Ladies and gentlemen, good day and welcome to VRL Logistics Q4 and FY 2026 Earnings Conference Call hosted by Motilal Oswal Financial Services Ltd. This conference call may contain forward-looking statement about the company, which are based on the beliefs, opinions, and expectation of the company as on date of this call. These statement are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen-only mode, and there will be opportunity for you to ask question after the presentation conclude. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Alok Deora from Motilal Oswal. Thank you and over to you, sir.
Thank you. Good morning, everyone, and welcome to the Q4 FY 2026 earnings conference call of VRL Logistics. Today we have with us Mr. Sunil Nalavadi, the CFO of the company. I will now hand over the call to Mr. Nalavadi to provide some opening comments, and then we can take up the Q&A. Thank you and over to you, sir.
Thank you, Alok ji, and good morning to everyone. I warmly welcome all of you to the earnings conference call of our company to discuss the financial and operational performance for the fourth quarter and year-ended FY 2026. On the onset, I would like to inform you that we have completed 50 years of service in the logistics industry. Our promoter, Dr. Vijay Sankeshwar, started this company in the year 1976 with self-driven single vehicle with one route. Today, the company is operating with 6,000 owned vehicles, along with the hired vehicles as well. Today, the operations of this company spread across 24 states and four union territories with around 1,300 branch network. We cater to all the commodity segments with 10 lakh+ customer base. We are very much thankful to all those who supported us in this journey.
I'm sorry to interrupt you, sir. Your voice is muffling.
Shall I repeat it? Hello?
Yes. Yes. just like few, a few second that was muffling, like 5 to 10 second.
On the onset, I would like to inform you that we have completed 50 years of service in the logistics industry. Our founder and promoter, Dr. Vijay Sankeshwar, started this company in the year 1976 with self-driven single vehicle with one route. Today, the company is operating with 6,000 owned vehicles, along with the hired vehicles as well. Today, the operations of the company spread across 24 states and four union territories with around 1,300 branch network. We cater to all the co-commodity segments with 10 lakh+ customer base. We are very much thankful to all those who supported us in this journey. I hope everyone has had an opportunity to review our investor presentation, which has been uploaded along with our financial results.
We started this financial year with a strong background of rate rationalization and the strategic pricing reforms, including the identification and exit from the low margin businesses. The year started with a deficit of 13% in our tonnage growth in quarter one, and for the full year, we are in a position to restrict the deficit in tonnage growth by 7%. We achieved the year-over-year growth in tonnage by around 3% in quarter four. The improvement in tonnage handling on quarterly basis in the current year, proving our efforts to increase in tonnage by adopting the right pricing policy.
We are taking many steps to increase in volumes, especially by expansion in our network by opening new branches in untapped markets, improvement in service quality by focusing more on own infrastructure facilities which in turn result in the better control of our services, route optimizations to reduce the lead time to deliver the goods, and having the lowest claim ratio as compared to other operators in the industry. When it comes to the financial performance of the company, the quarter four total income stood at INR 859 crores, up by around 6% year-on-year and grew 3% sequentially. Driven by improved realizations, new client additions, and the return of some previously lost accounts. Tonnage saw a quarter-on-quarter improvement supported by new account additions, growth in tonnage from the existing customers and return of volume following contract restructuring undertaken in last year.
Our daily tonnage crossed 11,500+ tons during the quarter, reflecting improving demand trends. The realization per ton stood at around INR 8,147, increased by approximately around 3% year-on-year, reflecting freight rate rationalization and route mix. We were able to maintain realizations with sequential revenue improvement by 3%. The yield improvement remains a key profitable driver and reinforces our focus on sustainable margin-led growth rather than volume-led expansion. On profitability, the EBITDA margin stood at around 21.4%, down by around 190 basis points year-on-year. I would like to inform you that the quarter four of FY 2025 was an exceptional quarter with a margin of 23%+ on account of our new initiatives such as freight rate rationalization, route optimization, et cetera, were introduced.
The margins in the current quarter compared to last year were impacted due to increase in lorry hire charges by around 1.73%, increase in salary by around 0.74%, and increase in vehicle repair and maintenance by around 0.85%. The fuel cost, which is reduced by around 1.77% to the revenue. The fuel cost remain well controlled in the current year. Fuel cost as a percentage to total income declined by around 24% from 25.7%. Due to decline in fuel consumption quantity and cost is increased to some extent on account of increase in the fuel procurement cost per liter from INR 84.50 to INR 85.54 due to decrease in purchase quantity from the refineries supplied through our own pumps.
