Ladies and gentlemen, good day, and welcome to the TCI Express Limited Q4 FY 2026 Earnings Conference Call, hosted by PhillipCapital (India) Private 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 on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Vikram Suryavanshi from PhillipCapital (India) Private Limited. Thank you, and over to you, sir.
Thank you, Swapnali. Good afternoon and a very warm welcome to everyone. Thank you for being on the call of TCI Express Limited. We are happy to have the management with us here today for a question and answer session with the investment community. The management is represented by Mr. Chander Agarwal, Managing Director; Mr. Mukti Lal, Executive Director and Chief Financial Officer; and Mr. Pabitra Panda, Chief Business Officer. Before we start with the question and answer session, we will have opening comments from the management. I will hand over the call to Mr. Chander Agarwal for opening comments. Over to you, sir.
Thank you, Mr. Vikram. Good afternoon, everyone, and welcome to the Q4 FY 2026 Earnings Conference Call of TCI Express Limited. I would like to thank all of you for joining us today. I hope you and your families are doing well. Our earnings presentation for the quarter has already been shared on the company's website and with the stock exchanges, and I trust you have had the opportunity to review it. To begin with, I will provide an overview of the business performance, operational developments, and key strategic initiatives during quarter four of financial year 2026. Following this, our Executive Director and CFO, Mr. Mukti Lal, will take you through the financial performance in greater detail. Q4 FY 2026 marked another quarter of positive business momentum for TCI Express, with the company delivering sequential improvement and maintaining its growth trajectory for the second consecutive quarter.
During the quarter, the company strengthened its multimodal logistics capabilities, customer engagement initiatives, and operational execution across business verticals. Demand trends remained encouraging across pharmaceuticals, automotive, engineering, renewable energy, consumer goods, and assembly-led shipments. The operating environment during the quarter remained challenging due to the geopolitical tensions and the conflicts in West Asia, which resulted in elevated airline fuel prices and increased logistics costs across the industry. Additionally, higher labor costs and temporary business disruptions arising from the motor-related SIR activities impacted operating conditions across select markets. While these external factors created near-term pressures on business operations, the company remained focused on service reliability, network efficiency, and customer-centric execution while maintaining a cautious approach towards the evolving market conditions.
The Surface Express business remained the largest contributor to the company's operations during Q4 of FY 2026, supported by customer additions, improved traction across industrial and assembly-led shipments, and higher contribution from key sectors including automotive, defense, solar, PV, and pharma. During the quarter, the company expanded its last-mile delivery network through new branch additions and strengthened operational reach across key regions. The upgraded Nagpur sorting center also commenced operations with enhanced handling capacity and improved processing efficiency to support higher cargo volumes and faster turnaround times. Other business verticals also delivered healthy momentum during the year, supported by focused operational execution and network optimization initiatives. Rail Express recorded strong growth driven by a rising adoption of rail-based cargo movement, consistent service reliability, and expansion of dedicated rail operations on key long-haul corridors.
The Domestic Air Express delivered strong operational performance supported by improved asset mentality, shipment consolidation initiatives, optimized cargo planning, and increased traction from pharmaceuticals and temperature-sensitive cargo segments. The International Express business strengthened its global network reach through customer additions. International partnerships, cargo consolidations were also taken during the year. Sea Express segment maintained healthy growth through the higher express shipping movement, conversion of existing customer opportunities, and traction from industrial sectors as pharma, automotive, and manufacturing in general. Meanwhile, the E-commerce Express segment continued to witness strong momentum supported by growing volumes from D2C brands, marketplace sellers, and expansion of last-mile delivery operations across key metro markets. Across these segments, the company continued strengthening technology integration, operational visibility, and AI execution capabilities to further improve customer experience and overall delivery network.
During the Q4 2026, TCI Express reported a year-on total income growth of 6%, along with sequential improvement over the previous quarter. The company also maintained healthy capacity utilization levels during the quarter, while continuing to focus on operational discipline, cost optimization and network productivity. Financial 2026 was a year of significant achievements for the company as it crossed the INR 1,000 crore balance sheet milestone and surpassed 1 million tons of cargo handled during the year. The company continued to maintain a debt-free balance sheet with sustained focus on cost discipline, operational efficiency and liquidity management. Reflecting its strong financial position and commitment towards shareholder value creation, the company also declared a higher dividend during the year. Furthermore, during the year, company continued to strengthen its focus on leadership development, employee engagement and social responsibility initiatives.
