Ladies and gentlemen, good day, and welcome to JSW Infrastructure Q2 FY24 Earnings Conference Call, hosted by ICICI Securities. 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 and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar. Thank you, and over to you, sir.
Yeah. Thank you, Sagar. Good morning. On behalf of ICICI Securities, we Welcome you all to the Q2 FY24 Earnings Call of JSW Infra. This is the note, this is the first call post-listing of the company. To discuss the results today, we have with us Mr. Arun Maheshwari, Joint Managing Director and CEO, Mr. Lalit Singhvi, Whole-Time Director and CFO, and Mr. Vishesh Pachnanda, Head, Investor Relations. We'll start with brief opening remarks by the management, which will be followed by Q&A. Over to you, sir. Yeah.
Thank you, Mohit. Good morning, and thank you all for joining our first earnings call as a listed entity. I am Arun Maheshwari. I start by taking this opportunity to thank each one of our shareholders for the trust and confidence that you have bestowed in our company. The company achieved a major milestone of getting listed on 3 October 2023. Despite global geopolitical challenges we witnessed in the last two years, that too after two and a half years of COVID disruptions, the business environment in India continues to be very strong. We are witnessing a solid structural growth in almost every sector of the economy.
Considering the importance of logistics sector, of a growing economy and more so maritime sector, which constitutes about 95% of the export trade, Prime Minister unveiled a blueprint for the Indian maritime blue economy and laid the foundation stone for projects worth more than INR 23,000 crore at the recently concluded Global Maritime Summit 2023. Government's vision of ports for prosperity, progress and productivity is bringing transformational changes at the ground level. It was heartening to witness that the government is taking measured steps to make the logistics sector more efficient and effective. The growing need of strategic modern logistics assets to bring down the overall cost has been the focus for past few years of country's budget as well.
Central and state governments are working in tandem to increase the country's total port handling capacity to 10,000 million tonnes by 2047, from the existing of 2,600 million tonnes per annum. In alignment with this vision, the role of private players is being progressively augmented with public-private partnership terminals. Major ports in India, which are central government-owned, have total capacity in excess of 50% of overall India's port capacity, and a large portion of it is yet to be privatized. This offers a huge opportunity for a business enterprise like us to leverage and grow our business. The government's move to landlord port model is encouraging and will fuel a lot of private investment, and will bring much-desired efficiencies and enhanced productivity into the port operations.
Against this backdrop, we continue to evaluate such opportunities, and presently we have placed our bids to acquire terminals at three different ports under the government's privatization move. As such, JSW Infrastructure Limited is uniquely positioned to capitalize on India's growth opportunities with a strong balance sheet and ambitious growth targets. Moving on to our operational performance for the period April 2023 to September 2023, the total cargo handled stood at 49+ million tonnes. This is 17% growth year-on-year basis. The total revenue and EBITDA for the half year stood at INR 1,814 crore and INR 991 crore respectively. With a strong balance sheet in the sector, we are well positioned to pursue organic and inorganic growth opportunity.
In line with the strategy of pursuing value accretive growth, I'm happy to share that the acquisition of liquid storage facility of 465,000 cubic meters at the Fujairah Port in Middle East for a consideration of $187 million. The facility was owned by Anthony Commodities Limited, which is a part of Mercuria Group. This acquisition helps us to foray into the lucrative business of liquid, liquid storage at the Fujairah Port, UAE, as well as which is one of the largest bunkering hub in the world. The transaction is expected to close by December 2023, and with this, let me hand over to Mr. Lalit Singhvi, to take through the financials and other details.
Thank you, Arun, and good morning, everyone. I take this opportunity to thank you all for your overwhelming response to our first equity raise program. The successful listing would not have been possible without your endorsement and belief in our growth story. So thank you again. Moving on to our quarterly results. In Q2 FY 2024, the company handled cargo volumes of 23.7 million tonnes, as compared to 18.7 million tonnes in quarter ended September 2022. Increase in cargo volume has resulted in increase in revenue for the quarter from INR 662 crores to INR 848 crores, a year-on-year growth of 28%. Cargo handled at Jaigarh and Dharamtar Port have increased by 35% and 34%, respectively, year-on-year, on back of increased cargo from the JSW Steel.
