Ladies and gentlemen, good day and welcome to the Q2 FY26 earnings conference call of Gateway Distriparks Limited and Snowman Logistics Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Please note that this conference is being recorded. Before we proceed, we request participants to include their firm's name alongside their name in the Zoom display. Today on the call, we have Mr. Prem Kishan Dass Gupta, Chairman and Managing Director, Mr. Ishan Gupta, Joint Managing Director, Mr. Samvid Gupta, Joint Managing Director from Gateway Distriparks Limited, Mr. Karthik Sundar Iyer, CFO, Mr. Rajguru Behgal, Chief Business Officer, Mr. Manoj Singh, Chief Strategy Officer. From Snowman Logistics Limited, Mr.
Padamd eep Singh Handa, CEO and Director. Mr. Raghav Garg, CFO. Ladies and gentlemen, we will now directly begin the question and answer session. Anyone who wishes to ask questions may use the raise hand option. If you wish to remove yourself from the question queue, you may click on the option again. You may please click on the raise hand option to ask questions at this time. Participants are requested to unmute themselves before asking their questions. We'll take a minute, and then we'll open the floor for the Q&A.
Michelle, please make an announcement. Then the firm name must be beside the name of each and every participant.
We will request all the participants to mention their firm name. They may rename themselves if they are joining the queue to ask the question. I repeat, may I request all the participants to mention their firm name besides their names? Please rename yourself before asking the questions. You may please click on the raise hand option to ask questions at this time. Participants who wish to ask questions may click on the raise hand option at this time. Ladies and gentlemen, you may click on the raise hand option and mention your firm name besides your names. The first question is from Yash Tanna. Please introduce yourself and proceed with your question.
Yeah, hi. Am I audible?
Yes, you are. Please proceed.
Thank you for the opportunity. So my first question, I just wanted to know the EBITDA per TEU for this quarter for rail and CFS for GDL?
Hi. So the rail EBITDA per TEU is around 9,300, and CFS is at 1,000.
Awesome. Okay. And so as the volumes sort of try to pick up, and I'm talking not from the next few quarters' perspective, but from probably a more medium term, let's say a two, three-year outlook, where do we expect this number to go to as double-stacking increases? And hopefully, we get connected to the DFC gets connected to Nhava Sheva. So what's the outlook here?
We're expecting double-digit growth closer to maybe 10%-15% is a good range that we're looking at from our existing locations, not counting Ankleshwar and domestic volumes or any other new location.
Okay. So 10%-15% volume growth, this is, right?
Yeah. So this is basically because of the trade deals that we're negotiating with the U.K. being implemented. E.U. and U.S. should get closed by then. The other countries also, yesterday, New Zealand was also announced that it might get closed. So there's a lot of positive traction coming in. And then the shift from road to rail, that will also help with the DFC connecting to Nhava Sheva.
Got it. And so in that sense, also, I'm trying to understand this EBITDA per TEU number. So will that also inch up? And if yes, what number can this go to in the next two or three years once the volumes pick up?
EBITDA per TEU, we've given some guidance in the past, but going forward, it'll be a different way that we'll be measuring because as we start more domestic volumes and more shorter distance volumes, say with Viramgam and Ankleshwar growing, it's not the right base to look at it if we keep this 9,000 to 10,000 range. We'll figure out a metric and get back to you once those volumes start.
Sure. Sure. Got it. And for the other one, was this domestic services that you guys have commenced now? As far as I remember, earlier, we were not getting into domestic probably because the profitability wasn't that much. So what changes our thought process here, and what is the opportunity here? How much incremental, let's say, top line and bottom line can be generated in the next three, four years from domestic?
The market has evolved over a period of time, and people are more open to rail for domestic versus just road. And the location Ankleshwar makes sense because a lot of domestic distribution takes place from there. We're trying to balance as much and trying to find return load. It's hard to put a top line number to it, but we are looking at it from a longer-term view where we want to do 1,000+ TEU of domestic in the next two years per month and then look to grow from there. And while we expand our network to other locations also, then we can increase this number further. And then just relying on pure Exim I mean, we had announced three, four years ago also that eventually our long-term plan would be to get into domestic.
