Today on the call we have Prem Kishan Dass Gupta, Chairman and Managing Director. Ishaan Gupta, Joint Managing Director. Samvid Gupta, Joint Managing Director. From Gateway Distriparks Limited, Kartik Sundaram Aiyer, CFO. Rajguru Behgal, Chief Business Officer. From Snowman Logistics Limited, Mr. Padamdeep Singh Handa, CEO and Director, Mr. Raghav Garg, CFO. We will now directly begin the question and answer session. Anyone who wishes to ask a question may use the raise hand option. If you wish to remove yourself from the question queue, you may press the option again. Participants are requested to unmute themselves before asking the questions. We will take a minute and then we will open the floor for the Q&A session. The first question is from Jainam Shah. Please unmute yourself, provide your company's name and proceed with the questions.
Yeah, hi team. This is Jainam Shah from Equirus Securities. This question relates to Gateway Distriparks mainly. When we see the railway specific volumes, that eventually suggests that there has been a good recovery on a sequential basis by around 11 odd percentage. And wherein I believe overall macroeconomic situation has not been great. So how do we see this going forward for the next half and for the next year, how do we see this momentum going on? Overall rail volume has been, you can say, at a good recovery for this particular quarter.
Hi. Yeah, volume we expect to continue at a similar trend. There is still uncertainty overall, like one month is good, one month is bad, it has been going like that. But overall, we have been able to gain some volumes, a little bit domestic also has started. Ankleshwar has got all its EXIM permissions now in place, so Q3 will see some volumes of that come in. So the rest of the year also, this 100,000 for the rail volumes is the bare minimum that we are targeting for the quarter. And next year should see some additional growth on that because we will be getting a full year of Ankleshwar EXIM operations as well. So our guidance remains in that double-digit thing, for both. Maybe this full year we have to see again, because Q1 took a big hit, but for next year, we maintain a double-digit growth.
Got it. On the realization front, overall blended realization has been improved around 5% YoY, 7% Q-o-Q. So is it on the back of some mix change? Mix change in a sense railway volume higher and CFS volume lower, or let us say something on, you can say domestic higher or let us say it would have negative impact if Ankleshwar has contributed as well. So if you can just throw some light on this. Is it a structural realization change or just a mix change or has there been any price action during the quarter?
There was some price increases. This was mainly after fuel hikes came in, so we have passed that on to customers. Our cost also increased accordingly to that. So that was pretty much a pass-through. Ankleshwar mix, yes, that has also made some difference. With EXIM coming in at Ankleshwar, you will see the realization per TEU go down a little bit because of its shorter lead distance. So we will be focusing on the overall EBITDA numbers going forward as well.
Got it. Yeah, that is it from my side. Thank you so much.
Thanks.
Thank you. We will take the next question from Prashant Kale. Please unmute yourself, introduce yourself and proceed.
Hello, sir. This is Prashant Kale, individual investor. Congratulations on good set of numbers. Sir, my question is regarding Snowman Logistics. Snowman Logistics is generating very negligible profit, despite of having in operation since long time. So what is the prospect for Snowman Logistics? Do you see any possibility to generate, let us say, INR 10 crore-INR 15 crore of profit per quarter in coming years?
Hi. We are reinvesting whatever we can, so that is why there is a higher interest and depreciation cost that is coming in. But if you look at the operating cash flow and if you look at the EBITDA also, it is a healthy growth happening in Snowman Logistics. Revenue side has been slightly lower because 5PL we have not gone as aggressive as we projected earlier because of lower margins in it. We can take some 5PL business if we want, but that is at no margin. So warehousing and transport is seeing improvement. In fact, this year we are probably on track to cross INR 100 crore EBITDA again.
Yeah, but significant PAT, bottom line. Do you see the possibility next year or when can we expect better profitability?
PAT, like I said, because we are reinvesting, the interest and depreciation will continue to be there. There might be some growth in PAT, but we are more focused on the operational cash flow coming through all our investments. And these are long-term generating assets, so these are made with the horizon of 30, 40 years. Our initial cold storage is made in the 1990s are still running to date. So, we have to look it from a long-term point of view. It is not just an accounting figure that we want popping out.