The quantity directly purchased from the refineries is reduced from 41% to 36%. We restricted the bulk purchase quantity on account of increase in the bulk purchase rates. The lorry hire charges increased on account of more hired vehicle engaged to carry the additional tonnage during the current quarter, and also due to increase in the lorry hire rates. The employee cost as a percentage to total income increased from 17% to around 17.91%, and vehicle running expenses increased from 4.9% to 5.8% on account of annual increments implemented from August 25 and higher driver incentives paid during the current quarter. We continue to view these increases as investments in our people, particularly given the industry-wide shortage of skilled drivers, where VRL's on-roll driver model remains a key competitive advantage.
With these changes during the current quarter also, we are in a position to achieve the 21%+ EBITDA margins. The sequential EBITDA margin is increased by around 48 basis points, supported by improved realization and strict cost controls and better asset utilizations. Profit for the current quarter stood at around INR 72 crores. For the full year FY 2026, our total income stood at around INR 3,245 crores. EBITDA margin stood at around 20.8%, expanded by nearly 190 basis points year-on-year, supported by a 10% improvement in realizations and sustained cost efficiencies. The profit for the year is increased to INR 237 crores as against the last year profit of INR 183 crores with a robust growth of around 29%.
The higher profits resulted into increase in cash flows from operation to INR 668 crores from INR 583 crores in the last financial year. The cash flows of the company have been effectively utilized for the purpose of capital expenditure to the tune of INR 298 crores, mainly for the purpose of addition of commercial vehicles to the extent of INR 101 crores and INR 165 crores has been invested into purchase of land and building facilities in the critical locations of our operations. The cash flow of INR 175 crores also utilized for the payment of dividend in the current year. Our balance sheet remains strong.
Net debt stood at around INR 440 crore as of March 26, and also the trade receivables to turnover ratio is at around 36 times of the revenue, which will work out the receivable days around 10 days, among the lowest in the industry, underlining the strength of our collection mechanism and diversified customer base of over 10 lakh GST registered customers. Due to the higher returns, the return on capital employed of the company increased to 25% from 21%, and return on equity is increased from 21% from 18%. Operationally, our network continued to scale. As of March 26, we operate around 1,293 branches and 50 transshipment hubs across 24 states and four union territories. The fleet rally rationalization continues with the older vehicles being scrapped and utilization of own assets improving.
Around 77% of our fleet is totally debt-free and 14% is fully depreciated, providing strong operating leverage. Our strategic priorities remain unchanged: profitable and volume growth, disciplined cost management, and tight working capital control. We are actively managing the risk posed by current geopolitical developments and potential thereof to cause volatility in fuel rates and other input costs. Looking ahead, while near-term macro uncertainties persist, we remain optimistic, improving demand conditions, stronger marketing initiatives, fleet rationalization, and expansion in under-penetrated geographies position to well drive the gradual volume recovery while sustaining the profitability. With this, I would like to conclude initial remarks. I'll request participant to open for question and answers.
Thank you, sir. Ladies and gentlemen, 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 are requested to use handsets only while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from Krupashankar NJ with Avendus Sp ark. Please go ahead.
Hello. Good morning, and thank you for the opportunity, sir. My first question is good to see that the volume growth is coming back on track and you have registered a first YoY growth during the quarter. Just wanted to get a sense around how do you expect the volume growth momentum in FY 2027, and what are the efforts you are taking towards boosting volumes on that front, sir?
Yeah, in terms of volume growth, we are expecting to grow at least around 6%- 7% for the full year basis. We are expecting that at least around 2% quarterly growth on a sequential basis even for the financial year 2027. On a full year basis, the expectation is around 6%- 7%.
What are the efforts you are taking towards boosting those volumes, sir? I think.
The efforts is basically our rate rationalization exercise is already completed. The customers are very well aware about the structure of the rates and other things. We are pushing, you know, a lot of marketing activities, and we are identifying the who are the lost customers and all. Just to inform that, we are getting a lot of new customers also, especially wherever we are opening the new branches, new geographies, we are adding the new customers as well. That is giving a lot of confidence for us to increase the volumes.
Sir, the diesel prices are also going up, right? Are you planning to further increase your prices to offset that impact of higher fuel costs?
