Good day, ladies and gentlemen. It's my pleasure to welcome you on behalf of TCI Express and SKP Securities to TCI Express Limited's Q1 FY 2025 Result Webinar. We have with us Mr. Chander Agarwal, Managing Director, along with his colleagues, Mr. Mukti Lal, CFO, Mr. Hemant Srivastava, COO, Surface Express Business, and Mr. Ashok Pandey, COO, Multimodal Express Business. This webinar is being recorded for compliance reasons, and during the course of discussion, there may be certain forward-looking statements. These should be viewed in conjunction with the risks that the company faces. We'll have the opening remarks from Mr. Chander Agarwal, followed by a presentation and then the Q&A session. Thank you and over to you, Chander Ji.
Thank you, Naveen Ji. Good evening and welcome, everyone, to Quarter One Financial 2025 Earnings Conference Call of TCI Express Limited. I would like to thank all of you for joining us here today. We have already circulated our earnings presentation and press release on the 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 will hand over the call to our CFO, Mr. Mukti Lal , to brief on our financial performance for the quarter. Let me start by giving a brief summary of the economic conditions we encountered during the first quarter of Financial 2025. In the realm of the global economic dynamics, India's economy continues to remain a little unstable and stable amidst global challenges.
Recent projections by the IMF emphasize India's significant role alongside China in contributing to the world's economic expansion for the year 2023-2024. India's GDP recorded a growth of 8.5% in financial year 2024. This growth is driven by the digital revolution, substantial government investments in infrastructure, expanding middle class, and sustained political stability. India is on the verge of a major structural shift in the growth trajectory, with potential to maintain an approximate 8% GDP growth over the long term. Moving on the industry front, logistics sector is poised for significant expansion, fueled by government investments and policy measures focused on improving transportation infrastructure. These includes major freight routes, development of logistics parks, and enhancement of highways, railway connectivity. Given this promising industry outlook, we are well-positioned to seize the opportunity within the Indian logistics market and deliver long-term value to our stakeholders.
Now, coming to the quarterly results. Quarter one of financial 2025 represented various challenges, including market fluctuations and increased costs due to the ongoing multimodal enhancements as well as the interest rates, high interest rates, labor costs, inflation, that impacted our customers. These factors, combined with a temporary decline in volumes due to the general elections and adverse weather conditions, led to lower utilization levels and subsequent decline in margins. However, despite these headwinds, these temporary headwinds, we remain focused and optimistic about the near future. We anticipate stabilization in the coming quarters, driven by evolving logistics demands and strategic initiatives, which will help us capitalize and position at the leading position in the country's door delivery sector. Moving on to the brief update on business developments.
During the quarter, we are making substantial strides in strengthening our multimodal business with a clear objective to increase its contribution to 20%- 25% of our total revenue over the next two, three years. By expanding this segment, we aim to provide more integrated and efficient logistics, express logistics solution to our customers, enhancing both service quality and operational effectiveness. Our recent automation of Pune sorting center, which spans [one length] 40,000 sq ft and features our AI-enabled automated cross-belt sorter, has significantly boosted our operational efficiency in Western India. This advancement is a key component of our broader automation strategy. We plan to extend this automation approach in our sorting centers in Calcutta and Ahmedabad over the next one year, one and a half years, further improving our capabilities and service levels.
In the rail logistics sector, we have successfully expanded our customer base and opened several new branches, providing excellent services to our clients. Now we are in a position to provide 24 hours, 48 hours, 72 hours and 96 hour delivery schedules. One of our key initiatives this year has been the launch of the Money Back Guarantee scheme. This program sets a new standard in express delivery industry by guaranteeing on-time delivery. The scheme underscores our confidence in our service efficiency and reinforces our commitment to providing exceptional customer service across service modes, including surface, air, and rail. Additionally, TCI Express is proud to be recognized as Great Place to Work for the fourth row in a year, demonstrating our ongoing commitment to a positive and rewarding work environment.
