Ladies and gentlemen, good day, and welcome to Adani Ports and Special Economic Zone Limited's Q3 FY 2026 conference call, hosted by Emkay Global Financial Services Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing Star, then zero on your touchtone phone. I now hand the conference over to Mr. Anshul Agrawal from Emkay Global Financial Services Limited. Thank you, and over to you, sir.
Thanks, Rohit. Good evening, everyone. I would like to welcome the management and thank them for giving us this opportunity to host the earnings call. Representing the senior management, we have with us today Mr. Ashwani Gupta, Full-Time Director and Chief Executive Officer, Mr. D. Muthukumaran, Chief Financial Officer, Mr. Divij Taneja, CEO, Logistics Business, and Mr. Rahul Agarwal, Head of Investor Relations and ESG. I shall now hand over the call to the management for their opening remarks. Over to you, gentlemen.
Thank you, Anshul. Hello, everyone, and a warm welcome to APSEZ's third quarter earnings conference call. We will begin with Ashwani's opening remarks and then open the floor for Q&A. Ashwani?
Good afternoon, good morning, good evening, depending on the time zone you are in. Thank you so much for being on this call. And thank you for your continued support and confidence in APSEZ. As India's largest and world's fastest growing integrated utility company, APSEZ has once again demonstrated exceptional performance in regular, consistent way. All the four business pillars of the company are delivering strong, high double-digit growth rates, much more than the markets, much more than the competition, much more than the trade. We are setting up the new benchmarks. This quarter, we have even surpassed our internal benchmarks.
Whether we talk about financials, we talk about revenue growth, we talk about EBITDA growth, we talk about PAT, we talk about market share, we talk about free cash, we talk about... If we talk about any indicator, you will see a consistent growth, delivering a very, very sustainable performance. And we have been saying that in every quarter, and we are demonstrating it in every quarter. Now, I will go a little bit more in detail. The domestic ports delivered the highest-ever nine-month container share at 40.6, which is our main pillar of growth. Then, when we talk about international ports, I still remember we always talked about how the international ports will perform, and now you can see that in quarter, we had a revenue which was INR 1,000 crore.
So which means that international business is also becoming INR 4,000-INR 5,000 crore revenue annual business, which is a very, very hyper growth trajectory. When we talk about marine, and if you remember, that when we did the acquisition of Astro, we very smartly handcrafted this business, and this is the reason that marine is also pulling our profitable growth. And all these do not come at the cost of profitability. So if you look at marine and international ports EBITDA, it is more than double, with double-digit growth.
And also, when you look at logistics, which is, of course, our second pillar, we have delivered the revenue INR 1,121 crore, which is 62% higher year-on-year, and this was possible because of our strategy, which is based on asset heavy, asset light, and asset zero. Then, all these financial disciplines, all these operational excellence, results in a very strong financial discipline. Which means despite the NQXT acquisition, where we are taking AUD 700 million of debt, we are still able to keep our leverage under a check of 1.8x. Which means, moving forward, when we are following this higher double-digit growth trajectory, our cash flow is so much significant for us, which will help us in investing-...
In the capacities on the existing asset, which is giving us the organic growth, but also to explore the meaningful rate of return in organic growth by a merger and acquisitions. So with the operational excellence and the financial discipline, we have revised our guidance by INR 800 crore. Now, all this have been very clearly appreciated and recognized by the external agencies. To start with, our balance sheet strength is now validated by Japan Credit Research Agency, which rated us a notch above India's sovereign rating. Now moving forward, we continue to invest in the capacities for the organic growth, especially in India, including liquid, including containers, and very recently, we announced INR 16,000 crore Vizhinjam Phase II expansion, and we are investing in Dhamra, Ennore, Kattupalli, Haldia, and so on and so on.
This growth momentum, along with the operational efficiency, positions us very much on the trajectory towards the FY 2029, which is our end of five-year plan, where we said we will be doing INR 65,500 crore of revenue and INR 36,500 crore of EBITDA. So once again, quarter- and- quarter, we are over-delivering with respect to internal as well as the external benchmarks, which are making us very much confident to reach the five-year plan in FY 2029. Now, giving little bit more details that how we are investing in the technology to improve the operational efficiency. Very recently, Vizhinjam has achieved the world-class GCR, which is a gross crane rate at 30 container lifts per hour, which is a benchmark just after eight months of operation.
That's why we keep on continuing to invest in the technologies. Now, all this profitable growth comes with sustainability at the center of our strategy. Sustainability is an enabler, not an objective for us. That's why, as a global leader in sustainable transportation, APSEZ has become India's first company in its sector and among a select group of global players to adopt the Taskforce on Nature-related Financial Disclosures , setting a new benchmark for nature-positive infrastructure development. We now take the questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Ketan Jain, from Avendus Spark. Please go ahead.
Thank you. Congratulations on a very good set of numbers, sir. My first question is, I was observing the numbers. Our domestic realization is up 9% year-on-year in this quarter. Can you tell us what is the reason driving this?
Hi, this is D. Muthukumaran. Thank you very much. Spot on. We have increased, and we have mentioned in page number 16, where we're talking about domestic ports, that the higher implied revenue and EBITDA per ton of this quarter is non-representative, and it also includes some take-or-pay charges, in addition to the routine price increase and mix change. So what we're trying to say is that, actually, you know, we have, you know, sort of enjoyed the benefit of price increase, mix increase, and, you know, benefit of mix change, and there is little bit of, benefit from Forex. And besides all these things, there is a little bit of an element on the denominator being, suppressed because we are getting take or pay, so the volume is not.