All right. Okay. Thank you, sir. My next question is regarding this, our Jaipur ICD. It has been stuck for almost two years now, and we see very little progress. Is there any new update or any progress in that court case?
Yeah, so we reported in our notes to accounts, if you see at the bottom, every quarter we give an update. All the final arguments have happened now, and the order is reserved. We should be hearing about the order soon, and we're hopeful that it comes in our favor, that we can start construction and then plan for operations accordingly.
Okay. If the order comes in our favor, how much time it will need for us to get the ICD up and running fully?
Up to 18 months.
Okay. Yeah. That's it. Thank you very much, sir.
Okay. Thank you.
Thank you. A request to all the participants to kindly include their firm's name alongside their name in the Zoom display. We will take the next question from Aditya Mongia. Please introduce yourself and proceed.
Hello, everyone. This is Aditya Mongia from Kotak Securities. A couple of questions from my side. The first one being in the press release, there is a mention of fairly decent revenue, EBITDA, and PAT growth, on the container business side. I could not fully fathom what is defined as a sub-segment over there because the overall numbers are not as good. Could you give us a sense of what business is being talked about in the press release?
This is Q2 versus Q1 that we are showing these growth numbers. Container business numbers basically means the standalone GDL plus, 100% numbers of Gateway Distriparks (Kerala) Limited and Kashipur entity. So together, all the CFS, ICD, and rail transportation, road transportation business, basically everything except for Snowman in our consolidated counts as the container business.
Okay. Just a clarification, isn't there a meaningfully strong seasonality between 1Q and 2Q as is visible in previous quarters' numbers or previous years' numbers? If you could give us a sense whether there's meaningful improvement beyond seasonality when we are talking these numbers out.
Yeah, there is a seasonality impact, so 2Q is normally our stronger one. That's why our main reporting on top the table we've given is year-on-year. We just wanted to highlight that 1Q was extra on the lower side, and we've bounced back and come back to normalized levels. Before the war, what we were looking at, the 100,000 TEUs per quarter, INR 100 crore EBITDA from the container business, that is what we were trying to highlight, that it's come back to that situation even though there's still so many macro issues going on. The war is still on. The tariff situation's not clear. It was just to kind of say our performance has been quite decent compared to the global scenario going on.
Understood. That clarifies. The second question that I had was more the preparedness of the company with the Western DFC opening up. I think in today's press release, Adani Ports has talked about and the partly connection happening on Western DFC. Could you give a sense of where Gateway Distriparks is on that journey?
Yeah. In fact, when the DFC got completed, Gateway Distriparks was the first one who started their first double stack train on 20th of June. So we are very positive on this development. In fact, we are anticipating that once the road to rail shift is going to happen, so we want to participate in that business. Plus, we have now Ankleshwar coming in, so we will be using our EXIM volumes and mixing it with the domestic volumes and moving up to north. So there is a good strategy. So we'll definitely would like to take advantage out of the situation about this double stack. Again, the trade is also looking at other options because whenever there is a congestion at other ports like Mundra and Pipavav, so they all always like to look for a third option.
Indian Railways is also looking at that, how they can increase the traffic on this JNPT leg. In addition to that, the JNPT ports are also working on a strategy that how to increase the rail coefficient, which is very down there. It is only 14%-15%. Once the rail coefficient increases, we are very hopeful that we will also try and get some benefit out of it.
Thanks for that. Just a related question on this one, as in we do understand that with the increasing speed, the capacity also goes up. Part A of the question, what kind of EBITDA growth and what volume growth can happen because of the DFC boost? Part B, in which quarter of this fiscal should we then be testing this thesis?
It is very hard to predict because other operators will also be there in JNPT, it is not just us. It depends how much we pass on to the customer, how much we retain. Part of it is also additional cost that we have received that we have not been able to pass on. Somewhere we have to see what the overall EBITDA comes like. It is definitely better because it is a direct connection right to the port, so turnaround time and asset utilization will improve. But how much volume then goes to JNPT depends on what the shipping lines do, and there is no clarity on when they will start calling more on JNPT. We keep meeting the lines regularly, and they have not given any indication yet. Until they take action, we cannot really comment on this.
