Ladies and gentlemen, welcoming you to the Container Corporation of India Limited Q2 FY 2027 earnings conference call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kunal Shah. Thank you, and over to you, Mr. Shah.
Yeah, good afternoon. Welcome to the Q2 FY2 2027 earnings call of Container Corporation of India. We have the management being represented by Mr. Ajit Kumar, the Chairman and Managing Director. I would like to hand over the call to Ajit sir for his opening remarks, post which we can take up the Q&A. Thanks, and over to you, sir.
Good morning, Mr. Kunal, and good morning to all the participants who have joined this conference call. Along with me, we have got the management team, Mr. Vijoy Singh, our Director of International Marketing and Operations, Mr. Vivek Gupta, Director of Finance, Principal Executive Director of Finance and Company Secretary, Mr. Harish Chandra, and our Group General Manager, International Marketing, Mr. Paresh Agarwal. You are now welcome to ask your questions.
Before you ask the question, I will give my opening remarks. I am very happy to announce a fairly decent result under very challenging geopolitical circumstances. CONCOR has demonstrated remarkable resilience amidst the adverse circumstances. We have recorded highest-ever physical performance in any quarter by posting total handling volume of 13,48,379 TEUs. We have posted highest-ever operating turnover at INR 2,373 crore and highest-ever total income in any quarter, INR 2,466 crore.
The revenue growth has been 0.93%. We have announced a dividend of INR 1.9 per share, and the total dividend has now gone up to INR 3.5 per share in the first half. We have also reported handsome profits. The standalone profit before tax has been INR 462 crore, that is amounting INR 154 crore per month, a very remarkable performance given the adverse circumstances through which we have gone. As all of you are aware, the ceasefire which was announced in the Gulf, it collapsed in few days, and the Strait of Hormuz for container traffic remains practically closed.
The ports which were the engines of trade in West Asia, they are not handling that. The trade has shifted to new ports of Fujairah and Khor Fakkan, and also o ur ports, both on the western side and eastern side, are handling and transshipping cargo which used to be transshipped in the ports of the Gulf region. Therefore, there has been lots of turbulence in the trade, but despite that, we have posted handsome results. Throughput in the H1 in the EXIM segment has increased by 4.57% and Domestic segment 4.22%, total 4.48%.
Our lead has also increased in the EXIM. In the Q2, we have got the lead of 722 km, vis-a-vis corresponding lead of 686 km in the Q2 of last year. In the Domestic segment, our lead has gone up to 1,315 km from 1,298 km last year. The average lead in Q2 has increased to 817 km from 779 km. That is an increase of 4.9%. Our Nepal business has increased from 45 rakes to 107 rakes in this quarter, a 138% increase. Bulk cement in tank containers has continued to increase. In this quarter, we have added 195 more containers. Total containers has increased to about 1,100, and the volume we have reported about 12,000 TEUs, vis-a-vis the entire year of 14,000 TEUs last year.
We have added 13 new rakes in the quarter, taking the total to 32 in the half year. Total number of rakes now stands at 456. We have added 414 containers, and we have also added seven reach stackers into our fleet. CapEx has been INR 299.75 crore in the quarter. So total half year CapEx has increased to INR 418.05 crore. We have moved 1,661 double-stack trains. In the Domestic segment, we have started one assured transit train, a new assured transit train from Whitefield to Tughlakabad via Tondiarpet on 14th of August, 2026. This is in addition to the assured transit train that we are running from TKD to Shalimar earlier.
In EXIM front, we have now new direct port delivery long lead traffic of JNPT to CTKR. In quarter two, we have done 2,374 volumes. New LCL export has started from Dadri to Dronagiri and JNPT. New EXIM long lead GCTK to IDBR. We have now got 18.48% growth in reefer exports. We have started new reefer services from Hyderabad to JNPT carrying pharma products. We have got 7.48% growth in DPD exports, 3.28% growth in laden exports, and all over, we have made a very strong performance in the quarter, and we are very hopeful that in the next half, we will have also very strong performance.