As we move forward, TCI Express is dedicated in strengthening in multimodal business with again, strong focus on serving SME customers through our rail, and Air Express division and branches. Supported by the robust asset-light business model and a well-defined strategic growth plan, we believe that these initiatives, and with these initiatives, we are well-equipped to seize the opportunity that lie ahead and deliver sustained value to our stakeholders. Our strong leadership team also will ensure that our sales targets and business targets are achieved. With this, I would like to now hand over the call to Mr. Mukti to talk about our financial performance over the last quarter.
Thank you, sir.
Thank you.
Yeah. So who is visible? I am audible?
Yes, you are. Yeah please you can start.
Good evening, everyone, and thanks for joining this call. I will now give a perspective of Q1 updates and run through this presentation for a few minutes, and then we will open the session for the question and answer. We completed our eight years after demerger, and now our B2B customer is like 97%, and 3% we are doing as B2C. This is the only express company where we have our own branches. We don't have any franchisee across India. We are also offering new dynamics of Sunday delivery, holiday delivery, and some scheduled deliveries to customers. All our operations are IT backbone. We're doing barcoding on packaging, GPS enabled.
We now started also a new thing where we are onboarding all the suppliers through our ERP system, where they come and join and submit the bill also. So it is very highly transparent process, where they have a to and fro way. Whatever they want to say, we can also say. In that sense, we are doing the performance evaluation through ERP system. So this is a new thing we did in the last three to four months. This is like we ranked 713 on market base on March 31st, 2024. Next, please. So this is, again, keep continuing to focusing on our strength. This is, again, we will be a satellite business model, and we will be carrying high-value cargo. We keep continuing requirement of low working capital to run our daily operations.
We have the lowest cost structure in India in the express segment. We continue to focus, like Mr. Chander mentioned, we also launched the Money Back Guarantee recently. We will keep continuing. We also started putting AI more into our IT operations in every aspect. One example, like the Pune sorting center, where we put an AI-based sorting center and everything is automated. Our complete fleet is 100% containerized movement. There is no open truck utilized for that. Our strategy for the long term would be to continue to focus on automation on our remaining sorting centers. Already we did two, one, where the remaining 10- 12 we'll be doing in time to come. Next slide please. These are the geographical footprint, and the same way, our company's branches reach to 970 plus. Next, please.
These are the two centers, which will like Gurgaon has been up, started in 2022 and Pune in March 2024. Now Gurgaon, Pune both has a streamline, and we are seeing the good result to be reducing the turnaround time is almost like 40%, and we will keep continue to streamline the things. This Pune center is really helping us to be getting the more volume from the west part of India. Next. Rail Express, this is like we getting robust growth in this business. In this quarter, we grown almost like 30% on year- on- year basis. Good thing is happening. Customer base is increasing. Now it is reached to 5,000 plus. We getting the repetitive order from the existing customer.
Now our next phase is, initially we started with the big customers and now we want to inculcate this business or want to spread the business with the sundry customers. That will be like a sustainable business model, and we can further fasten the growth on Rail Express because, again, we said time to time it is a high profit business and also it is a between service of air and surface. It is like we are in the right place and we want to expand it very well. Next, please. This is C2C. C2C, again, it is like a niche segment where we go into the customer and explaining them and then offering this service and the customer is getting this one very well. It's basically doing like a milk run. There are two models of that.
One is milk run, within the state and all. The second is we picking from the two location and delivering on one location and vice versa, where we picking from one location and delivering on two locations. In return, we utilizing these trucks to be in our normal transportation. We also here utilizing more IT-based system where we showing in advance to our destination where, what the truck is coming with this C2C service and how it will be like, what date will be vacant. We in advance planning for the more cargo, so that can be put in this return truck. This Pharma Cold Chain, and we are not much aggressive on that business because we restricted ourself with the cold chain pharma continuously. Pharma Cold Chain only. We are not putting our effort on food deliveries or other items.