Further, Paradip Coal Terminal, which had first full year of operations in FY 2023, has shown a cargo growth of 28% in the current quarter. Similarly, cargo handled at Paradip Iron Ore Terminal has increased substantially in the current quarter on year-on-year basis. Mangalore Container Terminal handled close to 54,400 TEU, which is 7% higher on year-on-year basis. Increase in Paradip and Mangalore locations have contributed to increase in third party cargo growth of 31% in current quarter on overall basis. So third party cargo has increased to 8.55 million tonnes from 6.58 million tonnes. Other income, which mainly includes interest on fixed deposits and gain on mutual fund investment, has gone up to INR 47 crore in the current quarter, as compared to INR 35 crore in the quarter ended September 2022.
EBITDA of quarter ended September 2023 has gone to INR 499 crore from INR 375 crore in the quarter ended September 2022, resulting in an increase of 33%. EBITDA margin stood at 55.76% in the current quarter, as compared to 53.91% in the quarter ended September 2022. Depreciation was INR 100 crore and finance cost was INR 71 crore in the current quarter, as compared to INR 99 crore and INR 109 crore, respectively, in the quarter ended September 2022. Tax expense for the current quarter is INR 72 crore, as against INR 29 crore in the quarter ended September 2022. Effective tax rate has gone up to 22% in the current quarter from 17%, mainly on account of end of 80-IA deductions for two berths at our Jaigarh port in current year, FY 2024.
PAT for the current quarter is INR 255 crore, as against INR 138 crore for the quarter ended September 2022, representing an increase of 85% on year-on-year basis. Increase in PAT is reflection of increased total income, efficient operations resulting in lower operating expenses and lower finance cost. As of September 30, we remain a net debt-free company with total cash and cash equivalents of INR 5,333 crore, while gross debt stood at INR 4,261 crore. Based on our strong performance over the previous periods, the credit agency Moody's has upgraded our credit rating from Ba2 to Ba1 with stable outlook. Now, I'll take a moment to reiterate the usage of IPO proceeds. So out of total proceeds of INR 2,800 crore, approximately INR 900 crore was meant for debt repayment.
As an update, we have already prepaid INR 345 crore in the month of October, and balance prepayment is expected in the current month. INR 1,200 crore is for CapEx, mainly for two million tonne LPG project at Jaigarh Port and expansion of Mangalore Container Terminal. Both are progressing well and are expected to be completed by January 2026 and February 2025, respectively. The balance is for general corporate purpose and will be utilized accordingly. On the acquisition, as Arun highlighted, the enterprise value is $187 million. This will be funded by a mix of debt and internal accruals. With this, I request the operator to open the line for questions. Thank you.
Thank you so much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, please press star and two. Participants, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Achal Lohade from JM Financial. Please go ahead.
Good morning, in relation for the good afternoon. My first question is with respect to volumes. Can you help us understand in terms of how you see 2025, 2026 volumes panning out? And what kind of third party, so can we expect for by FY 2026?
No, we are not able to hear you properly. Can you please repeat it?
Mr. Lohade, there seems to be a lot of disturbance from your side, or maybe your network is not proper. If you're using speaker mode, can I request you to use your handset, please?
Is this better, sir?
Yes, thank you very much.
Sorry, sorry about that. So, I would like to check in terms of the volume growth expectation, you know, over the next two years, what kind of volume growth and what mix can we look at?
Okay, thanks for this question. See, basically, you know, as we had, you must have seen of our company, we have been continuously growing in all the sectors, and we have been striving very hard for the last five years to increase our cargo mix profile. And we'll continue to do that, and the results have been quite visible in the previous four, five years. Going forward from here on, the way the opportunities are there in different sectors, our acquisition of Fujairah Oil Terminal is a step towards that, because we were never into tankage terminal, we didn't build the subject. Fujairah being a known territory for us. One of the largest, you know, liquid terminals market in the globe.