TCI Express was also recognized as a Great Place to Work for the sixth consecutive year, reflecting the company's strong people-centric culture and workplace practices. Furthermore, during the year, through the TCI Express Foundation, the company also continued to undertake community-focused initiatives across preventive healthcare, olympics sports training, rural development, environmental sustainability, and vocational skill development under programs such as KAVACH, SHALYA, SAMANTA and SAKSHAM. Positively impacting beneficiaries across multiple regions and reinforcing the company's commitment towards inclusive and sustainable community development. Looking ahead, TCI Express remains focused on strengthening its multi-modal logistics capabilities, expanding technology-based AI operations, and improving customer engagement across the service verticals. The company continues to focus on infrastructure expansion, operational automation, rail corridor planning, specialized cargo movement, and B2C network development to support long-term growth opportunities across the express logistics sector.
While geopolitical uncertainties and elevated fuel prices may continue to create near-term challenges for the logistics industry, the company remains focused on operational efficiency, service reliability and customer-centric execution. With this, I would now like to hand over the call to Mukti Lal to take you through the financial performance for Q4, financial year 2026. Thank you.
Thank you, Chander, and good afternoon, everyone. I will now take through the financial performance of TCI Express Limited for the quarter and financial year end. As our Managing Director has already highlighted, the business environment and operational development and service initiatives were taken across key verticals in the company. I will primarily focus on financial and operational highlight for the quarter and full year. For quarter four, I hope everyone has gone through our website for this investor presentation. We achieved a revenue growth of INR 327 crore as compared to INR 308 crore in Q4 of last year. With that, we are registering a growth of 6%+, and on a sequential basis, we are grown 4%. Total income stood at INR 331 crore in this quarter. EBITDA for Q4 stood at INR 37 crore as compared to INR 34 crore in Q4 of last year.
It is reflecting a growth of 11% year-on-year basis, and EBITDA margin for the quarter is 11.3%. Profit after tax stood at INR 21 crore, which is also similar of last year, and with a margin of 6.3%. For the full year, we also increased the income after two years. Our income is INR 136 crore against of INR 108 crore in last year, reflecting a growth of 2%+. EBITDA for this year is INR 146 crore with a margin of 11.7%, and profit after tax is INR 90 crore with a profit margin of 7.2% for the whole year. Overall performance during the year reflects stable operating execution, discipline in cost management, and continued focus on operational efficiency across the network, despite the challenging, as you all are aware, operating environment during this quarter.
From a return and efficiency perspective, return on capital employed for FY 2026 stood at around 20%, reflecting efficient capital utilization despite continuing investment towards infrastructure and network expansion. Current ratio also remained healthy at 3 x, highlighting strong liquidity position continue and balanced sheet flexibility. Working capital management remained stable during the year with a continued focus on receivable management, which has been maintained, even reduced by one day, which is from 59 to 58 days. Operational efficiency and discipline kept on monitoring. The company continued to maintain healthy working capital metrics supported by a separate business model and strong liquidity profile. The company continued to maintain a debt-free balance sheet during FY 2026 also, and we will intention to keep the same in future as well.
Net cash position remained healthy at INR 136 crore as of March 2026, providing strong financial flexibility to support future growth initiative and operational requirements. Cash flow from operation is also very robust at INR 112 crore during the year. The company incurred capital expenditure of INR 67 crore, primarily towards branch expansion, construction of sorting center and technology enhancement initiative across business verticals. I just would like to clarify that earlier we have a CapEx plan of INR 500 crore from FY 2023 to 2027, which has been revised from INR 500 crore to INR 400 crore. In this year we have planned to be like execution of around INR 130 crore as INR 270 crore we already spent in last four years. After that, we will be putting another plan for the next five years.
To summarize, the company deliverable stable financial position is supported by discipline execution, healthy liquidity position and continued focus on operational efficiency. Going ahead, we will remain cautious about ongoing industry challenges, including geopolitical uncertainties, volatility in air fuel prices specifically, increase in labor and operating costs, and regulatory disruptions such as SIR, which may continue to impact logistics demand and costs across global sector. However, our priorities remain centered on managing financial discipline, strengthening cash flows, and supporting long-term scalable growth through focused investment across multi-modal logistics capabilities and technology solutions. With this, I conclude my remarks. We can now open the floor for the question and answer. Thank you, everyone.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants, you are requested to use handsets while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue is sending. A reminder to all the participants, you may press star and one to ask questions. We have the first question from the line of Ravi Naredi from Naredi Investment. Please go ahead.