This is the features of recently offered Money Back Guarantee, where we are allowing this to be all the modes of transportation, surface, rail, and air. It is a Money Back Guarantee, where supposing we are not able to deliver, we will deliver back their money as a whole freight to them. This is also getting very good traction from the customer, and it will be there for long-term purposes. It is really also aligning our operation very well because we have to be delivered to customer on time. This is a Q1 highlights. Q1 really was a combination of various things. There's a mixed baggage on the sales side and cost side. Various challenges we face, like general election was there.
First time we also see where our sundry customer, SME customer also looks impacted due to ongoing high inflation and high interest costs, and resulting, our share has also slightly changed from 52% to big customer and 58% to these SME customers. So that is also going on. Capacity utilize accordingly as you-- these volumes was less in this quarter. That's why utilization of our fleet has also reduced from last quarter of 83%- 82% this time. We assure you that it is very temporarily and is already fixed in July month and volumes are back in here. We will be operation efficiency also getting from Pune, yeah. So this is a comment from Mr. Chander Agarwal, as already he has given. Next, please. We can skip here.
This is a financial performance where in this quarter we almost de-grew by 3.5% on a year-on-year basis and quarter-on-quarter, 7.5%. Accordingly, it's impacted EBITDA margin by 25% negative, and PAT level is also same way, around 28%. As I mentioned, EBITDA declined because there are two aspects of that: as volume has declined due to the ongoing general election and SME impact on that. Cost has also, if you notice, increased almost 250 basis points, and the main reason of that — we felt that, as you are aware, airline consolidation is happening, and that's why airlines have increased the prices on that. That has impacted, I think, in overall cost basis, 100 basis points has increased in overall cost due to that.
The second part is also after the privatization of all airports has happened, and that's why airport charges also increased by all these airport authorities. That is also what we've seen in this quarter one. On the capital expenditure side, we spent around INR 7.5 crore and construction of the ongoing sorting center construction at Nagpur. We will be on the path of achieving what we have set for this capital expenditure for the whole year, because soon we'll be going to start the construction at Kolkata and Ahmedabad. We already explained that. We can go ahead. This is the last three quarters' performance. This is visible here. Next, please. This is cash flow. Cash flow is going very well. There are no challenges on that.
In this quarter, we achieve INR 11 crore of cash flow from operations. So this is a competitive analysis we've given with the other five years. And still you see we are one of the leading margin profitability with all the. In spite of this lower EBITDA in this quarter, it is there. So this is the H4. This we are already discussing. We can skip, Naveen. This is the whole year which we discussed in last meeting. This is also we can skip. Yeah, this is the working capital cycle, which you can see our several days has maintained under 55 days, and payable days maintained at 35 days. So even we are robust in payment cycle, and it's reduced from 39 to 35. Accordingly, net working capital cycle is also 20 days.
You can understand, everyone can understand to run the daily show, we don't need the money. Whatever money we are earning, we are ploughing back into either ploughing back to CapEx or we have to be dispersed to shareholders by way of dividend. Next, please. This debt-free status is going on. We have zero debt in our balance sheet as on 30th June 2024. This is a balance sheet. You can see our balance sheet has marginally increased size from INR 850 crore-INR 858 crore, and mainly we put the money into the CapEx part. Please, next. This is a whole year. We can skip, Naveen Ji. You can see in FY 2024, we were the leader in margin proposition at EBITDA level as well as PAT level.
This is our journey from the last eight years, where we grew from 32- 60,000 pickup and drop locations, and branches from 500- 970. Sorting centers have not increased much — it is from 26- 28. Customer base has also increased from INR 1.5 lakh-INR 2.25 lakh numbers in 2024 and recently. We have grown at the PAT level around 20% in the last eight years. Next, please. This is our strategy and outlook for that. We will keep continuing to focus on SME customers, and accordingly we are now more focused on compensating for the cost increase in air mode. We are also focusing on increasing the business with SME customers in air mode as well as in rail mode.
