Ladies and gentlemen, good day and welcome to the TCI Express Q4 FY 2025 earnings call hosted by ICICI Securities Limited. I now hand the conference over to Mohit Lohia . Thank you, and over to you, sir.
Yeah. Hi. Good evening, everyone. Thank you for joining us today for the concluding FY 2025 earnings call of TCI Express Limited. First of all, I would like to thank management for providing us the opportunity to host the call. From the management side, we have Mr. Chander Agarwal, Managing Director, Mr. Mukti Lal, Chief Financial Officer, Mr. Pabitra Mohan Panda, Senior Chief Sales and Marketing Officer. Without further delay, I would now hand over the call to Mr. Agarwal for opening remarks. Thank you, and over to you, sir.
The line for the management is disconnected. Ladies and gentlemen, kindly hold while we reconnect them. Ladies and gentlemen, thank you for patiently holding. The management is back online.
Yes, Mohit.
Yeah. Hi, sir. Yeah. Hi. Good evening, everyone. Thank you for joining us today for the concluding FY 2025 earnings call of TCI Express Limited. First of all, I would like to thank management for providing us the opportunity to host the call. From the management side, we have Mr. Chander Agarwal, Managing Director, Mr. Mukti Lal, Chief Financial Officer, Mr. Pabitra Mohan Panda, Senior Chief Sales and Marketing Officer. Without further delay, I would now hand over the call to Mr. Agarwal for opening remarks. Thank you, and over to you, sir.
Thank you. Good evening and welcome, everyone, to Q4 and financial FY 2025 earnings conference call of TCI Express Limited. I would like to thank all of you for joining us here today. I hope you and your families are staying safe and healthy. We have already circulated our earnings presentation on our website and stock exchanges, and I hope you all had a chance to review it. To start with, I will give you an overview of the business trend and performance, and then we will hand over the call to our CFO, Mr. Mukti, to brief on our financial performance for the quarter and financial year FY 2025. FY 2025 marked continuous progress for TCI Express, underscoring the company's strategic focus and expanding its multimodal service portfolio, with surface business continuing to remain the key contributor in the business performance. Operational efficiency improved through technology and customer reach was further strengthened.
The surface segment was supported by addition of 10 new branches, while the Rail Express and Domestic Air Express segments expanded their service coverage with 25 new branches each during the year. In total, TCI Express opened about 60 branches. The logistics industry's evolving landscape and supportive government initiatives provided a favorable environment for sustained growth. TCI Express expanded its dedicated network for Rail Express and International Air Express services, reflecting a clear commitment to multimodal growth. The Rail Express segment has introduced temperature-sensitive shipments, enhancing capabilities to serve specialized sectors with cost-efficient and environmentally sustainable solutions. In the Domestic Air Express division, over 1,000 new pin codes were added, improving airport-to-doorstep delivery coverage, while the International Air Express service demonstrated strong growth, further strengthening the company's global connectivity. During the year, all key verticals contributed to overall business performance.
The surface, Rail Express, and Domestic Air Express segments each played a significant role in supporting the company's operations. Continued investments in automation have supported improvements in operational efficiency and network flexibility, positioning TCI Express to address emerging opportunities within the logistics sector. Operational cost pressures persisted, primarily driven by increased toll fees and labor expenses alongside regulatory compliance costs. Nonetheless, the company's asset-light business model, combined with agile network management, enabled stable freight rates and consistent service levels. Demand across core sectors, including automotive and manufacturing, showed marginal volume growth, reflecting cautious optimism in the economic environment. The company also intensified workforce development efforts, particularly in strengthening key account management capabilities to foster long-term client partnership and capture emerging market opportunities. Additionally, TCI Express has been recognized as a Great Place to Work for five consecutive years, reflecting its commitment to create a supportive and engaging work environment.
As part of our corporate social responsibility efforts, the TCI Express Foundation, in collaboration with TCI Foundation, organized a free artificial limbs camp at Prayagraj Magh Mela, supporting over 1,200 differently-abled individuals. The company also marked World Health Day and International Women's Day, underscoring its ongoing commitment to health, inclusivity, and employee well-being. In view of the company's consistent operational and financial performance, the board has recommended a final dividend of INR 2 per share. This brings the total dividend for FY 2025 to INR 8 per share, representing an intensive payout of 400% on the face value, INR 2 per share, reaffirming its commitment to delivering value to shareholders. Looking ahead, the company is well-positioned to capitalize on industry growth supported by government initiatives such as increased CapEx and planned development of 12 industrial parks, which are expected to enhance multimodal logistics infrastructure and reduce supply chain costs.
