Ladies and gentlemen, good day, and welcome to Q4 FY22 earnings conference call of Adani Ports and SEZ hosted by Edelweiss Securities 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Swarnim Maheshwari from Edelweiss Securities. Thank you and over to you, sir.
Thank you, Margaret. Good evening, everyone. I welcome you all on Adani Ports Q4 FY 2022 conference call. From the management today, we have with us Mr. Karan Adani, CEO and Whole Time Director, Mr. Subrat Tripathy, CEO of Ports Vertical, Mr. Vikram Jaisinghani, CEO of Logistics Vertical, and Mr. Charanjit Singh, Head ESG & Investor Relations. Without further ado, I would just hand over the call to Mr. Karan Adani for his opening remarks, of course, which will be our Q&A session. Thank you and over to you, Karan.
A very good evening to all the participants. Welcome to the conference call to discuss the operational and financial performance of Adani Ports and SEZ Limited for the quarter and year ending 31 March 2022. Let me start with the highlights of FY 2022 and refreshing memories on our strategic vision for APSEZ. Two years back, when we embarked on a journey of making APSEZ the largest port company globally, it was clear that the strategy to achieve this tremendous feat had to be customer centric. Given our two decades of experience in the port business, we were aware of the customer pain points in the logistics supply chain, which formed the building blocks of our decision to transform APSEZ from a port company to a transport utility. Our efforts for the last decade provided us with a robust foundation for vaulting into this new growth path.
In FY 2021 and FY 2022, while we continued our journey for port expansion to drive growth and also mitigate the business concentration risk, but alongside, we developed a roadmap for business transformation and started to action the plan of building our logistics capability. APSEZ's transformational journey reached an inflection point in FY 2022 with various successful acquisitions and some key project wins. First, we gained 100% control of Krishnapatnam Port through the purchase of the balance 25% stake from the outgoing promoter. Second, we acquired 41.9% stake in Gangavaram Port and signed an agreement with the promoters for the acquisition of balance 58.1% stake post the NCLT approval. Third was our acquisition of Sarguja Rail Corridor for its 70-kilometer railway line asset in the state of Chhattisgarh.
Fourth, APSEZ received LOI from Haldia Port Trust for a 5 million tons per annum bulk terminal. Fifth, APSEZ won the bid for a greenfield deep sea port project at Tajpur, West Bengal. These acquisitions and projects fit well with our strategy of focusing on the East Coast, not only from a portfolio diversification perspective, but also establishing our presence in regions with high growth. We recently made another strategic investment with acquisition of India's leading third-party marine service provider, Ocean Sparkle Ltd., that has 94 seaworthy vessels, including 75 tugs. With 27 years of operations, OSL has presence across 28 ports in India and experience of working in key global marine hubs. All these acquisitions implied an investment of around INR 11,400 crores by APSEZ and alongside an organic CapEx of around INR 3,600 crores.
We successfully managed to keep our net debt to EBITDA ratio unchanged at 3.4x. The year also recorded some operational feats by APSEZ team, and we managed to set new benchmarks for India's maritime industry. First, it was a record year of cargo volumes for APSEZ as we crossed 300 million metric ton mark and achieved a cargo throughput of 312 million metric ton, which also includes 150 million metric ton of cargo handling at Mundra Port, first ever by a commercial port in the country. Secondly, APSEZ recorded its highest ever container volume of 8.2 million TEUs, with Mundra alone recording container volume of 6.5 million TEUs, which is 15% higher than its nearest competitor.
Another major milestone for FY 2022 was the visibility on commissioning of various logistics assets, thereby providing sufficient surety that APSEZ is on track to achieve its announced capacity targets. These include investments in 100 trains, 8 operational MMLPs, and total grain silo capacity of around 1.2 million metric tons by FY 2023. With 5 million sq ft of warehousing capacity under construction operation, we are on track to achieve our guided capacity of 60 million sq ft. Another noteworthy achievement of the year are two strategic partnerships. Firstly, a joint venture with John Keells Holdings and Sri Lanka Ports Authority for construction of Colombo West International Terminal 2, and secondly, a partnership with Flipkart for the construction of over 0.5 million sq ft fulfillment center in the upcoming logistics hub at Mumbai. Both these partnerships are ensuring sustainable business growth for APSEZ.
