Allcargo Logistics Ltd (NSE: ALLCARGO) Q3 2025 Earnings Call dated Feb. 17, 2025
Corporate Participants:
Ravi Jakhar — Chief Strategy Officer and Chief of Staff
Deepal Shah — Chief Financial Officer and Chief Investor Relations Officer
Analysts:
Riya Mehta — Analyst
Rushabh Shah — Analyst
Praveen Batra — Analyst
Mohammad Naved — Analyst
Vikram Suryavanshi — Analyst
Navi Vasudevan — Analyst
Chinmay Nema — Analyst
Presentation:
Operator
Ladies ladies and gentlemen, good day and welcome to the All Cargo Logistics Q3 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. Thank you. I now hand the conference over to Mr Ravi Jakar, Chief Strategy Officer. Thank you, and over to you, sir. Thank you
Ravi Jakhar — Chief Strategy Officer and Chief of Staff
Yeah, hi, good afternoon. Thank you for joining us on this call. I’m joined here by my colleague, Deepil Shah, the Group CFO. At this point in time, we have been focusing on internal restructuring and identifying opportunities whereby we can use technology and other strategies to keep costs in control. That has been the broad focus and would remain so in the next couple of quarters. From a company standpoint, we have the international business and the domestic business. As-is visible, we have demonstrated good growth over the last year for the same quarter across all the businesses. On a sequential basis, the international business usually has seasonality when it peaks in the Septemberated quarter and therefore, it is marginally down on a Q-on-Q basis, while the domestic businesses are improved even on a sequential basis. And that is the reason why we see a strong performance year-on-year on both revenue and the reported EBITDA. As far as the domestic business is concerned, we believe that the domestic market remains flat. So we are not seeing any significant uptick in growth, nor are we seeing any decline. The market growth rate seems to be hovering around a 10% sort of a growth rate on the domestic logistics, which is express and contract logistics. A large part of growth is driven by expansion in-market share in the contact Logistics business, which has seen rapid expansion across various business segments that we participate in, ranging from auto and conventional chemical logistics to e-commerce and quick commerce logistics. On the distribution, the revenue has grown in-line with the market. However, company’s focus on cost optimization has allowed us to improve the profitability. And we believe that going-forward, we would continue to see at or above-market level performance on the top-line and there should be continued improvement on economies of scale and operational optimization to drive profitability in-line with the guidance also provided by the All Cargo management. On the international business, the market environment has been quite unpredictable. There are various global geopolitical and economic events, which shape the global trade. And at this point in time, it is difficult to predict. We have seen in the recent months, there have been announcements of special tariffs by the US government, particularly impacting Canada and to an extent China. We cannot say certainly the direction of the geopolitically motivated tariffs that may come in on other regions and the impact of the same needs to be assessed. However, in the short-term, these measures can lead to a slight reduction in the trade volume. But from a medium-term perspective, there is no impact on the business of our scale since we are present across all the key geographies. So if the supply-chain gets reconfigured, typically the trade lanes may lose volume and it might get shifted to another set of trade lanes. An example being manufacturing moving out of China into India or Vietnam could mean lower opportunity out of China, but increased opportunity out of Vietnam and India. And as a company that participates in the global trade across all the key markets, we believe the medium-term impact to be limited. However, the growth that we are anticipating in the short-term on the of global trade, that seems to be marginally muted on account of all these tariff restrictions and the overall geopolitical environment. There are lot of other variables as well. An end to a war in Ukraine would likely lead the revival of European economy, but there is an uncertain event and we are not sure which direction that goes. But from an impact perspective, as and when the war situation is de-escalated and the rebuilding starts and the European economic revival happens, that would benefit the trade and the performance of our international business operating under the EQ worldwide. So on an overall basis, I would say on the macroeconomic side, the environment remains good in India and flattish globally. On the company performance side, we have gained market-share in the domestic business like I explained. And on the international business as well, we have performed better than competition. However, given the macroeconomic environment, the opportunity as we see to drive growth in profit could largely come in from