Thank you to give me first opportunity. Chander Ji, I am shareholder since so many years, and I always try to ask questions in the con call. I remember when we made some con call three, four years back and what was our target for company, which is now going down and down and down. But the market is there. You can't do anything. Sir, my point, page 18 of investor presentation, you see our total income from 2023 to 2026 in four years are same. Profit margin reduced from 11.2% to 7.2%. That is net profit margin. In spite of our modernization of sorting center and we do not have any truck. So what is going on in business? Can we stop, start
Hello, Mr. Ravi Ji. Thank you for your question. I have also said this many times, like in the last con call also that it was a cycle that we cannot really avoid. When we had the COVID, there was zero business and you can see the graph went below the line. When COVID was over, we shot up to 30% growth. That was a knee-jerk reaction. Then slowly it came down to 18% and then 15% and then 5% and so forth. This is something which we again blame the demand and supply cycle, which has taken five years to settle down in at least the logistics industry. There is nothing that we have done to not mitigate that. We have still paid our dividends unlike other companies, religiously for the past five years and substantial amount of dividend.
I do not think that we should discount the cycles or the business cycles that one has to adhere to, especially after something like COVID. Going forward, of course, the five years it takes to kind of even out the graph and then start going up again. I think it is only a matter of time you will start seeing the same level of growth that we were used to earlier.
Right. I understand, sir. Can you bifurcate our total volume in railroad-
Yeah.
-air, and ocean trucks?
Ravi Ji, basically you see like total we have this multimodal revenue which is around 18.5% for the full year in FY 2026, which is growing. Over the period, we also felt to depend on the one business is also sometimes risky and to mitigate that as we put in a focus to offer other services also and added one by one, like Rail Express and then C2C and then refocusing now on E-commerce . This is our strategy now to making this around 18% and 18.5%, which we want to become around 22%-25% in next two to three years. We continuously making effort to de-risk the existing model.
Though again, Surface is in our road segment and where we have the highest stake and that internally also as we understand your concern of the growth. That's why if you see and you might appreciate for that in last two quarters, we start to growing in the range of single digit. Surely for this quarter also we will be start to grow further on that. Soon you will see a rebound on that. You also please understand, in spite of that reduction of our margin, we are still in about in PAT level. That is also our target to have all the time to healthy growth, not the growth to just compromise on the margin and all.
I understand, sir.
This is the case.
Yes, sir. I hope I. This Rail road is 18.5%?
No, no. Basically Rail, C2C, Air, all put together and E-commerce. Together is 18.5%.
Okay.
Yeah. Not alone Rail.
Okay. One last, sir, due to spike in fuel prices, any fare we have increased in the current quarter?
Yeah. So now holiday is a buzzword, and everyone is concerned about that. Ravi , there is a sequential change happening in fuel prices. So though it is a natural passing on process is there, we wait for some time because we see ultimately diesel has to be increased by at least INR 10, which we already seen is INR 8 has been increased. So we have taken some time lag to passing on to customer because that sequential happen in 10 - 15 days. But now we already passing on to our all the customers, barring I think 10% - 15% we negotiate with them. Otherwise, it's a directly natural process to be passing on that. So we will do that.
Thank you.
Thank you.
Thank you. Okay.
Thank you. This is the next question from the line of Alok Deora from Motilal Oswal Financial Services. Please go ahead.
Hi, good afternoon. Sir, just had couple of questions. One is if you can indicate what was the volume in the fourth quarter and the volume growth for the quarter year.
Yeah. So whole volume all of these 267,000 metric tons precisely.
Okay.
And the whole year it is, we cross again 1 million metric tons and precisely 1,004,000 metric tons basically. And volume growth in this Q4 is 4% over last year.
Right. Okay. Sir, just wanted to understand, I mean, the growth has been pretty restricted. I mean, it has been in the mid-single digit and slightly or slightly lower than that in the last, even if you look at seven, eight quarters. So if you can just highlight what is happening there because the market does not seem to be reviving, at least for us. Also the margins which used to be pretty high number at 15%, 16%. Even if you take a normalized margin of 12%, 13%, we are now at around 10% - 11%, which seems to be now the stable state margin. Just wanted to get your sense on where the volumes are headed.
I mean, if you were to take FY 2027 volume guidance from you, just if you can highlight on that because the volume guidance which we have been giving due to different reasons, the numbers have been lower than that, and which has also, I believe, impacted the margins. Just some thoughts on that would be helpful.
Yeah. So, in this quarter we have given a guidance of around obviously a high single digit growth, which is around 9%, 10%, and we achieved a 6.5%. So I think handsome job done on that, but we somehow could achieve again 9% or 10% also. But after March we slightly disrupt on, I think not major, but 1.5% kind of growth we disrupt due to this all geopolitical situation and major disruption on air side where our international business is also getting affected after this Gulf war started on February end. Domestic business also because there is a disruption in the pricing because ATF has increased in a 50% and obviously international prices sort of like 2x or 3x, so people has hoarded up their material and all. That is why we somehow couldn't achieve 1.5% more growth in this.