Yeah, but does it assume that one needs to grow JNPT, otherwise the road to rail shift may be just a feeble effect over here?
Yeah. Definitely, overall volume at the port has to also grow. But even within that, there's a road to rail shift that can happen. That is a smaller component right now. The main chunk depends on how much the lines again will call. Right now, we've estimated maybe 10,000, 15,000 TEUs moving to north by road can be shifted via the DFC, but it takes time.
Well, I'll get back into queue. Thank you for the response, Vipin.
Thanks.
Thank you. The next question is from Kunal Tokas. Please introduce yourself and proceed.
Hello. Am I audible?
Yeah, hi.
Yes, you are.
Okay. Thank you. My questions are on Snowman. The first question is if you can let us know what the volume growth was YoY for this quarter in terms of pallets handled.
So, if we talk YoY, it is close to-
Around 10%.
-around 10% increase in terms of number of pallets handled. Stored, not handled. Handling is separate.
10%?
Yeah.
The increase in warehousing revenue was less than that, right? Was that a function of the product mix or reduction in prices?
See, it is a mix of even the frozen chilled dry area what we keep, so at times, the overall revenues look different if there is a more of dry, depending upon seasonality.
Okay. The pallet capacity also reduced from last quarter. Why was that?
Some of the park-and-pay warehouses, the lease and tenures end, so that has been removed from the overall capacity.
Are we still on track for this year's addition?
Yes, we are. See, our own capacity additions, we are still on track. We are bringing up close to 23,000 pallets in next few months, which is the expansion strategy. These are short-term arrangements which we do specifically for certain customers, wherein an arrangement is for a year, at times 14 months, 10 months. Those all warehouses we keep adding and reducing, which are on park-and-pay mode. We go to the market and hire certain pallets on a satellite model, you can say.
The last question is on 5PL, if you can give some update in terms of increase or decrease in scope of work, number of customers, and prospects for this segment.
So far we have not added any new customer in this financial year in 5PL. Few of the discussions are on the verge of closure, yet not concluded. In terms of growth within the partners who are already there, one of the customer has shown a negative growth, but rest have shown a positive growth. Overall segment has grew by 1%, or 2% to be precise. Overall growth was a little sluggish, but we expect it to catch back in Q3 and Q4 and meet our targets.
Was there any increase or decrease in the scope of work that you handle for your customers in terms of more geographies?
There is an increase in scope with one of our major customers, wherein we were earlier doing two geographies, three geographies. Now we will-
Yes.
-be doing pan-India for them. So there is a definite increase in that.
Okay. Just to confirm, your pricing is linked to the volumes that flow through your business, right?
Sorry, come again. Your voice was not clear.
Your pricing, how is it determined? Is it a share of the amount of inventory handled, or is it fixed?
See, it depends from customer to customer, but mostly it is linked to the overall sales the customer do.
Okay. Does it decrease as the customer scales the volume it gives?
There are certain guardrails in the contract. If there is a decrease in customer sale, yes, to certain extent, we also slow our procurement. But then there are certain guardrails which covers our overall exposure.
Do you mean floors and caps?
In terms of stocks, in case if there is an over-procurement, that gets covered.
Okay. Because otherwise it is really linked to the volume side.
Yeah. If you can repeat the last one again, I could not get it.
If it is really variable in terms of the volume handle.
Yes.
Okay. Thank you.
Yeah.
That was all from my side.
Thank you.
Thank you. A reminder to all the participants that you may please click on the Raise Hand option to ask questions. The next question is from Jojo Shaju. Please introduce yourself and proceed.
Yeah. Hi. Thanks for this opportunity. This is Jojo Shaju from Tirthan Capital . My first question is, how is the EXIM trade imbalance currently trending in terms of import versus export ratio? Are we planning to monetize on the recent Indian Railways reforms, such as the containerized fly ash or fertilizer earth, to generate revenue from return trips that previously ran on empty containers?
Yeah. EXIM imbalance, it is 56% import and 44% export. It is in the same range. Regarding this fly ash circular, that is one business we are not participating as of now. That is under domestic segment. As of now, we are not into that business.