Additionally, the Union Budget 2025-2026 targeted tax relief measures are anticipated to boost disposable incomes and consumer spending, stimulating industrial production and demand for logistics services. TCI Express remains focused on strengthening multimodal capabilities, expanding customer access, and leveraging technology to drive operational excellence and differentiated service offerings. These strategic priorities will enable the company to sustain growth and create long-term value in FY 2026 and beyond. With this, I'd like to now hand over the call to Mr. Mukti to talk about our financial performance for this quarter. Last quarter, I'm sorry.
Thank you, sir, and good evening, everyone. Now I would like to discuss the financial performance of the company. Our Managing Director has already highlighted the development during the quarter, and I would like to delve into the financial aspects. During the quarter, our revenue from operations stood at INR 307 crore as compared to INR 296 crore in Q3 FY 2025 and INR 317 crore in same quarter of last year, by registering a growth of 4% on quarter-on-quarter basis and degrowth by around 3% on year-on-year basis. Total income quarter was INR 313 crore as compared to INR 299 crore in Q3 and INR 319 crore in Q4 of 2024. EBITDA for the quarter stood at INR 34 crore with a margin of 10.80%. Our profit after tax for the quarter stood at INR 21 crore with a margin of 6.6%.
Overall, on the FY 2025, our revenue from operation is INR 1,208 crore as compared to INR 1,254 crore same period last year. EBITDA for the period was INR 143 crore with a margin of 11.7%, and profit after tax is INR 91 crore with a margin of 7.5%. We ended the fiscal year with generating a cash flow from operation of INR 118 crore and continues to generate solid cash flows to build our strategic growth plan. In FY 2025, the company invested INR 37 crore in CapEx, primarily focused on expanding our branch network, upgrading sorting centers, and ramping up our IT infrastructure to enhance automation and operational efficiencies. These investments are aligned with our long-term vision to strengthen our multimodal service offerings and maintain a competitive edge in the logistics industry.
Now, I would also like to about some highlights on our multimodal offerings. We achieved some points on Air International. We grow on that business in almost 50% over a year-on-year basis, though it is a very small business in overall pie. Second milestone, we also like transporting almost 100 tons from the Delhi hub, which is also kind of like from Delhi gateway. We transported almost 25% of overall international business. That also customer rate is also increased in this part around 30%. This is the highlight for Air International. Air Domestic, we also enhance our network, and on that process, we added 1,000 new pin codes and map for the faster deliveries and pickups for this business. We also like putting dedicated vehicles for the pickup and delivery. That's why this is also investment we're putting into for Air Domestic.
In the same way, we're also putting separate vehicle and creating separate branch network for the Rail Express as well. Rail Express also done very well, and the growth in this business is around 25%. We also increasing new repetitive customer in Rail Express, and that is we are getting very good traction from the customer in this portfolio. Our commitment remains rooted in balanced growth and revenue quality with the additional automation unlocking greater efficiency and flexibility across our network. We remain confident in our ability to capitalize on opportunities and solidify our leadership position with industry-leading services. Thank you very much. Now I would like to open the floor for question and answer. Over to you, please.
Thank you very much. The first question is from the line of Rohit from Samatva Investments. Please go ahead.
Good evening, sir. Thank you for the opportunity. Sir, my first question is on your automated sorting centers. In the presentation, you have mentioned that the sorting centers reduce the sorting time by 40%. It also improves your throughput time. But if I have to look at the world picture, it is yet to contribute in terms of margins. Just wondered why is the margins not coming through and on both these automated centers, if you could provide some monetary metrics for us to understand the growth that has happened over the past year, maybe in terms of ROIs, in terms of throughput, in terms of capacity utilization. Something in monetary terms also. That's my first question.