Yeah, of course. Diesel prices are increasing, it is increasing to every operator. Ultimately the cost, whatever additional cost will come, that needs to be passed it on to the customers. During the recent movement, whatever the rate increase is there. To pass it on that expenses, we have not increased the rates, but some of the selective routes wherever we are offering, you know, some kind of a discount. Wherever actually the volume growths are coming, we identify such routes, wherever the rate tweak is required, we have already done it. For the month of April also, we saw that the year-on-year volume growth is around 8%, we are maintaining EBITDA percentage in the range of around 21%+ .
Understood. Given the fact that, you know, there is going to be further increase on selective routes, does that put pressure around the volume growth expectations? Because the hikes have been quite recent, right? Just to get a sense, how do you want to.
No, volume growth pressure is, see volume growth pressure is not on account of the increase in fuel rate. Basically what's happening, some of the commodities demands are affecting. Say, for example, the products which are related to the petrochemicals and all, which are directly related to the crude oil. Say, for example, plastic products and all. We are already saying, you know, acknowledging in the market that the demand of such products is coming down. Those things may impact on the volume. Because of the increase in freight rates and all because of increase in fuel rates, so everybody in the market or each and every operator has to take up all that. It has to be passed it on to the customer.
Understood. Understood. I could also see in the presentation that, you're not currently availing the direct procurement, due to increase in bulk fuel rates. Just wanted to get-
Yes.
A sense that, you know, do you see any, while you have guided that, the first quarter margins will be hovering at around 21%, but do you see an impact on your margins, because of, the proportion of bulk supply coming down?
Yeah, to that extent, you know, EBITDA level definitely we are having, you know, we are very flexible to maintain at around 20% level. Some basis points may impact on the margin because of this facility has been withdrawn. The bulk purchase is already lost.
Understood. Last question from my side, if I may, sir. Just wanted to get a sense around CapEx which you will be incurring in FY 2027 towards fleet and any hubs which you will be adding during the year.
Yeah. We identified around two, three locations now which are in the pipeline. Especially places like Nagpur and Raipur is there. Some additional locations we are looking, but overall capital expenditure will be around INR 300 crores for this full year. Now in the current year also we invested almost around INR 300 crores. Out of that, around INR 100 crore for the vehicle and remaining, most of the capital expenditures for the land and building facility. Even going forward also the mix will be like that. Around INR 100 crores-INR 150 crores for the vehicles and, around INR 200+ crores, for land and building. On a full year basis, we are expecting around INR 300 crores-INR 350 crores capital expenditure.
Understood. Thank you for answering my questions. I'll get back in the queue.
Yeah.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touch-tone telephone. Our next question comes from the line of Pramod Dangi from Ratnatrayi Investment Management LLP. Please go ahead.
Yeah. Thanks for the opportunity and congratulations for the, you know, good set of numbers. You know, on the CapEx , Sunil, can you hear me?
Yeah, please.
Yes. You know, NJ just explained that going forward the CapEx will be around INR 100 crore on the vehicle and that INR 200 crore on the land and buildings or the warehousing. In the last three years, you know, in 2025 we have done a huge CapEx of INR 400+ crore . Where we see our recycling, you know, the refinancing or the vehicle purchase cycle coming back into the picture in 2027 or five years, seven years down the line?
No, this capital expenditure is a continuous cycle. See now what happened, the government has put a restriction of the life of the vehicle for 15 years. Even though it is not mandatory, but there are a lot of restrictions to operate the vehicles which are crossing more than 15 years. That's the reason whatever capacity will cross the 15 years, we need to add those vehicles. Apart from that, whatever tonnage growth will come, to carry the additional tonnage growth also we need to add the vehicle capacity.
Normally, do we replace the vehicle in five to seven years, or we keep it till, you know, end of the life, 15 years in our fleet?
Normally end of the life, up to 15 years.
Okay, great.
Only in certain circumstances which are outdated or major accident happens, such vehicles will be scrapped even before that time.
Okay. Okay, great. Second, as you know, as we in last one year carried out the loss-making or the lower margin businesses. Going forward, will the 10% volume growth rate come back or the it will be like in line with the industry of 5%, 6%, 7%?
Yeah, currently the trend is, there are, you know, certain pressures in the market. As I said, some of the commodities are impacting because of increase in the oil price. The product which are related to that, it may be the some of the plastic goods or some of the, you know, the oil related commodities. In spite of that, actually we are expecting the growth in tonnage in the range of around 6%- 7% in the next year because of our, you know, the network and catering to many products in the industry. We are not depending on any line of a commodity or line of a customer. That is, that is giving lot of flexibility for us to increase the volumes.