Obviously, the Surface Express already we focused on that, and we will keep continuing to put CapEx into automation. This is our 2030 vision — where we want to be in the next two to three years, we want to be in Multimodal Express. By 2030, we want at least one-fourth share in our overall revenue, and we will keep ourselves as a satellite business company. We can just skip. This is our long-term strategies, and we already discussed in the last. This is the growth driver. We will keep focusing on digital transformation, where we are putting whatever we can make more digitalized from the manual operations, we will keep continuing on that.
We're also focusing on green energy, where we can put more EV vehicles and these other CNG vehicles, how we can be used more into in first mile or last mile deliveries. This is our leadership team. So first, on the ESG side, we released our first ESG report, which is also available on our website, and you can all visit there. These are a few awards. Like Mr. Chander has mentioned, we get, in the fourth year, Great Place to Work award, and we are India's Logistics Champion award from ISCM. Our ratings are also stable. We have the long-term loan rating from CRISIL. Rating, though we don't have any loan, but we rate ourself from the CRISIL, which is a AA- , and ICRA has given A1+ to us. And these are the LEED certificates we have.
This is capital market information, as on 20th June, that was the last working day for that quarter. Because the last day of this quarter was also against Saturday and Sunday. Thank you very much. Now we can be open for the question and answer session.
Thank you very much, Mukti. Friends, we now open the floor for the Q&A session. Anyone wishing to ask a question, please raise your hand and we'll take it up. We have the first question from Alok Deora. Alok, please go ahead.
Hi, can you hear me?
Yes, you're loud and clear. Please go ahead.
Good evening. This is Alok Deora from Motilal Oswal. Sir, just had a few questions. First, on the margins, it's come off quite a lot. If you look at the volumes, the volumes are down around 3%, the revenues. But the margins have come off quite a lot. Just some color, if you can provide on that, what has happened there. And also if you could provide the volume figure for this particular quarter.
So Alok, thanks for that. Basically, volume was 235,000 ton for this quarter, and it is almost like volume side, we de-grow by 2% only on year-on-year basis. On margin side, yes, we mentioned there are two sides of things. One is our volume has reduced, so capacity utilization of truck has been reduced by 1%. That is directly adding to my cost. You've seen my cost has increased almost 250 basis points operating cost. 100 basis points by that, and 100 basis points by airline has increased the prices, which is beyond our control. Also now to compare, because this is a high-cost business, we really could not be able to passing on to customer. To compensate with that, we are trying to get the business from sundry customer where revenue per unit is very high.
We already started with the new setup and new branches, new team, we already working out for that. Another aspect also, we are also expanding our multimodal specifically for air and rail. We are creating a separate network because you understand, beyond the tier one cities, we were earlier using surface model to be delivered last mile because otherwise we can't send the vehicle in all the tier two, tier three cities. For example, supposing we need to deliver on Haridwar. Today, supposing we get the material at 12:00 P.M. o'clock, so then it has to go through hub-and-spoke model to my surface and then deliver tomorrow, whatever afternoon time or so. But now we change the strategy and want to directly send the material from Delhi to Haridwar. That way we'll be saving 24 hours for the delivery.
We will be delivering the same day delivery. Like we get that in Delhi today, and we will be delivering. Same way we're doing for the Rail Express also. For last mile delivery, we are creating a network separately. It is giving really good traction to customers and a good message to that. That's why it is a long-term effect basically. Initially it is showing in our cost, but, yes, long-term, it will be stabilized and normalized in time to come.
With around 2%-3% volume de-growth, we are seeing such a large impact on margins. These are all measures which you are talking about would be more from a— it will show results in maybe two, three quarters' time. Do we see the margins being at current levels only because the demand environment continues to be muted and your volumes could be flattish kind of in the second quarter? Do we see these margins of 11%-12% as the new normal? Or just some color on whether you can bounce back very quickly to 14%+?