So if you're calculating price per ton, you know, you'll have to actually, you know, sort of, put all these things. And of course, we don't give the breakdown of each of these elements. But yeah, I mean, we have all these things put into the price increase.
Understood. Understood. So that is why that difference in this thing. So my second question is, if you could help us with the cargo breakdown of the international international cargo in, port-wise.
Okay, I'll flip to the page. Can you go to the next question in the meanwhile?
Yeah. My last question is on Mundra. What is your outlook on Mundra for the full year? I think we are down around 2% for nine months. What is your outlook on Mundra for the full year?
Yeah. So, you know, as you can see, Mundra is doing extremely well, utilizing each and every capacity which we could. Quarter three, if you look at the container cargo, because if you remember, I always talk about container, container, and container, because we know that two of the power plants in Mundra are highly dependent on the imported coal, so we are focusing on that. You can see that month-on-month, quarter-on-quarter, we are increasing, we are increasing the container. In quarter three, we did roughly 2.2 million. In January, we touched 754,000.
This is when we have not yet opened up the capacity for the new terminal, which will be coming in next year. So, I think in January we already did 754,000, which is a real benchmark, because our efficiency in Mundra is reaching the best of best in terms of GCR, in terms of rail evacuation, and so on. And now, after the CT5 comes in, definitely, we will have a add-on capacity. So to answer to your question, container, liquid terminal, fertilizers, and all these commodities, Mundra is on the right track.
When it comes to the coal, especially the thermal coal, there we of course see flat movement, but anyhow, that is not going to change the dynamics of our Mundra financials, because as Muthukumaran said just before, those are all take or pay capacities, when it comes to financing.
And, uh-
Okay, on the-
I've given the volume state, the numbers above 8.4. Israel about 2.1, and Tanzania about 3.1, MMT.
Sorry, sir, I didn't, I couldn't hear you. Could you repeat?
Colombo, 5.4 MMT, Haifa, 2.1, and Tanzania, 3.1. 3.1 MMT, these are all quarterly numbers.
Understood. Thank you, sir. Those are my questions.
Thank you.
Thank you. The next question is from Priyankar Biswas from JM Financial. Please go ahead.
First of all, my congratulations to you for increasing the guidance, and, of course, for a very strong outlook for the year. My first question is, so when I see the numbers in a bit more detail, we are seeing that there is this others revenue that we are seeing. There is a significant increase in the top line there and almost a doubling of the EBITDA. What is driving that? Is it our dredging entity or is it the track maintenance entity, and how should we look at this particular item going forward?
Priyankar, hi. Thanks a lot for the question. You know, subsequent to last financial year's income tax changes, we did a little bit of a restructuring of assets and some dredgers, which were sitting in Adani Ports SEZ at the, you know, top company, did go to Shanti Sagar, which is a subsidiary company, then that gets clubbed under others. And then there are also, you know, sort of, others include, you know, another subsidiary, Sarguja, where our volumes have ramped up quite significantly in these, in this financial year. So, I just wanted to lay these explanations out to you before coming to your, I guess, the purpose of question, quality of analysis or quality of, revenue. You know, these are, you know, sort of sustainable, non-recurring... Sorry, recurring, not non-recurring, sorry.
These are sustainable, recurring, usual routine incomes. So there is no. It's, it's just a classification. There is nothing in particular, you know, sort of for you to focus on, others line. And in any case, actually, as you can see as the last point, on a per ton basis, these contribute, you know, EBITDA contributes INR 2, so increase, so which is not quite significant. So, overall, I just wanted to reemphasize that these are accounting classifications and, nothing to highlight to you on, in sort of, quality of income.
Sir, furthermore, in Vizhinjam, we just heard the announcement of this INR 16,000 crore further expansion of capacity. Now, on that, can you just provide us like, Like, let's say, what is the timeline for the CapEx? And, following that, what sort of volumes, let's say, you are building in? Because by the time it comes, let's say, on stream, we would be very close to our FY 2028 and 2029 targets. So if you can share some color. And is there some plans for, I think, offshore ship-to-ship bunkering, something of that plans, at least for the press release that I would make out?
The last question. Can you just repeat the last sentence?
So, is there some plans for liquids as well in Vizhinjam? Like, ship-to-ship bunkering or something of that sort?
Yeah, yeah. Oh, I think, I think Muthu will talk about, I mean, this INR 16,000 crore is for the phase two development. This will take the capacity more than 5 million, because, you know, with the technology and with the efficiency, we are delivering 20%-30% more than the nameplate capacity. This INR 16,000 crore includes extension of the breakwater, it includes the berth, includes the equipments, and it includes all the ecosystem, which is needed to run the port. Obviously, this includes the potential to develop the liquid terminal. To start with, we have already signed the MOU with BPCL for LNG bunkering.
This will be a ship-to-ship rebunkering, because as you know that,
Mm-hmm.
Today, the LNG bunkering is, at, generally, and then, you know, the, Colombo is still struggling. And because on this international channel, there is no not many competitive LNG bunkering facility. That's the reason that shipping lines are not bringing their LNG-capable vessels on this channel. But, with this, with the, vessel-to-vessel, ship-to-ship bunkering facility in Vizag, which is just 10 nautical miles from the international water, which is boosting, the shipping lines and motivating them, to bring their vessels, which are LNG capable. And, and, and I'm pretty sure, this will be, this will be very successful. And BPCL, will, of course, bring, the LNG from very nearby, Kochi plant.