The DFC opening has led us to start cabotage service from JNPT to Dadri, and we hope in the next quarter, we will further strengthen that particular stream of traffic. We have reduced our upper deck rates for EXIM traffic from Dadri to JNPT and some other terminal. We have also reduced our EXIM rates at Tughlakabad so that Tughlakabad rises further as a flagship terminal of CONCOR. In Domestic front, the tile traffic at Morbi, which was affected adversely by war, this has now improved. We are getting robust growth there.
Gunny bales, which was also affected in the eastern India because of geopolitical issues and have got sorted out. Whereas we had no gunny bales in July this year, but from August and September, August, we are getting traffic, good traffic and August and September, we got good traffic in gunny bales. In bulk cement, as I have told, we are continuing to improve our traffic streams. We are now talking to fertilizer manufacturers for taking fertilizer bags in containers.
We have food grains, we had little setback, but we hope because of the busy season surcharge, now busy season surcharge is over in September, we hope we will get back some traffic from October onwards. GAIL, we have signed a contract with them. That traffic is expected towards November end, and it will add further volumes to our Domestic market. Then in the port market share, we have achieved improvement in JNPT. JNPT has gone up by 3.5% to 63.75%. So EBITDA, we have maintained a very handsome EBITDA if you consider total income, then the EBITDA is 25.79%.
So despite all the turbulence that we had in trade in last quarter and the last, in fact, last half year, maintaining an EBITDA 25.79% is very creditable, and perhaps it indicates the resilience that CONCOR has and the strength that CONCOR has to have post good results in the next quarter. So these are my opening remarks. Now I will request the participant to start their question. Thank you.
Thank you very much. We will now begin with 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Krupashankar NJ from Avendus Spark Limited. Please go ahead.
Good morning and thank you for the opportunity, sir. My first question was more of a booking question. Just wanted to get a sense around what would be the originating throughput for the quarter across EXIM and Domestic, please?
For the quarter Q2, the originating EXIM volumes are 5,75,401. Domestic volumes are 1,43,014. Total 7,18,415. We have seen increase in Domestic volumes.
Got it, sir. So the third question was also on to the part that in the Domestic side of business, while we had earlier highlighted that we can grow by over 15%, just given the first half has been relatively weaker. First, I wanted to understand how you are seeing the ramp-up of new contracts and do you want to revise your guidance on either the EXIM or the Domestic volume growth for the FY 2027? And continuing to that also, on the Domestic profitability, the EBIT margins in this business have come down materially, right, to around 2% sort of a level. So just wanted to get a sense around, is there any one-off cost in the Domestic business which had impacted beca use we could clearly see that the EXIM business EBIT margins were quite strong. So these are the two questions, sir.
Yeah, as far as this Domestic, the guidance and the first half performance is concerned, as you are aware, due to the turbulence in Gulf, the gas supplies got affected to India, and we had the entire tile cluster in Morbi, it practically shut down in the first quarter. They have gradually revived in the second quarter. They were weak till July, and August, September, we are seeing good volumes in tiles. Similarly, for the various geopolitical issues, the gunny bale traffic was totally affected in Bengal in the month of July.
From August onwards, we have seen strong recoveries. Then the food grains, we had busy season surcharge applied on Konkan traffic from July to September, so w e did not have that busy season surcharge was not there in railway BCN wagons then t he polymer traffic was also affected, so we are getting recovery there. Food grains will have recovery because the busy season surcharge now equally applies to containers and railway wagons. Fertilizer, we are talking to various fertilizer manufacturers.
becaause the railways has changed the rating system to GTKM base, so we are trying to take advantage of that. If we succeed, then we will start new streams of fertilizer traffic. Bulk cement, almost every week we are setting up new streams as more and more tank containers are joining our fleet. Already we have got 1,100 tank containers, 2,000 are in pipeline, and further more orders we are planning. Similarly, we have got signed a new contract, as I told you, with GAIL, and we expect traffic coming from it in November end. All these things will see strong recovery in Domestic traffic and w e are just watching the situation in the West Asia.