As I said, it is very temporary. In Q2 onwards, our margin, as you rightly said, back to normal of 14%+. And second, volumes, we are expected because it's a pre-festive season, so we are seeing there was an uptick in the volume and because July we have started with the growth and August we are also seeing, and September month would be also pre-Diwali month. So hopefully, we will close that quarter and then subsequent quarter in a growth. So I don't see any challenge for the whole year what we anticipated. We will surely achieve that.
Just last question. Considering Q1 has been very muted and we have been talking about 10%-15% volume growth on and on in FY 2025, does that number still hold, or what's the volume growth we are looking at for FY 2025 and maybe in FY 2026?
We are hopeful to get the double-digit growth for sure this year, and next in the range of 12%- 15% in FY 2026.
Sure. That's all from my side, sir. I'll come back in queue if I have more questions.
Thank you.
Thank you, sir.
We take the next question from Jainam Shah. Jainam, please go ahead.
Hi sir, good evening. Si r, f irst of all, on the data point part, if you can share the percentage utilization for this particular quarter, your fleet utilization.
It is 82%.
It is 82%. Sir, just wanted to check on the top line, as a percentage or in the absolute term, how much Air Express would be contributing for this particular quarter overall scenario in percentage term or in the absolute term?
Air domestic and air international put together is around 7%–7.5% of the overall revenue.
Got it, sir. And sir, similar percentage for the last year could be how much?
Yes. It's the same way. Yeah, it's the same way.
Okay.
There's no change on that.
If we see that the Rail Express has grown at around 30%, while our total income were at around 3%- 4% decline in this particular quarter. So if we just back calculate, then our road Surface B2B Express would be down by around 10%. So is this what kind of challenges that we are facing because of this 10% decline in our road Surface Express B2B part? If we compare it with any other industry player, there has been some single-digit kind of a growth that has been seen in this particular quarter. And if you see on a top line or a bottom line, it is in last three to four years has been quite stable for us post-COVID.
Is this what the industry is suggesting, or are we having some business development activity which can change this thing and eventually we can move back to 10%, 15% kind of a growth?
I will give you an answer one by one. Basically, there's been a decline of 3.5% overall and rail has been growing like 30%, but rail is not significant right now, as I said earlier. Surface has not de-grown by 10%, it is de-grown by 4.5% only.
Okay.
Otherwise, all services are the same thing except rail has grown very well. That's one thing. Second part, coming on to after COVID, we robustly grew. In FY 2022, we grew around 28% because that was a low base. Subsequently, next year, FY 2023, we also grew around 15%, 16%. Then in last year, in spite of all the challenges, we grew 1%. Even few companies, if you see industry numbers, they also grew similar kind of numbers, but their margin has fallen down heavily, like 50%, 60%. We maintained our margin because this is, again, put together if you see four, five aspects which we continuously focusing on and more emphasis onto adding the new services. That's why we are in a good place and we are future ready now. Because you rightly said, we taken two steps for that.
First, we started focusing more on Multimodal, where we have Mr. Ashok Pandey as our new COO for Multimodal, and we are creating a different network separately from Surface for that. The second part, we also initiated giving a separate sales team under the supervision of Mr. Pabitra Mohan Panda. Those are the two steps we have taken where we are aligning things and focusing more on the sales part. This has also started giving results; in July we have seen results and hopefully in August we will keep continuing on that. We are aligning with that and certainly we will get the revenue in double-digit growth this year.
Just last part from my side. We have introduced this Money Back Guarantee scheme. Is this more of a confidence-gaining from the customer, or has there been any cost that has been booked in this particular quarter, any substantial, or is this just the confidence kind of a thing that we are getting from the customers?
This is a very good question. Basically, we launched this service in the mid of this quarter. Second thing, you rightly said that we are giving the confidence to customers. We are allowing this service to all three aspects. In this kind of thing, we are usually getting this service used by small customers and there we can get the good revenue. That's why we launched the service.
Got it, sir. If I have anything, I'll join back with you.
Please.
Thank you, Jainam. We take the next question from Kripashankar. Kripashankar, please go ahead.