APSEZ continues to be guided by the adopted ESG framework to drive sustainable growth. We continued working towards our goal of making our ports carbon neutral by 2025. Some actions undertaken to achieve the objective include electrification of rubber-tired gantries, electrification of mobile harbor cranes, purchase of electric internal transfer vehicles, and building renewable electricity capacity. To support our carbon neutrality goal, we are also doubling our mangrove plantation target to 2,000 hectares. We will finalize our net zero plan during the year in line with the commitment made by the Science Based Targets initiative. In November last year, the APSEZ board, based on representation from the ESG and Risk Committee, had decided to exit from Myanmar. Thereafter, we announced a timeline of June 2022 to action the board's decision.
My team has worked very hard to ensure that we deliver on this guided timeline. I am pleased to announce that we have recently signed an agreement for sale of our Myanmar asset. The share purchase agreement signed with the buyer will enable us to broadly recover the investment that APSEZ has made in the project. The deal will be concluded after receipt of proceeds in line with the agreed condition precedent. Let me now invite Subrat, Vikram, and Charanjit for a brief on the operational and ESG performance. Thereafter, I will run you through the financials. Over to you, Subrat.
Hello, everyone on the call. Let me give you an overview of the performance at the port vertical. I will start with cargo volumes. APSEZ continues to outperform all India cargo volume growth, and in FY 2022 handled a cargo volume of 312 million metric tons, a growth of 26% as against 5% growth registered by all India ports. The said cargo volume of 312 million metric tons includes 30 million metric tons handled by Gangavaram Port. Now, to add on to what Mr. Karan Adani said earlier, it is a pleasure to see Mundra Port continuing its journey towards glory and set new benchmarks at every turning point. The team at Mundra deserves a special mention for such a spectacular achievement, and I'm sure they're ready for achieving newer heights and win further laurels for APSEZ.
Coming to performance of Mundra Port, it grew by 4% in cargo volume during FY 2022, while the APSEZ portfolio, excluding Mundra, grew by 58%. Non-Mundra ports in the portfolio, especially on the East Coast, are growing faster and have contributed 52% to the cargo basket, which is higher by 10 percentage points. This growth is primarily due to our strategic focus on achieving East Coast-West Coast parity and diversifying cargo mix. With this, we are swiftly moving towards a balance between the West Coast and East Coast, which now improves to 62-38 from a level of 74-26. Our cargo basket continues to see an all-India growth and constitutes 38% container, 50% dry bulk, and 12% liquid cargo. Other products like LNG and LPG that we have added to our cargo basket continues to strengthen our portfolio.
Now, let me share some segment-wise cargo data. First of all, on container cargo. During the full year of FY 2022, APSEZ handled a total container volume of 8.2 million TEUs, a growth of 14% compared to an all-India container growth of 11% on a year-over-year basis. Mundra Port continues to be the largest container handling port with 6.5 million TEUs, which is 15% higher than JNPT. Our strategy of providing multiple entry and exit points by diversifying our geographic footprint, single window service to the shipping lines, integrated supply chain solutions to the end customers, along with partnering large shipping lines through our JVs, enables continuous gain in market share.
Mundra currently has a market share in excess of 33% in all India container volume. Our efforts to strengthen the position in container segment, add newer locations, and offer unique solutions to shipping lines resulted in the addition of 9 new container services, of which 6 services were added at Mundra Port and 1 each at Hazira, Katupalli, and Ennore ports. This will contribute around 245,000 TEUs of container volume per annum. Talking about dry bulk cargo, during the year, the total dry bulk cargo handled was 156 million metric tons, which is a jump of 42%. Within this segment, minerals grew by 97%, coking coal by 39%, and a total coal volume registered a growth of 32%.
To enrich and diversify our cargo basket, we have added four new cargo types, namely sulfur at Dahej Port, dolomite at Katupalli Port, gypsum at Krishnapatnam, and LD Slag at Dhamra Port. We have added new customers at Dhamra Port, including names such as Bhushan Power & Steel Limited. Krishnapatnam Port, which was acquired in FY 2021, continues to see the adoption of best practices of APSEZ. We are enhancing capacity by debottlenecking and mechanizing operations at a brisk pace. For the first time, limestone was handled through a mechanized conveyor, improving port productivity and efficiency, at the same time helping increase margin portfolio for the product. During the period, we have added 12,000 sq m of covered godown to handle agri products. We continue to add new customers at Krishnapatnam Port, and this will go a long way towards achieving the full potential of the port.