I think the important thing to understand is that one sorting center or two sorting center, the incremental saving can only be seen when we create our total mesh network of 10 sorting centers. Then the real savings is visible on a bigger scale. If you look at it only from one area standpoint of view, it has definitely benefited. The cost of labor has come down, the throughput has become faster. In all angles, in that one particular location, the benefits can be seen. Even if you look at our sorting center in Pune, that area used to be always, and still is, a big problem for labor, and that has been actually We have mitigated that risk by putting the automated machines.
Of course, if you put 10 of these, you will see a much bigger impact and a bigger tangible saving versus what you can see with only one or two centers.
What will be the timeline for us to get the entire chain? You speak about 10, so maybe eight more are required. What sort of capital outlay is required and what are your timelines in terms of getting the full network in place?
Yes. Basically, we looking for two more center in, I think, FY 2027, because construction has been started at Ahmedabad and Kolkata. Two center, I think we will be ready by FY 2027. Then subsequently, we looking for Chennai, Bangalore, Hyderabad, these kind of centers. I think by 2030, we will be able to put all 10 in place with the full automation. Second part, even in spite of in these two center, we are able to reduce my overall direct cost. In overall terms, it is around 30 basis point. Though margin is not improving, these are different tasks. I will explain that also subsequently. On that front, we are really getting the advantage for the, as we mentioned, our throughput and then decrease in the labor and increase the efficiency there and ultimately saving in the direct cost.
Sir, you spoke about margins not coming through. What is the reason for that?
No. This is like as second, because operating costs has increased, that is also having different regions as we earlier also mentioned in different calls. One is increase in air cost, second increase in toll tax and labor cost. Then third, we also as mentioned, created wide network for our multimodal services, which is Rail Express and International Air Express services. Because as you know, we have the only one line of business. That is also sometimes a challenge. That is why we also want to grow our multimodal businesses simultaneously, so we can have whenever supposing we have some challenge in a Surface Express, then these business can be support. Supposing we have the multimodal businesses some problem, then we can have the support from the Surface Express. Like you seen in industry-wise, people also like taking support on our different products.
That is why we are also in that process where we are developing these different other product, which is similar in nature for the expression industry and suitable for that industry. Wherever we are working, this is all like niche segment specifically for our two services. One is Rail Express and other one is C2C Express segment.
Got it. My second question is, recently, a lot of the e-commerce players, originally they used to do a lot of insourcing, have now started shifting towards outsourcing. Do you see any advantage? Have you seen any new business from the e-commerce segment? Because historically, we have not been focusing a lot on the e-commerce part. Has there been any change in strategy for us to focus more on the e-commerce, maybe even quick commerce fulfillment centers, anything like that?
So all these businesses are very unprofitable.
Okay.
Yeah. So I would like to stay away from them. And they can give you top line, but forget the bottom line. Even quick commerce and all that. So they are burning P money, so it does not matter. And in real sense, they have not ever made a single cent, a single rupee.
So going forward, we will stay away from-.
Yeah, absolutely. I don't see it turning profitable in any way. Even if you have 200 million ton volume or whatever, it's not going to turn profitable because they have themselves killed the market by lowering the prices. I remember that it used to be INR 45, INR 50 for e-commerce delivery. Now it's like INR 4, INR 5, where it's not practical to do it anymore by anyone.
Fair enough, sir. Just one more question I had was, so historically, our key focus area has been the SME segment, right? I get it, last one, two years, SME has been underperformed.
Yeah.
Manufacturing consumption has been a bit low. I just want to know what are our trigger points basically that you are tracking for our industry, the SME part to come back. Because as long as in one of your old calls, you had said we are focusing more on Just give it a second. So historically, you said you want to focus on the relations and get ready to take some lower pricing. I just wanted to know how are you tracking the SME and are you seeing any progress on that front?
Actually, that's a very good question because unfortunately, the SME was the hardest hit last year, and that really affected our business. I was reading the data that the inflation had touched almost 9%, and I think the interest rates were about 8%. So the most affected group of people were the SMEs. Since our business also comes 50% from those guys, we were quite surprised that this happened. This was actually a side effect of the fact that it was also election year. People, we forget. Election years, and before that, in September of 2023, all the cash was withdrawn, the INR 2,000 rupee notes were withdrawn. Then came the elections. So basically, liquidity dried up in the market. Then there was high interest rates and then high inflation, and then SMEs got really badly affected.
