# 1. Financial Performance ## A. Key Figures * **Rail EBITDA per TEU:** **₹9,300** (Q2 FY'26) · **CFS EBITDA per TEU:** **₹1,000** (Q2 FY'26) * **Target CFS EBITDA per TEU:** **₹1,300–₹1,400** * **Snowman Capex:** **₹100–150 Cr/year** (next few years) ## B. EBITDA per TEU * **Metric Evolution:** Management to introduce a new performance metric as domestic and shorter-haul volumes grow, rendering current EBITDA per TEU less representative. * **CFS Performance Drag:** Current CFS EBITDA per TEU depressed by **one-off legal and maintenance costs** and **export softness from US tariff pressures**, with recovery anticipated. ## C. Margin Trends * **Cost Pressures:** Margins face headwinds from **annual inflation-related cost increases** across operations. ## D. Capex Allocation * **Capex Discipline:** Snowman capex to remain structured at ₹100–150 Cr annually, while container spending stays low due to **flexible procurement** and stable pricing. --- # 2. Volume & Demand Trends ## A. Key Figures * **Export Volumes:** **4%–5% reduction** due to US tariffs (now stabilized) * **Domestic TEU Target:** **>1,000 TEUs/month** within 2 years * **Market Share:** **16–17% in NCR** · **27% in Punjab** · **38% in Uttarakhand** ## B. Export Volume Impact * **Stabilization Post-Tariff Impact:** Export volumes down modestly due to US tariffs but have stabilized; recovery and growth contingent on finalization of a **trade deal**. * **FTA-Driven Export Upside:** Pending FTAs with the **UK, EU, and US**, along with new trade corridors (Oman, Philippines, ANZ), expected to lift Indian export and container volumes. ## C. Domestic Volume Growth * **Rail Adoption Boosts Domestic Services:** Expansion into domestic logistics driven by modal shift from road to rail, anchored by strategic hub in **Ankleshwar**. * **Resilient Import Demand:** Import volumes remain robust despite persistent trade barriers. * **Regional Share Gains:** Strong market share expansion in key northern regions, with **Uttarakhand share now at 38%**, signaling effective regional penetration. ## D. Customer Mix Shift * **Customer Mix Adjustment:** Shift in mix due to **GST classification changes**; loss of select restaurant clients outside 5% GST bracket, though overall impact deemed minimal. --- # 3. Operations & Network ## A. Key Figures * **Double Stack Percentage:** **41%** network-wide (QoQ: 39%) ## B. Double Stacking Progress * **Margin Resilience:** Despite lower per TEU margins in domestic services, profitability is preserved through shared infrastructure and **hub-and-spoke optimization** on the Western DFC. * **Operational Efficiency:** Incremental improvement in double-stacking penetration reflects ongoing network-wide execution, with **direct cost advantages** realized at Faridabad ICD. ## C. ICD & Distribution Network * **Domestic Reach:** Anchored by Ankleshwar, the network serves key North Indian markets via **company-owned ICDs** in Ludhiana, Garhi, Piyala, and Kashipur. * **Expansion Strategy:** Growth in underserved regions may leverage **third-party terminals or CRTs**, indicating a flexible, asset-light approach to geographic scaling. ## D. Fleet Optimization * **Profitability Realignment:** Unprofitable vehicles have been withdrawn, and the fleet is being upgraded through **leasing** and targeted capex to improve utilization and reliability. --- # 4. Product & Segment Performance ## A. Key Figures * **Warehousing Revenue:** **₹60 Cr** (QoQ flat) * **Warehousing Margin:** **3%** (QoQ drop from 12%) * Transportation PBT Margin: ~7–8% previously, targeting high single-digit PBT margin again ## B. Warehousing Segment * **Margin Pressure on New Capacity:** Warehousing margins collapsed QoQ due to **low utilization post-expansion**, operational disruptions in seafood-linked facilities, and higher diesel costs from weather and power issues. * **Stable Top-Line, Budgeted Growth:** Revenue held steady QoQ, with long-term growth trajectory remaining in line with plan despite near-term execution headwinds. ## C. Rail Segment * **Transportation Profitability Eroded:** Rail transportation