Moving to liquid cargo, APSEZ handled liquid cargo, including crude of 34.7 million metric tons, implying a growth of 19%. All India liquid cargo handling ports registered double-digit growth. This was led by higher volume handled at Hazira and Mundra ports. As a part of our cargo diversification, we have added LPG and LNG cargos into our portfolio. In FY 2022, APSEZ handled 1.5 million tons of LPG and LNG. With the rise in demand for gas products as a greener source of energy, we expect to see volume growth in this segment as well. I'm happy to inform that the LNG terminal which was under construction at Dhamra is now nearing completion and is expected to be commissioned in November 2022. As you may know, this is a 5 million metric ton capacity terminal with a user pay contract with IOCL and GAIL.
Coming to the performance in Q4 of FY 2022, we have handled 78 million metric tons of cargo in Q4 FY 2022, which is a year-on-year growth of 7%. This growth was led by Dahej, which grew by 58%, Ennore 61%, and addition of Gangavaram. Cargo volume without GPL was subdued on account of lower import of coal by key IPPs and lower trading coal volume, which was impacted due to higher commodity prices, disruptions in the supply chain. We believe with the revival of demand from coastal power plants due to increase in power demand and softening of prices globally, coal volume in coming quarter is likely to improve. I will now hand over to Vikram to update you on the logistics vertical. Over to you, Vikram.
Thank you, Subrat. Good evening to everyone on the call. Let me give you an overview of the performance at the logistics vertical. Speaking about logistics operation in the last one year, Adani Logistics has witnessed a 29% increase in rail volume as compared to last year. That is 3,13,273 TEUs versus 4,03,737 TEUs. This has been achieved with recommencement of Kila Raipur Logistics Park operations in December 2021. We have also commissioned Nagpur Multi-Modal Logistics Park in December 2021. With this, we now have a strong central India presence and have six multi-modal logistics parks. Furthermore, the logistics parks at Virochannagar, Taloja, and Panipat are under development as per plan.
GPWIS vertical continued its growth trajectory, with new circuits added from mines to power plants. The bulk cargo transportation is gaining momentum and helped us achieve 100% growth in financial year 2022. During the period, Adani Logistics handled 8.81 million metric tons against 4.41 million metric tons in financial year 2021. We have also commissioned 13 new rakes during the period. With that, we have 23 GPWIS rakes in our stable, with 2 more rakes to be added by Q1 FY23. Adani Logistics now operates 75 rakes as against 61 rakes in financial year 2021. We will continue to add rail assets as we expand our network footprint and scale up in existing and adding new circuits.
Coming to Adani Agri Logistics, three projects of 1 lakh 50,000 metric ton capacity at Panipat, Kannauj, and Dhamra have been completed last financial year. Darbhanga and Samastipur projects totaling 1 lakh metric ton capacity are under construction and progressing as per plan. In warehousing, our new grade A warehousing facilities at Mumbai, Indore, Palwal, Ranoli, Kochi, and Virochannagar are under construction, totaling 4 million sq ft, which will be commissioned by quarter 4 FY 2023. We have successfully signed and closed deals for 0.8 million sq ft cumulatively. Furthermore, we are also in final stages of signing LOI with clients for 0.5 million sq ft built to suit warehouse. Adani Logistics is on its trajectory to emerge as a leading company in grade A warehousing with the commencement of new projects, while also focusing on strategic acquisitions for warehousing assets.
We are working in line with our vision to become an end-to-end integrated logistics service provider in India by creating logistics infrastructure, including multimodal logistics parks, warehouses, grain silos, and complete rail solutions for container, liquid, grain, bulk, and auto cargo. I will now hand over to Charanjit to update you on the ESG performance of APSEZ. Over to you, CJ.