Am I audible?
Yes, you are. Please go ahead.
Good evening, and thank you for the opportunity. My first question would be on price hikes. Mukti , for the quarter I can see that there's close to about 1.5%-2% of a price hike taken in the quarter. We have seen that there are certain escalations relating to underlying cost pressures across industry, be it toll rates or other general inflationary hikes. Is there any further price hike anticipated which we will be taking to pass through these costs?
You rightly analyzed, yes. Basically, cost dynamics is also changing in this industry where you rightly said toll cost is also speedily growing. Each year it is allowed to be increased by 7%- 10%, and road is improving, but somehow we have taken — like diesel price cut was in last quarter, but this has been compensated with the toll increases even more than that. That's the thing, and on another side, we really could not be found to increase the prices with customers because again, they're also facing the same challenge of ongoing inflation and high interest rate. Specifically for SME customers, we've seen — earlier we used to get the price hike easily from that segment, but now they're also facing lots of challenges.
I don't see we will be able to get any price hikes or maximum we can get like 50 basis points to 100 basis points in the remainder part of this year.
Understood.
Yeah.
You also highlighted during the presentation that the Pune facility has resulted in incremental customers in the west region. Could you throw some more light on it? What sort of growth, if I were to put around — at first, I know that there's been a decline this quarter, but can you throw some light on what would have been the growth in the west region, and where are the sectors which has performed well versus the rest of the time?
West is growing because west includes Maharashtra and Gujarat and all. Slightly declining in south region, and north is doing well and east region is also slightly impacted.
Any numbers you can put across of what would have been the growth in west probably, or decline in south, if I may?
Basically, west region is also like we have around 1%-1.5% growth rate. Accordingly, north is like flattish and south may be like - 5% or so.
Contribution-wise, of course, west and north would be the significant portion of our business, right? Should be close to about 50%+, 55%+, right?
As mentioned, all three regions put together, except east, we have 85% revenue. This is equally spread actually.
Last question if I may. The new sorting centers were likely to bring out more efficiencies and better margin expansion prospects, et cetera. Now, how long do we further wait for these benefits to come through? Any number you have in mind or any timeline?
Like we earlier also mentioned, this is giving very easy and dependence on labor is reduced, turnaround time is increasing with that in western region. Now one corridor has completed, like from north to west. North we have Taj Nagar and then west is that. There's one region where west we get the more businesses. In time to come also, our thrust is that now this idle time of truck has been reduced. Now they're able to make more trips and ultimately they're giving the benefit to us. We're getting the benefit of 25 basis points- 50 basis points on an overall basis. And that will keep continuing once we will be adding more sorting centers. But over and above, this is also giving confidence to customers because this is increasing our service level.
The second part, this is also a one-off avenue for the revenue where we are getting our weight also on these automated sorting weight. So supposing there is any difference in the weight on the lower side, we can directly calculate and then send to the customer. So that is also a revenue stream we are generating through that. So ultimately, yes, we will get the benefit out of it.
Okay. Thank you. I have one more question, but I'll come back. Thank you. Thanks.
Thanks, Kripashankar. We take the next question from Akash Vora. Akash, please go ahead.
Thanks for the opportunity. If I go 12 months back, I think we had also come out with a guidance, saying that we'll be clocking around INR 1,750 or INR 1,800 kind of top line this year. That guidance was shot last quarter itself. But then from that to revenue degrowth this quarter, would you consider that we are losing market share or what is it like?
Akash, basically, if you see the number of all industry players is also same. If you see the Express numbers, I am saying, because all have different companies doing different. We are not here to losing any market share because there's overall impact on consumption side, that's why volumes are declining for everyone. Like other Express company, you see their numbers. I don't see we are losing market share and rather customer confidence in us. It is with us, and we will be grow like what we are saying. We don't have any doubt on that.
Okay, sir.
Akash, you're on mute. Yeah.
It is the opposite, sir.
Go ahead, Akash.
I wanted to ask how much does the Rail Express business now contribute to our whole supply?