Second thing, margin level, as we mentioned in the last time also, one reason was to consolidation of airline which is again beyond our control and we are now trying to be like this quarter is again a disrupt quarter for that rate prices and all you are aware about that. Again it is not in our hands. Also is an impact on the other side where once prices increase in air, people shift to other mode of transportation, like might be obviously in surface or rail or whatever it is. So this is also happening because price is higher. But still, I think you will be see the very good number in quarter one for the air business also. So we are putting effort for that to how to mitigate whatever cost has increased in last year, which we need to passing on to customers.
I think that sense this time is very good because in our industry, fortunately, unfortunately, people or customer are ready to take the fact of fuel increases but not other cost increases. Or you can say in general time increase like consolidation of airline happened and supposing the air cost has increased by 10%, so nobody is ready to give any hike. They are saying it is your problem and there is no general hike happened, no diesel hike happened. We will not give into that. But now it is like ATF is the case, so everybody is ready to give that price hike, and that we are also taking. Another thing is obviously privatization of these airport funds. It is also beyond our control. These are two things. Even my cost has been disturbed by 1.5 basis point.
Second, obviously, lower volume has dropped my utilization level of truck, which is really we can't take the risk to reduce the capabilities for the temporary period, and then you add on that. Whenever you reduce the capacity, then you add on slightly higher cost. Third thing, labor cost. Everybody talks about an industry where labor cost is proportionately increased for every logistic player, which is also having. On my overall cost, it is almost increased by 100 basis point, though this cost is less than 10% to overall cost. But you can see there is an increase of 15%-20% on their cost, because otherwise you can't be retained on labor nowadays, because there is, again, continuous elections were there and then labor is going for SIR processes also happened across India. You can see disruption in cost side also continuously going on.
Alok, as you appreciate, is still in the industry. If you see an express industry, we are in margin level of PAT level, we are 7.5% . Obviously, we have to be willing to bring back to the double-digit margin on a PAT level, because again, we don't have any cost and depreciation and interest on that part. So we are very willing, and we increase our capabilities in multimodal, all the services which you see in the traction and margin will be soon increased on that part. So FY 2027, again, we have an intention to increase at least 100 basis points to 150 basis points on that with a revenue growth of double-digit plus.
Yeah. Volume growth, what is the guidance for 2027?
It is again 10% +.
Okay.
Yeah.
In April and May, we already have kind of lost some growth in the first two months because of the reasons you mentioned. Do you think the 10% is achievable even after that?
Yeah. I think for us, even April was not that bad, what we thought of. May also, I think is going good. I think quarter one will be low, even with again, kind of high single digit growth, and subsequently in a quarter-on-quarter basis, we will improve because now I think you must have gone through with our presentation wherein multimodal, all the services we have grown almost 20%+ . That capability will help us to grow in this year. Supposing we will grow these all product like 25%, and then surface is also around double-digit growth. Ultimately, we will achieve this 10% for the short.
Got it. Yeah, I think that is all from my side, sir. Thank you, and all the best.
Thank you.
Thank you. We will take the next question from the line of Jinesh Joshi from PL Capital. Please go ahead.
Thanks for the opportunity. Sir, I have one bookkeeping question. If I look at our depreciation expense, it is up by about 50% to about INR 9 crore, and even the interest expense has increased to about INR 1 crore odd. Is there any change in the depreciation policy, and what kind of quarterly trends should we expect from here on?
Yeah, this is a good question. So basically, what happened, we had taken two big sorting center on lease on a longer term. It is this one in Kolkata. So that's why it has been added in the ROU assets, basically. Right of use assets has been increased, and that's why it's come in depreciation portion. So I think next year onwards, this will be in the same range. So that's the only reason.
Understood. And sir,
Depreciation policy. Depreciation is almost like per quarter is around INR 6 crores or INR 6.25 crores kind of depreciation would be there in each quarter.
Right. You mentioned that we have taken lease for two sorting centers. I think, but our total count remains intact at 28. If you can clarify on that, please.
Yes. Basically, earlier we had a policy to take all the assets on the less than one-year contract, basically, and get renewed wherever it is applicable. That is why that has not come into right to use assets in advance. Now, as we have taken, because nowadays it is good to having a longer tenure for the lease because in Mumbai, we have taken for the five-year lease because we freeze the rent hike and all. In the same way, we also taken on Kolkata also. In Mumbai, we vacated existing one, which we have taken on a one-year and new one taken for the five-year lease, and on a bigger space. In the same way in Kolkata, we vacated earlier one and gone to a new one with, again, five-year lease. That is why this has been increased for this one. Number is the same.
We replaced the existing to new one.
