S J Logistics (India) Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Strong quarter, forward integration underway: Revenue grew 26.5% YoY to ₹157.1 crores, with PAT up 42.5%, while the company commenced direct vessel operations that will reshape its cost structure and competitive position.
• NVOCC is the breakout division: Revenue surged from ₹2.09 crores in H1 FY25 to ₹31.93 crores in H1 FY26, a 1,400%+ jump, though management says slot shortages capped what could have been ₹50+ crores.
• Four-vessel fleet arriving fast: One vessel already operating, the second by end-November 2025, and all four by end-December 2025, with management targeting vessel operations to contribute 30-40% of next year's topline.
• Margins expanded sharply: EBITDA margin rose 391 bps to 18.1%, and PAT margin reached 11.4%, driven by mix shift toward higher-value NVOCC and forwarding activity.
• What to watch next quarter: Whether the second vessel deploys on schedule, any disclosure of vessel operating economics, and whether H2 PAT margin hits the targeted 13%+.

Vessel Operations: The Forward Integration Bet

• Fleet rollout on an aggressive timeline: One chartered vessel is already in service on the Swiss Express Service; a second vessel arrives by end-November 2025, and all four will be operational by end-December 2025. Financial contributions from vessel operations are not yet reflected in H1 FY26 results.
• Route designed for control: The consistent service runs Kandla → Jebel Ali → Jeddah → Alexandria, with onward arrangements from Jeddah and Alexandria to Sudan, Aqaba, Barbara, Latakia, Novorossiysk (Russia), and multiple Turkish ports. Each vessel carries 1,100 TEU capacity, loading roughly 700 TEUs of heavy cargo.
• Vertical integration logic: Moving from freight forwarding to NVOCC to vessel operations gives the company control over routing, scheduling, and space management. Management describes this as forward integration: owning containers, controlling the vessel, and managing the cargo end-to-end.
• Slot constraint is the catalyst: NVOCC growth was capped by third-party slot availability; management stated H1 NVOCC revenue could have exceeded ₹50 crores if space had been available. Own vessels directly solve this bottleneck.
• Utilization strategy targets self-sufficiency: The company aims for 85-90% occupancy from its own customers, containers, and vessel operations, selling slots to outsiders only when the vessel is light.

Rajen Shah: "Since we have our own vessel, we are also controlling the cargo. We have our own containers also. So, you can understand that we are controlling everything, the position from where we have started."

NVOCC & Project Cargo: The Growth Engines

• NVOCC scaled dramatically: Revenue grew from ₹2.09 crores in H1 FY25 to ₹31.93 crores in H1 FY26, reflecting an expanded line of network and traction across Middle East, Red Sea, Mediterranean, Africa, Libya, Turkey, and Russian sectors. The division uses owned, leased, and purchase-to-lease containers.
• Project cargo delivered 40% growth: ODC, tyre and project cargo contributed ₹126.6 crores in H1 FY26, driven by infrastructure project movement across South America and Africa, with expertise in destination clearance and inland delivery.
• Transmission tower demand rising: Electrification build-out in Latin America and Africa is pulling demand for transmission towers, with Indian manufacturer participation increasing over the last decade.
• Container fleet expanding: The company has ~3,000 containers on lease, shown as long-term borrowings per accounting standards, and plans to shortly add special equipment including open-top and flat-rack containers beyond the current dry-container fleet.

Financial Performance & Margin Trajectory

• H1 FY26 delivered broad-based strength: Revenue grew 26.5% YoY to ₹157.1 crores in Q2, EBITDA rose 61.4% to ₹28.4 crores, and PAT increased 42.5% to ₹18.1 crores. EBITDA margin expanded 391 bps to 18.1%.
• PAT margin improved with mix shift: PAT margin reached 11.4% in Q2 and 11.5% for H1, as higher-margin NVOCC and forwarding activity grew. Management noted that historically, the second half (Oct-Mar) outperforms the first half.
• Security deposits drove balance-sheet movement: Long-term loans and advances increased by over ₹43 crores, primarily from security deposits placed for vessel chartering contracts.
• Additional working capital facilities in progress: Management is in discussions with bankers and expects to shortly secure additional working capital lines to support vessel operations.

Resilience & Geographic Strategy

• Diversification cushioned global softness: Despite global turbulence and lane-specific slowdowns, the diversified model spanning ocean freight forwarding, NVOCC, and vessel operations, combined with a strategic focus on Middle East and Mediterranean markets, offset weakness elsewhere. The asset-light model provided operational agility.
• Geographic focus is deliberate: The company concentrates on lanes where it has destination clearance and inland delivery expertise, particularly South America, Africa, and the Middle East/Mediterranean corridor, rather than competing across all global routes.

Pushback & Unanswered Questions

• Vessel operating economics undisclosed: When asked about fixed commitments, bunker call advances, expected topline and EBITDA margins from chartered vessel operations, and working capital intensity over the next 2-4 quarters, management described the route and capacity but provided no financial metrics.
• Long-term vessel addition path not quantified: A question about the vessel addition roadmap over 2-3 years, asset turnover, and revenue contribution was met with a reference to a prior answer and a statement that it will help topline and bottomline, without specific numbers.
• Acquisition discussion declined: Management refused to discuss acquisition plans for a small company on a public platform, stating only that "once it is done, you will be informed."
• Capital requirement question redirected: A question about the deposit quantum for chartered vessels was initially answered with credit policy details; after clarification, management stated the security deposit information had already been discussed.
• SEBI constraints cited: Management noted they were receiving questions they are not permitted to answer under SEBI guidelines and requested questions stay within those boundaries.

Guidance & Commitments

Rajen Shah: "I may sound very conservative, but it is not conservative. We always believe in delivering more than what we are projecting."

Key Metrics