It still won't be a major contributor like Exim, but maybe 10%-15% of our business can be domestic after a few years.
Got it. And is this expected to dilute profitability in any way?
The per TEU margins are lower on domestic, but then it's the same team doing it. It's the same set of trains and terminals. So the overheads aren't increasing. So it's an incremental top-up, and we'll be using Hub and Spoke. We'll be trying to double-stack as much as we can along the Western DFC. So again, that's why I was saying earlier that it's hard to put a number to what EBITDA per TEU can look like maybe a year or two down.
Right. Right. Got it. And the other question was on Snowman, actually. So I think on Snowman, one change that we have observed since the last few quarters is that on a PBT level, the transportation margins have completely gone away. So we are just sort of breaking even there. So what is happening? So how will this change? I think at one point in time, we used to lose 7%-8% PBT margins on the transportation vertical as well. Now I understand that I think there were a few new assets capitalized, but now what's the plan to get back profitability there?
See, we're working on there have been certain costs.
Hello?
Hello. Is it audible now?
So you're working on.
Yeah, you're a little bit distant. Yes.
Okay. So in transportation, we are working towards realigning the entire business model, and this is the quarter wherein we are going to reassess and, I mean, a lot of new businesses which are being brought back. This will boost up the entire profitability, and we'll go back to where the numbers were a few quarters back.
Okay. So this is at a high single-digit PBT margin? Are we referring to?
Yes. That's what we are targeting at. So at EBITDA level, we have turned positive and with a reduced top line, and further improvements are happening in the entire. We are redoing the entire metrics once again.
Okay. Got it. So can you slightly elaborate on what the realignment process looks like? And are we reducing the low profitability customers? What is exactly happening?
Some of the vehicles which were off-road earlier operated at a very negative margin. Those are now moved out, and the fleet will be refurbished, which will help us to increase the profitability.
All right. Got it. And so on the warehousing front as well, so I think last quarter we did see growth. We moved to INR 60 crore out of a top line. And this quarter, again, we are at INR 60 crore. Now with the new facilities commissioning, what is the outlook here from a one-to-two-year perspective?
In long term, definitely there is a growth which is as per our plans, and quarter by quarter, we are achieving our budgeted numbers. That's something which I can tell you.
Okay. So any outlook that you would like to highlight for us?
Not at this point in time, but definitely we see good positive quarters coming ahead.
Sure. And I think a final one on the warehousing segmental margins again. So I think we were doing last quarter was 12% PBT margin. This quarter is a significant dip. It's 3%. So can you tell me why such a significant dip in warehousing margins?
One was on the utilization part of the overall capacity which was there. Some new capacities were added, and the overall utilization was reduced. Other was our existing couple of warehouses also had a stress because of seafood and other elements in a couple of those warehouses, which has actually led to reduced margins, and then third was weather, which was quite patchy this time, which has increased power cuts, and we have had a considerable diesel consumption in the warehousing unit.
Okay. And going forward in the next few quarters, do we expect this to reverse and revert to the mean 10%-12%-ish that we were making?
Yes. We are seeing positive traction from December onwards till the year end. We are expecting good volumes.
Got it. Got it. All right. Thanks, sir. I'll join back in the queue with any further questions.
Thank you. A reminder to all the participants that you may please click on the raise hand option available on your screen. You may also rename yourself with your firm's name so that we know which firm you belong to. I would request all the participants to introduce themselves and go ahead with your questions. Please mention your firm name before asking the questions. We'll take the next question from Vikram Suryavanshi. Please introduce yourself and go ahead with your questions.
Okay. Yeah. Hope I'm audible?
Yes, sir. Please.
Okay. Yeah. Hi. Good evening, sir. I'm Vikram from PhillipCapital. This CFS EBITDA per TEU, basically, I'd say the number is pretty low compared to normal range. So any specific reason for this quarter, or that is like a new normal?
No, there were some one-offs which included, say, legal costs and repair and maintenance. There was also a dip in exports because of the U.S. tariff situation. So we should see this improving in the coming quarter.
Okay. So can we come back to like a INR 1,500+ or something like that or probably?