Got it. Normally we get a tonnage, but do we have the, you know, other metrics of the tonnage with the kilometers?
No, we do not as of now.
Okay. Okay.
The tonne-kilometre was your asking.
Correct.
Yeah.
Lastly, how the competitive, you know, scenario in the industry. I understand that few of the companies have also increased their prices and likes of Delhivery who were giving at the lower price, they are also going on the price hike. How the competitive scenario in the industry as of now? It has changed in last few year, few months, or is it still the same?
The competitor scenario, yes, the industry is highly dependent on the unorganized operators, but that ratio is coming down day by day. The unorganized market is converting into the organized industry. Many of the organized players actually taking share of the unorganized operators. About the fuel rate is concerned, whatever increase is there, it is everybody has to increase the rate and accordingly everybody is taking a call to increase it or pass it on to the customers.
Okay, great. Thanks.
Thank you.
Thank you. Reminder to all the participant, if you wish to ask a question, you may press star then one. Our next question come from the line of Nishita Shashikesha from Safire Capital. Please go ahead.
Yes, hello. I just wanted to understand, you mentioned that we'll maintain the EBITDA at around 21% and that we are able to pass on our price increases to the customers. Is there any lag with which we pass on the prices or we can like, directly pass the cost, increased cost to our customers?
Yeah, there will be some lag. See now, in the last one week only there are two times increase in the rate. We cannot increase like this. But definitely we will analyze the trend over a period of at least one or two months, then we will take a call. Now, because of some disturbance in the bulk supply route we got impacted. Because of this price increase of INR 3 also, we have already increased some of the freight rates in selective routes, not in the entire routes of the company. That is giving, that is taking care of whatever additional cost we are incurring. It has been already passed it on to the customers.
Like that, in the future, whatever changes will happen, we will analyze for some period and again we will take a call to increase the rates.
Okay. we've already taken a price increase in some routes only, like not all of our routes?
Yes.
Okay, okay. Like even with the lag, are we going to be able to maintain the 21% margin?
Yeah, that lag will be not much longer period. It will be very short period, say within a month or so.
Okay. Understood.
Yeah.
My next question is, like how many branches do we plan to open in FY 2027?
This year we have opened around 110 branches, and out of that, around 55-60 branches which were closer to the existing branch and some of the non-performing branches are also closed. In the current year also we are expecting 100+ branches, new branches, to be opened.
Okay. 110 net branches have you opened or gross? Like how many branches did you close, you said?
Gross branches.
Okay.
Around 60 branches. Net branches are around 40 numbers.
Okay. Even in FY 2027 we plan around the same number, like 100, 110 new gross branches and then we close around 50 branches?
No, in going forward, the closure branches will be lesser. Net branches itself, we are expecting at least around 100 numbers in the coming year.
Okay. Okay. Understood. Yeah. Thank you so much.
Thank you. Our next question comes from the line of Anshul Agrawal from Emkay Global Financial Services Ltd. Please go ahead.
Hi. Thank you for the opportunity. First question I had was on pricing in the industry versus VRL. Since we've taken price hikes in Q4 FY 2025, and I believe industry did not follow suit, our pricing was slightly premium or premium versus unorganized operators. Now, in a fuel inflationary environment, when unorganized is expected to sort on pass on these hikes, would this lead to a convergence of pricing, but or should we think that, you know, that difference, that premium range should be maintained because even we'll sort of pass on these fuel hikes as and when the prices are hiked?
Yeah. Now what is happening, it is, you know, inevitable to each and every operator in the industry to increase the rates or pass it on this fuel increase cost to the customers. Accordingly, we will analyze the competitor movement, and accordingly we decide our pricing strategy. With respect to the whatever rationalization and the other things have been based, you know, defined based on our costing, that will never change. For example, in some of the route, our margin is, say, hardly anything, or some of the customer contract is giving very low margin. We don't wish to do that business. We wish to maintain certain operational margin and accordingly, we are going to fix the rates irrespective of any other operator in that particular route or that particular customer.
Got it. To say the Q4 FY 2025 price hike that which led to a divergence in our versus sort of industry pricing, that should sustain slash remain despite this fuel inflationary environment.
Yeah. Even in the market, many of the customers who have already left us, they are coming back to us. That's the reason, for the quarter four we are in a position to grow, in volume by around 3% on year-on-year basis.