It is very easy to lower the price, but it is 10 x harder to bring it back up to that level that we want. India is a very sensitive market for pricing. Once you lower the price, it will be very hard to raise the price unless you are giving some sort of a discount in your billing or you are doing some sort of a different kind of accounting or something that is benefiting the customer. Otherwise, increasing prices is one of the hardest things to do here in logistics, especially.
Got it. So sir, what are top two or three segments? Is it auto? Is it manufacturing? If you just give me a broad credit, these are top three, how much does it contribute, and which are those segments?
Yeah, so consistently, these five top vertical is giving almost 55% revenue to us, and these are auto, pharma, engineering, and yeah, it is lifestyle products and electronics. These are the top five segments is giving revenue to that. All that also replicate in the SME customers, also the same segment we are getting the business from them. So most affected one is the lifestyle products companies, and slightly is auto. So these companies is really affecting this SME business. Also, we also noticed eastern part of India is also not doing well, where we facing double challenge, like movement from the other part of India is there in eastern part of India, but there is an empty vehicle is coming. So one is less business. Second is also increasing my weight loss or you can say, utilization of truck is reduced.
This is two ways about for that purpose.
Sir, have we lost market share in the SME segment? Would that be the case?
No. If you see overall basis, if you study the whole industry, this SME business is now reduced for everyone. Tonnage has not increased for the part load and LTL for everything. Different segment has been increased in a different manner. If you see third party logistic increase because Q commerce has really increased for that purpose. FTL has increased for the different purposes. That is why if you see overall basis, tonnage has decreased overall in part load and this LTL basically. Where the high value is a slightly low value, both has been reduced in this FY 2025. There is no matter to see lose markets there. That is not the matter.
Are you seeing any recovery? Do you expect any recovery by the festive season? Are you seeing any signs of recovery?
That is there. We also take on a strategy to be improved on first business and obviously in eastern part of India. We can again, serve two purpose, obviously reduction of cost and business improvement. Second, we highly focused on creating a team and hiring new people or experienced people for our Rail Express segment and air segment so that we can grab this high yield customer from that segment. We working on two, three strategies and that has already played very well in this year onwards. Current year onwards.
Okay. Thank you so much.
Yeah. Please. Thank you.
Thank you so much for answering all the questions in detail.
Thank you so much.
Thank you very much. The next question is from the line of Dhruvin Kadakia from SKP Securities. Please go ahead.
Hello, sir. I just wanted to understand for this year and for this quarter, how has been our volume growth and what has been our breakups in terms of our different segments, the surface segment, air, international segment, et cetera. If you can just help me with those numbers.
Yeah. Tonnage is almost 255,000 ton for this quarter and whole year is around 995,000 tons ton for the whole year. Other than surface business, all put together is around 17%- 17.5% for the whole year. Major chunk is coming from air, domestic and international put together. Second is C2C and then followed by rail and e-commerce and then cold chain pharma. So this way it is like we're splitting that.
All right, sir. Thank you so much.
Yeah.
Thank you very much. The next question is from the line of Sonam Gupta from TCI Express. Please go ahead.
Sure.
Sonam, please go ahead.
You can take the next question, please.
Sure, sir. The next question is from the line of Ravi Kumar Naredi from Naredi Investment Private Limited. Please go ahead.
Chander, how are you? All good?
Very good. Thank you. How are you?
We are good too. I just wanted to ask when can we think that the turnaround should come in two to six months or one year in this line because we have gone down so much in two years. That is my question.
Six months.
After six months. Because you are such an experienced promoter, so you know better when we have to have a turnaround from here. Although you are doing all the expansion time to time, you are doing all the sorting center automatically. So you must be doing this thinking that whenever we get the opportunity in the coming time, we will get its benefit. Definitely.
See, there is a lot of opportunity in express trucking. You will see that all the big people, all the big companies, they all want to enter the express because there is so much opportunity in it. But the thing is they cannot make their own network, they cannot hire their own people. That is why it is a sort of a barricade. But nevertheless, we are no less, and we will go ahead. What we do is we follow the market, as the market is. That is why we go zigzag. The company, what I understand, is showing straight up the arrow. So that is questionable also sometimes. So we are like an open book. Everything is transparent. We are the lifeline of the market. We will tell you exactly what is going on in a small village in Kerala to all the way to Ladakh.