It is almost like 2%-2.5% right now.
2.5% of the whole revenue.
Yeah.
I would just like to understand seeing good traction and—
Akash.,
—where are the other industries where we are losing out as compared to our previous years. Hello?
Akash, we just missed your question, actually, there's some—
Hello?
Hello?
Akash, if you can repeat your question, please. Yes, you are. Please, can you repeat your question? We lost you midway.
I just wanted to understand the end user industries or segments where we are seeing good traction and areas where we are struggling as compared to our previous years.
I'm sorry, Akash. We lost him midway, actually. That's a good one. How do you all complete that?
Are you asking about the sectors in which we have lost business? Is that your question? Because we are missing you.
Correct.
Mukti, Akash is asking which are the sectors in which we have seen a decline, or we have lost business from.
We are still seeing there is less volume growth in the textile and engineering sector, more into that.
Okay. And which ones are we seeing good growth in?
Growth is supported by the auto sector and in few parts of pharma, we're seeing a slight growth on that.
Thanks a lot, sir. I will come back and let you know.
Yes.
Thank you, Akash. Friends, anyone with a question, request you to raise your hand and we'll take it up. While others line up their question, we have a follow-up question from Kripashankar. Kripashankar, please go ahead.
Thank you for the follow-up. Mukti Ji, going by the trend, I think, if you're targeting about a double-digit growth for the financial year 2025, the second half of this financial year has to be of 15%+ growth. Given the softness in demand, do you anticipate that sort of a growth coming through?
We've taken various initiatives internally, like we're strengthening, as mentioned, the multimodal businesses. Second, we also created a separate team for the sales on the dealer level. We're giving a whole network from top to bottom, we're strengthening that also. Usually, what happens, these industries are driven by operations more, so we want — there's never happened in that, so we're creating a separate team as an effort to create more sales. Third thing, we keep adding the branches and the number would be there. Fourth thing, we also like putting vertical-wise team or adding new verticals, like we're focusing more on the solar one. The second one, basically home furnishing is also a good segment where we are also pushing hard to get the business from that.
Few things which really help us to get the business and surely we will be trying to touch upon this double-digit growth for the whole year, at least.
With respect to branch addition, any number you have in mind or any specific zones where you will be targeting more? Anything on those lines?
We are more focusing on west and north side this time to improve further businesses. We're seeing internally where we can have more opportunities for the business, so we found these two zones where we will be focusing on that. More branches, like in number, I think we will be finished around 50- 60 branches number addition for this whole year. It will be also a mix of that. A few branches will be open for the surface business, a few branches will be open for the multimodal business.
Understood.
Yeah.
Understood. Thank you, and all the best.
Thank you, Kripashankar. We take the next question from Ronald Siyoni . Ronald, please go ahead.
Good evening, sir. I had a query regarding the margins. As you said that price hikes won't be much possible for the next few quarters, majorly the levers would be on the cost side, but can we improve the cost structure in the short term to such an extent that over the next two quarters we can come back to the margins? Because I think it will be very difficult to improve the cost structure and the pricing side is a little bit capped. Maybe margin pressures will continue over the next two quarters, at least, for the company?
Ronald, you rightly said. Price is almost capped because we are not really looking to enhance the prices in the remainder part of this year. Second part, yes, cost side, there are two aspects of that. One is truck utilization, which is directly impacting our cost. From 82%, we want to be with the volume growth, or supposing volume growth was the same even what we have in Q4, then my utilization level would be reached to again 83.5%- 84%. Ultimately my cost will be impacted or reduced by 150 basis points by that directly. That's the one aspect where we will improve our margin levels. Second part, I think, because we are adding the separate network for this air mode or rail mode.
That still will continue, because this is a strategy for the long term, so that may not be reduced there. But yes, I think we will improve the margin level at least 150 basis points- 200 basis points in quarter two onwards.
150 basis points improvement could be seen if there is a variation of 1% in utilization.
Yes.