Thank you. So we have a question, Priyan, on CapEx. The CapEx will go on till FY 2029, and the payments will happen until FY 2030. I'm actually, while talking to you, trying to pull out the EGM notice, in which we have given the year-wise anticipated cash flows. You know, just one second, I'm getting it up for you. This will increase the capacity from the current 1.6 million TEUs to, we will expand it by 4.1. So therefore, in total, we will go up to 5.7 million TEUs of total capacity. We have also given the details of exact project specification. You know, how many cranes, what is the breakwater requirement? All of them are in the EGM notice that we have actually calculated.
I'm actually trying to read out to you from there, the CapEx. FY 2026, we have INR 90 million. FY 2027, we have INR 350 million. FY 2028, we have INR 700 million, and 2029, INR 550 million, and FY 2030, INR 63 million. This is the, you know, anticipated cash flows on account of this project. I mean, it will not be out of place to actually put in, you know, a caveat that these are estimates which is going to go four years out, so there may be variations, but, this is our estimate of cash flow.
Sir, very helpful. What I was trying to actually understand, like, when you are doing this large expansion of Vizag, and you have a plan for INR 36,000 crore EBITDA in FY 2029. So is this asset contributing handsomely to that from this expansion?
No, this expansion, you know, it will... we will... See, the basic port already exists, right? We already have an 800-meter berth. So we will keep on building up. It is not that we will increase the volume in 2028 only. I think we will be doing an incremental ramp-up of our volume. And this EBITDA, which we have declared that we will be doing by FY 2029, includes all the ports which we have, includes the ramp-up, and includes the existing business. So it's not a new decision which we took, which is going to impact the EBITDA. It is all included in our business plan, right?
Just to add to it, actually, you know, as I mentioned, this project will only be completed by FY 2029, and the results we're talking about is for FY 2029. So it will be very, very small contribution to that estimate. It is being built based on the market's growth and, you know, sort of, our company's growth going forward.
And that, that's very clear. And just if I can squeeze just last one in. Since NQXT would be included from the next quarter, so can you give us some idea, like, how should the balance sheet be essentially looking like when we close the year, like FY 2026? And how should we look at, let's say, a little bit ahead?
I think in the page number I'm trying to remember, but basically, the total debt, net debt of Australia, is about INR 4,800 crore as of December 2025.
That's the gross debt, INR 4,744 crore. 280 crore is the cash.
Yeah, sorry. Yeah, INR 4,500 crore.
... Okay, sir, I will come back into the queue.
Thank you. Next question is from Parash Jain from HSBC. Please go ahead.
Yeah. Hi, Ashwani and Muthu. I have two questions. First of all, if you can talk about your 2030 target of 1 billion ton, will it be entirely or largely fulfilled by the ongoing expansion in half a dozen port that you mentioned in your presentation, including Vizhinjam, and so on and so forth? That's question number one, and if not, then will the recruitment target will be in India or in overseas? The second question is with respect to Vizhinjam. Do you need, like, do you have an entire ecosystem in place to handle your target capacity in terms of evacuation, in terms of cargo? If you can share any color, and also the pricing difference between Vizhinjam and Colombo.
So let me start with the second question first, Parash. Vizhinjam, basically, you know, at this point in time, we are positioning it as a transshipment. So, you know, evacuation into hinterland is marginal for now. That said, you know, there is a road connectivity, which is right outside the port, which can evacuate for exim cargo. And, you know, there is also a plan for us, and we are, you know, evaluating and implementing a rail connectivity program in that port. So if and when, you know, rail also happens, we will have, you know, added evacuation capacity, and road, of course, can serve to the extent that we need. So it is not a constraint. As the market develops, we will be able to actually, you know, sort of, handle the exim cargo quite easily.
At the moment, it is positioned as a transshipment cargo. To your question on 1 billion ton, basically, you know, we are talking about the, you know, split of largely domestic and international. Domestic is, you know... Sorry, international is about 150 million metric tons, for which the current four ports that we have in the portfolio, you know, sort of has a very clear visibility of how we can get to 150, from these four ports with the current program, with nothing, you know, sort of added new. Now, if we do add anything more in the international, it'll actually add to the comfort of a 1 billion ton. As far as the balance, 850 million ton is concerned, it is all going to come from domestic market.
You know, Vizhinjam is the transshipment port, and if you go back to the earlier question, I did mention that, you know, Vizhinjam is going to have phase two coming in only post FY 2030 volumes. So therefore, you know, current volumes that we are doing, you know, you have the current indication of where we will do. Now, if you remove that, everything else is, you know, sort of, coming from the existing ports that we already have. And, you know, we have explained in the last quarter that we see a disproportionate increase in Dhamra. You know, we, we can see that going up to, you know, 100 million tons in times to come. Other than that, you know, all the ports will actually go up in proportion.
Mundra has an ecosystem to grow faster than other people, but that is, you know, sort of only at the margin. By and large, we don't anticipate any proportionate contribution coming from ports in a way which is different from what we have today. So the current split is by and large indicative of how we will do. All the ports, you know, we expect to contribute to growth, and you will see that we have been investing in all of the ports. You know, expansion capacity is being created in an organic manner, so we expect the proportion to, by and large, remain the same.
On top Vizhinjam, if you can talk about the pricing of transshipment cargo versus Colombo, for instance?
Sorry, what?
High, low?
Yeah. Yeah. See, as you know, pricing is always the consequence of supply and demand. So, Colombo is short of capacity, and I'm pretty sure that in a coming 3-4 years, Colombo will be struggling for the capacity. We have the capacity, and in addition to the capacity, we would be also offering the expansion very, very, very, very soon. So, Vizhinjam, anyhow, as an overall port, will keep its competitiveness, and we will fight with the competition accordingly. So far, in last since we started, absolutely, we have no pricing pressure because of that, because we are driving, driving the business by the services we, we give to the shipping lines, not only in Vizhinjam port, but everywhere in the world, including Colombo.