margins have collapsed to breakeven, prompting a full business model realignment to restore prior profitability levels. * **Container EBITDA Under Pressure:** Per-container EBITDA declined YoY due to **increased competition, freight imbalances, empty runs, lower double-stacking, and adverse port and weight mix shifts**. ## D. 5PL & New Products * **5PL Expansion with Key Client:** Engagement with **Unilever** deepened through new locations, while **2–3 major NDA-bound accounts** are in development, signaling pipeline momentum. * **New Product Traction:** Company is adapting to market shifts with new offerings that are gaining early traction. --- # 5. Capacity & Expansion ## A. Key Figures * **Warehouse Capacity:** **~5,000 pallets** per facility (varies by city tier) * **Container Inventory:** **800–900** owned domestic containers * Container Cost: ₹3.5–4 Lakh per new 40-foot domestic unit ## B. Warehouse Development * **Dual Ownership Strategy:** Warehousing expansion follows a strict two-pronged approach—**fully owned** or **fully leased** facilities, with no hybrid models. * **Scalable Build Plan:** Targeting development of **two to three owned warehouses annually**, supported by ~2 BTS facilities per year, aligned with cash flow and market opportunities. * **Tiered Capacity Deployment:** Facility size scales with market maturity—**larger in Tier 1**, ~5,000 pallets in Tier 2, and **smaller BTS/Park & Pay models in Tier 3** cities. ## C. Container Procurement * **Cost-Optimized Sourcing:** Evaluating **secondhand containers** and **China imports** to identify most economical procurement path, despite current price advantage from overseas. * **Flexible Fleet Growth:** Expansion funded through utilization of existing inventory, short-term leases, and selective new purchases. ## D. Satellite Terminal Plans * **No Active Development:** Satellite terminal initiative remains on hold with **no progress** reported to date. --- # 6. Risks & Market Factors ## A. Port Congestion * **Headline:** Port congestion has deteriorated versus last year, weakening the link between transit performance and **EBITDA per TEU**. ## B. Power Disruptions * **Headline:** Warehouses in **South India** face power disruptions due to weather-related infrastructure damage, with mitigation reliant on rapid repair efforts. ## C. Trade Policy Risks * **Headline:** Growth outlook supported by **upcoming trade deals** with the UK, EU, US, and New Zealand, alongside modal shift to rail via the **DFC-Nava Sheva corridor**. * **Headline:** **US tariff exposure** is minimized through domestic market focus and diversified international trade mix. --- # 7. Guidance & Outlook ## A. Key Figures * **PBT Margin Target:** **High single-digit** in transportation segment * **Warehousing Margin Target:** Return to **10–12%** historical levels; positive traction since December * **Volume Growth Outlook:** **10% to 15%** medium-term growth from existing locations over 2–3 years * **Strategic Wins:** **At least one 5PL account** expected to close in FY '26, with ramp-up in Q1/Q2 FY '27 ## B. Margin Recovery * **Transportation Margin Inflection:** Achieved positive EBITDA despite lower revenue, with clear path toward **high single-digit PBT margins** driven by operational improvements. * **Warehousing Recovery Underway:** Margins showing positive momentum from December, supported by rising volumes and operational stabilization, targeting return to **10–12%** range in coming quarters. ## C. Volume Projections * **Sustainable Volume Expansion:** Medium-term growth of **10–15%** expected from current footprint, excluding new sites and domestic volumes, indicating strong utilization and pricing power. ## D. Strategic Bidding * **Gati Shakti Participation:** Company is actively considering bids for Indian Railways terminals under the **Gati Shakti** initiative, expanding public-sector logistics engagement. * **Large Client Pipeline:** Of 2–3 major 5PL opportunities, **at least one closure expected in FY '26**, with operations starting in early FY '27, signaling scalable B2B contract growth.