If it increase.
Yes.
On the follow-up on that multimodal thing, are we, over the long term, planning to have multimodal capabilities like Transport Corporation of India? Are we changing our focus to go away from Express and diversify more into, say, have rail and express as other revenues where growth is much more diversified rather than concentrated? Over, say, the next three to four years down the line, should we see TCI Express being a multimodal logistics player?
Chander , would you like to answer on that?
Yes, I think that's quite possible because at the end of the day, road network is available, and the rail network is also available, and so is the air network. But I don't believe that air network is so much of relevance in time to come. Therefore, it'll be very critical that we develop a rail network alongside the road network. I'm not saying that the rail network of the corridors, they will play an important role in our business, because they are only for the Western Corridor and all that. They're only for containers for export and for commodities. So they are not going to be our main concern or a threat. What will be important is to use the existing network of the railways touching every location. So I think, yes, going forward, we will see further utilization of the rail and surface network.
The focus solely would remain on Express, or there can be moving away from Express business also?
Not at all. Because Express, again, the margins will only come from Express. Others are all commodity business. I will not get into the commodity business of transportation.
Thank you, sir, and best of luck, sir.
Thank you, Ronald. We take the next question from Kunal Bhatia. Kunal, please go ahead. Kunal, please unmute yourself and go ahead.
Am I audible now?
Yes, you are. Please go ahead.
Thanks for the opportunity. Sir, you just did mention about the cost escalation from the air freight side or from the cost escalation on the airport handling part. On that account, have we taken any price increases for our customers? And if that we have taken, how much is that? And my second question is in regards to our overall growth for the current year. What is the kind of growth, if we just exclude Q1 for the time being, July and August, say we are almost midway August. What is the kind of growth we have already seen in the one and a half month which has passed by?
Kunal, I will answer one by one. The first question you asked for the cost aspect, whether we are able to pass on to the customer on air mode. This we couldn't able to pass on because overall airline air cost is already on the higher side, so the customer couldn't allow that. To compensate that, in time to come, we started to be adding business from the SME customer, like we're doing for the surface cargo, where we're getting the highest profits. Same way, we also started doing, getting business for the small customers, for the rail and air both. So we will keep working on that strategy. Coming on to the second part on the growth part, yes, we are hopeful to be getting double-digit growth in the remainder three quarters of this year.
The trend is good, like single-digit growth in July and hopefully this will be increasing further in August and September. Last year, if you see quarter three, quarter four, there was a muted growth, because the base is low for these two quarters. Hopefully we will get a good growth rate in the second half of this year. Usually this is also happening. The second half is always good in comparison to H1. By this strategy, I think we will achieve what we are saying here.
You mentioned that you had an improvement of 40% in terms of turnaround time. Was it specifically only to the Pune sorting center or in general?
[crosstalk] No, in Pune only.
Pune and Gurgaon both.
In Pune only. Pune and Gurgaon. Yeah.
In terms of the overall revenues, how much would have been handled through Pune and Gurgaon centers?
If you see, in and out revenue for both centers, I think is 25% put together. In and out, I'm saying, because they sit originally also, and they sit for the destinations also. Put together, I think it's 25%.
For Pune and Gurgaon both?
Yeah.
Okay.
Right.
Okay, fine, sir. Thank you so much.
Thank you.
Friends, we are running out of time, and we need to wind up. Request you to forward all your unanswered or follow-up questions to me on my email ID. I've shared it with everyone. Now I hand over the webinar back to Chander or Mukti for the closing remarks. Please.
Chander Sir, please.
Thank you everyone for joining us today. We have tried to address all your ques tions, and if you have further inquiries, please connect with the 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 once again.
Thanks a lot.
Thank you. Thank you very much. On behalf of SKP Securities, thank you very much, Chander, Mukti and Hemant and Ashok for taking time out to interact with the investors. We look forward to hosting you again in the next quarter. Thank you very much and have a wonderful evening. Bye-bye.
Thank you, sir.