Okay, fair enough. That's very helpful. Thank you, and have a good rest of the day.
Thank you. Thank you, Parish.
Thank you. Next question is from Sumit Kishore from Axis Capital. Please go ahead.
Hi, good evening. Thanks for the opportunity. One question on,
... The container cargo volume growth that you have seen in the logistics business, it's about 4% each quarter. It seemed to be a bit low versus what you were tracking and what even Concor has done slightly more than that. Also, you know, as the second biggest player in the space right now, given that DFC is going to come up in March, and Concor has given a very strong growth guidance for the next 3-4 years on their call. Just wanted to hear your thoughts on how you are looking at the next 3-4 years post DFC.
So I, I'll just respond to that. So you're right, we are Q- on- Q looking at 4%, so that's roughly 1.64 to 1.70. So initial response to that is that we are going down the integrated path and looking at having a complete port to factory sort of thought process. That's why you're seeing a reconfig happening. With regards to the DFC, which is roughly 1,506 kilometers, which ultimately will connect the northern hinterland into, let's say, Nava Sheva to Mundra. We don't see too much of disruption. We're looking at our volumes remaining steady. And primarily, if I look at it, the rail slabs that you're looking at between, let's say, Mundra and the other ports vary from six to seven rail slabs that will increase.
So apart from, let's say, the increase in cargo carrying capacity, the rail slabs will not really, you know, benefit that process. So we will see a little more movement, no doubt, maybe from road into rail, but we don't see any delta, affecting us. In fact, we do look at, the industry as a whole benefiting from this.
Your response sort of gives me the impression that you are looking at a single-digit growth for the next 3, 4 years in the rail container volume, even after DFC. Is that the right impression?
No, not really. If I'm looking at Adani Logistics in particular, we are targeting double-digit growth, as we have done even in this year. If you look at my year-on-year numbers, we are in double-digit, we're roughly at 11%. So we are looking at double-digit to continue.
For rail container volumes?
That's right.
Okay, and-
I think for the DFC, you know, we appreciate DFC, because at the end it is contributing to the overall trade, and it is contributing to the traffic. One thing which is very important for all of us to be very clear, what comes to our competitor port is because of their port competitiveness, which is draft, which is evacuation, and so on and so on. What comes to Mundra is because of Mundra's competitiveness of the port, whether it is a vessel turnaround time, whether it is the efficiency of our ecosystem at Mundra, whether it is the draft, and also our relationship with the shipping lines everywhere, right? Anything which comes to Mundra can also go to Vizag for the transshipment.
That is the competitiveness in Mundra as a port. Now, we can always say that catchment area for our competitor and us are different, so that will always continue. Now, the question is: What is the impact of DFC on us? Is negligible, and I would say zero. Why? Because when it comes to travel time, the travel time on the DFC will improve, but the travel time on connections to the competitor port and to the competitor ICD will remain the same as it is between Mundra and our other ICDs inland. So we don't expect the total end-to-end time using the DFC to go much less unless until the bottlenecks and which will take time and effort both.
But more than that, the only competitiveness which may come is from what is the cost per TEU after the DFC will be started. Because this is where the shipping lines can say that even if Mundra has got a better draft, even if Mundra has got a better vessel turnaround time, even if Mundra has got a better services, which is end-to-end, but still, you know, my, your competition will have a competitiveness because of DFC, and answer is no. Why? Because there will be additional 300-350 kilometers where Mundra will have the competitiveness, which is roughly 5-6 railway slabs, and which is not few hundred INR, which is few thousand INR.
So I think our customer slash shipping line will think twice to use our competition DFC, if it is our catchment area, if it is, if it is our competitiveness. And that's where we do believe that DFC will increase the efficiency of our competition, but what will not take away the business from us.
Very clear. Also, just a brief comment, if you can make on the GPWIS volumes, which have been flattish this year. Is that mainly because of, coal, not being too much?... invoke or what, what is the reason for GPWIS volume being flattish for nine months?
So it's predominantly, if you look at it on the East Coast, we've had an extended monsoon. So I've gone from 5.5 to 5.2, so this is primarily the reason for it.
Extended monsoon, okay. Flattish for nine months is, again, linked to which commodity?
So no change in commodity mix, so it will remain flat. I mean, you know, we I mean, we were thinking and we wanted to take your feedback also. I mean, we started communicating about GPWIS when, you know, the Indian policy was talking about increasing the GPWIS and increase in the participation of private players in GPWIS, and we were very bullish on that. So only thing which we can do is to run GPWIS in a very efficient way. But the issue comes when we want to run the GPWIS in an efficient way, but at the end, we are connected to the main traffic of the railways. So if GPWIS is not getting the load, sometimes it comes empty.
That's where you will see the fluctuation of the utilization of the GPWIS. Not because GPWIS does not have the business opportunity, just because that overall ecosystem of rakes owned by Indian Railways and the rakes owned by us do not get the full optimization because of, because of import/export imbalance.
Got it. Just one last question. Your EBITDA for nine months is INR 16,830 crores. How's been the conversion to operating cash flow for the nine-month period? And the way you are tracking on operating cash flow, which is much, much ahead as compared to your EBITDA. So, as compared to your CapEx plan for FY 2026. I mean, in the past to your cash position and your balance sheet just gets better. So, what are your CapEx plans through 2030? If you can repeat them once again, and what do you do with the extra cash generation?