Okay. Sir, we have seen another reform, wagon design liberalization from Indian Railways. Now that private operators are permitted to induct customized wagon designs, are we evaluating specialized refrigerated container rakes with the collaboration of Snowman Logistics to run on scheduled cold chain rail corridors?
We are exploring common opportunities, but there are some movements that we have started in reefer exports. Little bit we have done in domestic also, but it is very minimal right now. Long- term, we might look at some more opportunities as our network expands.
Okay. What is the current monthly volume run rate in the Ankleshwar MMLP? I think we have given a target of 5,000 TEU per month target. How are the volumes currently going on?
EXIM is just starting out now. We have got all the permissions in place. We are getting the BL points opened. Right now it is minimal, but anyway, we do not share location-wise throughput.
Okay. Lastly, on the Indore ICD, what is the status of the current construction, and when can we expect the facility to be fully commissioned and start contributing to our overall revenue?
Yeah. It is in full swing, so civil and rail works have started. We are targeting by within December 2027, if we can be operational. Following, say, six months after that, it can start contributing some good volumes. It takes two years to ramp it up after operations, but we should start seeing something within the first year itself.
Okay. Okay, sir. Thank you. That is from my side.
Thank you.
Thank you. The next question is from Harsh Patel. Please introduce yourself and proceed with the questions.
Hi, this is Harsh Patel from Alpha Alternatives . Just to confirm, you said 10,000-15,000 TEUs shift from road to rail per month, right?
That is from JNPT, which could happen, yes.
On an overall basis, because of the DFC, what kind of volume shift do you expect?
One is the road-to-rail angle that we said. 10,000-15,000 is what is moving by road today, that can be targeted. Not all of it might get shifted, and not all of it is going to come to us. It will be split amongst other operators, too. Then there is the other angle of how much will move from other ports to JNPT, which we cannot predict. It depends on what the shipping lines do.
Understood. The second question is on market share now. Some of your peers, like Adani, offers end-to-end bundle offerings. How do you defend your market share against them in CONCOR?
In fact, the bundled offerings, in fact, we were the ones who started way back in 2008. We have already offered rail, road services along with the terminal services to the customers. We are able to protect our market share like NCR and Punjab and Uttarakhand. We are able to protect our market share. In fact, in some of the areas, we are able to increase our market share as well.
Okay. But this is largely because you are also doing the same offering as them, or you were the first one to start this?
No, no. We have a good network of terminals, so we have a good stickiness with the customers. We have also done some IT advancement in terms of API integration and latest technology, like tracking and tracing the containers cargo like OCR. We have been constantly doing the improvement in terms of the latest tech so that we are able to have a long-term association with customers.
Got it. And lastly, the CapEx that you have done and you have planned, what kind of asset turnovers do you typically think will come in the next, let's say, three to five years?
In terms of? Didn't understand.
I mean-
What kind of CapEx we want to do or?
The CapEx that you are planning.
Yeah.
What kind of typical turnover ratio do you foresee in the coming future? When I say future, let's say three to five years on a long-term basis.
See, it depends. A lot of it is replacement CapEx also. A lot of it is shifting from lease trains to own trains. We are also electrifying our fleet. It is hard to give an asset turnover like this, but any new project that we are doing, we are targeting at least a 15% IRR and a seven-year payback. If that kind of helps the guidance a little bit.
Yeah.
Yeah.
Got it. Okay. Thank you.
Thanks.
Thank you. Please click on the Raise Hand option to ask questions. The next question is from Mohit Chugh. Please introduce yourself and proceed.
Hi. Thank you for the opportunity. This is Prateek Giri from Subh Labh Research. Sir, my first question is, post the DFC linkage with JNPT, initially, the data which we tracked from JNPT about evacuation of the containers via train, probably the numbers are not very encouraging. The number of trains which are reaching there, or rather the number of containers that are getting evacuated via trains is probably the same on an average, if we take pre-DFC, post-DFC. I just wanted to understand if you are seeing any pricing intervention from Indian Railways, where they are intending to probably lower the price to gain more market share from road. Are we seeing something like that from Indian Railways, sir?