So I think the range we've given in the past is INR 1,300-INR 1,400. That's still the target going forward.
How is the basically things are quite evolving, particularly with the U.S. trade barrier? But in terms of demand level, has it continued to impact volumes, or there is still underlying some base volumes which are continued despite tariffs? Or how do you import-export mix if you can comment on that?
Imports are going strong, but export side, we saw a dip, and part of it is because of the U.S. tariffs. Maybe you can say about 4%-5% of our volumes were lower on that account, but it has stabilized over the last month or so, but until the trade deal is finalized, I don't think we'll get back to the earlier numbers of exports plus a growth on the exports that we were looking forward to.
Okay. Understood. And domestic side, the business quarters have started from Ankleshwar. What is the second leg? Is it like in Mumbai or something where we have a region which comes and then we distribute? Or how is the basically strategy to develop a network on a domestic?
So right now, we're servicing from Ankleshwar to north. Part of the containers have gone towards Ludhiana, some to Jammu, some within NCR. So we're trying to explore as much within our network that we can. But we're open to other opportunities also to regions where we don't have a full-fledged ICD, but we can operate out of a third-party terminal or a CRT.
Currently, we are kind of a tie-up with basically third-party terminals for north distribution, or we are using existing terminals?
So, north, we're using all our own ICDs in Ludhiana, Garhi, Piyala, Kashipur.
Okay. So any plan to then build for this Indian Railways terminals, basically?
Which ones?
Indian Railways terminals under the Gati Shakti.
No, if something good comes, we'll have a look at it. But right now, we haven't applied for any opportunity with them.
Okay. We also had a plan to develop our own satellite terminals. So any progress on that front?
No change on that situation.
Okay. And any update on Jaipur?
No change again.
Understood. Okay. Thank you.
Thank you.
Thank you. The next question is from Kunal Tokas. Please introduce yourself and proceed with the question, sir.
Hello. I'm audible?
Yes, sir.
I'm Kunal from Fair Value Capital. Just one question on Snowman. What is your CapEx plan, capital program for Snowman for this year and for the next few years?
So we'll be roughly spending about INR 100-150 crores per year. And primarily, that is on making two to three owned warehouses on owned land. Other than that, we'll have some small CapEx on build-to-suit or transportation, increasing our fleet, and we're exploring some EV and CNG vehicles also going forward. And then we'll also be getting maybe two facilities a year on a build-to-suit model.
Just for clarity, can you also maybe specify what your preference would be? Would it be to own warehouses and vehicles, or would it be to be more asset-like and lease those assets?
No, our preference is actually it's a two-pronged strategy. So for the warehouses, we want to own the land and construct on our own and do CapEx out there. And on the asset-like side, we will continue where a fully built-up facility is available for lease. We will not be doing a mixed lease where part of the assets are leased or the land is leased and the warehouse is done by our CapEx. So either fully owned or fully leased.
How would you decide between the two, say, for any particular location whether to buy the land and build it yourself or lease it?
There's no difference for us. So as and when we know what our cash flow is allowed, we will spend that much on our own CapEx. And beyond that, whichever opportunities we get for BTS, we'll do that.
The ideal size of a facility that you would be looking at would be how much?
It depends on the city and the market, but roughly on average, 5,000 barrels per facility is what we're looking at.
5,000. Is there an idea or a market reference with slowly increasing these capacities as the market matures?
Yeah. So Tier 1 cities are more mature, so we would look at bigger capacities there. But Tier 2, I think 5,000 now is possible. And then Tier 3 is where we would look at, say, BTS or Park and Pay, which could be smaller facilities.
All right. Okay. Got it. Thank you very much, and have a good day.
Thank you.
Thank you. Participants who wish to ask questions may please use the raise hand option. Please click the raise hand option to ask questions at this time. The next question is from Ashish Soni. Please introduce yourself and proceed with your question.
Yeah. Hi. I'm Ashish Soni from Family Office. So I have just two questions. What risk mitigation steps you have taken to avoid U.S. tariff impact to stand alone business? That's number one.
