on the board, so please do feel free. We will be happy to answer them. Thank you very much.
Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Achal Lohade for closing comments.
Yeah. We thank the management of Adani Ports and SEZ for giving us the opportunity to hold the call. Thank you all for being on the call. Thank you so much. Have a good evening.
Thank you. On behalf of Nuvama Institutional Equities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.