Understood. Sir, in this quarter, you highlighted that our volumes were at about 267,000 tons, which is a 4%-5% growth on a year-over-year basis. Can you highlight what is the growth in the Surface Express volumes? That is one. Secondly, even on the margin side, if you can just clarify one thing. If I look at our multimodal business, I think Domestic Air Express has grown by about 18%, given the growth in the Rail Express business is about 35%. To an extent, I think the growth that we are seeing in volumes could be driven by these multimodal segments. Our margins have come off, and you highlighted certain inflationary pressure, and I do understand about these things hitting our margins.
Is the new segment, the multimodal segment, margin dilutive in nature, and how to think about the margins from here on, given surface will continue to dominate the overall mix?
Yeah. This is a good question. Basically, what happened, there is a disruption in cost in Air Domestic and International Air . This is a temporary fact where margin has been down. Otherwise, it is almost same to surface or slightly higher on that. Rail margin are very stable. C2C Express margin are also very stable. Disruption in margin only in Air Domestic Express and International in this quarter. Going forward, that will be again more than Surface for the show. Surface margin also, we will be improved with this one, because now as the diesel price has increased. Also we have seen in 2021 or 2022, where our margin has been jumped almost 300 basis points in a single year due to that arbitrage benefit we have taken after diesel prices has been hiked very sharply on that year.
So in this year is also sharply increased, and we are talking about the e-tender customer, and we passing on to our customer on our selling price, and we giving effect of price hike to my vendor on my cost price. The arbitrage of this one is very good, like kind of 30%. Hopefully, we trying to maintain that, and surely it will be helped to improve my margin, and everything will be synced with that. But sometimes this flexibility, time lag is very important because we are skeptical where, supposing tomorrow again, government increase 5% of diesel prices. Then again, you establish a process, you discuss the customer, you increase the prices with the customer and everything done. That is why suddenly you also get a hike of INR 5. Then you again go and convince them, and then somehow you need some time for that.
That might be hard, supposing one or two again increases happen, which is that we do not see really, because INR 8 is, I think, fine. INR 1 or INR 2 might be increased, but supposing tomorrow they will be increased further INR 7, then again, becoming slight challenge to we again go to customer and convince them, and then increase the prices. Otherwise, supposing it is stable, that is why we giving in a cautious statement also because this time is highly unpredictable environment is going on. Though we are highly profitable company, and we are also chasing all the time stable margin, stable cash flow position and all. So depending upon slightly on these geopolitical situation, which we right now not seeing anything deteriorating, but right we seeing now is a stable one.
Hopefully, we will increase the margin for the show for 100-1 50 basis point for sure.
Sure. Sir, one last question from my side. What was the CapEx to upgrade the Nagpur sorting center, and what kind of reduction in sorting time have you seen because of this automation? That is one. And secondly, what are the timelines for automation in Kolkata and Ahmedabad, if you can just clarify, and also the CapEx that we need to incur for these automations.
Yeah. So very good. So basically, on Nagpur, we were on a lease basis. So now we built up our own one. And for clarification for everyone, this is not fully automated one. This is a semi-automated one because this is not a big facility. It is around 70,000 sq ft- 75,000 sq ft facility only. And that's why I do not see any changes on the cut-off any time for this one, router and all. This would be, I think, almost same or hardly 5%-7% changes on that. Because it is not fully automated one, it is no sense to be having automation there for this purpose. And for this year, we make a total CapEx of INR 67 crore, which we spent on ongoing projects also, which is going on one in Lucknow, another one in Ahmedabad and Kolkata. So these three locations is also going.
In future, we also built up in next one will be in Chennai and Bangalore, we will try for that.
Sir, the automation timelines.
Yeah. Kolkata and Ahmedabad will be automate. And I think Ahmedabad construction, Ahmedabad and Kolkata construction will be finished in this year, and automation will be ramped up by next half year. Like in FY 2028 half will be there.
Sure, sir. Thank you. Thank you so much, and all the best.
Thank you.
Thank you. We will take the next question from the line of Chirag from Keynote. Please go ahead.
Yes. Thank you for the opportunity. My first question is that as you have changed your recognition method for the warehouses, just wanted to understand on the like-to-like basis, what were our EBITDA profits?
Sorry, can you come again? I could not get your question.
As you said that we are now using our warehouses space. So the recognition methods related to rent expense to Ind AS 116, which is pouring down through depreciation and finance cost. So if on a per unit basis we would have looked at, what would have been our EBITDA profits for the quarter?
This is actually accessible item. Usually, we getting on an annual basis only. There would not be any big change. This hardly like whatever EBITDA increase you have seen on a PBT level, will also same way.
If I understand that INR 4 crore worth of interest and depreciation expense have increased on a year-over-year basis, our EBITDA profits would have been INR 28 crore rather than INR 32 crore.