Thank you, Vikram, and very warm wishes to everyone on the call. APSEZ's ESG effort in FY 2022 gained momentum on various fronts. On the environmental side, the focus is now three-pronged. First, achieving carbon neutrality by 2025. Second, targeting water supply from non-competing sources only. Third is progress towards biodiversity positive status. As emphasized by our CEO, we are marching firmly towards our target of achieving carbon neutrality with various initiatives underway. Besides retrofitting of RTGs and key cranes, APSEZ has also initiated transitioning of ITVs from IC engine to battery type. We are also actively exploring low carbon solutions for each stacker, empty container handler, shunter, dumper, and other equipment. With India being a water stressed nation, we are making necessary efforts to ensure that our water supplies are from non-competing sources, such as treated non-potable water, harvested rainwater, or desalinated water.
Around 50% of our total water requirement is now being met from such sources. This lower proportion versus the last year is due to inclusion of Krishnapatnam. With the efforts being made at our end, this number will be in the range of 80%-90% by 2025. APSEZ has also intensified its effort towards biodiversity improvement. The company is credited for the management of 6,000+ hectares of mangrove plantation, a record by any corporate in India. Mr. Karan Adani has already announced for another 2,000 hectares of mangrove plantation to further support our carbon neutrality objective. We continue with our endeavor of supporting the communities in line with group's agenda of growth with goodness. Our social initiatives are currently reaching to around 800,000 people, and we are targeting to take this to 1 million people in the next few year.
A third-party impact assessment of some of the key community focused initiatives is in progress and will enable us to have a more targeted approach. More importantly, we have ended the financial year with outperformance on most of the environmental and social metrics against our targets. From the corporate governance perspective, APSEZ's decision to make three of its key Board committees, that is Audit Committee, Nomination and Remuneration Committee, and the Corporate Responsibility Committee, fully independent is a strong reflection of company's management walking the talk to achieve ESG leadership. Not many companies in India and other emerging markets have achieved this feat. With this, now let me hand over to Mr. Karan Adani to update you on the financial performance. Over to you, Karan bhai.
Now speaking of the financials, consolidated revenue grew by 27% year-on-year to INR 15,934 crore in FY 2022. This is backed by 21% growth in port revenue, logistics revenue growth by 26%, as well as higher SEZ and port-led development income. During the corresponding year, total EBITDA grew by 22% to INR 9,811 crore. Speaking about port operations, in FY 2022, revenue increased by 21% year-on-year to INR 12,964 crore. EBITDA for the same period grew by 21% year-on-year to INR 9,120 crore, in line with the increase in cargo volume.
Overall port EBITDA margins stood at 70%. Speaking of the logistics business, in FY 2022, revenue from the logistics business stood at INR 1,208 crores, a growth of 26% on account of improving container and bulk rail and terminal traffic, along with improvement in rolling stock, both for container and bulk cargo movement. Our efforts to diversify by adding bulk cargo, elimination of loss-making routes, and operational efficiency resulted in a significant increase in EBITDA and margin. While logistics business EBITDA grew by 41% to INR 320 crores, the EBITDA margin expanded by 283 basis points to 26% on a year-on-year basis. During the year, profit before tax stood at INR 5,946 crores, and PAT stood at INR 4,795 crores.
During the period, the tax incidence was lower due to the lower composition of profit from APSEZ standalone entity, which was impacted by the Forex movement. During the year ending March 31, 2022, trade receivables reduced by 10% from INR 2,386 crores to INR 2,170 crores. This is despite a 27% increase in total revenue. Accordingly, DSO has improved by 29% from 69 days to 49 days. During the period, net debt to EBITDA remained within the guided range and stands at 3.4 times. The said net debt to EBITDA does not include EBITDA and cash from Gangavaram Port. If included on a pro forma basis, the net debt to EBITDA stands at 3 times.
Net debt to equity during the year has improved to 0.85x in FY22 compared to 0.89x in FY21. APSEZ continues to maintain its investment grade rating, and two of the three major international rating agencies, namely Moody's and S&P, have maintained a stable outlook. The company has been maintaining key ratios within the desired range while growing rapidly. Moving into FY23, I am confident of APSEZ's growth prospect that are supported by a number of catalysts. Firstly, India's GDP growth rate for the year is estimated to be 8%-9%, and with the government targeting to make India $5 trillion economy by mid of the decade, we see a good boost to India's exports.