That way we are feeling and sensing. I think we have had our challenges as a country economically, and I think now we are coming out of it.
Right. Because even in these bad times, you did not let your cash flow get bad and you are giving continuous dividend and you are paying attention to expansion. This is a very good thing, sir.
Yes. Thank you.
I wish you all the best, sir.
Thank you.
Thank you very much. The next question is from the line of Krupashankar NJ from Avendus Spark. Please go ahead.
Yeah. Good evening and thank you for the opportunity. I was briefly not part of the call, so if at all you had mentioned, what was the tonnage for the quarter and for the financial year?
For quarter it is 255,000 tons, and for the whole year is 995,000 tons.
Got it, sir. While seeing coming in from-.
Sir, your voice is cracking.
Yeah. Is it better now?
Yes, sir. It is still cracking a little bit.
Okay. I will try my best to ask the question.
Sure.
If it is challenging, I will fall back in the queue. While you have seen a good growth in the Rail Express business, while we understand that the inflationary pressures have always been there, why not take a price hike which can help us support our growth at this point? Till what point are you waiting for that price hike to come through, sir?
Yeah, Krupashankar, so basically, as people talking about price hikes, because we did that exercise since last four, five year, and I think we are not struggling for the price hikes. We are struggling and we are lacking in the tonnage. Pricing is not an issue for us. Even profitability is not an issue for us because in spite of that reduction, we are, I think, having the highest profitability levels. I am saying pricing is not an issue for us because we have not taken because volumes are already less. We do not want to lose further volumes if supposing few customer is not ready to give that. Because we also in industry, we have seen there, people has taken price hikes and then customer has gone away. One quarter they may be have the profit, but in second quarter they might not be having that same profit levels.
We are the consistent company. We will take obviously price hikes, but in the right time. I think in this year, we strategically thought and planned for to take the price hike almost 3% for the whole year.
But sir, the inflationary pressure has been much higher than 3%. Will it be suffice to cover your incremental cost if the underlying market itself is weaker? Does it make sense to continue on this path? Because tonnage will be weaker only.
Yeah. Very good question you ask. Basically, what we seen in last year, there is a cost pressure on front of toll tax and labor cost and air cost. We strategically utilized that time to analyze all the thing, how we can re-rationalize the cost. This is a good thing. In this year, first task we taken, now in this year, we are not given any hike for the on account of toll increase or labor increases. Second part what we did, we started even rationalization of the cost because as everybody is aware, tonnage would not be much in this year as well, what everybody's anticipating. That way we also rationalizing our costs. Certainly our cost will be reduced from this current level. Third thing, we also negotiating for the air cost and all. That will be also benefiting in this year.
Various things or initiative we have taken to control this first, and then second part is to reduce that. Third thing, we will enhance the prices from the customers, obviously. We certainly improve this margin level from the. I think it's bottom out, reduction of this compressed margin bottomed out. Might be from the first quarter, otherwise in second quarter onward, we will be start to improve our margin level. For the whole year, certainly we will be improve at least 150 basis point to 200 basis point in this whole year, for sure.
Got it, sir. One more question from my side is on the CapEx side. While the tonnage growth is a little bit weaker, can we slow down on the CapEx part, sir? Because the capacity is where you have expanded, it's still not picked up to a large degree. Can the macro factors push your CapEx to a certain degree?
CapEx is completely for the long-term vision where we building up the shorting center for the next 20, 25 years. Profit is less or high, this not matters. Because this is also depending upon the particular buying the land parcel also. Because after a long pursuance, we find the land. Whenever we found the land, we buying that. It is little bit, also time sometime is maybe happen immediately or may not be happen, it take 1.5 Year also. That depends upon. It is really not impacted our CapEx plan at all. It will be go with as a strategically what we thought.
Last question from my side. Anything on branch expansion for FY 2026 and 2027? Any target in mind?