Got it, sir. Second question was any particular reason why our lorry hire charges have sort of increased? I believe we have adequate number of vehicles to sort of manage our own tonnage. The purpose of sort of doing this higher CapEx on vehicles was to sort of ensure that, you know, lorry hire charges sort of remain at a minimum. Any particular reason why these have increased?
No, the overall number of vehicles, the vehicle capacity has been reduced compared to last year versus the Q4. For example, last year we were at around 6,100+ vehicles. Those numbers have been reduced to around 5,900 vehicles. Because of, you know, reduction in the capacity of the vehicle and, on the other side, the tonnage has been improved. To carry that additional tonnage, we engage outside vehicles.
Got it, sir. Given that our CapEx plan or vehicle spend plans are stable in the current year as well, do we anticipate a similar number of vehicles being scrapped as this current year, sir?
No scrappage will not be there, but there will be addition of vehicles. As we planned earlier around 500 vehicles addition, out of that around 100+ vehicles have been already added. The remaining 400 vehicles are going to be added till December.
Got it, sir. The next question I had was on the tonnage contribution from the new branches that we have added in the current year. Would you be able to share that number?
Yeah, new branches, in the current year addition is hardly around, in Q4, around 1.5 % growth. You know, those are contributed. These are all new branches. Just, they are, you know, adding the new customers. The current year, the contribution is around 1.5 %.
Got it. Any particular plans or strategy of sort of extracting more volumes from these new branches in the coming year? Because I think we are adding net, you mentioned 100 branches on a base of say 1,300. That should sort of contribute 7%-8% volume on our overall base, or, they'll take time to ramp up?
It will take time to ramp up. On a full year basis, again, we are expecting that if we open, you know, gradually 100 numbers, we are expecting that on a full year basis, these branches may contribute around 2%-3% in the tonnage. Apart from that, around 4% we are expecting the normal growth either from the existing customer or new customer in the area where we are operating. That's the reason we are in a position to reach around 6%-7% volume growth on a full year basis in next year.
Got it, sir. Very clear. Just one last question. Any guidance on what could be our depreciation charges for the next two years, considering that, you know, we have added a lot of hubs in the current year. I see depreciation has sort of not inched up in the current year despite the CapEx we have done. Any sort of number that you could share?
The depreciation cost will not increase because the most of the new properties where we are investing the value of the land is very high. Land is a non-depreciable asset. There will not be any depreciation cost on that. Only some portion of the building or infrastructure what we are creating on these facilities will be depreciated. Again, it is for a longer period. There will not be much impact on the depreciation because of new facilities.
Great. All the very best for the next year, sir. Thank you so much.
Yeah, thank you. In spite of that, what is happening, because of investment in these own facilities, our lorry hire , the rental expenses are coming down, and even the lease liability and right-of-use in the balance sheets are coming down. That will further strengthening our balance sheet.
Clear, sir.
Yeah.
Thank you, Anshu. Our next question comes from the line of Mr. Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Yeah, good morning, sir. Thank you for the opportunity. Just wanted to understand, you know, with respect to vehicle mix, if you could call out, and what is the typical kilometers which actually travels on a daily basis on an average?
Sorry, I'm not hearing you properly. Will you repeat your question, please?
Sir, my question is, in terms of the vehicles.
Yeah.
If you could call out what is the average tonnage and what is the average lead distance typically travels on a daily basis?
The lead distance is in the range of around, 270 km- 280 km. I am telling you about across all the vehicle categories.
Right.
The capacities are in the range of around, 15 tons- 18 tons.
Understood. Any particular reason why we don't maintain tonne-kilometre data, sir? Like, is it not a relevant metric?
No, tonne-kilometre, see, since we are handling N number of routes, it's basically the 1,300 raised to 1,300. That is the kind of routes where we are operating. That's the reason. Because of, you know, the bulk information, we are unable to conclude that information. We are trying to do that. Let us see. If possible, definitely we will share that information to you.
Understood. The second question I had, if you could give some clarity for FY 2026 for the full year, what is the mix in terms of the, you know, the industry mix, what you used to give earlier?
Industry mix again, Yeah.
Yes, yes. Please go ahead, sir.