So we thought, you know, a step over there will give the hands-on experience for us to get into tankage terminal, which is very promising again in India going forward. So, the effort is on, and I think, we have been growing at the rate of 22% CAGR for the last 20 years, and most prominently in the last four years, we have grown at the rate of 40% CAGR. I think our all the efforts would be to maintain a long-term kind of CAGR, depending upon the opportunity what we get, depending upon the project, how we are executing. We see immense opportunities coming in, and we'll try to maintain the similar kind of CAGR on the growth front, in the volume as well as product basket.
Well, as, the current questioner has left the queue, we will take the next question from the line of Mr. Lokesh Maru from Nippon India Mutual Fund. Please go ahead.
Thank you. I hope I'm audible.
Yeah.
Congratulations to you on excellent set of numbers and the successful listing. I have two questions. One is on seasonality in volume of take and margin mix over the four quarters of a year, and another is what is the peak, you know, EBITDA potential or what are we expecting from the Fujairah port in FY 2025 and FY 2026 respectively? Just, these two questions. Thanks.
The first one is Mr. Maru, the first one is seasonality you're talking about, right?
Right. Seasonality in volumes and margin mix across our four quarters.
So, I'll just take the first part of the question on the seasonality, and rest my colleague can answer that. Basically, in India, monsoons are very heavy during July to September period. So a typical, I would say, H1 is generally slightly lower. Q1 is okay, Q2 is slightly lower, but Q3 and Q4 are generally better than Q2. So, in all, if I have to look at it, H1 is slightly lower than always as H2. So whatever the results we have given for H1, you can derive from, you know, from there on. H2 would be, in our expectation, as our experience has gone in the last 20 years, H2 has been slightly better than H1 always. So it would remain that way.b So far as the profitability and Fujairah time, Fujairah ports are concerned, my colleague, Lalit, would.
So as regards Fujairah acquisition, probably you are asking. So, as we look at it, that, it should be around, say $20-$22 million, for, you know, next FY 2024-25. So that is the number we are expecting from this, and we'll keep updating as we, you know, start operating this, but this is our expectation. Is there anything else on this?
Sir, just a follow-up on both the things. Fujairah, $22 million of EBITDA annually, right?
Yes .
Okay. On seasonality, so H2 is stronger. Is it, you know, a fair assumption to put it that H2 would be 60 and H1 would be 40, like 60/40 ratio or 55/45 kind of a ratio?
Our previous experience has been, you know, generally, H2 is almost better, but then, we have seen it has been ranging from 7%-12%, somewhere better than H1. So it could be somewhere in between that.
Understood, sir. Thank you so much, and all the best.
Sure.
Thank you. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead.
Good morning. Thanks for the opportunity. I have two questions. The first question is, could you give us an update on the ongoing progress or development of the Jatadhar and Keni ports? You know, what is the stage of financial closure and sort of groundbreaking for both these projects? The second question is on your BSE filing related to the container train operator license that you have secured from Sical. Could you give us more strategic insight into what this means for the company over the next two years? Thanks.
Okay. On the update on the, on the two greenfield ports, Jatadhar and Keni. So Jatadhar, as we said, you know, we'll be, getting this soon. As we talk today, there is a meeting going on, in, Odisha on this particular, concession agreement. So hopefully, we are expecting that it should be, coming around in another couple of weeks time. So it should be done within the next couple of weeks time, as what we understand from the authorities over there. So far as Keni, award of contract is there, I believe a lot of discussion has happened within the government in the last couple of weeks.
Though it is still the award is yet to be given to us, and we are expecting the general guidelines what have been given to us, that they would be soon giving their decision on the award, maybe within a week's time or so. So hopefully, by end of middle of November or end of November, we should be there on both the sides. So far as your second question is concerned-
Yes.
regarding the container train operator license. So, if you have closely watched our company, we were never into containers. We got into containers 2020, and, we have been very happy with that. We were never into LPG. We got into LPG in a smaller manner in Jaigarh. We have been very, very outstanding results. We were never, never into liquid terminals. We got into liquid tankage terminal in Fujairah by this acquisition, what we have announced yesterday. So we'll, we'll test that water with that as well, and we are pretty hopeful. Our due diligence says it is a very, very good investment.