Various media reports are indicating, giving contradictory views that what is going to happen in November. We are optimistic that the things will get resolved. If the trade routes get normalized and the West Asia crisis does not deepen, then we will have strong volumes both in EXIM and in Domestic in the coming quarter. So we will review our guidance in the month of December. Right now, we are just keeping quiet as far as guidance is concerned because the situation is evolving.
We do not know what is going to happen even by the end of this week so t he situation is evolving. We are keeping a close watch. But our Domestic signals are very strong. Like the country has demonstrated resilience in view of this war-type situation, we are also at [Konkan]. We have maintained our volumes well and posted decent results and w e are very optimistic that we will have strong performance both in EXIM and in Domestic and in other allied logistics services in the coming quarter.
Thanks for that, sir. And a follow-up on the EBIT margins on the Domestic business, sir, it has weakened considerably. Any one-offs you want to call, sir?
No, because see, when the volumes, like tile volumes, it disappeared. So there is a strong competition. We are not the lone participant in the market. There is strong competition. So whatever was the remaining volumes, for that, competition was there. So i n order to keep our market share up and continue to carry these Domestic volumes, we had to, at places, yield as far as our rates are concerned in some places. But we have not compromised our margins in a great manner.
Some increase in expenses are there, so w hatever dip you are seeing in our margin, it is because of some marginal increase in expenses arising out of fuel price rise, and the staff cost is increasing, the land, and other issues. So because of that, we have a less margin. But as volumes increase, those expenses, some of the expenses are fixed expenses, like staff expenses are fixed expenses, land expenses are fixed expenses. So, if the volumes rise, then our margins will improve.
Understood, sir. I have more questions. I will get back in the queue. Thank you.
Thank you.
Thank you. The next question is from the line of Priyankar Biswas, an individual investor. Please go ahead.
Yeah, hi. This is Priyankar Biswas from JM Financial. So my first question is, if I heard your commentary right, did you mention that the busy season surcharge has been removed and—
No, no. That is not what you have heard is not correct. The issue is that during the July to September quarter, busy season surcharge did not apply to BCN wagons. For that quarter, the BCN wagons, the railway wagons, they did not have the busy season surcharge. For containers, the busy season surcharge is applicable throughout the year. So because of that 10% rate differential, some of our food grain traffic, which was in containers, that shifted towards BCN traffic, so t hat was the issue I was trying to mention. I hope you have got it now, right?
Yes, yes. Now it's very clear. Also, again coming back to that, if I heard it right during your presentation, you had highlighted that there were certain price cuts that were made in, let's say, TKD and Dadri.
Yes.
So if you can tell me, like, what is the extent, let's say in percentage terms, by which you may have reduced the rates? As a result, at least in the second half of the year, how much would you expect that your realizations to come off because of that and h ence, any comment on the profitability?
Dadri, we have revised the upper deck prices, 40-ft container prices, to get more double-stack traffic. It is depending upon the stream and the circuit, it amounts to 10%-20%. Depending upon the kilometers, different slabs are there, so 10%-20% price reductions we have effected. Similarly, in TKD also, the export and import, those handling costs have been reduced. That also amounts to different types of traffic. It also goes from 10%-20%. So we hope that because of these two reductions, we are encouraging, incentivizing customers, particularly in case of Dadri, Varnama, and other DFC terminals, to get traffic migrating from road to rail, so w e hope to have modal shift of traffic that will add to our incremental traffic.
In case of TKD, what was happening because we were passing the entire land cost to the customer, so the customers were going out of NCR, and those cargo was coming from outside the NCR region into Delhi by trucks and t rucks were adding to pollution in Delhi. Now, by reducing our tariffs in TKD, we hope that the cargo which is consumed in Delhi itself will come by rail into the heart of Delhi in TKD. It will also have economic effect. It will have benefit to us. We will have more volumes. It will have also benefit to consumers in Delhi. Logistics costs will go down. It will have also an environmental impact that now cargo will come by train rather than by road into Delhi, so t hese are the benefits of that TKD traffic tariff revision.