Same way. We want to increase 80 branches for the FY 2026, same way, 100 branches for the 2027. Out of that, 50, half branch would be for the Surface Express and half branch put together for the Rail Express and Domestic Air Express business. Because we are creating a separate team, separate network for this business. That is slightly also cost pressure because this cost is coming under as a recurring expenditure. This way we will be expanding in our FY 2026 and 2027.
Thank you for answering my questions, sir. All the best.
Thank you.
Thank you very much. The next question is from the line of Kevin Shah from Emkay Global. Please go ahead.
Yeah. Thank you for the opportunity. I just wanted to-.
Sir, your voice is very low.
Is it better now? Hello.
Yes, sir.
Yeah. Can you just provide a guidance for FY 2026, given that you are not planning for a price hike, mainly on the volume front?
Can you come again? Sorry, I just missed what you said.
Yeah. I am asking for the guidance for FY 2026.
Yeah. So 2026, what we have seen and what we discussed with the internally and make a strategy, I think we will be achieving a tonnage growth is around in the range of 7%-8%, and overall revenue growth in the 10%-12% for this year.
Okay. Can you provide a mix of your SME and institutional business?
This time in FY 2025, we completed with 52% from the institutional and 48% from the SMEs. That ratio also we will again try to bring back to 50/50, which we have since last two decades we are maintaining the same ratio. We will try to go back to that normal one.
Okay. That will be good. Thank you.
Thank you very much. The next question is from the line of Kriya Sharma from J&K Securities . Please go ahead.
Thank you so much for giving me the opportunity. Hello, Chander, sir. Mukti sir. We have been an investor of this company for the last four years and we have followed the developments in the company and the industry in general. Sir, I regularly go through the financials of the company and of all investors also. I want to know why have we not been able to grow over the past 12 quarters while one of your competitors, Delhivery Limited, has outgrown you by a distance? Sir, I see that our tonnage has been absolutely flat during the last 12 quarters, and at the same time, our realization has dropped sequentially from INR 13 to 12 quarter back to INR 12 in Q4 FY 2025. At the same time, Delhivery's PTL tonnage has grown 92% during the same period, I think, with a growth in PTL realization simultaneously.
Can you please share the reasons behind this? Thank you.
First of all, we don't want to comment on the competition here. We can give an answer on a one-to-one basis. Second part, our realization has not dropped what you just mentioned. Our realization is intact, even grown on FY 2023, not grown in FY 2024 and 2025, but it has not declined.
Thank you. Okay.
Yeah.
Thank you very much. The next question is from the line of Manish Goyal from Thinqwise Wealth Managers . Please go ahead.
Hi. Thank you so much. I have two questions. On the new businesses, are we probably incurring losses, and what is the impact on the EBITDA margin from the new businesses? Second, when you guided for 100 and 150 basis improvement in margins, is it from the level from what we are seeing in quarter four, or is it on the entire FY 2025 basis you are expecting improvement in margins? Thank you.
Yeah. Thank you very much. So basically, new businesses, we are not incurring any losses. Rather, I am saying because there is also gross profit is in the similar way, in the range of 32%-35%. What we are also earning in Surface Express is in the range of 30%-32%. It is creating in a separate network. So it is an initial investment we are making, because supposing one vehicle is going, it is half empty or 75% empty for a particular route. So it has to be there. We have to bear that cost for the time being. So we are strengthening this segment for the Rail Express and Domestic Air Express. Second, for what you ask for that, for the whole year, we are targeting to improve this margin for the whole FY 2025. Not for the-.
So what base we have of FY 2025 on that entire year, you expect 100 basis point- 150 basis points improvement.
Yes.
That will be driven by.
Yeah.
That will be driven by both taking price hike of 3% and controlling cost. Basically, we are not passing on more cost increase.
Yes. So cost, as we stopped to increase, this is now we started rationalization of cost, as mentioned. Second, we started to ask for the price hike. Third, we are making more focus on these high-yield businesses, like Rail Express and Domestic Air Express. Fourth, we also focused on businesses in Eastern part of India, where my emptiness of truck will be reduced subsequently, and that will help to improve my utilization of trucks. So ultimately, it will contribute to improve margins.