Increase in iron and steel trade, which can be attributed to China's decision to cap its steel production to the 2021 levels and absence of exports from Russia. This is likely to boost coking coal import by India. Another key growth catalyst is the increase in India's power demand and a higher fuel cost allowed as a pass-through by some states, thereby resulting in a recovery in coal volumes at port. There are some APSEZ specific catalysts, such as the start of operations at Gangavaram Container Terminal and Dhamra LNG, wherein we have already signed delivery contracts. Similarly, for our logistics business, we have signed some leasing contracts for the warehousing facility where the construction was started in FY 2022. Our cargo volumes in March and April are a good reflection of the improving momentum.
Considering the mentioned catalyst, we are guiding for volume for FY 2023 to be in the range of 350-360 million metric tons. This will translate to consolidated revenue to be in the range of INR 19,200-INR 19,800 crores. Consolidated EBITDA to be in the range of INR 12,200-INR 12,600 crores. Port revenue, range of INR 16,700-INR 17,000 crores. Port EBITDA to be in the range of INR 11,600-INR 12,000 crores. Logistics business to generate a revenue between 1,500-1,600 crores. CapEx for the period to be in the range of INR 8,500-INR 9,000 crores.
Free cash flow from operations after adjusting for working capital changes, CapEx, and net interest costs during the period is expected to be in the range of INR 1,400 crore-INR 1,700 crore. Net debt to EBITDA is expected to be in the range of 3-3.5x. The board has recommended a dividend of 20% of PAT for the year, which is as per the dividend distribution and shareholders' return policy. In conclusion, let me summarize our performance in FY 2022. It has been a stellar year for APSEZ on multiple fronts. This includes a record cargo volume, organic and inorganic investment, and the strategic partnerships formed during the year. It also marked a critical point in APSEZ's transition from a port operator to a transport utility.
We believe that APSEZ is all set to emerge as a proxy to India's growth story of becoming the third largest economy in the world.
With a zeal to make India an alternative manufacturing hub, the government of India is making significant initiatives to boost the country's infrastructure, which is likely to boost the country's economy in the coming years. The analyst estimates are reflecting India's GDP to grow at higher than various other key emerging economies. APSEZ, with a formidable footprint along the entire shoreline of the country and with access to over 90% of the country's hinterland, is all set to ride this growth wave. Our investments in logistics infrastructure, including a network of multimodal logistics park, container and bulk rolling stocks, and warehousing facility, are enabling us to reach the customer gate. To enhance customer service, we are integrating technology into our infrastructure platform for a tailor-made single window solution and capture a higher wallet share.
I am sure with all this, we are on track to achieve our FY 25 business growth targets. Let me conclude by saying that our focus on customer and sustainability will enable APSEZ to achieve its growth ambition and become a global role model. With this, we can open the lines for question and answer.
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 the touchtone 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. Anyone who would like to ask a question, please press star and one at this time. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from DAM Capital. Please go ahead.
Yeah. Good evening, sir, and congratulations on a very good year, especially on the acquisition of some of the marquee assets. So my first question is how much is the tariff hike you are baking in the current guidance given that the, you know, the cargo guidance is of around 12%-15% hike, or 15% increase. However, the revenue guidance is around 28%-30%. Are we expecting any improvement in coal supply to Mundra power plants given that the last year, I think one of the major reason of, you know, slightly muted growth was primarily because the Mundra power plants were operating at a very low PLF.
In our guidance, what we have given, we have not taken a major growth in coal volumes. We have kept it at the same level as what we did last year. In cooking coal we have taken a 10%-12% growth in the cooking coal volume. On the coal volume, thermal coal, we have kept it more or less at the same level as what was there last year.
Tariff hike, sir?
Sorry?
Tariff hike. Have you taken a tariff hike you are baking in the current guidance, because cargo is 12%-15%, while terminal guidance is 20%-30%.
Yes, we have also. See, there is certainly a tariff hike in line with the past trends, but also the revenue number includes OSL.
Okay. Understood, sir. Understood. Secondly on the we are looking to expand the new capacity CT5, is this expansion of new capacity CT5 contingent on the renewal of concession agreement, and have you heard anything on the renewal? Can you please share any update?
You know, this is not contingent to the extension of the concession agreement. At Mundra, our existing terminals are operating at 90% plus capacity and we are seeing a robust customer demand. That's the reason we are very confident that whatever CapEx we are putting, the payback would be within the concession period that we have. In terms of from a concession period point of view, we are at the last stage of policy rollout. We expect the policy rollout from Gujarat government to come out, hopefully by this year, this calendar year.