optimizing the cost, which is a significant component if you look at our P&L. And there are a host of measures that we are adopting. One such approach is technology, which is a continued work. The second key measure, which would be more significant in the year 2025, the calendar year 2025 would be around outsourcing and centralizing various operational and support functions. Last year, we had successfully rolled-out a common financial system globally and that now allows us to centralize some of the financial functions. Likewise, we have also set-up operational centers in Philippines, Turkey and Mexico, which allow us to centralize resources from expensive Asian economies like Australia, Japan, et-cetera, Turkey for the European countries and Mexico for US. We believe that this would be the year where we will be able to rationalize lot of positions by outsourcing them from the current base locations to these outsourcing centers. We do not see immediate benefits showing in this year, since there would also be corresponding severance costs and some overlap in transition of resources. However, from a medium-term perspective, we believe that these changes would allow us to bring down our cost of operations and thereby enabling improved profit margins. So these are some of the key initiatives that we have been focusing on. And we believe that we are well-placed to continue to be the market leaders in the LCL consolidation and also grow on the FCL business as-is visible in the volume updates that have been shared on a monthly basis. On that note, I would like my colleague, Deepal, to take you through the financial highlights for the quarter and the nine months ended December 2024. So over to you, Deepal.
Deepal Shah — Chief Financial Officer and Chief Investor Relations Officer
Thank you, Ravin. I will now discuss the performance for Q3 FY ’25. The consolidated revenue for Q3 FY ’25 stood at INR4,106 crores as compared to INR3,212 crores for the previous year, representing a growth of 28% for that particular quarter. For Q2 FY ’25, the revenue stood at INR4,3001 crores. The consolidated EBITDA for Q3 FY ’25 stood at INR138 crores as compared to INR11 crores for Q3 FY ’24, representing a growth of 24%. For Q2 FY ’25, the sales stood at INR135 crores. Coming to the profit-after-tax, the company reported a INR10 crores profit during this quarter compared to INR17 crores for the same quarter last year and INR38 crores for the previous quarter, that is quarter two FY ’25. The consolidated net-debt for the quarter ended December ’24 stood at INR614 crores. The previous quarter net-debt number reported was INR553 crores, but that included a dividend cash available of INR98 crores. So the actual net-debt after the dividend payout would have been INR651 crores. As compared to that, we have INR614 crores as net-debt, so the debt has reduced from INR651 crores to INR614 crores. Moving to the segmental performance, I will start by discussing the performance of the international supply-chain business. The less than container load volume for the quarter ended December ’24 stood at 2.2 million CBM, representing a 2% growth over the same quarter last year. FCL volume for the quarter stood at 170K TEUs, up 11% over the same-period last year and the air volume for the quarter ended ’24 — December ’24 stood at 8.14 million kilograms. This represents growth of 5% as compared to the same-period last year. For Q3 FY ’25, the ISC business reported a revenue of INR3,544 crores, representing a growth of 20% as compared to the same-period last year. For the previous quarter, IFC segment revenue stood at INR3,770 crores. The EBITDA for Q3 FY ’25 stood at INR86 crores as compared to INR72 crores for the Q3 FY ’24, representing growth of 19%. For Q2 FY ’24 the same stood at INR79 crores. Moving on to the Express business operating under the supply Express supply-chain business. The volumes for Q3 FY ’25 stood at 3 lakh 31,000 tonnes as compared to 319,000 tons during the same-period last year. For the quarter reported revenue stood at INR392 crores as compared to INR371 crores in the same quarter last year. The EBITDA for the quarter ended December 2024 amounted to INR22 crores as compared to INR7 crores for the same quarter last year. Moving on to the contract logistics business which sits under the All Cargo supply Chain company, a wholly-owned subsidiary of All Cargo Logistics. The contract logistics revenue for Q3 FY ’25 stood at INR127 crores as compared to INR78 crores for the same-period last year, representing growth of 62%. For the Q2 FY ’25, the revenue stood at INR11 crores. The growth has come on back of new client additions. EBITDA for the Q2 FY ’25 stood at INR38 crores as compared to INR24 crores during the FY ’24 — Q3 FY ’24 and for Q2 FY ’25, the same stood at INR32 crores. In-line with best disclosure practices, we have been consistently providing other key comparative financial performances and operational indicators in our investor presentation. One can refer that for more details. Thank you we can move to Q&A.