Yeah. I'll start with your first question. So you were saying that this JNPT after DFC, because it has started very recently, June. It will take some time for some traffic to shift, because that last stretch which was not completed, so it happened recently. Number two, there are various factors for the shift that is going to happen, because one is that extra distance of 350 km over Mundra and Pipavav, that comes into play. The shipping lines, they need to decide how they are going to route their vessels and what are the offerings which will be given by the port. I'm talking about the port terminals at JNPT. Yes, you are right, there has been representation to the Indian Railways, how to rationalize the tariff towards JNPT so that they will be able to compete with the Mundra and Pipavav.
But it is too early to comment on this, that how much ultimate benefit will be passed on, and maybe we will have to wait for another couple of months to see some incremental volume happening on the rail side at JNPT.
Understood, sir. Helpful. Sir, my second question is on, probably earlier there was some understanding between container train operators and Indian Railways that the second stacked container will be at a discounted rate. First, does that still continue? Just a follow-up on this is, does that discount is being retained by the CTOs to boost their margins? Or in the competitive forces working in the industry, they are being passed on to the end user to gain market share. If some initial sense you can help us with.
In fact, Ansuy was saying that there's a discount on the upper stack. That is given by Indian Railways to the CTO. But again, it depends that how much double stack you are able to do that. If you look at, the CTOs are not able to optimally utilize that train. Once you have the entire double stack, those volumes are not sufficient enough so that kind of discount can be passed on. But as of now, what I can comment is that what we deal with the customer is based on their overall volumes. We don't give a double stack discount separately.
Okay. Got it. So as of now, there's no competitive forces working to probably offset that discount which is offered by Indian Railway to us. The discount is there, but that is on the basis of some other business agreements.
Yeah. It is a function of the volumes.
Got it. My third and last question before I join the queue back is, one of our major competitors has been continuously talking about assured time trains on fixed routes, probably the longer routes. So I just wanted to get your opinion on this. Is it something really value additive to the customer? Because Indian Railways to an extent have some scheduling and timing.
Yeah.
Are we also doing it, will it add real value to the customer? Does this give very clear visibility for the freight? If you can throw some light there.
Yeah. In fact, I would also like to tell you that, like I said, that we were the first ones who started the double stack train from JNPT. This timetable train also started from our terminal in Gurgaon. Yes, it gives a definite benefit because especially on the export side, the customer is looking at the reliability of the service. Earlier-
Yes.
-what used to happen, one train used to take, say, 40 hours, the other train used to take 80-100 hours. Now this timetable train shows that it is between a reasonable range. If a normal train takes 40 hours, the timetable trains, they are taking much lesser, between 30-35 hours. I am giving you example from Gurgaon, say, Mundra. In fact, after the trials, now they have started these timetable trains for other ports also. Pipavav, it has started. We have also done trials for JNPT. Yes, it has given lot of confidence for the exporter. Some of the shipping lines, they have also started block trains, export block trains. That has also given them the confidence so that they are able to catch the vessels.
Got it. This is again helpful. Just one small follow-up on this. Does this give Railways, I mean, our ecosystem, our CTO ecosystem, any edge over the roadways, the trucking ecosystems are?
Yeah, definitely. It is now, railways is easily able to compete with the road in terms of transit. Because if you look at, the train is also taking almost the same time which a truck takes from north to Gujarat ports.
Okay, got it. I will join the queue back. Thanks a lot. Very helpful.
Thank you. A reminder to all the participants, please click on the Raise Hand option to ask questions. The next question is from Jai Unadkat. Please introduce yourself and proceed.
Hi. Thank you. These questions are all related to Snowman's updates, and I am Jai from [Nomit Investment Trust]. So there was this indication that we will have INR 100 crore plus kind of and potential EBITDA this year, which is good to know. Wanted to understand what kind of deployment or CapEx are we looking at for this year as well as a couple of years forward. Given our utilization at 85% odd, I am assuming that we would get into expansion. So wanted to understand whether we are focused on being asset light or do we intend to own assets, how this expansion will work. Also, the reduced cyclicality or seasonality of the business with extended summers, as well as expanding use of a cold storage requirement for categories like ice creams or pharma, which are actually doing well.