The industry mix, again, predominantly it'll be driven by the textile and cloth industry, so cloth commodities. Currently, the contributor contribution from this segment is around 17%-18%. That trend is going to be continued. Next line of item is about the agriculture products. Agriculture, again, seeds, equipment, all put together. Fertilizers, all kind of pesticides, all put together is contributing currently around 10%-11%. The same line of contribution is going to continue. Only new thing is, see, we are signing a good contract with some top corporate entities. Predominantly their products are related to either, you know, some of the materials are related to textile and similar to that product. Industry mix will not change drastically.
Textile, agri products combined is about 30%. What about the balance, sir?
Balance, again, industrial goods are there. There are pharmaceutical industries. Again, books and stationery goods, automobile products. All are in the range of 5%-6% .
Is it possible to share the mix? Okay. They are all in 5%-6%.
Around 5%-6%. Yeah.
Understood. How about the MSME large enterprises and the spot bookings?
Spot booking, again, to-pay booking, what we call. To-pay and paid booking, which is a spot payment what we are getting from the customer. That is again, contributing in the range of around, 80%. And, account customers are contributing in the range of around, 15%-16%. And remaining FTL, around 6%-7% full truck load. There actually the mode of booking will be all the mode of booking, to-pay, paid, and account.
6%-7% is FTL, through full truck load you're talking about, sir?
Yeah. Yeah. Yeah.
Understood. How about door-to-door mix? What is that ratio in FY 2026?
Door-to-door, earlier it was around 33%-34%. Now it is increased to around 38%-39%. Close to 40% of the commodities are door-to-door.
What is the price difference between door-to-door and the others?
The relation will be around INR 1.5 per kg will be more in door delivery.
Understood.
Per kg. Yeah.
Sir, I wanted to also understand, you know, in terms of the competition. Given the price hike or, you know, what we have taken, how are our rates compared to the immediate peer? Is that substantially higher? Is that comparable or is that lower?
Compared to the unorganized players, actually we are offering some premium rate to the customers. Again, see the point is, in our operations, Our competitors are different in each leg of our operation.
Right.
For example, the express cargo companies, actually they are not directly competitor to us. Wherever, you know, we are having some account customer, corporate clients, only in those scenario the express cargo rates can be comparable. In corporate, actually our rates are more or less comparable with, you know, these express cargo companies. In rest of the cases, again, it will change route wise and commodities also. Say, for example, we are handling most of the textile commodities from Gujarat to rest of the country. There our competitors are again the local operators, means route wise operators. Say, for example, if textile is moving from, say, Gujarat to Andhra Pradesh, we need to competitor compete with one operator. Gujarat to Karnataka, again, another competitor. Within cities also there are different operators. Say, for example, Surat, Bangalore, one operator is there.
Surat, Hubli, another operator. Surat, Hyderabad, another operator. Like this. Depending on the product and depending on the route, again, we need to compare with the competitors, and accordingly we are charging. Compared to unorganized players, yes, we are having some premium rates. In terms of organized players, we are more or less, comparable to them.
And-
Rate also depends on demand and supply. Say, for example, some of the operators will not provide service properly or 24/7. In those scenario, definitely we are offering some premium rates.
Understood. Yeah, I think that's about it from my end. Thank you so much, sir.
Yeah, thank you.
Thank you. Our next question comes from the line of Tanish Jain from [A54] Partners. Please go ahead.
Hello. Thanks a lot for the opportunity, sir. Am I audible?
Yes, sure. Please.
Perfect. Sir, can you talk a little about the bus business which you have? We are seeing a lot of new buses on the road. Like how many buses do you have? What's the revenue? What are the margins like?
No, currently we are not into bus business, this company. The promoter, another company is having a bus business. It's a unlisted entity.
There is no. We've seen cargo, et cetera, going there, so that is at arm's length there.
No, nothing.
Understood. Thank you.
Yeah.
Thank you. Our next question comes from the line of Mr. Alok Deora from Motilal Oswal. Please go ahead.
Hi sir. Just couple of questions. You know, if you take this, all these charges, you know, on diesel prices increase and bulk procurement coming down and, you know, also, you know, the toll charges increasing, how much we are now in a position to increase the freight rates? We have increased at certain routes, but in general, and, you know, the talks are that the prices will increase further. Like today also there was a price increase of nearly INR 0.80-INR 0.90.
INR 0.90. Yeah.
Sir, how do you see this? I mean, when would be a situation where, say, in a case where INR 3, INR 4 is increased further during the next three months. How are we looking at margins at the gross and EBITDA level to pan out? Would we be able to maintain this fourth quarter run rate or can it come under some pressure? Any thoughts on that?