Not really, because some depreciation is usual. Depreciation is also increased, which is assets we increases, like Nagpur increases and last time Indore has been added in the just end of the year, so full year depreciation is coming and other assets also coming. I think, yes, you rightly said, around INR 3 crore kind of CapEx. Sorry, just leasehold has been. Otherwise, it's INR 29 crore on EBITDA level, and PBT level obviously is the same, otherwise.
Right. Secondly, I wanted to understand this thing that, will it be possible for you to provide volumes for non-surface?
Non-surface volume, this is very unpredictable on that sense because this is, in international, these are different countries we serving. Volume is, again, supposing it's going Canada or U.S. or supposing it's UAE. Volume is really highly unpredictable, and there is no value on that. But in Air and Rail, we don't want to be give until we become a sizable one. Then we will be start to disclose. Otherwise, because again, very niche segment on Rail and all, because we doing through the passenger trains. This is really very niche segment. So we really don't want to be disclosed on that please.
Got it. Will it be fair to assume that the realization that we are getting on rail passengers, as you are saying, is somewhat equivalent to what we have in Rail Express, Surface Express?
No. On that sense, yes, it is mid of Air and Surface. It is almost like 2.5x almost to Surface, basically. That is there.
Got it.
Supposing I am charging INR 15 for Surface, Rail would be in the range of INR 35-INR 40, and obviously Air is in, again, INR 80-INR 100. This way.
Got it.
I am just giving an example. It is not like exact numbers, but I am saying on that way.
As we are using passenger trains, we are not liable. Generally, logistic industries, if I am not wrong, become profitable when there are to and fro movements of goods taking place in a particular trailer or a truck. Similar when it comes to railways also. If it would have been direct freight corridor way of doing things, to become profitable, we would have required to and fro movements of goods taking place. As we are doing it through passenger vehicles, will it be fair to assume that we are profitable on operating levels in our Rail business?
Yeah. Good question. Basically, for clarity for everyone. In Rail and Air, it is not applicable, what you say. Like to and fro not required. Air operations are completely different where we are hiring the space on. Because these prices are also completely different, where is a busy route is having a different pricing, and empty route has a different prices. Supposing I am bringing the material from Delhi to Kolkata is a different price, even for rail and air also. From Kolkata back to Delhi, prices are very low. This is not applicable on that. It is we hiring only space wherever we require from the directly railway also and through agent network also. This is a good profitable business in Rail side and Air side.
Same way in air, they are providing the belly space to. We directly having now connection with the biggest airline in India. That is also advantage. That is why I am saying on air prices, we had taken very high control, and now it is under control, and we will be show the margin improvement in spite of these all ATF increase and all, because we are now direct. We have taken the direct stock from the biggest airline in India, and that will be really giving advantage to giving a preference of the cargo also. Obviously, price stability also in this challenging environment. On that sense, gross profit in both the cases is more than 30%.
Got it. 30%. Good to hear that. Similarly, are we seeing demand escalating towards this compared to Surface? Because in my understanding, what happened in last one year is that the air express industry has not grown, maybe broadly 2%. However, the surface industry has seen growth, like in double digit. It is just that we have not seen that kind of a growth compared with your lifted and unlifted space.
So again, you rightly said this number is showing that, but we should see which segment has been grown on for which product I am saying, or transportation is grown. Basically, if you see autos are not grown that much. Consumer deliveries has not grown that much. Lifestyle product has not grown that much. But other product, if you see, paint industry has grown very well. Pharmaceutical has grown very well. So it is depending upon product requirements related to, like, e-com related product is also grown very fast because e-commerce is encouraging. So depending upon that, but if you see in other industry where we also dealing in, where we serving. So almost everyone is on the same platform. In Q4, if you see the numbers, I think the same number on that.
Wherever people are depending upon the e-com industry, they are grown slightly high, which is fine. Another thing, air industries, we have very minuscule share. So now we putting more branches to getting more business from the SME customer, majorly from tier two, tier three cities. That is really good results to us. For the rail also, we have the same strategy. We are putting more branches, more different team, where we getting the material from the tier two, tier three cities. This is really giving a good positivity in the business. We will be keep continuing with this strategy only.
Got it. So we are somewhat focusing more towards the multimodal logistics and focusing that our revenue from that particular segment increases drastically compared to our earlier business.
No. This is not that way. Actually, I am saying slightly higher growth in multimodal, which is like we want to become currently is around 18%. We want to become not much, but 20%-25% in next three, four year. By 2030, we want 22%+ kind of share from these services. Means Surface will be also increase on a same way, but slightly because these are the, is a mature market, or you can say existing product where we can be growing at 10%, but obviously these other services are niche segment, where we certainly grow in a 20%+ kind of growth. So they will be having a slightly higher share in each year, but not much, 1.5% in each year will be increase on that part. I am saying on that way.