So we've tried domestic market. That's what we're trying to do. But other than that, I mean, as a macro, we are a middleman. We're not controlling where the trade is going. We were always targeting other countries' volumes also. So it wasn't that we were U.S.-heavy or anything like that. So where the overall trade goes is where we go.
Okay. And other part, you mentioned that you have some energy consumption because of power issues. So where is this region, and are you taking any steps to mitigate that going forward? Because warehouse business can get impacted because of that, right?
No. Typically, it was, I mean, it is, for a few of the warehouses, typically in south where the power cuts were higher, and that was in general because of heavy rains or downpour, and the lines went down. I mean, nothing we could do. All we are doing is get the maintenance done, and it is done and up and running.
Okay.
Yeah. Waterlogging has impacted that.
Okay. And all these FTAs, I think you mentioned a few of them. So any other FTAs which can positively impact our business? You spoke about U.K. and maybe probably U.S. and New Zealand. Any other thing which you think can give positive flip to the FTAs because others are also impacted by it?
Yeah. So U.K., E.U., U.S. will all help in increasing exports out of India. Imports is going strong. And lately, there's been a lot of talk of India and China restarting a lot of imports coming in from China to India. So that will also help. And even the smaller countries where there's been Oman, Philippines, New Zealand, there was lately something about Australia restarting seafood exports to there. So all these initiatives will help the overall container volumes in India.
Okay, sir. Thanks a lot, Directors.
Thank you. The next question is from Slade Alexander. Please introduce yourself and proceed with the question.
Yeah. Hi. Good evening. It's Slade from Artha India Ventures. So my question is for the management of Snowman. In the management commentary in the presentation, the reason for the transportation segment declining was given as a shift in the customer mix. So can you please elaborate on that? What does that mean? Did you lose customers, or what exactly was that? And then it also says after that, we expect a recovery in the coming quarters. So are there any customers in the pipeline, any particular names that you all can give? And the fleet optimization that is given, so will you all be moving more towards the leased model and reducing the own fleet? Or just if you could explain how exactly do you all plan to recover?
Okay. In terms of fleet optimization, I'll go from third to the first question. So in terms of fleet optimization, we are moving out the agent fleet and replacing it with a new one, adding a few new ones. Most of that will be on lease, other than the CapEx, which we already mentioned in the other question, answering to other question that we'll be doing some CapEx and transportation as well, which will help us have a better utilization of the assets. The breakdowns or expected breakdowns will reduce. That's one part of it. Okay. In terms of the customer mix, because of this GST change, there had been certain I mean, there had been some impact as we don't operate in 5% GST yet. We're trying to work out how and how much is the impact.
But yes, a few of the customers, they have opted out, especially the restaurant brands which were with us. So we have lost a little bit of it, but not considerably. Though the team has started working on different products, and we are gaining traction in those. Our exposure in ice creams is increasing. With the ice cream players, it has increased, and that is giving and driving the growth at a much better revenue. So we are focusing on ice cream brands as of now.
Okay, and also about the customer mix for the 5PL segment, so you all have mentioned Unilever and Kopi Kenangan, but these were there a while ago, right? So are there any new customers in the pipeline for this for FY26?
We have added new location with Unilever. That's one part of it. And 5PL is one business wherein the pipeline always remains very narrow, but it's a long conversion process. There are a couple of customers with whom we are working right now. The names, because of the NDAs we have signed with them, cannot be disclosed, but yes, we are working on two, three major accounts in the same space.
So just to confirm, these two, three, are you all targeting to close them in FY26 itself?
Yes. I mean, at least one of them will be closed in FY26. The operations may start in Q2 or Q1 of FY27.
Okay. And sorry, just one last question I wanted to ask. It's more towards the management for Gateway. So about the creeping stake that you all have been acquiring, is there any final target that you all plan to achieve to hold with regards to the ownership of Snowman?
I think we clarified this the last few calls that our target was to reach 50%, risk cost 50%. And as of now, there's nothing immediate in plans for us.
Yeah. Okay. Thank you.
Bye.
Thank you. Please click on the raise hand option to ask questions at this time. The next question is from Jignesh Makwana. Please introduce yourself and proceed with your question. Mr. Makwana, please unmute yourself and speak.