Hmm. So, first question, conversion. Basically, you know, we have an annual interest net, including, you know, sort of our netting off income, in the region of about INR 1,800 crores. And, tax, you know, little less, but call it similar amount. And we have already given you the guidance for the full year of INR 22,800 crores as the EBITDA. So, you know, if you remove these two or deduct these two, you will, get the, you know, sort of, operating cash flows a little over INR 18,000 crores. So that is the answer to your first question, and we are on track, you know, sort of, for this conversion. To your second question, what we are going to do, with extra cash?
You have seen that over the last two, three years, we have been, you know, sort of doing, you know, sort of, buybacks where required. We've been actually prepaying some loans. So, you know, we have said there is a policy, we will keep cash, you know, to a comfortable level of at least two quarters of CapEx and, you know, anticipated cash outflows. So that's the minimum that we would like to carry in our balance sheet. And, you know, as and when we generate a, you know, excess cash flows, we will deal with the way it is invested.
Which is, which is in the past, you would, you know, CapEx 3, you know, but right now, your CapEx plans are much lower.
We will actually give you, along with the next quarter, the, you know, sort of CapEx plan for FY 2027. It will be, you know, sort of discussed in detail, like we have done for, you know, past years. At the time of Q4 results, we will give you. You will see that, you know, directionally, for all the projects that we have already announced, we will have more cash CapEx than what we have done in the past. It will all stack up when we give you the breakdown in Q4.
Sure. Just to revisit, to meet your target of 1 billion ton, has the CapEx plan over a five-year timeframe, which was there earlier, changed?
No.
Okay, so it's only going to be timing of the CapEx rather than... Okay, I think we'll look forward to the fourth quarter discussion. Thank you.
The next question is from Mr. Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Good evening, sir. Thank you for the opportunity. The first question I have is with respect to container at Mundra. Yeah, if I see the last three quarters, you know, our, our container volume has been between 2-2.2 million TEUs. So, A, if you could, or rather last four quarters. So if you could give us some sense as to what, you know, what is the challenge out here, and, B, the outlook. You know, I know you've given the kind of overall number, but if you could just talk a little bit on container and coal for Mundra particularly, and also at aggregate level. Thank you so much.
Yeah, I mean, sorry, I'm trying to understand your question. You're saying that between 2 to 2.2 is less or more or okay, or, or-
No, actually, okay. Let me, let me rephrase, sir.
Yeah.
If I look at the container volume growth for last 3 quarters-
Uh-huh.
It's -3, +4 and +6 at Mundra Port.
Uh-huh.
I mean, it has been growing in high double-digit or mid-teen in the past.
Uh.
If you could-
Okay.
you know, give us some sense as to what is creating this hiccup and the, the outlook. And similarly for coal.
I think, no, there is no hiccup in Mundra. Of course, there was a hiccup in quarter one when we had this operations hindered , because of which, you know, we had the disturbance in the supply chain, and that's where the quarter one was two million. But then it started picking up from quarter two, and quarter three, as you can see, is 2.2 million, and January itself is 7.5. So if I do my math correct, you know, we should be more than more than 2.2. So, as I said before, Mundra is still having the capacity, and we are really cashing each and every bit of the capacity. And, very soon our CT5 will be open.
So we don't see any challenge in increase in volume in Mundra. I think on the coal, there was a combination of two things. Number one, India as a whole saw the sluggish power demand. That was number one, which means the thermal coal import, all India basis, was minus 2.7%. And we, as the two power plants in Mundra, because they are dependent on the imported coal, they also got the hit because of that. And that's where, you know, we had this issue.
Now, moving forward, both the plants have been fired, and I think both have got the approvals to move forward, and they will move forward, because that's where the India power needs are. Having said that, once again, I repeat that the Mundra growth is not driven by these two power plants, or by the thermal coal. Mundra growth is driven by container, container and container. That's why we decided to invest in container container terminals. Mundra growth is also by the liquid. If you would have seen, in last two quarters, you would have seen the growth in LPG also, and the fertilizers, the agri, and so on and so on. So overall, we really want to drive the growth in Mundra by container.
Got it. Secondly, just a clarification. NQXT will be consolidated from first of January. Have I understood right?
Yes.
or first of April 26?
First of January.
Understood. If you could clarify, you know, in terms of the other expenses line item, you know, that seems to have kind of seen a decline on a YY basis. You know, any particular reason out here, if you could call out, if I see this is INR 475 crore?
Yes. No, so there isn't actually any particular, you know, sort of reason. These are just, you know, quarterly and seasonal things. And if you see year as a whole, it'll actually stack up.
Got it. Thank you. I'll fall back in the queue for more questions. Thank you.
Thank you. The next question is from Vasudha Khurana, from Aviva Life Insurance. Please go ahead.
Hi, thank you for the opportunity. I would like to ask if, what are the kind of borrowing target for FY 2027, and what kind of avenues would, would the company be looking at in terms of, domestic and external borrowing? If you could share some segregation.
Okay. So in FY 2027, we have only routine amortizations coming up for repayments, which is in the order of INR 3,500 crores. You know, we will give you the EBITDA guidance for the next year when we discuss next quarter numbers. But directionally, you will find that, you know, we are generating sufficient cash flows to meet the mandatory prepayments required, as well as the CapEx plan that we have. This is a little bit of, without numbers, it's a little bit of a peep into, you know, what you might, you know, sort of hear from us in next quarter about the next financial year. So we don't need any borrowing.