Questions and Answers:
Operator
Sure. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles ask questions, please press star and one. First question is from Reha Mehta from Equitas. Please go-ahead.
Riya Mehta
Hi, Ravi, hi, Deepal. Thank you for giving me the opportunity. Sir, my first question is in regards with the XCL business. We have seen a good growth there. So which particular regions or which particular sectors are we seeing this growth coming in from?
Ravi Jakhar
Are you talking about the FCL business?
Riya Mehta
FCL, yes.
Ravi Jakhar
Yeah. So the FCL business has seen good growth in Asia and India as well. These are the two markets in the Latin-America. These are three areas which have seen good growth. The trends are largely similar for the LCL business as well. Europe has largely been an area of concern from a growth perspective as the economy and trade-in that part of the world has not resumed normally still.
Riya Mehta
Right. Also, also what — what is — are we seeing a shift from LCL to SCL?
Ravi Jakhar
So the LCL to SCL shift typically happens on significant fluctuations in the ocean freight rate. At this point in time over the last six to nine months, barring marginal seasonality which happens, the freight rates have been reasonably range-bound. So there is no significant shift from LCL to LCL or vice-versa driven by that.
Riya Mehta
Got it. And what would be the specific sectors or commodities we would see in STN business?
Ravi Jakhar
So we are commodity agnostic, different markets. So if you would look at Latin-America, a lot of these are minerals and some exit commodities. But if you would look at India, it would be consumer electronics, auto. In Turkey, these could be textile, garments. So each market would have very different underlying commodity profile on the FCL.
Riya Mehta
Got it. Also, what — how are things happening? You said Europe is looking concerning. However, where we are seeing some uptrends coming from Europe like companies posting results as well and they are seeing some green shoots. Have you witnessed something — increase in inquiries or something coming from Europe.
Ravi Jakhar
So we have not seen any significant change in the activity either in volumes or in bookings at this point in time in Europe. So we are not seeing any definitive improvement at this point in time. Like I said earlier, our understanding is that an end to the share Ukraine conflict can lead to the revival in the European economy. That is one aspect. The second aspect, which we are believing would lead to a increase in, you know, disposable income both in US and European countries would have been lower interest rates leading to lower EMI payouts since these countries tend to have high domestic leverage. However, in the current environment, particularly in US with the policy outlook they seem to be taking, it looks like any further interest-rate cuts are clearly deferred. So on both these accounts, at this point in time, there are no abates, but if something was to change, if the war was to come to an end and rebuilding was to start, that could be a good positive trigger for the European economy. In terms of the war as like I said, at this point in time, we do not see any significant changes.
Riya Mehta
Got it. The 40 feet container utilization since the last two quarters, we’ve been seeing a significant growth on a Y-o-Y basis, the operational numbers which you have been giving. So when do you see this culminating into operating leverage and increasing our margins.
Ravi Jakhar
So these have been — so wherever we are doing more 40s, we have generally been using — having utilization as a good utilization on these straight lines. So there has not been any significant change in that sense if you look at the numbers. And we believe that we would remain around the same range. Like I said, the — on the gross profit side, we are now well-equipped in the sense, the 40 feet continued utilization and some of these sectors are well-placed. What has happened is the last couple of years with the trade outlook being weak and the growth in volumes and gross profits has not really been to the desired level while the SG&A costs despite all the reductions, there is always inflationary pressure on that. So that is where we believe the biggest opportunity for this year, assuming that we do not expect significant growth on the volume side unless there is a change in the economic outlook, we believe the opportunity is to continue to focus on the cost below the gross profit. At the gross profit level, with the current freight rates, we believe that similar yields will continue in terms of gross profit per cubic meter and gross profit per TU on the FCL.