Yeah. Hi. Jignesh here from Asian Market Securities. If you can provide the market share across our ICDs, how has been the competitive landscape over there? And if you can quantify the double-stack volumes from the Faridabad ICD, that's one.
Yeah. I have absolutely the same, so our market share in NCR is still hovering between 16%-17%, and Punjab market, we have increased our market share to 27%, and in Uttarakhand, it is 38%, so there has been growth in the market share, especially in Punjab as well as Uttarakhand.
Okay.
Regarding double-stacking, so we have increased our double-stacking percentage from 39%, which was last quarter. This quarter is 41%. And we don't calculate the double-stacking percentage terminal-wise. So basically, it's a hub-and-spoke model wherein double-stacking planning considering the volumes of all the terminals. So we don't do a bifurcation. And we see a very positive outlook, especially in terms of import volumes, which have been growing. Though there has been a temporary blip in the U.S. export scenario, but as we have already conveyed that things are going to improve. But keeping in view of the pendencies which are at the port, so we are anticipating robust growth in the coming few months.
Yeah. Sure. But I do agree you can't quantify the double-stack. But if you can qualitatively give some ballpark number that because of commencement of double-stack operation for Faridabad, how much incremental maybe in percentage it has been supporting those volumes? Because we have been doing what, 90,000-95,000 containers every quarter, somewhere 30,000, 35,000, 33,000 kind of containers monthly and rate. Now we are already crossed 1 lakh kind of containers in this particular quarter. If you can quantify, qualitatively say something on that part. And second, the last one from my side, how has been the empty running position in this particular quarter?
So again, it's not possible to break it down terminal-wise. Faridabad, even before it got double-stacked, used to be hubbed at one location or another. So it was getting double-stacked. But there are some direct cost benefits out of double-stacking directly versus double-stacking out of a hub. So that's pretty much all we can say on that. Regarding empty also, sorry, we don't share a split between laden and empty numbers either.
Actually, why I was asking this little part? Because despite our double-stacking has been increasing, but if you look at our buildup per container in rail segment, I think last year it was around INR 9,800. So now we are down by about INR 500 in YoY basis. So I'm not able to get why the absolute margin per container has been on a pressure side.
There are many reasons. One is competition. One is an imbalance is there. Empty running is part of it. Lower double-stacking in certain routes. So mix towards ports changes, weight slab changes. Transit time also was slightly better last year versus this year because there is port congestion going on. So it's not just a simple one or two-line factor that just translates directly into EBITDA per TEU. Also, annual costs increase. Inflation is there. Costs increase. So that has to get impacted somewhere as well.
Okay. Thank you.
Thanks.
Thank you. Please click on the raise hand icon to ask questions. The next question is from Vikram Suryavanshi. Please proceed with your question, sir.
Hello. Am I audible?
Yes, sir.
Okay. Perfect. Most questions were answered. Just one clarification on the domestic side. Probably we'll need our own equipment, I mean, containers, so how is the plan there, or are we currently doing trial and error based on market with lease, so is there any CapEx plan for the container addition there?
We had an inventory of about 800-900 owned domestic containers. We'll be looking to use those. Plus, we've taken some on a short-term lease. We'll try that out. We're also buying some. But the cost of a new container is not that much. It's about INR 3.5 lakh-INR 4 lakh rupees per 40-foot container for a brand new one. We can evaluate buying a second-hand container also. The CapEx on containers will not be that large.
Okay. And in case the new one is we choose to buy, probably we'll import from China. Or now we have a domestic supply available at competitive, right?
We have both options. We'll evaluate whichever is better. I mean, whatever is more cost-effective. We'll compare both domestic and imported.
Okay, but currently, I guess China could be still cheaper, or?
It's unclear because right now we've gone for the lease model.
Okay. Understood. Thank you.
Thanks.
Thank you very much, ladies and gentlemen. That was the last question for today. Participants that have missed out due to time constraint can reach out to the management and SGA for Gateway Distriparks and Snowman Logistics for any further information. With that, we conclude this conference. Thank you for joining us, and you may now exit the meeting.