You know, that said, you know, we have been having, you know, sort of virtually all markets open. We've been able to borrow-
... in the ECB market, we have been able to borrow in the rupee banking market and the rupee NCD market. So we have and then we also have short-term markets like CP. So we have multiple avenues of, you know, sort of markets open to us. And, you know, over the course of last one year, you know, we have been dipping into each of these markets just to actually remain active in these markets. So we've been doing, you know, borrowings in all these markets over the period of last one year. It gives me the confidence to tell you that all these things are open because, you know, so we have done these.
Okay. Thank you so much.
Thank you. The next question is from Kalpit Sabhaya from GYR Capital Advisors. Please go ahead.
Hey, congratulations to the management and for the good quarter. So my question is, regarding the upcoming projects, like, with the recent notification of Galathea Bay as India's 13th major port, and the government's move towards PPP model with a private anchor. Is the company planning for any interest in the bidding for this project?
Say that? Sorry. Yeah, sorry, I missed your question, so I just got it. So thank you. Yeah, you know, in India, we are already running between 27, 27% market share. And any new capacity which is built up in India, definitely we will go for it. Even if it is a PPP model or it is a HAM model, whatsoever model comes in, we will go for it.
Okay, great, sir. And the, if as per the research I have made and the estimated cost of around INR 44,000 crore at the phase one, how would such a massive greenfield investment project will be, like, sourced through the current leverage ratios and doubling the EBITDA by FY 2029?
Hey, hey, sorry. Sorry to interject. Your voice is not coming through clearly. It's a little blurred.
Is it, is it properly now?
We'll try to make it work.
Go ahead.
Yes, go ahead.
Yeah, so the estimated project cost is around INR 44,000 crore. How much massive greenfield investment impact will occur on the current leverage ratios and the long-term target for doubling EBITDA by FY 2029 or 2030?
The current 44,000 means what? No, I understood. So basically, you know, we have given the strategy presentation where we have said the total investment program identified is INR 75,000 crore, out of which INR 50,000 crore is for the, is for the ports. For us to do that kind of investment, we don't need fresh borrowings. On the contrary, even after this investment, in a 5-year plan, we will be in a net cash generator because our operating cash flows are far more than the currently declared investment program. So on that basis, our leverage will go down, you know, on a net basis. Of course, we are always on the lookout for more growth opportunities. You know, that is something that will occur, you know, episodically, and whenever we actually get the opportunity, we will invest inorganically.
Okay, got it. That's it from my side. All other questions were covered up. Thank you.
Thank you. Next question is from Manish Somaiya from Cantor. Please go ahead.
Thank you so much for taking my questions. Good afternoon, good evening. Obviously, a lot of things went right in the quarter, but maybe at a higher level, if you can just tell us, you know, what could have been better? What are we missing? What, what are we not seeing, in the quarter that could have gone better?
That's great. Thank you. I think in Vizag we reached 30 GCR in the month of December. If we would have reached it in the month of October, we would have done more volumes in Vizag, because we are up in Vizag. So, let me say that. I think the second point is on the logistics. I think we announced our strategy nine months before, and quarter and quarter we are demonstrating significant increase in our logistics. And very recently, we have started the optimization of the rail, trucking, and warehousing.
I would say that, you know, the rail volume, which we saw, the container volume, especially the 4% increase, definitely has many opportunities. And this is where, just before we said that, especially in logistics and especially in rail container, we will be doing much better, with respect to the, with respect to the previous quarter. I think the rest, I would say, you know, coal, thermal coal import is not in our hands. Whatever is in our hands, I would say that if I prioritize, I think the rail container, and I would say that, I mean, that is something which I would say that we, we will be doing much better.
Then, just looking at international ports and logistics margins, appreciating the fact that those two segments are ramping up, how should we think about margins? Because margins, you know, did decline sequentially from second quarter to third quarter. How should we think about the cadence of margins, as we look out the next few years, where do they settle?
So, Manish, you're absolutely right. You know, at, you know, sort of the headline level, our profitability margins, you know, sort of have come down in this quarter. But if I were to set the context correct and analysis correct, we have been, you know, sort of laying out a strategy which will go down this path. It is well within the framework of what we have set ourself to do. And, you know, our international margins, bulk of it is coming from marine. Marine is firing at about 55% of EBITDA margin, and it is also giving a return on capital employed of 14%, which is far, far above the threshold.
And we've been guiding that as far as the logistics and international ports is concerned, the best metric is to use the return on capital employed, because, you know, it's a non-homogeneous market. In a heterogeneous market, it's pointless to compare, you know, EBITDA margin. It actually does not tell you the business performance. So therefore, you know, we have been providing details on return on capital employed.
Okay. And then just lastly, Ashwani, you know, there's been a fair amount of discussion today on the 2029 targets, but maybe if you can just help us understand, you know, what could be the tightest constraints to achieving the fiscal 20 29 guidance that you have laid out? And I think that would be super helpful, and actually related to that, you know, do you have any plans to potentially revise the fiscal 2029 outlook that you have provided?
I think, of course, I will answer the question number 2. I don't think we are revising the guidance on the 5 years, because 5-year is always a guidance which guides us to execute the business on day-to-day basis and deliver and communicate the results on quarter on quarter. So I think this is the policy, the philosophy, or the procedure we have adopted, and we will keep that. Obviously, like we have seen in this quarter, that we were confident we have the visibility, so we revised the guidance, but we will not update the 5-year just because we are revising the guidance for this quarter. I think this is how we are managing our business by maximizing the opportunity and minimizing the risks.