Okay, sir, that is very clear. If I just may squeeze one more in. Sir, in the 1H of FY 2027, the Domestic volumes were particularly weak. I mean, of course, I understand the reasons that were provided, and I also understand that we had a particularly severe monsoon as well, so maybe on top of that. Considering that in FY 2027 full year, what sort of growth should we pencil in for, let us say, the Domestic traffic for the full year?
Yeah. You see, the Domestic, so far the handling volumes in the first half, it has grown by 4.22% and o riginating also, there is marginal increase, but i n million tons also, we have seen increase in volumes. But issue is that, as I told you in the beginning, the situation is evolving. If we, these geopolitical issues, we will just watch for one more month, that is very crucial, and then I will be able to give a good forecast. Right now, we hope that whatever guidance we have given in Domestic, that will hold at least for the H2 part. So, right now, we are not giving because it is not correct to give revised guidances so frequently, then it loses its sanctity. So, exact percentage I am not telling you, because the situation, the media reports are suggesting is evolving, and no one knows that what is going to happen.
Okay, sir, that's very clear. Just a bookkeeping, if you can give the—
Mr. Priyankar, sorry to interrupt. I request you to join back the queue for more follow-up questions. The next question is from the line of Achal Lohade from Nuvama Wealth Limited. Please go ahead.
Good morning, sir. My question was you've kind of indicated there is a price reduction or the tariff reduction for the upper stack container, and you also mentioned the price reduction for the handling charge at TKD. Is it possible to get some quantification? What is the revenue loss on account of this and w hat kind of volume delta can we expect in the second half because of these actions?
After reduction in Dadri, we have now experience of two, three months. There is instead of reduction in revenue is increasing in Dadri. So because this is incentivizing, our volumes are increasing, so we are having increase in revenue in Dadri. We don't have any reduction. And TKD, we have just reduced it 15 days back, s o we are observing and we hope we'll be positive on revenue, despite those reduction is to incentivize to get more volume. So we'll be positive in volume and positive in revenue, both in Dadri and TKD.
Understood. Second question I had, if I look at the other expenses, excluding or reducing the land license fee out of the operating expenses of INR 344 crore, I see that the operating expenses have gone up from INR 210 crore- INR 240 crore. So would it be possible to get some more clarity as to which line item has driven this increase, sir? This INR 20 crore increase or INR 30 crore increase?
Yeah. You see, the primary, the reason of increase in operating expenses, little bit of increase in staff expense, little bit increase in our handling expenses because of fuel price rise and other general price rise, then similarly, our FMLM segment also, that is road transport segment also, there is a little bit rise in expenses because again, the truck rates have gone up marginally. No single factor can be taken out which has raised to the increase in these INR 20 crore. They are all spread over on different items. This spread over is very natural that given the general inflation level that we are in, so it is nothing, no abnormal increase is there.
Got it. And just ask if you could help us with the port-wise market share, please, sir?
Yeah. The port-wise market share you want, this JNPT, Pipavav, and Dadri or—
Yeah.
JNPT, we had the market share of 63.75%, Mundra 34.65%, and Pipavav 47.81%. This is as far as this quarter is concerned.
And total, sir? Aggregate?
Aggregate means—
Total for India, overall all ports put together, for example.
Around about 50%.
It is about 50%.
50%. Okay. Possible to know what the change QoQ or YoY is in terms of the JNPT you mentioned 3.5 percentage point.
Yeah. The Mundra and Pipavav, there is marginal decline. Mundra is 1.8% drop and Pipavav 2% drop. JNPT 3.53% growth.
This is year-on-year, right, sir?
Year-on-year for this quarter, Q2.
Okay. Great, sir. Thank you so much. I will call back. Thank you, sir. Thank you.