We are hopeful for to give that clarity to all the investors once the policy is out.
Understood, sir. Thank you and all the best, sir. Thank you.
Thank you.
Thank you. The next question is from the line of Ashish Shah from Centrum Broking. Please go ahead.
Yeah. Thank you for the opportunity. Sir, first question is on the INR 23,000 crore CapEx plan that we have unmet. Over what period is this plan? Second, if it changes or anything in our 500 million ton guidance, so does the guidance get increased because of this CapEx plan?
23,000 crore CapEx, that is keeping in mind not just port, but it is for whole APSEZ, that is ports, logistics, the marine business, the truck business, storage business as well. As you know, in this, last year we had started the new business, which is warehousing, and that is a big, if you see almost, from this year's guidance, one-fourth of the CapEx goes towards the new business. From our point of view, the 23,000 crores is in till FY 2025. This only helps us not just up to the 500 but, also part of it helps us to move after the 500 as well.
Sure. Secondly, in terms of the expected return from this CapEx, I mean, prima facie, just a little back-of-the-envelope kind of a number seems to suggest that if INR 4,100 crore is the EBITDA at an optimum level from this INR 23,000 crore CapEx, then the post-tax ROC probably could be, you know, lesser than maybe 11% or 12%. If there is any clarity you can provide on that, it'll be helpful.
Ashish, Charanjit here. We have all the numbers with you, but given that we have only a few minutes left for this call, right, 15, 20 minutes, so I request that we focus on-
Sure.
The strategic questions in this call. For each and every number, the IR team will give you the data points. We have every number with us. Does that make sense?
Yes. Thank you. Thank you, sir.
Thank you.
Thank you.
Yeah, thank you.
Thank you. The next question is from the line of Parash Jain from HSBC. Please go ahead.
Thank you. Sam, I have probably three questions to ask.
Sorry to interrupt. You see your audio is not very clear. It's not audible as well. Can you please check?
Okay. Let me try to be heard whatever I can.
If you can come in the handset mode.
Handset?
It's actually breaking also. I think it's the network.
Could be. Actually, I'm dialing it from home. I don't know. Otherwise, probably I'll reach out to CJ after the call.
We can hear you, Parash. Parash, we can hear you. Good.
Okay. Lovely. Yeah. First question is, currently with the whole world debating about whether we are heading into a stagflation or a recession, you are embarking on a like multi-fold than your previous hundred. What is that paying for versus your existing capacity? Will it simply a route of improving utilization as a way to grow your throughput? Secondly would be, with what's going on in Colombo, does it change or do you need to adjust your timeline or CapEx with respect to your upcoming venture? Thank you.
Parash, you were breaking up a little bit, but, if I understand correctly, your question was, with the uncertainty, global uncertainty, what is the confidence level on the CapEx program that we are embarking on? Am I correct?
Yes. Yes.
Okay. If you see, Parash, in terms of our CapEx, you know, half of the total CapEx is in the logistics, and it is focused on warehousing. You know, if you see the breakup, part of that also, we are very confident on, that is because it has nothing to do with the growth, but it is actually to do with the mindset change from consumer going towards more of digital. We are replacing a lot of Grade B and Grade C warehouse to Grade A. If you see, we do believe that, out of the total CapEx, INR 2,500 crores on warehousing, we are very confident on, and we don't expect any changes on that front.
You know, 50% of the CapEx on the port side is focused on the container segment, and mainly it is in Mundra, Gangavaram and Dhamra. The second is the two greenfield projects, that is Vizhinjam and Colombo. In Mundra, we are already at 90%, as I said earlier. With that we need to expand because we are seeing significant growth coming in and demand coming in, and we don't expect that demand you know, slowing down. Gangavaram and Dhamra. Gangavaram is again a new site for us, new territory. We do expect to take volume out of Visakhapatnam Port over there because we'll have better facility, deeper draft. Same on Gangavaram and Dhamra.
We've been talking about starting container business in Dhamra when we took over. We do expect Dhamra to compete and be a hub port for not just Bangladesh, but even Calcutta. As I said, the Vizhinjam and WCT, that is the container terminal in Colombo, we are very confident on closing on those two terminals. I will answer your Colombo question next. The remaining 50% of the CapEx on the port, from that also 50% is in Dhamra itself and we are seeing the kind of volumes that are coming in.