And this year, what is the CapEx plan? Because the presentation mentions that we have a plan of INR 500 crores, out of which we have spent roughly INR 200 crores in three years. So now the balance INR 300 crores, when do you intend to spend? And if you can broadly say how much would be going towards capacity creation and how much would go towards creating sorting centers.
So majorly for the capacity creation in terms of branch network, we do not need much CapEx. Obviously, one branch hardly having CapEx of INR 1 lakhs or INR 2 lakhs per branch. But major portion, obviously, going into sorting center creation. So that in this year, we are planning for the INR 80 crore- INR 100 crore, similar way of the next year also. Earlier, we had taken a target to finish this INR 500 crore by 2027. I think now we need to extend one more year. So we will revise it, I think, even after quarter two by seeing this year's CapEx, how it is shaping, because it is slightly differing due to that land purchase. So we are looking for land purchases in various places. Supposing that strike, that deal, then we will be definitely in this year, maybe have around INR 100 crore + kind of CapEx in this year, and next year again is INR 100.
Right, sir. Thank you so much.
Thank you.
Thank you very much. The next question is from the line of Kunal Bhatia from Dalal & Broacha Stock Broking Pvt. Ltd.. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. Sir, you mentioned in this year the issues regarding three specific things. One was the toll tax, air cost, and labor cost, which went up. Could you elaborate a bit more on how much was our operational efficiency impacted because of these three elements? If you could give us some sense on the quantum of the same.
Basically, this is a very good question. If you see cost has increased by 250 basis points. Of that, 100 basis point is increasing due to labor cost increase and toll cost increase in overall year basis, I'm saying. 100 basis point increase because this due to low tonnage transportation. Utilization of truck has been dropped from 83 .5- 82.5 for the whole year for this FY 2025, and 50 basis point due to other reasons of increase of the air cost and air network cost. These are the contributing factors we have for the FY 2025.
Okay. And sir, coming next year, you have given a guidance of 7%-8% volume and 10%-12% of overall revenue. What are the key factors you are baking in to achieve this growth? Because, sir, there has been a lag in terms of the kind of growth achievement we have been having. If you could give us a bit more insight into this kind of a guidance.
Well, basically, in FY 2025, we also seen various uncertain kind of business, in FY 2025 where we plan for some X business and that happened like X minus anything. Good month has also not played very well for all the whole industry players as you see in everywhere. Same way, we are confident and we plan and discuss with the customer, and as I said, we more focusing on eastern part of businesses. We also adding new sales team to be focused more to get the new business. Obviously, we will get the combination of business from the existing customer as well as new customers. So we focusing more into new businesses also. As mentioned, it is also for this new high-yield business also like Rail and Air International or Air businesses and C2C business.
Okay. And, sir, in the current year, in terms of the business from the SMEs, did we lose out in terms of market share to any other player from our existing customer? Have we lost any market share there? Could you give some sense on that?
SMEs business is for every industry player is reduced actually because they are in a problem and they are weaker slightly. But I think now it is bottomed out, and that will be start to improve. So, what we noticed from the everywhere and from the customer side, SME business itself is reduced actually. So it is no matter of losing market share and all. It is overall basis is reduced for everyone.
Okay. My question was more towards, are they trying to downtrade to any other players in the industry? Obviously, taking into account that even their business is impacted or they too have some cost issues. Have you observed that kind of a trend happening in the industry?
For you talking about SME customer?
SME and otherwise. Have people sort of downgraded to other logistic players?
Not really, because in express industries, it's a good thing. As I have mentioned, we are not struggling for the rate price and all because it is hardly anything for the customers in terms of their product value. It is hardly 1.5% for their product value. So they're really not excited to be reduced the prices in express market.
Okay. Fine, sir. Thank you so much.
Yeah. Thank you.
Thank you very much. The next question is from the line of Amit Kumar from Determine Investments. Please go ahead.
Yeah, thank you so much for the opportunity, sir. Can you hear me?
Yeah, please. You are clearly audible, yeah.
Sir, with respect to the tonnage guide that you have given 7%-8%, what are you actually seeing in April and May? Both are in May is almost over. So in the first two months, are you seeing any sort of green shoots of recovery in terms of that tonnage?
Yes, seen, but not much. It is in a single low-digit growth. We have seen in these two months. You rightly said, it is May also completing soon. Yeah.