Thank you. The next question is from the line of Vikram Suryavanshi from PhillipCapital Limited. Please go ahead.
Yes, sir. Good afternoon. What was the rail freight margin and operating margin for this quarter?
I could not hear. Kindly speak a little louder or close to the mic.
Yeah. What was the rail freight margin and operating margin for this quarter?
Rail freight margin for this quarter.
Yeah, the rail freight margin for the quarter is 28.3%, which is almost at par with what it was last year and o verall operating margin is around 31.5%.
Okay. Any development or how is our long-term plan for extending this business for shipping side with Bharat Container Shipping or existing partnership we are doing for the forward integration in our shipping side? So if you can highlight that, I think that will be—
There are two points here. On the— we are on standalone basis, we have taken last year initiative of starting shipping services, and we started it from the Middle East, particularly the U.A.E, b ut because of the war in March, that has got disrupted. Still, we are sending few containers to Gulf now. And in addition to increase our shipping activity in the Southeast Asia and Far East, we have signed two agency agreement last month itself. And in the first half in H1, our turnover from this shipping activities was INR 12 crore up to September, April to September, INR 12 crore.
We are hoping that in the next half, we will have good turnover and we will end the year with about INR 50 crore of revenue from these shipping activities. The point number two, as far as Bharat Container Shipping Line is concerned, that proposal is under approval by the government. The various clearances that was required for the MoU to translate into an agreement and the project being approved, those clearances from different ministries were received. But it is under approval of the government, and once the government approval is received, the setting up of the Bharat Container Shipping Line will take off. We will have 20% stake in that.
Yeah. Any plan to restart coastal service under Shipping Corporation or it will—
Yeah, because of the various turbulence in shipping sector, although we wanted to initiate this coastal shipping, the ships rate, the lease rates of the ships have increased very drastically. The market is totally in a very fluid state, so a t this point, we did not want to venture into coastal shipping. Once the market stabilizes, we had the discussion and an MoU with Shipping Corporation and other partners also to restart coastal shipping. But for the time being, that is on hold because the shipping sector is in turbulence.
On ocean side, both the shipping lines and the ports, they have raised the rates very significantly. Ports are doing lots of transshipment, so their hands are full. Shipping lines, of course, their hands are full because the shipping is getting delayed, the ships are getting delayed and traversing longer routes. So a t this point, we don't have the plan even to enter into coastal shipping in the current financial year. I would like to be very frank, b ut once we are watching the situation in November, if the things stabilize, we will definitely restart that initiative.
Okay. Thank you very much.
Thank you. The next question is from the line of Durgesh Shukla from InCred Capital Limited. Please go ahead.
Hello, sir. Thank you for the opportunity. Sir, what is the rail coefficient for this quarter at the ports JNPT, Mundra, and Pipavav Port?
Yeah, I will give you. Rail coefficient.
Yes.
Yeah. Just one minute.
Yes, sir.
The JNPT rail coefficient for the quarter was 12.88.
Okay.
Actually, what has happened in these ports, the transshipments have increased. We are not getting apple-to-apple comparison because port handlings include the transshipment volumes, and transit containers, they neither go by road nor they go by rail. But whatever figures I have, I will share with you. I am sharing that. But this is not an apple-to-apple comparison. I am giving this disclaimer. We are working with the ports to arrive now at a correct index. So JNPT is 12.88, and Mundra is quarter two, 24.85, and Pipavav is 64.81.
Sir, Pipavav is 64.81, right?
Yes.
Mundra is 22 point?
Mundra is 34 point. Sorry, Mundra is 24.85.
85. Okay, sir. What is the empty rakes in this quarter?
Empty running?
Yeah.
You are asking of empty running?
Yes, sir.
Empty running cost for EXIM in this quarter is INR 21.73 crore, and Domestic is INR 77.09 crore. Total is INR 98.82 crore. In the EXIM, it has reduced marginally, and in Domestic, it has increased marginally.