Yeah. There will be some temporarily, you know, disconnect or some variance will be there. Definitely on a full quarter basis, we are planning to maintain the similar EBITDA numbers. The reason is, say, for example, now because of the disturbance in the bulk diesel supply or through refinery, we have already tweaked in some of the routes that wherever we are offering at a lower rates and all, or wherever there is a less competition. Where actually we have already increased some of the rates. We have changed certain metrics also within the chargeable weight and all. Say, for example, earlier we used to charge 1 cu ft equal to 8 kg. Now, for certain routes, we increase from 8 kg to 9 kg. Straightaway the quantity will increase in such routes.
Definitely it will take care of whatever additional cost. Similarly certain, you know, line items. See, for the customers we are charging different expenses also. Like one is the basic rate. Second thing, we are adding some of the loading, unloading cost, some of the freight on value cost. Some three, four additional items. There also we are increasing certain metrics. For account customer or contractual customer, we are adding one line item in the contract that the fuel surcharge. That fuel surcharge, depending on the fuel rate, that will change. For example, today also if we increase certain rate, but minimum rate they will expect at least around INR 2 increase, INR 3 increase in certain contract. Based on that fuel, that fuel surcharge will apply to the customers.
Because of these steps, we are confident that we are going to maintain the EBITDA similar level. There may be some basis points impact, but not in a big way.
Okay. Got it. The price increase which has happened till now in diesel, around INR 4 or so, INR 3+ the INR 1 today, that is not having any real impact because that is basically more or less passed on.
Yeah.
Got it. Sir, on tonnage terms, as you mentioned, one of the in your presentation also some of the customers has come back and, you know, now it's, you know, we could see. Basically what you had highlighted during the first half of the year has actually happened, where at the end of the quarter the loss in volumes have reduced, and we have actually turned into the growth phase. Now, how confident are we of getting this 7%, 8% volume growth for 2027? Or could it be higher or, you know, lower? Any risk factor to on either side of this? Or would it largely be in the 7%, 8% based on what you are seeing?
No, the tonnage have been already constrained in the last year, this current year as well as the last year because of some of the exercises what we have taken. Considering our service level, most of the customers are coming back, and also we are adding the new customers. Say, for example, in Q4 year-over-year basis, our quantity, around 17% of the quantity is contributed by the new customers. Year-over-year, I am saying. The left customer share is around 14%. Existing customer growth year-over-year is around 1%. On a total of all these, actually we are in a position to grow by around 3% in the volumes. Apart from whatever the left customers are there, we are getting the new customers' quantity also, better than them.
There is a volume increase from the existing customers, so that is giving more confidence. Moreover, even though if we achieve, you know, 7% growth in the tonnage, that deficit is already there in the current year. We see on a full year basis that the tonnage decline is 7%, and predominantly it is from the customers who are already know our services. They are already experienced with the VRL. We are because of this juncture of increase in the fuel rate, increase in the freight rate, again, definitely they will come back to us. That's what we are hoping. The major share will come from them also.
I've got it, sir. Yeah, I think, that's from my side, though. Thank you.
Yep. Thank you.
Thank you. Next question come from the line of Gaurav Gandhi from Blue Retail Capital Management. Please go ahead.
Thanks for the opportunity, sir. Just one question. Sir, do you see any risk to the volume growth because of the Western DFC going live now? Some shifts might happen to the railway side. Do you see any kind of risk to the volume growth?
DFC is directly related to the full truckload, the commodity what we are carrying is not, you know, directly linked with the railway services. That's the reason, the impact of DFC will not be much on our commodities or our quantity.
Okay. Okay. Thank you. That's it from my side. Thank you.
Thanks.
Thank you. Ladies and gentlemen, that was the last question for today. I would like to turn the conference over to management for the closing remarks. Thank you, and over to you, team.
Yeah. Thank you once again to all the participants and your patience hearing. Yes, everybody, most of the, you know, the questions related to about the recent trend in the fuel rates. Considering our network, considering our customer base and customers, considering our the service to the multiple commodities in the industry, we are hoping that definitely we can pass it on this cost to the customers and maintain the EBITDA margins in the range of around 20%+ going forward. With this, I wish to complete this call. Thank you.
Thank you so much, sir. Ladies and gentlemen, on behalf of Motilal Oswal Financial Services Ltd, that concludes this conference. Thank you for joining us, and you may now disconnect the lines.