Similarly, container train operator license, we were never into end-mile delivery, so this is the first step towards the connecting the end customer directly. So this is a test what we are doing. The investments are very minuscule, but it's a, it's a flare which probably will take the company to the next level of servicing to our customers. So this is an attempt towards that, and I'm sure the way our research says, it would be a good investment, and once we get a hang of it, probably we can go further deep into these deliveries.
Thanks a lot, and wish you all the best.
Thank you.
Thank you so much. The next question is from the line of Priyankar Biswas from BNP Paribas. Please go ahead, sir.
Thanks for the opportunity, sir.
Yes.
My first question is, like, regarding further acquisition opportunities. Both in case of major ports, tenders or, let's say, NCLT cases that may be there. Can you provide, let's say, a pipeline or some sort of thing, like, what can we expect in the, let's say, next 24 months, regarding major port tenders or maybe some acquisition opportunities? That's the first one.
So guidelines wise, if I have to look at it, you know, Government of India has made it very clear they would like to be in landlord model, and every month we see a couple of opportunities coming up. Few of our liking and few of our not in the, to overall strategy sitting. So, every month we're seeing opportunities coming in. The pipeline is huge. How much comes, when it comes, it purely depends upon the individual port developments. It is difficult to put a number, how much will come in the next, 12 months or 24 months, but, but there are, there are opportunities coming every month. And, I think, two, three out of 10 are to our liking. So we can, you know, we keep exploring it.
We look at the geography, the potential of increase, the customer base, whether the cargo profile suits our overall strategy, whether it is fitting into our, our, you know, vision of 2030 or 2035 global vision. So if everything ticks box, then only we pursue that opportunity very sincerely, and then we bid for it. So it is difficult to put a number how many opportunities will government give, but the capacity wise, if I have to look at it, almost out of 2,600 million tonnes of total port capacity of India, 1,600 million tonnes is owned by Government of India. So, 1,500 million is owned by Government of India.
So that, and out of which only, you know, 30%-40% is, as of now, under public-private partnership. Balance is yet to be given on public-private partnership. So pipeline is solid in terms of capacity. Pipeline is solid in number of, the intention of the government, and, we being one of the largest, terminal holders in India. I understand this business very well, and hopefully we will be well suited for participating in these biddings and secure something out of it.
So far as NCLT is concerned, we are not looking or scanning each and every opportunity which is coming our way. We are very cautious, choosy, and ensuring that our money gets us better return. There's a plethora of opportunity. We don't want to just bid whatever opportunity comes in our way and stuck with that. So we would like to invest only a value accretive strategy or any investment which gives a better return for all of us.
Sir, if I just add on to it, so like, which states would be your focus as far as, let's say, considering ports?
So, see, we have been in Maharashtra, we have been in, Karnataka, we have been in Chennai, in Tamil Nadu, we are in Odisha, and we are in Goa. So we w here we are not is Gujarat, we are not in Bengal, we are not in Andhra, we are not in Kerala. These are the four states left out by us. There are opportunities coming in these states and, including the existing states where we are.
I think we would see if we can have something in Gujarat, if we can have something in Andhra, if we can have something in, more in Karnataka or somewhere. So already Odisha and Karnataka, we are already pursuing greenfield ports. We would like to look at that. But otherwise, you know, good enough opportunities in every state today. Whichever comes in our way, if it is fitting in our overall strategy, we are definitely there.
Okay.
Four states we are not there as of today: Gujarat, Bengal, Kerala and Andhra. These four states definitely remains on our wish list.
Sir, if I just can squeeze one more in.
Yeah.
So, we are seeing a lot of volume growth driven by your Paradip asset in particular.
Yeah.
So if you can highlight what is the peak potential, I mean, if you include future expansions as well, especially on the coal and iron ore sides, because I understand that there would be increased coastal movement from, let's say, Coal India connections. So what is your, can you shed some color on that aspect?
Thank you for asking this question. See, these are the two big investments we have done outside Jaigarh Port. Jaigarh Port is our flagship port, and the second biggest investment we have done is in Paradip Port, in these two terminals put together. Now, Iron Ore terminal is only three-year-old terminal, running at 100% capacity, has the potential to do much more than what it is designed for, what has been in the concession agreement. And if the port allows us, we can handle more cargo over there, which we can certainly see, because port would be earning revenue out of our handling of cargo as a revenue share. So far as the coal terminal is considered, it's a 30 million ton coal terminal. This is the second full year of operation of the terminal.
