Gateway Distriparks Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Mixed quarter with one-off hits: CFS EBITDA per TEU fell to ₹1,000, warehousing PBT margin collapsed to 3%, and Snowman transportation hit breakeven, all driven by identifiable one-offs and realignment rather than structural demand destruction.
• Export volumes dinged by US tariffs: A 4%-5% export volume dip tied to US tariff uncertainty has stabilized, but management warns exports won't return to earlier numbers plus growth until a trade deal is finalized.
• Domestic rail is the new growth vector: Services commenced from Ankleshwar to North India, targeting 1,000+ TEUs per month within 2 years, using existing infrastructure for incremental margin without adding overhead.
• Snowman is in active turnaround mode: Transportation is being realigned with negative-margin vehicles removed and fleet refurbished, while the 5PL pipeline holds 2-3 major accounts with at least one closure expected in FY26.
• What to watch next quarter: Whether CFS EBITDA per TEU rebounds toward the ₹1,300-₹1,400 target, warehousing margins begin their promised recovery from December, and any progress on US/EU trade deals that would unlock export growth.

CFS & Export Volumes

• One-off cost drag: Legal costs and repair & maintenance expenses pulled CFS EBITDA per TEU down to ₹1,000, well below the ₹1,300-₹1,400 target range management still holds.
• Tariff impact quantified: About 4%-5% of export volumes were lost due to US tariff uncertainty, while imports continued strong. The situation has stabilized over the last month.
• Recovery gated on trade deals: Management does not expect exports to return to earlier numbers plus growth until a trade deal is finalized, with UK being implemented, EU and US expected to close, and New Zealand announced.
• FTAs as broader tailwind: Restarting India-China imports and seafood exports from smaller countries like Oman, Philippines, New Zealand, and Australia will help overall container volumes in India.

Samvid Gupta: "...until the trade deal is finalized, I don't think we'll get back to the earlier numbers of export, plus a growth on the exports that we were looking forward to."

Domestic Rail Services Launch

• New service live: Domestic rail services have started from Ankleshwar, servicing North India including Ludhiana, Jammu, and NCR, using Gateway's own ICDs in Ludhiana, Garhi, Piyala, and Kashipur for North distribution.
• Incremental economics: Per TEU margins are lower on domestic versus EXIM, but the same team, trains, and terminals are used, so overheads do not increase, making it an incremental top-up to existing operations.
• Volume ambition: Management targets 1,000+ TEUs per month of domestic volumes within the next 2 years, then growth from there.
• Network flexibility: Gateway is open to operating out of third-party terminals or CRTs in regions where it lacks full-fledged ICDs, expanding reach without heavy capex.
• Container fleet ready: An inventory of about 800-900 owned domestic containers is available, supplemented by short-term leases and some purchases, with evaluation of both new and secondhand options underway.

Samvid Gupta: "The per TEU margins are lower on domestic, but then it's the same team doing it. It's the same set of trains and terminals. So the overheads aren't increasing. So it's an incremental top-up..."

Warehousing Performance

• Margin collapse explained: Warehousing PBT margin fell from 12% to 3% QoQ due to three factors: lower utilization on newly added capacity, stress in a couple of existing warehouses tied to seafood and other elements, and patchy weather causing power cuts that increased diesel consumption.
• Power issues concentrated: Higher power cuts occurred in a few warehouses, typically in the South, due to heavy rains, downed lines, and water logging. Maintenance has been completed and operations are back up.
• Recovery signal: Management sees positive traction from December onwards through year-end, expecting good volumes and a reversal toward the mean 10%-12% PBT margin, with budgeted numbers achieved quarter-by-quarter.

Snowman Logistics Turnaround

• Transportation reset: Transportation margins fell to breakeven at PBT level from 7%-8% previously, driven by a shift in customer mix after a GST change. Some customers, especially restaurant brands, opted out because Snowman does not yet operate in the 5% GST regime.
• Fleet realignment underway: Management is moving out aging, negative-margin off-road vehicles and refurbishing the fleet, with most replacements on lease and some capex for transportation to improve asset utilization and reduce breakdowns.
• Margin target: Already turned positive at EBITDA level, with a target of high single-digit PBT margin going forward.
• Warehouse strategy two-pronged: Snowman wants to own land and construct its own warehouses while continuing asset-light models where fully built-up facilities are available, either fully owned or fully leased. Tier 1 cities get bigger capacities, Tier 2 can now support 5,000 pallets, and Tier 3 uses BTS or Park and Pay with smaller facilities.
• 5PL pipeline materializing: Working on 2-3 major accounts in the 5PL space, with at least one closure expected in FY26 and operations potentially starting in Q2 or Q1 of FY27. A new location was added with Unilever.
• Capex run-rate: Roughly ₹100-150 crores per year, primarily for 2-3 owned warehouses on owned land, plus small capex on build-to-suit or transportation including fleet expansion and exploring EV and CNG vehicles.

Padamdeep Singh Handa: "Because of this GST change, there had been certain... impact as we don't operate in 5% GST yet. We are trying to work out how... and how much is the impact. But yes, a few of the customers, they have opted out, especially the restaurant brands, which were with us."

Rail Segment Margin Dynamics

• Multiple pressure points: Rail EBITDA per container faced headwinds from competition, imbalance, empty running, lower double stacking on certain routes, mix changes toward ports, weight slab changes, and transit time slightly worse year-on-year due to port congestion, plus annual cost increases and inflation.
• Metric evolution coming: As domestic and shorter-distance volumes from Viramgam and Ankleshwar grow, the historical ₹9,000-₹10,000 EBITDA per TEU range will no longer be the right base. Management will develop a new metric once those volumes materialize.
• DFC tailwind ahead: Road-to-rail shift is expected to accelerate as the Dedicated Freight Corridor connects to Nava Sheva, supporting the 10%-15% double-digit volume growth target from existing locations over 2-3 years.

Strategic Positioning & Capital Allocation

• Gateway Snowman stake steady: The target was to reach and just cross 50% ownership, and as of now, nothing immediate is planned.
• Satellite terminals and Jaipur on hold: No change on the satellite terminal situation or the Jaipur update.
• Gati Shakti terminals not pursued: Gateway has not applied for any Indian Railways Gati Shakti terminal opportunities but will evaluate if something attractive emerges.
• Trade deal catalyst stack: UK FTA is being implemented, EU and US deals are expected to close, and New Zealand has been announced, all of which will help increase exports and container volumes.

Samvid Gupta: "We've tried domestic market. That's what we're trying to do. But other than that, I mean, as a macro, we are a middleman, we're not controlling where the trade is going."

Guidance & Commitments

Key Metrics