Okay. Yes, sir, what is the lead distance overall in this quarter?
Yeah, the lead is 817 km overall, which is 4.9% more than the corresponding quarter last year, which was 779. 817 km versus 779 km.
Okay, sir. That's all from my side. Thank you so much, sir.
Thank you. The next question is from the line of [Yash Maniar] from Sycamore Advisors LLP. Please go ahead.
Thank you for the opportunity, sir. So I want to ask that over the last few years, CONCOR has lost some market share of the road freight, and partly that's because of the full benefits of the Western DFC were delayed, so n ow that corridor is operational, how does the management see the pace of modal shift from road to rail over the next three to five years? Specifically, what kind of incremental volume growth and market share recovery can CONCOR realistically target? What the benefits, will these benefits become meaningful or not?
Yeah, the dedicated freight corridor is going to be very meaningful and significant for CONCOR. And in order to attract road traffic to the DFC, we have taken two very important steps. In addition that the DFC has got now fully connected, we have taken two important steps. One step is that we have got the customs approval at JNPT to start cabotage service. In the cabotage service, the domestic small cargoes, parcels, which were coming by road to Delhi area, this is getting aggregated and being put into 40-ft containers onto the upper deck of double-stack trains at a JNPT terminal.
So this service has just started, and we are going to strengthen this service. This will lead to shift of light good cargo from road to rail. Second, in order to shift the normal cargo, both light good and heavy goods, from road to rail, we have reduced the upper deck cost of 40-ft containers and w e are hoping that there will be more shift of cargo from road to rail. And as you are asking that how much it will shift, as I told you, now it is 13%, 14%, the modal share in JNPT. We hope to achieve in medium term 18%, 19%. This will lead to substantial increase in our volumes.
Okay, sir. I have a follow-up question that now since the WDFC is now operational, and we understand these benefits which were told by you, that double-stacking and high utilization. Can you help us to understand that what's the implementation achieved so far? What are the targets achieved so far, and what percentage of eligible trains are currently operating through this double-stacking?
The double-stacking normally is at the level of about only 30% at JNPT, but it is substantially higher in Mundra. JNPT, what is the issue is that, the last two, three months, the ships, vessels are not keeping their schedule. They are moving out of schedule. The import traffic has been very erratic, and because import containers are not coming, they are getting stuck in the port areas of Gulf of Oman. The two ports are working, Fujairah and Khor Fakkan and t hese ports, they are not releasing empties.
Empty containers are not coming. Because of that, export volumes are also getting affected from India. The shipping lines are not bringing empty containers because they are busy in managing the loaded containers. So because of all these issues, the full benefits have not got realized in last two, three months. The DFC has been operational. In addition, as one participant indicated, there was heavy rains, and the DFC routes were also occasionally got affected. But now from October onwards, we are seeing better volume performance and o nce the ships start coming as per their schedule, then double-stacking will improve. At present, double-stacking, therefore, is about only 30% in JNPT, but we hope that it will increase.
Okay, sir. One last question from my—
Sorry to interrupt. Mr. Maniar, I would request you to join back the queue for more follow-up questions. The next question is from the line of Prateek Giri from Subh Labh Fiscal Services Private Limited. Please go ahead.
Hi, Mr. Panda. Thank you for the opportunity. Mr. Panda, my question is again in continuation with the previous participant's question on the improvement which we are supposed to get after JNPT connection with DFC. Now, I understand there has been geopolitical uncertainties, etc. , but if I talk of particularly about JNPT, the rail coefficient there is very low. So initially, we were expecting that the initial market share gain or volume gain will come from road to rail shift, which probably is not there in this quarter. So I understand probably this might be an early quarter for the connection which has happened recently. But can you throw some light on what recent developments you are seeing which is giving you confidence on gaining market share from road? That is the first question, Mr. Panda.