Riya Mehta
Got it. So any further scope of reduction in cost? Because I think last couple of calls, we have mentioned that we have already reduced a lot of costs and we are working at almost optimum level. So do we see any further scope of reduction in cost?
Ravi Jakhar
Yeah. So in terms of operating efficiency, we have done what could have been done and which is what I mentioned earlier as well. However, like I mentioned at the start of our call, the opportunity lies in outsourcing, which we have started. We did it for US last year. And this year we have started moving certain positions out of Europe into Turkey and some of the expensive Asian economies into Philippines. So that would lead to savings and that is to be factored in. But along with that, we also come in the severance and restructuring costs in the short-term. Once everything is done, the restructuring costs are one-off, while the savings would be permanent in nature. And every quarter, we would provide the severance cost and the estimated incremental profit from these changes in the long-run.
Riya Mehta
So what will be your current restructuring cost or in this current quarter, the severance cost?
Ravi Jakhar
So for this quarter, our severance cost was approximately INR20 crores to INR23 crores, crores.
Riya Mehta
And by — till when do we expect this severance cost to take a hit on us?
Ravi Jakhar
So I would say that we would move certain more positions in finance and operations functions over the next couple of quarters. And in terms of the end-state, I would say the quarter-ending December ’25 should have no additional severance cost, while you should have some of the benefits coming in from these. That is the broad outlook, but the plans could be a couple of months ahead or behind.
Riya Mehta
And the outsourcing you’ve spoken about, that is basically manpower outsourcing or the entire office and everything you would be shifting
Ravi Jakhar
Like certain activities which are done on-ground can be moved to another location which could be cheaper. Got it. I’ll join the queue for further questions. At the same time, some positions in the past quarter had also become redundant, so that is in addition to that. So there are these two elements. Redundancy, like I said, is already kind of done and we believe that if we can manage some functions from other places, then that could allow us to create more redundancies on the site.
Riya Mehta
Got it. And in terms of air, we are seeing very good growth. So how much would this be as a percentage of revenue contribution or something if you could help hit some number.
Ravi Jakhar
At this point in time, it would still be 5% to 6% and high-growth is definitely also because of the lower base and expansion into many other countries.
Riya Mehta
Got. Got it. Thank you.
Operator
Thank you. Next question is from Shah from RBS Investment Managers. Please go-ahead.
Rushabh Shah
Hi, I just had a few strategy-related questions with respect to. So my first one was, it has been over four years since we acquired and the turnaround has taken much longer-than-expected. So now with this new team in-place, what specific gaps have we identified and why do we believe that things are now on-track? If you just please elaborate here.
Ravi Jakhar
Yeah. So two points here. I would provide the perspective, which is a shareholder’s perspective. For specific questions, we would need to refer to the since it’s also a public listed company and we typically respond to management queries in there. But to provide you a perspective, I would agree that the turnaround is delayed. Nevertheless, if we see the recent performance for this quarter, the reported EBITDA is three times the last year’s same quarter and the debt, which used to be more than INR400 crores when we acquired the company, today the company is sitting with a cash surplus of more than INR200 crores. So there’s a significant change from being minus INR450 or so to plus INR200 something. And this has been made possible by a lot of efforts which have been put in. In terms of the operational parameters, the company was losing market-share even after our acquisition because the turnaround does not happen quickly. And like I said, it did take even longer than what we would have anticipated. But over the last four quarters, again, on a relative basis, the volumes have also now been growing in-line with the market. And in fact, in the quarter gone by, we outpaced the market growth rate. A few other comparable companies are also listed and there is potentially enough information already in public domain to verify and compare some of these volume performances. And yes, there is almost a new team on the leadership side in Gati and we believe that there is a strong confidence of shareholders as in the new management team, primarily driven by the relevant experience of this team. So if you look at the people who are driving the company today, they’re all veterans from the industry and they come in from the similar business with years of successful execution of their plans. So in summary, I would say a strong leadership which has extremely relevant hands-on experience in the business and the performance demonstrated by numbers, be it market-share, which has started to grow now or the bottom-line, which is important, the reported EBITDA is three times what it was last for same quarter last year. So we have confidence that we should now see every quarter to be sequentially improving.