Need to know if there is any realignment that the business is looking to do, whereby the profitability and the mix can improve. The last one being that there was this, again, guidance on the call earlier, that the 5PL growth is not on anticipated lines, or we are not being as aggressive because of the lower margin potential there. Looking to understand what has really changed there in the last three years, such that the focus or the fact that our opinion of having that grow as a profitable separate vertical is now turning to say that there is growing risk and lower margins. Thank you.
So in terms of expansions and investments, we are continuously looking at both BTS and owned capacities. We do have a plan wherein, currently we are constructing around 23,000 pallets, odd pallets, which are under construction, and another 20 odd thousand pallets are under discussion. This will continue to. We will continue to grow as per our P&L thing. The expansion is on radar. When it comes to your 5PL question, I would want to clarify that one of the customers has not done in line with the projected volumes. That was the reason why we have had lesser top line in that. But the other customer has filled in the shoes and has done much better. That is the reason why we grew and we are still able to maintain or match our targets number in terms of EBITDA.
Other than that, we are very bullish on adding more customers, but as mentioned earlier, we are not looking for customers wherein the margins are negative or almost nil. So we would want to work in that domain, expand. As I said earlier, also that we are on a verge of closing couple of accounts. Few other accounts which were supposed to be closed due to commercial inabilities, we could not close those.
If I may, I have a follow-up, if that's okay to ask, or would you like me to join the queue? Whichever way you suggest.
Sure, you can ask quickly.
So on this part that went unexplained is the mix improvement, which I had indicated earlier as well, if I could know, because I think it is also the mix which makes a difference to our margin and profitability. So at this point in time, on a year-on-year basis or, I do not know how you internally look at it, but how is the mix changing and how is the mix of that profitability coming from better segments like pharma, ice creams, if my understanding is correct of that segment being a little more profitable than the average businesses. So, that is one. And the power cost, because for us, the largest cost would be stemming out of there. How are we managing that or balancing that if there is a sense that you can share, please. Thank you.
A mix is a constant thing. Location to location, we keep on replacing lowest paying customers with the top paying customers available in that location, so that helps us to grow margins. And that is a constant thing which we keep doing. Pharma, ice cream, they have their own cycles as well, so we will be very cognizant on the fact that we need to ensure that the mix gives me a constant utilization as well. Considering all those parameters, we get into a mix for each location of our warehouse, and that has helped us remain around 85%, 86% utilized throughout the year. There was one more question.
Utilization.
There was one more question you wanted.
Yeah. If the power cost and how we managing that, is that absolutely a passthrough for us, or would that be impacting profitability in the last six months, to say?
Some of the contracts, during renewals, we pass it through. That is how it is, because the contracts are done considering certain power increases in the coming year. That is how we typically do our maths. So at the time of renewal of contract, it is further negotiated with the customers.
Fair to assume that we are absorbing some burden at this point in time in the last six months, or not sure if
No, we typically take 6% to 8% increase, which is expected in the coming year. When we do a contract, we consider that sort of increase already in the pricing.
Great. Thank you. Appreciate it. Thank you.
Right.
Thank you. You may click on the Raise Hand option to ask questions at this time. The next question is from Kunal Tokas. Please proceed with your questions.
Hello. Am I audible?
Yes.
Yes.
Thank you again. My question is for Snowman again, and it is similar to the earlier question.
I am sorry, sir, your voice is a little muffled. May I request you to kindly remove your headphones and directly speak in the instrument, please?
Is it okay now?
Yes, much better.
Okay. Thank you. The first question is, what will the share of dry versus cold be in the new capacity that you are planning for this year and for future years?
Okay. The new facilities are all cold and temperature controlled. We have a very minimal share of dry there. Typically, we are planning to shut a chamber and do it in initial time, and then convert everything into frozen.
Okay. And the share for your existing capacity would be what?
Around 10%-12% of the total capacity right now.
10%-12%.
Yeah.
The reason I was-
Other than a few-
Yes.
-dedicated warehouses which are purely dry. They are not part of our cold facility, they are adjoining to cold facility. We have three such warehouses.
Okay. The reason I ask these two questions is that if you look at the very long-term trend, the last seven, eight years the margins have been structurally going down, and this quarter was no better, even if it was better than last year. I think if I remember correctly from past conf calls, you had indicated that the major reason was a shift in dry versus cold and a shifting product mix. My question was, what can we do to improve this metric?