Okay.
The focus is just for the all services because my surface is an anchor product, so that has to be, must be grow for that.
Okay. Will it be possible for you to provide the revenue mix from SME and non-SME client?
Yeah. This is, since last two decade, we maintaining in a 50/50. Right now is around 48 / 52 because, again, everyone knows SMEs are under stress slightly, and that's why this ratio is so. But we are trying hard to be getting back into 50%+, obviously. In this year, results are very good in this last two months. So hopefully, in each quarter we will be maintaining this year onwards in a 50/50, which we maintained since last two decades.
Got it. One thing, I am happy to see that you have made the volume of 267,000 tons for the particular quarter. If I look at last 24 quarters, this is the highest volume that you did. Just wanted to understand that, going forward, will it be possible to maintain the current run rate of volumes and make sure that you would be able to grow on a conservative basis? Because I understand that this is industry dynamics where the sales comes from the perspective when the logistic industry is moving, the client person industry is moving. But just wanted to be very clear that on a conservative basis also, we are expecting that you will be able to grow volume rate to 10%.
Yeah. So 10% is achievable, and we will surely achieve for that, and we are making lots of effort for that. I said, internally, in Surface, we also put in a people or vertical-wise. Each team is giving a special focus on new segments also, like EV vehicles and solar and defense. These kind of product we also exclusively giving. This is a new segment where we do not have the business supposing on EV, we are very less in it. Now we are giving a focus on that, and you see many electronic small vehicle companies are coming. So we started doing relationship with them. So certainly, internally, Surface cargo also, we will have the focus for the different verticals to getting a more market share from the customer and all. And obviously, price hike is also happening this year.
Overall growth, I will finish in the range of 12%-15% with the price hikes also. So volume will certainly be getting more than 10%.
Got it. Just one last one from my side. As the prices of diesel have increased, I understand that we would be able to pass it on to our clients, maybe in slight lag manner. But I just wanted to have your view on unit economics related to EBITDA per kg. Like today we make what, INR 12.3, INR 12.4 per kg revenue, and our EBITDA is around INR 1.25-INR 1.27. We have been in the range of almost INR 2, INR 1.8 EBITDA per kg historically.
Yeah.
Just wanted your guidance how we can improvise on our operating expenses so that we can actually reach back to those levels again.
I think I already replied on that, but again, to repeat that. Basically, if supposing these fuel hikes has already been stabilized and there is no hike happen in future, which we also discuss with the client and handsomely passing on to customers. Almost 85% we pass on to customers. But supposing tomorrow again, it's increasing up to INR 7 or so, then this is slightly challenging. We also bear that cost to some extent. So this all depends. Supposing any disruption on it, this Gulf war is going on longer period, then indirect impact also there, because there is two impact. One is diesel cost, but certainly other input cost is also increasing gradually, like dollar is what you see in a worse condition, rupee-dollar ratio and all. And labor cost is still bound because government wants to give a social security to these guys.
Minimum wages is increasing continuously. Over and above, each state government also wants to be putting very high pressure to implement these norms by every state. We are as a pan-India company. Slightly, it all depends, but we are very confident to be passing on everything to customer and environment. That sense, customers are very positive to accept these increases because they are also aware of all this. There is an overall pressure for that from each service provider for these customers. By these conditions, yes, we will be improved. Supposing this is stabilized in current time, then certainly we will be improved the level of around 100 basis point- 150 basis point in EBITDA level, for sure.
Got it. Okay. Thank you so much. I'll join back again.
Thank you. We will take the next question from the line of Vivek from SK Global. Please go ahead.
Yeah, thank you for the opportunity. Just wanted to have an understanding on your branch expansion and manpower addition plans going forward.
Yeah. So basically, branch expansion as we opening up the branches almost like in last year, we opened around 70 branches, where is majorly opened for the Air and Rail business because these are new businesses where we want a different focus to getting more revenue from that. That's why we opening up the separate branches also. And around 15, 20 branches in the surface business. So in this year also, we have very good setup. We have very good study in our hands where we have to open the branches for these all products. So again, in this year, 40 branches would be opened for surface business and 60 branches for the Rail and Air and C2C put together. So again, expansion plan for the 100 branches would be there in this year.
Got it. Also, I think I might have missed out on that point. Could you provide some reason on the increase in depreciation for this quarter? And going forward, what can we expect to be a sustainable rate or amount of depreciation on a quarterly or on an annual basis?