That's answer to number two. Answer to number one, Manish, that, there is only one thing, which can take away from reaching the target, which is a big turmoil between the, between the countries and, which is, which may impact the trade. But otherwise, with the small geopolitics here and there, with the small, you know, tariff discussions here and there, you would have seen that it does not move the needle on the reverse direction. So I think we are very much on the track, and we will be on the track. And, and, yeah, as I said, there is only one thing, it's a big turmoil between the countries which will impact the global trade, then only we will be impacted.
But a small thing here and there, whether it is Red Sea or it is some Houthi or it is something, it does not move the needle, because now, you know, fortunately, our base is quite big.
Okay. No, that, that's super helpful, Ashwani. Thank you so much, and, and good luck, Muthu.
Thank you.
Thank you.
Thank you. Next question is from Pulkit Patni, from Goldman Sachs. Please go ahead.
Sir, thank you for taking my questions. I have a few of them. The first couple are just bookkeeping.
Pulkit, I'm sorry to interrupt, but your voice is not very clear. If you're on a hands-free device-
Is this better? Is this better? Can you hear me?
Okay. So it's-
It's still not clear?
I mean, we can make do with this, Pulkit, but it's not very clear.
Oh, I'm actually sorry. Okay. Yeah. So I'll just try to be a little loud. My first question is, bookkeeping. Is it fair to assume part of the realization improvement that you've seen in the quarter is also to do with the rupee appreciation?
The answer is yes, Pulkit, but can you be a little far away from your handset or whatever you're talking from? Because it's a little too jarring. Like, we can't hear you clearly.
Okay. Just, is that better, Muthu?
Yeah, yeah, it's better. Please go ahead.
Okay, okay. My second question is, in your press release, in the release, you've spoken of the gross debt, which, where you mentioned that it excludes certain non-core liabilities related to NQXT. Could you just highlight what those are and what would be the total number for those?
...So this is also a matter that was approved by shareholders yesterday in the extraordinary general meeting. If you go back, Pulkit, to the deal construct, you know, along with our acquisition came certain non-port related assets and liabilities. We said that, you know, in short order, as much, as soon as possible, we will take them out. We guided for a few months time frame, but we actually ended up doing within the month. And also, you know, as of now, it stands approved, so it's only an accounting entry that we need to pass. So for all practical purpose, you can ignore them as we speak today. But just to give you a sense of amount, because you asked for the amount, we have indicated the amount to be $2.54 billion as on 31 January 2026.
However, none of these have any bearing. And, as of today, it stands dissolved, and there are no non-core assets and liabilities as we speak.
Okay. So everything is dissolved as of now. My next question is on coal volumes. A quarter of our total volumes come from thermal coal, and while there is a lot of uncertainty, and we've seen the last sort of couple of years, coal has had some downward pressure. How is the company looking at sort of diversifying away from this exposure to coal? Like, what's the plan for coal to settle down for us in terms of our total proportion of volumes? Just some sort of forward-looking guidance there.
It's a broad outlook. If you want, I can give.
I don't know from where you got this number. Coal has got different coals, right? Coal has got thermal coal. Thermal coal has got imported coal and coastal coal. So imported coal is going down, but coastal coal is increasing, right? All India level, coastal coal is increasing. Then, second is the coking coal. Coking coal is used in the steel industries. Because the steel is having a growth, the coking coal is also having a growth. At 10.8% is the growth, which is on the coking coal, right? Then coastal coal, 1.9% is the coastal coal. So at first, to answer to your question, coal is not going down. Overall, coal is going up. Only the thermal coal, which is linked to the import, is going down, right?
So, as far as we are concerned, we have a business portfolio, which is mix of container, coal, iron ore, liquid, and so on, and we manage the mix in the way trade is progressing. So if the imported thermal coal is going down, it's not going to change the needle. As you would have seen, it has not changed the needle in this quarter also.
No, no, absolutely, sir. Let me rephrase. I didn't mean it's going down. I'm looking at slide 41, where it's going down as a proportion, which is actually a good thing. I just meant, where do you think it settles as a proportion of the overall cargo for us? So from 30% in FY 2024, nine-- this 9-month, it's at 22%.
But-
I want to-
But where did you get this 30% of thermal coal?
No, sir, thermal coal-
Cool.
As a percentage of overall cargo from slide number 9, 41, is 22%, coming down from 30%. That's what I meant.
So, see, you are asking, Pulkit, where will it actually settle down?
Yeah.
If you see that, you know, the coal will, I mean, if you look at next 5 years trajectory, India is talking about the declared power, thermal power plants increased by 50% in capacity. And that is one data point. The other data point is, you know, we have been investing in container over the past, you know, sort of several quarters. Our growth in containers, you know, sort of is, let's say, 20%, you know, or if you have to pick one number, which is growing the highest amongst the portfolio of products that we have got.
So, you know, if you bake in both these two, you know, I would say in the long term, you know, if you are starting with 30% as a number for FY 2024, you know, there is no reason why, you know, we will be, you know, sort of away from, let's say, 20 on coal in five years from now. Considering that our container is, you know, sort of growing the highest, and we also have in our business plan, you know, sort of oil and gas products coming in in the next five years. So if you put all of them, so we, you know, the weightage of coal will go down and, you know, we should be somewhere between 20%-22%.
Okay, so around the same, 20 or 20%. Thank you. This is very useful.
Thank you.
Next question is from Ankita Shah, from Elara Capital. Please go ahead.
Yeah, hi. Am I audible?
... Yes, Ankita.