See, overall warehousing revenue has grown close to 10%, 11% this time as well, whereas my mix of revenue has not grown. As I said, in 5PL business, we saw a flattish quarter. Otherwise, the warehousing revenues are well in line with our targets. Yes, we could have been 88%, 89%, that is what was the targeted utilization, and we were at 85%. So that has impacted the overall 2%, 3% margins there. Otherwise, as we had been constantly moving from converting certain dry spaces into chilled and moving from dry to cold part, it is helping us out.
Okay. But if we see the average margins pre-COVID, and for some years after and during COVID, they were close to 18% versus the 10%, 11% that we are logging now. That can't be all attributable to having more dry capacity, right? Because the circuit is only 10%- 12%.
See-
Okay.
-10%, 12% is in terms of capacity, not the margin percentage.
Yes. My question is on margins. Why are margins for warehousing going down and not increasing?
That is because of increase in 5PL business. That is what is contributing to overall reduction in number. Percentage is decreasing, but absolute number is increasing.
No, but why would 5PL affect the segment-level margins of warehouse?
That is also because of minimum wage hikes, power hikes, everything. That is an annual thing. This year, out of turn, with the wage code coming in, with the gratuity numbers got affected, PF ceiling limit got changed. All these factors haven't been passed on yet because we have annual contracts. Karnataka, for example, they raised minimum wages by close to 70%. Haryana was 35%, Punjab was about-
Yes, but it's not just this year. From FY 2022, it has gone from 18%- 16%, 11%, 10%.
Okay. Right. No. What you're referring to is basically because we started adding park-and-pay in that time, and started some dry warehousing too, like in Shoolagiri, and we had Tadpu earlier. It all comes under the warehousing division. But if you look at the overall EBITDA, that's what we're focused on. There was also a reclassification of costs, which if you look at our transcript of Q1, you'll get some further details of how we've allocated fixed costs between the verticals. But broadly, if I tell you, the core warehousing of cold storage, owned and long-term leased cold storages, those margins are intact. Build to suit will have lower margins, but since there's no CapEx from our side, at the PAT level, it is better.
Park-and-pay is obviously a spot basis where the margin is very thin, under 10%, but that's pure, you take it from someone, and you give it to someone for a few months here or there. So park-and-pay capacity has gone up. Before, FY 2022 didn't have that. So all these factors have contributed to the overall percentage appearing lower than it actually is.
Okay. All right. Thank you for your answers. Have a good day.
Thank you. The next question is from Prateek Giri. Please proceed with your questions.
Hi. Thank you again. Sir, I just wanted to understand a bit more about capacity expansion that has happened because of DFC on JNPT. Probably there were some numbers on probably number of trains that can reach JNPT on a day. How much has that gone up, if you have that number? Secondly, there were some teething issues which were discovered initially, related to co-pilot, rather, railway pilot, loco pilot shortage, and if they can infra. These two things, if you can share your opinion.
On the JNPT figures, we wouldn't have access to that, but they have approximately, I think, 15 rail lines there. Now most of them, barring maybe one or two, can handle double-stack trains. Theoretically, the TEU capacity goes up by that much. But it's obviously not practical to assume that all of it will be utilized right now. We're not seeing any capacity constraints at JNPT in terms of container handling by trains. It needs to increase, the volume needs to increase for them. Then you'll see an increase in throughput.
Regarding loco and crew shortage, that is a seasonal problem, and it happens during some peak seasons, wherein there's a shortage of drivers in the crew and other railway staff. That is not something a new problem. It happens on different divisions across India.
Got it. All the terminals at JNPT are now DFC-linked? Probably there are four container terminals there, and all are linked with JNPT. Oh, sorry, DFC now.
Yeah.
Okay. Very useful, sir. Thank you.
Thank you. Please click on the Raise Hand option to ask questions at this time. The next question is from Devraj Radha. Please introduce yourself and proceed. Mr. Radha, I have unmuted your line. Please proceed with the questions. I am sorry, there is no response. Anyone who wishes to ask questions may please click on the Raise Hand option. 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 the conference. Thank you for joining us, and you may exit the meeting now. Thank you.