One of the largest coal export terminal in India, handled very efficiently with all the modern equipment. This is the second year of operation. The first year of operation, we were handling 40% of the total capacity. This is the second year of operation. We expect that we should be our target is to achieve 60% of the total capacity. Still, we will have enough headroom available to utilize that capacity. Being one of the very strategically located these two terminals, very close to the mines, it becomes a naturally first choice for any customer to handle their cargo from these two terminals. Imagine there is no new coal mine started for coastal movement. There is no new thermal power plant started for coastal movement.
This terminal, which is one of the largest, came into the scenario and running at almost 60% capacity in the second year of operation. So there's so much of cargo demand. The people were, you know, because of the strategic location, we see that, you know, the volume will continue to grow in this terminal till we reach our peak over here. I think, another two year, two to three years' time, we should be there for the, for touching the peak.
Okay, sir. So there could be further expansion on this or, this is the capacity?
No, no, CapEx is already done, so it is only the utilization, because any port takes about four to five years of utilization. The beauty of a terminal model is that the customer base is already there, strategic locations are there, so the utilization is much faster in terminal businesses. So maybe two to three years, we reach almost 80%-100%. What we have witnessed in other terminals, whether it's Ennore or Mangalore or Paradip iron ore terminal, the utilization has been close to 100% of the third year of operation, and the coal is only the second year of full year of operation.
So we expect a similar feat should be there for coal terminal also, but it all depends upon how much of coastal cargo or how much of railway is available, how much coal mining is done. But in all fairness, because of the location and the facility what we provide for the coal movement on the coastal side, we should be there.
Thank you, sir. That's very clear.
Yeah.
Thank you so much. The next question is from the line of Aditya Mongia from Kotak Securities. Please go ahead.
Good morning, everyone, and thank you for the opportunity. My first question relates to Jaigarh Port and the Dharamtar Port. I wanted to get a sense that while these ports are benefiting from wallet share gain, for how long can a very, very strong trajectory continue post which the wallet share gain from Dolvi will kind of be taken out?
Sorry, it was not very clear.
Airport.
Yes, seaport, but then what was the question?
Aditya, would you mind repeating your question, please?
Your voice was a bit echoing, so we couldn't really-
Sure.
-get on.
Sure. Am I audible to you right now?
Yeah, it's better, yeah. Slightly better, yeah.
Sure. So the question was that, today, Dolvi is kind of helping the Dharamtar and Jaigarh report fantastic growth numbers, probably due to wallet share gain. For how long does this strong period for Dolvi and the Jaigarh and Dharamtar continue, post which the wallet share gain argument gets taken out?
Okay. So, see, Dolvi and Jaigarh has been, you know, growing, showing strong numbers. Jaigarh has different rules altogether, also in addition to what the Dharamtar had, because Jaigarh has been handling third-party business. The sugar has grown quite a lot in the last three, four, five years. LPG has started, fertilizer has started, so there are a variety of other cargos which are at Jaigarh. So their growth story and Dharamtar growth stories are similar to an extent, but then Jaigarh has a more potential and more growth story available to them, because it's a greenfield port, deep sea water port, and a good hinterland over there. So, going forward, the way, JSW Steel Dolvi plant is growing, as of now, they are 10 million ton, which is
This is the first year of their peak of 10 million tonnes, what they are producing over there. That's why the growth numbers are coming, going up and up. The kind of their sourcing is changing, the more volumes are flowing into Jaigarh. So we see not everything will come directly to Dharamtar. There is part of the volume will also come to Jaigarh port, which will add, more volumes at Jaigarh, in addition to what they are already doing.
There, there is an intention, for JSW Steel, what we understand, that they would like to increase their capacities there also, which will be a direct, plus point for Jaigarh and Dharamtar both. With a minimal CapEx, we can do much, much more volume in these two ports again. Once we have a very clear advice from JSW Steel, probably that will help us to give our projections much more stronger and very clarity, how and when it will happen.