Yes. The signal, I will just give you a signal indication. In one day in Dadri, we loaded eight trains, and seven trains were double-stacked. Our volumes and performance in Dadri, Varnama, they have increased very significantly. So these are the signals which indicate that more traffic is coming to us by rail. And as I have already repeated, we have incentivized to the customer by reducing our, moderating our rate and t herefore, we are very confident that significant road traffic is going to shift to rail. Northbound road traffic, I am telling you, because the DFC is connecting JNPT to Northern India and w e are now started running direct service from Ludhiana to JNPT via Dadri.
Earlier, that service was not there. Even our Kathuwas terminal, that is also giving us good volumes because traffic is moving by DFC. Numbers, percentages, this will take time to be indicated because the data available in the public forum and public space is not very clear. But as I told you, one data that is affecting us now, sudden spot in transshipment import volumes. The data is getting affected, so it will take some time to have a feel of the situation. Maybe one or two quarters more, you will realize.
One follow-up, Mr. Panda, on this. I am not sure whether you have numbers for this or not, but how was the October month? I am sure in internal reviews, probably you might have seen those numbers for the October month in terms of volume growth, particularly from JNPT to Northern India traffic in railways.
So in October, that is what I am saying, we are seeing good signal. We have got positives in October, but as you know that we do not release physical numbers month-wise. We release quarter-wise. So we will release on completion of the December quarter for everybody to view. We are seeing improvement in physical volumes in the month of October.
Very helpful. Just last question, Mr. Panda. So earlier, haulage charge used to be a major impediment in gaining market share or even to gaining market share from road, because we used to see some erratic price increases from our parent. I am just trying to understand, post this DFC completion, are we seeing some moderation from Indian Railways also, that they want to make the environment conducive where they can reduce haulage charges so that ultimately leads to road to rail shift?
When Indian Railways announces any revision in its haulage charges or tariffs, it is publicly notified. So wh at you have seen and we have seen are four notifications. The commodities, the pattern of tariff has shifted from the old system of slabs to GTKM-based slabs. That is in bulk cement, fertilizer, fly ash, and food grains. So these four commodities, they have rationalized the tariff and have changed the system. Now, in certain segment streams, we have found benefit in bulk cement, and bulk cement needed special type of tank containers. We are procuring thatm, s o that stream of traffic has taken off.
As far as food grains are concerned, as I told you, we are trying to capitalize only from the month of October, and there are other issues in food grains and o nce those issues get resolved, we will hope to have some benefit. As far as fertilizer is concerned, there is a fertilizer gets a rebate by rail, so we are trying to get that level playing field for containers also. We are in discussion with fertilizer manufacturers and Fertilizer Ministry to get that level playing field, and we are hopeful on that front.
Fly ash, it is still the rates are in favor of these wagons, railway box and wagon so w e have not so far started on that front, but we will definitely, we are working out how do we have a presence in fly ash stream, b ut we will have a presence, but we are working out that modality for that. So, wherever railway has revised or rationalized the tariff structure, we are working on all those fronts, and we will get benefits out of it. We have already got benefit on bulk cement, and in other segments also, we are working. We have got a very large pool of talented officers. They are spread over all over the country. They are talking to various stakeholders, manufacturers, and we will definitely have benefit out of these rationalizations.
Understood. Any benefit that CTOs have got in this cost rationalization?
Container?
CTOs, container train operators, in this cost rationalization of haulage charges.
Yeah—
You described about the other commodities, but container I am asking.
I am talking about all these commodities getting transported via containers only. These commodities, when they get transported in containers, will get benefit. We are getting that benefit in bulk cement being transported in tank containers. Similarly, we are working to get benefit out of fertilizer, food grain, fly ash being transported in containers. We want to containerize this traffic. Substantial part of this traffic are still moving by road. We want to containerize and get benefit.
Got it. Thank you. Just one suggestion, Mr. Panda. A lot of data is orally recited.
Mr. Giri, sorry to interrupt. Just a second. I would request you to join back the queue for more follow-up questions. Thank you. The next question is from the line of Krupas hankar NJ from Avendus Spark Limited. Please go ahead.