Yeah. So again, I have gone detailed reply for that, but this is basically due to ROU has increased. That is why this number is there. But I think in run rate would be for the whole year, not INR 30 crore - INR 32 crore in next year. Because this is around INR 2.5 crore amount has been increased. INR 2.5 crore- INR 3 crore increase due to ROU. We have taken in this quarter, and it will be also same in the next quarter as well.
Got it. Sir, just one more thing. On the volume growth, you said that you expect a 10% sustainable volume growth on a conservative basis. Based on the volume growth, what kind of revenue guidance would you give out?
It is again, because now is the price hike time, and we also passing on to customers handsomely. For sure, 15% +.
So this is for FY 2027, or you are targeting for a long-term basis?
Again, it is very hard to say after that, but again, for FY 2027, we are for sure like 15% in revenue growth, I am saying. And volume is 10%, 11%.
Got it.
Sir, due to the time between, Vivek, I would request you to please rejoin the queue again for next question.
Sure. Okay. Thank you.
Thank you. We will take the next question from the line of Jainam Shah from Equirus Securities. Please go ahead.
Yeah, hi sir. Thanks for the opportunity. I have joined the queue late, so I might have missed out this. What has been our capacity utilization for this particular quarter?
Yeah, so capacity utilization slightly improved over quarter-on-quarter basis. So in this quarter, was around 83% utilization was there in this quarter.
I am a little bit confused. Is it 83%, right?
Yeah, 83% +. So like 83.25% and so. Yeah.
Got it. Thank you so much.
Thank you. We will take the next question from the line of Pravesh Kochar from FourLion Capital. Please go ahead.
Hi, Pravesh. Multimodal revenue last year, FY 2025, was 17% or 17.5%? What was the full-year growth in multimodal business?
This year is now around 18.5%. Overall, whole growth was around 20% in this segment, multimodal.
For the full year FY 2026?
FY 2026, yeah.
Okay, got it. For FY 2027, do we expect this to continue on the multimodal mix?
Yes, even slightly increase, but for sure, yes, 20%.
Got it. Understood. Last question on the E-commerce business. Can you give some more color on who you are competing with, what segments you are in, and what kind of work you are doing?
Yeah. Great. Basically, in E-commerce business, we earlier also do 4%, 5%, but over the period that has been reduced because we did not have any strategy to be doing for the new service provider was there and all. Now we refocusing basically more into D2C segment, where branch directly deliver to customer, and where we have our strength there, because everywhere we have the branches. So we refocusing on that and B2C also. So we targeting very SME customer, not the big giants. These again, two big boys and all. So we are giving an intra-city deliveries and within the state kind of work, we put more focus on that work. Again, because our target is to having the only profitable business in this segment, otherwise we will not do that. So our strategy is very clear.
We will be doing with the, again, client, which is in this top two or top five and then second line. So we are always targeting on a second line and very small SMEs, which is directly sending to this D2C segment. So our target is that and to ultimately, right now we are around 2.5% business in E-com, which we want to be increased to 5% also. Also we putting in a effort for the B2B segment also in E-commerce, which other companies also doing the same, where material going from their merchant to warehouses or warehouses to return to merchants. This business we are also focusing for this E-com segment. This is also giving a good results. We are very near to closing one big account for that.
We refocusing on that sense also, where we will do the B2B segments within the E-com window.
You mentioned Q-commerce also within e-com. What are we doing there exactly?
No, Q-commerce, we are really not going into that. This is not in our strategy, actually. I am talking B2C, D2C, and within e-commerce, B2B movement, where they are happening from merchant to these all warehouses of these platforms. That segment I am saying.
Got it. Are we working with any 4PL kind of players, like the Shiprocket, Shadowfax kind of a thing, or it is directly with the end SME customer?
Few customers are there. Few customers we focusing, you're right, we're focusing on that platform also. How we can be more competitive and more revenue can be taken from these platforms. So we're focusing on that as well. We're getting few small businesses from there as well. And direct, obviously, our major strategy to get the direct approach from the SMEs, because we have very good relationships with across India. So we know the market, we know the geography. So our focus is to giving these small customer or direct going to them. But obviously, these platform is also giving an opportunity to everyone. So we also register ourselves in these two platform and getting business from there as well.
Understood. Thank you for those.
Thank you.
Thank you very much. Ladies and gentlemen, we will take that as the last question. With that, concludes the question and answer session. I now hand the conference back to the management for the closing comments. Chander, over to you, sir.
I thank everyone, all the shareholders, who attended this call, and looking forward to speaking again next quarter. Thank you very much.
Thank you. Thank you, everyone.
Thank you, members of the management. On behalf of PhillipCapital (India) Private Limited, we conclude this conference. Thank you everyone for joining with us today. I am Yamuna, disconnecting the line.