When we are looking at the high single-digit growth on an overall basis, then obviously the second half of the year will probably contribute more to that. Any sort of drivers or any sort of conversations with clients which makes you believe why that is going to be the case?
Again, it's really very early to predict that. But obviously, we have taken that, and we are making planning for the same and taken discussion with the customer throughout across India. So by that, getting their feedback, we've taken this target, and obviously, we started to grow. So obviously, with the festival season, we are not seeing any kind of disruption due to last year, election was there and all. This year, we are not seeing, hopefully nothing, and will be fair year, and the tonnage must increase in this year. And obviously, price hike also would be there. So with that, revenue growth would be in a double digit for sure.
I appreciate the element on price. I just wanted to get some sense on volume.
Yeah.
Thank you so much.
Thank you.
Thank you very much. The next question is from the line of Pravesh from FourLion Capital. Please go ahead.
Thank you for taking my question. Could you just briefly elaborate what percentage of the growth that you are assuming is from the new 80 branches plus 60 branches this year that you have added, versus from the existing ones for the 7%-8% volume guide for next year?
Yeah. Because as major branches added for these two products, Rail Express and Domestic Air Express. That is also growing very well in these two months. Subsequently also, we increase the more utilization of these branches by putting more person on, specific person for these two products. Surface business as usual, we added only 10 branches in last year, whole year. It is not significant amount we generated from these branches, as usually whatever branch we adding for these surface customers is for the sundry businesses. That is why it is not much significant on that.
Understood.
Next year, we planning to add 80 branches, so that also over the period of full year. Again, I said 50% for these two products and 50% for the surface. Maybe, you rightly said, it may be help to grow, taken the 2%-3% total tonnage improvement in the overall year.
The other segment mix, we have been mentioning on the calls at 17%, 17.5% for quite some time.
Yeah.
Is there any particular portion in the other segment that is declining given that your Rail Express and Air Express has been growing well for us?
Yeah. Basically, we were earlier having this e-commerce around 4%. Now it is reduced to 2% because our focus is not on that e-commerce. Because earlier we were also doing B2C deliveries for the small customer. Now it is not lucrative, and also e-commerce player also expanded in Tier 2, Tier 3 cities. So that portion has compressed from four, I think two or three years back, it was around 4%. Now it reduced to 2.25% only. So that is the percent. Whatever we increase in this year, it is compressed by this e-com business.
Understood. My second question is on the update on the ESOP policy. Could you please explain the rationale and also what is the new vesting schedule? Thank you.
No. ESOP, we have not did anything. We just changed some time limit. Earlier, we give an option to be vested within two months, which we, I think increased to four months. And time period, supposing we give an option in this year, this has to be exercisable in the next three years. This will be slightly flexible, we extended period, I think from three to five years. So these kind of regulatory kind of things, to giving more flexibility to our employees. So that is the only thing.
Understood. Thank you, sir, and congratulations on induction on board. All the best.
Thank you.
Thank you very much. The next question is from the line of Rohit from Samatva Investments. Please go ahead.
Hi, sir, just had couple of follow-ups. First on the Rail and the Air segment, have we added any new personnel at the top management level?
No. As you are aware, we already created at top level, Mr. Ashok Pandey is the COO of this multimodal business. We adding further also, Head of Air, Head of Rail business. We adding that. That we already did in last year. This year, we creating people on field, more people on the field, specifically in sell side, that we hiring from the street and all, and we putting that team. So upper top is already there, but now we putting more people on the field.
Got it. My last question will be, to set up a new automated plant, what will be the total CapEx for one plant?
Yeah, it is around in the range of INR 20 crore-INR 25 crore alone for this sortings and sorter only.
Sorters.
Means automation cost.
For one plant.
One plant. Land and construction cost is different depending upon the location. Yeah.
Got it. Thank you so much, sir. Thank you.
Thank you.
Thank you very much. As there are no further questions from the participants, I now hand the conference over to Mr. Agarwal for closing comments.
Thank you everyone for joining us today. We have tried to address all your questions. If you have other inquiries, please connect with our investor relations team, and we will be happy to address the same. We look forward to meeting you in the next quarter. Please stay safe and healthy. Thank you.
Thank you very much to everyone.
Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.