Thank you for the follow-up, sir. Just wanted to get a sense around EXIM peak.
Sorry to interrupt, Krupas hankar. The management line has been disconnected. Just give me a minute, I will join them back again. Thank you for your patience. We have the management back on line with us. Please go ahead, sir.
Yeah, welcome.
Thank you.
For the next question.
Yes, sir. Krupas hankar NJ here again from Avendus. Just one follow-up question. Given the West Asia uncertainty, what you have highlighted, and the ships' schedule being quite volatile, just wanted to get a sense, is the trade using CFS more than inland container terminals for movement of goods because of these uncertain periods a nd once the issue is settled, do you see that that could be one of the drivers of rail coalition?
That dichotomy of CFS versus inland container depot is not there as far as turmoil in shipping is concerned. The CFS-ICD competition or the ecosystem, that remains prior to this turbulence and will continue. What happens that once the cargo which is unloaded at the port, the bonded cargo, they go to CFS, and from CFS they can go by train to ICD, or in the CFS they can get released. The released cargo generally do not come back to rail. They go by roads. There are direct, in the port itself, the cargo gets unloaded, and from there we get bonded cargo in the port yards on rail, which go to ICDs.
So if the port yard handling capacity becomes more and more, then more cargo will shift to ICDs rather than getting cleared in CFS, local CFS, and being released on road or through double handling through train. So while the ICDs are there doing well and well established in the hinterland, the issue becomes what is the efficiency in port yards, railway yards inside the ports, and how these empty rakes or loaded racks, they can be quickly moved into the port yards. It is a question of mobility through the railway system into the port yards and the handling efficiency in the port yards.
Now in JNPT, anticipating the DFC connection, they have strengthened the port yards, b ut that needs further upgradation if we want to see massive modal shift of traffic from road to rail. So w hatever upgradation they have done, they can do double stacking, but they need to do it more quickly. They are adding more machines in the port yards. They are adding more railway lines in the port yards. So if port yards become expansive, stronger, efficient, then you will have modal shift of traffic from road to rail as traffic will move to ICDs.
If the port yards remain weak, then traffic goes to CFS and gets cleared there. So this is a system that is there not only in India, it is there everywhere in the world. But ICDs, they deliver a good service to the country by quickly moving the bonded cargo from the port to the hinterland and t he hinterland exporters and importers, they would like the ICD system performing well. Am I clear now?
Yes, sir. Very clear. Thanks for answering in detail. Last question from my side. On the CapEx for the year, just wanted to get a sense of what would be the figure for FY 2027, the year estimate, and how much of it—
Yeah, the CapEx, our MoU target is INR 800 crore, but internal target is INR 945 crore. And in the first half, as I told you, we have done INR 418 crore. And generally, the second half, there is more CapEx, so we are already on the path towards INR 900+ crore of CapEx.
How much would be towards terminals, sir, out of this CapEx?
Yeah, the terminals, we are developing two new terminals. One is at Salawas near Jodhpur. That is likely to be commissioned very shortly, maybe this month and another terminal is at Pathri, Haridwar, that is getting commissioned maybe in this financial year itself and t hen one more terminal work we have started in Amritsar. One terminal work we are doing near Ahmedabad on double-stack, this DFC, that is Charodi. So these four works are now going on and expenditure is happening. So we hope that out of this INR 950 odd crore that we are going to spend, maybe INR 200 crore will be spent on this terminal, four terminals only and further land acquisition we are planning at various other terminals. So if those land acquisitions happen, we will have more CapEx on them.
Understood. Thank you and all the best.
Thank you. Anyone who wishes to ask a question may press star and one on the touchtone phone. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you, sir.
So thank you all very much for all your questions. We can again assure you to have a robust performance in the coming quarters. We had a good performance in quarter two, decent numbers, and we are very hopeful that our both volumes and revenue will have growth in the coming days and w e wish a very happy Diwali to all of you in the festive season. Thank you very much.
Thank you. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.