Sure. Thanks for the color over there. The second question that I had was, while we talk about privatization, from a balance sheet perspective, how much money can be put to good use over, say, the next three years, given your own assessment of how the business is going to scale up in terms of dividends as well?
Participating in privatization, you mean to say?
I'm trying to assess how much money from the balance sheet can be put to good use over time, over a three-year period, from your perspective, towards adding new assets.
Yeah. So it's like this, we have, you know, given a guidance that, we'll have a net debt to EBITDA, you know, of 2.5. So today we are net debt three positions. So you can see that there is a large headroom available for our growth, as the balance sheet is so strong today. So based on this guidance, we will keep investing for our growth projects.
Understood. Just to kind of finish this part more better, is there a sweet spot in terms of project size that you are looking towards when you're bidding for that? That's the last question from my side. Thank you.
So project site, per se, you know, we already said, you know, Jatadhar is one project site in Odisha, which is greenfield port. There's another one which we are awaiting the award in Karnataka, in Keni. That's again, a greenfield port. We have done an acquisition in Fujairah. That is another one which we have done. The project site we are already bidding, continuously assessing and bidding into the terminals, into the government ports, which are all strategically located, has been running for 60, 70 years. So those are strategic location in any which case. As I said in the earlier, one of the investors call was that, you know, the Gujarat, Mangalore, Kerala, and Andhra are the states wherein we don't have any footprints as of now.
We would continue to seek and explore the opportunity if we get something over there.
Over. Those are the questions from my side. Thanks a lot for your response.
Thank you.
Thank you.
Thank you. The next question is from the line of Mr. Achal Lohade from JM Financial. Please go ahead.
Sorry, I got disconnected. Am I audible now, sir?
Yeah, yeah.
Yeah.
You are audible.
Yeah. Sir, I missed out on the, the long term was the last word I heard. If you could repeat the same, if you would have talked about FY 2024, 2025, 2026 volume, guidance, anything given?
So what we had, we have mentioned earlier is that, you know, generally our growth has been 22% CAGR of the last 20 years. And in the last four years, we have been doing about 40% kind of CAGR. On a long-term basis, we would like to o ur wish list would like to maintain the similar kind of CAGR. The opportunities are unlimited, the balance sheet is there, the management intention is to keep growing the business, and India is offering that opportunity today. Probably with this kind of balance sheet, we would like to continue, our wish list would to continue, maintain the similar kind of CAGR going forward.
Understood. Is there any number you can put out, sir, for CapEx for FY 2024, 2025, 2026?
On the CapEx front,
No, CapEx, actually, we, we keep looking for many opportunities, and we just said that, you know, our, guidance is 2.5 net debt to EBITDA. So within that, we'll keep doing it. So it's difficult to give any number as we look for many opportunities. We just announced one acquisition today. Then there are, greenfield projects, which will keep coming in, how much money will go in that in particular year. So number is difficult, but within that guidance, we'll keep growing.
Right. And if I want to ask you about Jatadhar project, you know, given we are at the almost closing of the contract agreement, can you help us in terms of what size, by when, and what CapEx would it entail in the phase one or total?
See, the Jatadhar project, the total project is for about 52 million tonnes in two phases. The phase one is about 30 million tonnes, and the second phase is 22 million tonnes. We are yet waiting for the concession agreement to be signed. Hopefully, we should be signing it very shortly now. And the project should take about three years' time from the day we start commencing the construction. So in all fairness, we think this is the first project on the greenfield side, which we'll be starting and completing.
Sir, any clarity you can give with respect to the environmental clearances? All the approvals are already in place for Jatadhar?
Yeah, all the approvals are in place for that.
Understood. Thank you so much, and I wish you all the best.
Thank you.
Thank you. The next question is from the line of Nikhil Abhyankar from ICICI Securities. Please go ahead.
Thank you, sir. Thanks for the opportunity. So, my first question is on Fujairah. How much is the debt at Fujairah? Our capacity utilization is already at 95%, so are we looking at any future capacity addition?
Fujairah.