We do expect, you know, a lot, that we are actually running short of capacity on that front. Even in Dhamra a lot of the CapEx is mechanization.
Yes. Yes.
Yeah. On Dhamra, you know, a lot of the expansion that we are doing is mechanization and expansion of capacity by mechanization. It's predominantly to do with the hinterland development in terms of mining and the steel plant expansion that we are seeing. On Colombo, we are very confident. Let me answer the first question, that is, the business rationale for doing a terminal in Colombo does not change. Actually, with the kind of disruptions that we are seeing, our conviction on actually the capacity enhancement between both Vizag and Colombo is more solid, and we do believe that that is the right option to the right choice.
Given the current situation, we are working in terms of how do we give as much orders as possible through local contractors and basically to support the local contractor growth and local employment. As of today, we don't expect any major changes in the timeline. We do expect that by FY 2024 we'll have the first phase of Colombo terminal up and operational.
Okay. Perfect. Thank you so much, Karan, and have a lovely day.
Thank you.
Thank you. The next question is from the line of Vibhor Singhal from PhillipCapital. Please go ahead.
Yeah, hi. Thanks for taking my question. So Karan, just a couple of questions from my side. I mean, you just spoke about the overall CapEx plan and 50% of it being logistics. Especially in the warehousing, if I look at the next year CapEx of around INR 2,500 crores, how do you see that playing out over the next 3-4 years? Is it going to be kind of a recurring CapEx plan or is it like kind of front-ended in effect of the three and then it slowly goes on taper off? How do we see this enhancing of capacity in the warehouse specifically?
On warehousing front, as you know that we had last year given our vision statement of 50 million sq ft. This INR 2,500 crores gives us 9 million sq ft, which will get operational by Q1 of FY 2025 and by next year, by Q1 of next year. Till the time we don't reach 50 million sq ft, you will see more or less similar recurring CapEx happening in the warehousing sector.
The thumb rule could be for, let's say, around 10 million sq ft you would spend around INR 2,500 crores. You could use that as a thumb rule. Yeah.
Yeah. 10 million is 2,500, so let's assume for next 5 years another 3-10 million sq ft will keep getting added.
Keep getting added. Got it. That's very helpful. Also just wanted to check on the margins front. I mean, basically, our port margins are overall in India 70%, and we are basically trying to, I mean, whatever ports that we acquire, we, of course, tend to take them to the similar levels. On the same front, where do you see the overall margins for the company going and any of the ports. Would that also be applicable for Gangavaram Port of keeping its margins around 70%?
Your question is on the margins, right? EBITDA margins?
Yeah, on the margins. Yeah, EBITDA margins.
Okay. Just specifically to ports or you're talking overall?
Gangavaram Port and overall. What is the outlook for the three margins separately?
Yeah. Gangavaram, our target is after the acquisition is completed, we would be taking it up to, we have a plan ready which will take the margins up to 72%, 71%-72%. There are certain costs which we can't touch till the acquisition is not completed. Once that is done, we do expect we will be reaching to 71-72. We've already reached 65%-66% if I'm not wrong.
Overall margins I think, we will keep pushing, you know, teams keep working on it, in terms of from a port point of view and, our guidance still continues that, you know, we'll keep pushing for 1%-1.5% growth in our EBITDA margins, for overall ports.
For overall margins. Got it. Thank you so much. Thanks for taking my questions and have a short day.
Thank you.
Thank you. The next question is from the line of Nikhil Nigania from Bernstein. Please go ahead.
Yeah, hi. Thank you for taking my question. My question is the container market share for Adani Ports. We do see some pressure in maintaining that market share through the last few quarters. What could be the reason for that and how do you see it changing, going forward?
I think if you see the pressure that we were facing on the overall container business was mainly on the south side that is between Krishnapatnam and/or Kakinada. I think on the north combining both Hazira and Mundra we are. We've not lost any market share. Actually we've been gaining. I think on the south side we have few opportunities which we are working on and few lines that we are looking at shifting. I think we are confident that this year we will recover south so on the south side we should be able to recover we should be able to recover significantly.
On the west, we do continue to push and as the rail connectivity in Mundra keeps increasing, we are very confident that, you know, we will continue to grow our market share on the west side.