Rushabh Shah
And second thing is the market feedback on Gathi services suggests that at the commercial level, we have a strong team with Mr Ketta and Mr. However, at the operations level, there is still significant work needed to be done to achieve that consistent service levels. So do you think is there a need to hire another senior person on the operations front?
Ravi Jakhar
So this is a management-specific question, but just to advise, we have an extremely capable Chief Operating Officer who comes in with the experience of managing supply-chain for Tata Group companies and has previously worked with Amazon and comes with a higher rigor and discipline having served in Indian Navy as well. So — and in terms of the performance indicators, like I mentioned, there are various parameters delivery in-full on-time and various other operational parameters that we measure and compare against the competitors. For the last six months, I can confirm that we did not have any challenges in terms of the operational parameters, which continue to hold good at par with the industry standards. During the festive season gone by, we did not see any disruption in our operations. And perhaps was the only company in the industry, which did not see any operational disruption during the festive season. Beyond this, perhaps you could join in on the call of Limited next time and possibly seek more responses or you could call for a meeting with the management as well. You can place a request to the Investor Relations team for Gati. But broadly, like I said, as shareholders of of Gati, we remain confident of the current management team being able to deliver the desired performance. And we shall continue to be patient given that there’s already been a significant turnaround on the balance sheet and P&L and not just on the you know, the subjective parts?
Rushabh Shah
And what is the outlook on-contract logistics? Have you signed any major customers recently or are looking to sign.
Ravi Jakhar
So contract logistics, we have continued to sign significant contracts, which is why if you see the growth in the business over the last one year has been, let me just check, I think it should be almost 35%, 40%. Let me check the exact number for you. Yeah. So if you see the contact logistics business, revenue growth is actually revenue growth is 62% on a year-on-year basis, which is extremely high and the EBITDA has also improved. The one concern which possibly remains in the contract logistics business is the white space, which means that we have been growing, but that requires us to maintain some degree of white space, which would get absorbed over a period of time. So currently, while the revenue growth is significant, it is possibly not translating fully into the bottom-line, given the operating leverage should also play-out that is primarily driven by the wine spin, which is more of a short-term phenomenon as the business continues to grow and the space gets eased out. So I would say that profitability should improve on account of reduced white space. While on the revenue side, the company is already demonstrating an extremely robust growth of more than 60%.
Rushabh Shah
And recently, there was a press release on this income tax-rate. What is the update on that?
Ravi Jakhar
So the last week, the income tax authorities had conducted a and we have fully cooperated and provided whatever information was and there is no material update emerging out of that. Should there be any update the company would keep everyone posted. Okay. Thank you.
Operator
Thank you. Next question is from Praveen Bhatra, who is an Individual Investor. Please go-ahead.
Praveen Batra
Sir, it was actually regarding that income tax search, but answer has already been given no question there.
Operator
All right. Thank you. We’ll move to the next question. Next question is from Naved from Kotak Mahindra. Please go-ahead. Avid from Kotak Mahindra. You may go-ahead with your question.
Mohammad Naved
Yeah. Actually, what about the share price of and even so many companies loss-making their share market capital is higher than Alparco. So what is the management reaction about share price and Rah, but from this.
Ravi Jakhar
So as management, our focus is on generating profit and making all the relevant disclosures, providing as much information as we can to the investors. We would continue to remain focused on doing that. We cannot make any comments on the share price.