You are talking about Fujairah terminal? Yeah, currently capacity, you know, there is a huge demand, so it is at 95% utilization. And, you know, very recently it's being talked at 100%, you know, all the tanks are being utilized. So, there we have- we, government is ready to give us, you know, adjacent land. So there is a possibility once we take over, and then, if demand persists, we will certainly, you know, expand those capacities at a much lower cost. And, then we'll scale it up, further from, you know, 465 thousand cubic meter is the current capacity, or we can always increase this capacity to reap benefits of the expanded, you know, capacities.
Understood. So, and so can you just confirm that the CTO operations that we have acquired, so there are no trains as of now? Sical, it doesn't have any trains?
Green set.
CTO, sir, CTO.
No, no, it doesn't have any. It doesn't have any what?
Trains.
No, CTO is a permission for, you know. Yeah, of course, there are no trains as of now, but then we are. So it is a first step, as I said. The first step getting into this last mile delivery connectivity, and we'll build from here on, on this. So this is a testing ground for us into, into this segment. So we are slowly, we'll be slowly building up this particular portfolio.
Okay. So, like, are there any opportunities in minor ports from state governments in the near to medium term?
So as of now, we have mentioned about two, Jatadhar and Keni, which we are working on. There are they keep coming, several opportunities being, second largest port company in India, definitely every opportunity also comes to our table. And we, we look at in our, all, you know, sense, whether it is really fitting into our overall scheme of things of growth and the kind of CapEx the kind of intel and the kind of cargo growth, profile of cargo
The customer, last mile delivery, everything. It has to tick many boxes before we really go full hog on that. So we keep assessing several opportunities and, and India is offering several opportunity. I must be very candid about it. And I think, we are there to, to encash part of it. But as of today, we have declared two, and we have mentioned two, and we will, we'll talk about that.
Okay. And so final question: Who are our customers at Paradip, and where exactly is the coal destination from this port?
So this, this is a coal export terminal. For a port company, coal export means it is all moved towards coastal movement. India doesn't export coal per se, so it is all for coastal movement. The end users are largely five major ones: Tamil Nadu State Electricity Board, Andhra Pradesh, Telangana, then Karnataka, then Sembcorp. These are the four, five, major customers over there, which are utilizing these services from us.
Okay. Thank you, and all the best.
Yeah. Thank you.
Thank you. The last question is from the line of Rajarshi Maitra from Incred Capital. Please go ahead.
Thank you for the opportunity. So my question is on the first half, performance, of last year, first half of FY 2023. So what I noticed is that between the first quarter, FY 2023, and second quarter, there was a volume decline of about 20%, and moreover, group company volumes declined by about 26%. So in the, what I want to ask is in the second quarter of FY 2023, was there anything, any exceptional events that happened, because of which the group company or group volumes declined 26% in second quarter, FY 2023?
We don't have that number here.
Hello, am I audible?
Am I?
Am I audible?
Yeah, yeah. So you want to say that anchor customer's volume was lower in FY 2023 H1 compared to FY 2024?
So the second quarter. So second, yes.
It's like that.
So the anchor volumes in the second quarter, FY 2023, was about 12 million tonnes, and the anchor volume in first quarter, FY 2023, was 16.4 million tonnes. So, just wanted to check, was there any exceptional reason for that?
No, no. Q2 is always, as we discussed earlier, also, it's a monsoon month. In the monsoon month, you know, every year you will find, cargo dipping compared to, you know, Q1 or Q3.
Okay.
Last year there was a cyclone there, which affected operations for, you know, part of the period.
Okay. So the cyclone had an impact, which was not there this year. So as a result, the decline is not as sharp.
Yeah.
This year, the volume, the decline is not as sharp.
Absolutely. Yeah.
Okay. Thanks for that.
Thank you so much. Ladies and gentlemen, I would now like to hand the conference over to Mr. Arun for closing comments.
Thank you, all investors, and thank you for hearing us out very patiently, and continue to have the confidence in the company and the management. The sector is looking good. India's economy is standing out as compared to any other economy of this size and scale, and I think we are into the right country, in the right sector. Looking forward to have continuous engagement with you all. Thanks again for joining on a Saturday. Thank you.
Thank you so much. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.