Understood. Thank you, sir. One last question. This one big Forex cost in this quarter, any view that you could share on that would be helpful, because it's a big number.
Yeah, as you all know, it's a mark-to-market cost. As you know that we have a natural hedge. It is not a cash flow item, but it is more of mark-to-market and because of the natural hedge that we have, we actually because of the dollar income that we get, we don't hedge our debt. We've always seen that we always look at it as the mark-to-market more on the 5-6-year horizon. If you see that it's more or less nullifies itself. It makes sense not to hedge it because our interest cost remains, you know, is at the lower side of the lower side, and that's what we focus on.
To be honest, I don't have any guidance on or thoughts, but this is what we can say. We continue with our strategy of not hedging, leaving it as a natural hedge. We focus on and we look at more on the net interest cost on an overall cash. This is not a cash flow item for us.
Understood. Appreciate your answer. Thank you.
Thank you. The next question is from the line of Nikhil Abhyankar from DAM Capital. Please go ahead.
Thank you for giving me this opportunity. I've got just a couple of questions. What is your expectation of monetization of land in the medium term, given the ambitious plans of the group companies? The second question is there any update about stake sale in NQXT, any update from the government? Thank you.
Look, it's hard to give a longer term on the SEZ because there are multiple one-off items which are coming on in terms of land sale. We can give you this year's guidance. We have roughly INR 350 crores worth of land sale, which will happen and which we have a very good visibility. Actually, we have a full visibility of it. I would not say pretty good, but we have a full visibility. I think there are multiple land deals that we are working on, but it's on an overall long-term basis, you can take INR 700-INR 800 crores every year is what we would be targeting on. On NQXT. Sorry, go ahead.
You had a question on that? You want me to follow up?
No, I was just saying that, I was just asking about NQXT.
Yeah. On NQXT, it's you know I'll just restate our you know our thoughts over there. We are very keen on it. It is a strategic asset. From our point of view, as you can see, the balance sheet, it will be a fully funded acquisition as and when it comes. Timing of it is difficult to see. I think it is very difficult for us to give a timeline because I think, as you all know, one of the big issue, I mean, well, not issue, but one of the big steps that government needs to solve on is how will they treat the land and what will be the land licensing fee.
I think once that is approved, we do expect then the sale process to fast-track. But it's very hard to give a timeline as of now.
Thank you. That's all.
Thank you. Ladies and gentlemen, you may press star and one to ask a question at this time. The next question is from the line of Sagar Parekh from Financial Consultants Group. Please go ahead.
Yeah, hi. Thanks for taking my question. I just harping on this MTM loss again. I understand it's not a cash flow item, but does it mean that this INR 500 crore loss is basically so as the rupee depreciates, your loan amount in absolute terms increases by that much? Is that the right way to look at it?
No, that's not the right way to look at it because our loan is in dollars and as well as our income is in dollars. As part of our policy, the way we look at it is we look at our five-year dollar inflow and any repayment that has to happen at a particular year, we as part of treasury policy keep that income, we provide for it in our cash flows for that part during that particular year. I don't think, because of the dollar movement, our debt increases.
Okay. In the presentation, you have given about $580 million of revenue in dollar terms in FY 2022. How much would that be in FY 2023 and how much is the dollar driven repayments that are coming up in FY 2023?
I'll request CJ and finance team to answer that.
Yeah.
Yes. See, with respect to the growth, what we are factoring, you can consider in the same proportion.
Okay.
For the revenue.
No. In terms of repayment, liability repayment in dollars for FY 2023.
Yeah. There you see the charts what we have given on slide number 27, I think.
Right.
26 to be more precise. We have, given the coverage that we have. We have a coverage of around 2.5-3 from a longer-term perspective, even for FY 2023.
Okay. Basically, the $600 million of revenue in dollar terms will take care of the liability repayment for this year.
Slide number 26.
Okay. I'll possibly take it offline with the IR team. Thanks. That's it now from my side.
Thank you. As there are no further questions, I now hand the conference over to the management for closing comments.
Thank you, everybody. Our IR team is always available to answer any questions and to clarify. Even me and my team are available if there is any doubts that are not settled by the IR team as well. Thank you for your support and look forward to hearing from all of you.
Thank you. On behalf of Edelweiss Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.