Hi. Firstly, congratulations on a very all-round performance. Congratulations to the team. My question is on NQXT. So, in EBITDA, you've mentioned that, you know, one quarter in the guidance, sorry, guidance on EBITDA. And one quarter of NQXT inclusion is included in this at INR 300 crore. This is for the fourth quarter expectations, right? For-
Yes.
FY 2026.
Yes, Ankita.
What would be the similar number on the revenue side?
So, it is firing at 65% EBITDA, so the INR 300 crore is roughly 65%. So it'll be about INR 450 crore, INR 5 million, little less.
Oh, 65% EBITDA. Okay, I'll-
Correct. Correct.
Going forward, there was expectation that, you know, there will be contract negotiations. So will we see contract negotiations on the higher side from FY 2027 onwards itself, or it will take time to pan out?
No, there isn't, there isn't much happening in FY 2027. There is a little bit of a quantity in FY 2028, and there are large, volume coming up in FY 2029.
Okay. And this could lead to this, 65% margin. Can go up to what levels? Will it become, like, similar to what our domestic ports are making margins?
Yeah, yeah. It will be, it will be to that level. You're right.
That will be, like, mostly beyond FY 2028, correct?
Sorry, I was actually doing the math while talking to you. No, actually, we would still be at around similar percentage because both denominator and, you know, sort of numerator will both go up. As the EBITDA goes up, it is coming from price realization. So absolute EBITDA will go up, to the INR 400 million mark that we have guided.
Okay. But you are saying in terms of EBITDA margin, it will remain more or less similar only?
Let me just do the math for you while talking to you. So there is-
Or maybe take it offline. It's okay.
Yeah. I mean, it'll not be significantly off. It'll be, you know, few percentage point up. See, you know, currently we are doing $350 million of revenue and $230 million of EBITDA, and the $230 million will go up to $400 million, so the $350 million will correspondingly go up to $520 million. So it's 400 upon 520, so it'll roughly be similar percentage. 70%, I mean, that's the percentage. That's the math.
Got it. Got it. And, in our consolidation, will we take the nameplate capacity of 50 million tons or contracted capacity of 40/40 in our calculation over future?
Capacity will be 50 million.
No, the volume numbers that we will be calculating will be using-
Uh-
the nameplate capacity, only 50 million from NQXT. Will that be the number that we should work?
No, no. So for volume, we will actually go with, and we'll probably put it as a note also, where whenever this comes up. We will put actually, contracted volume or actual, whichever is higher.
Okay.
The reason for that is actually contracted volume will give us a definitive revenue at a per ton rate. If we do more volume than contracted, then, you know, we are going to realize, you know, that much more. We will be paid for the extra volume at the similar rate.
Got it. Got it. Okay, great. I think, yeah, that's it from my side, and wish you all the best and best wishes.
Thank you. Thank you.
Thank you. The next question is from Rajarshi Maitra, from InCred. Please go ahead.
Yeah. Yeah, hello. Thanks for the opportunity. So my question is on the margin. So as I see, slide 22 in your PPT. So if I look at the margins for few ports like Mundra, Kattupalli, Dhamra, and Karaikal, so there seems to have been a year-on-year margin decline. So is there anything specific that you would like to highlight for these? And also for Gopalpur, it's obviously there has been a sharp decline. So these five ports, anything specific that needs to be noted? Thank you.
No, there is nothing specific here. You know, on an absolute per ton basis, our EBITDA has been going up in the large ports. Gopalpur, of course, we will implement the turnaround program, and as it happens, it will catch up. It is a per ton EBITDA that you need to track where we are going now.
Okay. And, Gopalpur, specifically, what has been the reason for... I mean, so this quarter there has been actually a negative EBITDA and, about, yeah, I mean, about as close to 70% decline in revenue on a year-on-year basis. So, what is the basis here? Because the volume decline is, I think, 25% odd. So what explains this kind of a sharp dip?
So there are certain fixed costs in the ports. You know, all the equipment that we have, they are all on hire. So our fixed cost is, you know, sort of something that we need to work on. So like I said, as we actually work on it, we will actually sort that also out in times to come.
Thank you. Thanks a lot.
... Thank you. The next question is from Nidhi Shah, from ICICI Securities. Please go ahead.
Yes, thank you so much for taking my question. So my question mainly surrounds that how much of our container volume depend on exports to the US?
380,000.
All right. And have you seen any?
Sorry.
Any decline in these-
Just a minute. 380,000 out of 12.5 million, which we do.
All right.
Okay.
Have you seen any weakness in these volumes, specifically?
No, we can't measure it because it's so, so minor.
All right. My last question is that, what do you think, would be the impact of volumes at Mundra, given that, there is copper, coal to PVC, and the solar module capacity will also be expanding in that region. So overall, what is the contribution of additional volume that we can expect from,
Yeah.
Group companies?
Difficult. It's difficult to say, but yes, it is contributing. It's difficult to say how much.
All right. Thank you. Those were my questions. Yes.
Thank you. Thank you.
Thank you very much. That was the last question in queue. I would now like to hand the conference back to the management team for any closing comments.
Yes.
Hang on a second, please.
So thank you, thank you for your, thank you for your time, thank you for your support. I also want to take this opportunity to share with you that Mr. Muthukumaran will be taking the assignment in the group with effect from first of March. So I really want to say thanks to you for your great support to Mr. Muthukumaran, because of which APSEZ is at this stage. We will be introducing to the succession. This is in line with our succession plan and the career development plan, and we will be introducing Mr. Krishna as the new CFO in the next call. Thank you. Thank you for your support.
Thank you very much. On behalf of Emkay Global Financial Services Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.