Mohammad Naved
Sir, how long you would — you keep on telling this even large making company, TVS supply-chain is market capital is more than 5% above. You are climbing world number you’ll see a later, but your market capital is INR313,000 crore only.
Ravi Jakhar
The stock price or market capitalization are not under the control of the company management and we cannot offer any comments on that. Thank you.
Mohammad Naved
So as a promoter, as you have to retail investor side, when the market is such a low, yes, they 5% 6% decline for more than last one year, yes, but it is 52 weeks low.
Ravi Jakhar
Like I mentioned, the stock price remains same for retail investors, institutional investors and promoters and is outside the purview of the management. We as management on this call can only ensure that the company across all the business segments continues to remain well-positioned and we would continue to do our best. I cannot comment any further on the share price and would request that we move to the next question.
Mohammad Naved
Sure. Thank you.
Operator
Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Vikram from PhillipCapital. Please go-ahead.
Vikram Suryavanshi
Yeah, good evening, sir. Sir, while talking about gross profitability in international supply-chain business and fixed-cost, it seems that somehow fixed-cost has increased this quarter if you look at Q-o-Q as well as Y-o-Y. So is there any cost increase what we are seeing in terms of inflation or other network-related cost also apart from what we discussed in terms of restructuring and services.
Ravi Jakhar
So one more component therein is a lot of countries also have bonus provisions in the last quarter and for countries which have performed well, there would be bonus provisions in December because many countries run on January to December. In fact, globally, that business is run on Jan to December from a business standpoint, even though financial years could vary from one country to another. So that would be another aspect, which could see us sequentially the December quarter could be slightly higher. Also, we have seen an increase in provisions, which is almost to the tune of INR8 crores. So there are some of these one-off items as well, which are there in that. But overall, like I said, the inflationary increases we have been able to offset with optimization and reduction and we believe that we would continue to be able to do further rationalization by making some of the positions redundants by transferring those functions into a different mechanism, which can be operated at a lower-cost from low-cost countries and therefore the positions in the high-cost countries can become redundant. So this restructuring would go on for another six months and therefore, we believe that the SG&A costs would remain in jack despite all the inflationary pressures.
Vikram Suryavanshi
Understood. And earlier, we also used to get to a decent amount of growth with market-share gain. So now with our network, how much further scope is there like to improve our direct services as well as market-share gain or now it will be more like a overall growth or industry what we should mix?
Ravi Jakhar
So I would say that we made growth on the back of you know, growing in specific countries and markets and there could be some marginal expansion in-market share this year. However, the opportunity lies once there’s a turnaround in the global trade. You know the historical average is about 3% growth rate for global trade, 6% for the LCL trade. In that kind of an environment as the volumes grow, there are many trade lanes which are at the threshold, which we are not able to make direct and therefore, we are not able to distinguish against the competition. But as the growth environment kicks-in, then the opportunity for market-share expansion also improves because then there are many of these marginal trade lanes, which we can convert to direct trade lanes and expand the market-share. So I would say that the — within this particular year, we could gain marginal market-share. But in the coming years, as we see revival in growth, we could continue to expand the market-share. And potentially there is no reason why it can be much higher. Like I — we have shared in the past, our global market-share is still below 15%, while there are many countries in which our market-share is 30% plus or even 40% plus. And these includes emerging economies. These includes mature Western markets, Northern Europe, Southeast Asia, India. Many of these markets we have 30% or 40% higher share as well. So there are lot of opportunities wherein we can grow, but it typically becomes challenging to expand market-share in a subdued market environment. So with some tailwinds on the train side, we can potentially get back to further acceleration and increase in-market share.
Vikram Suryavanshi
Got it. And what is our current gross debt and net-debt in consolidated?
Ravi Jakhar
Yeah. People if you could on that.
Deepal Shah
So in gross and lend debt.
Ravi Jakhar
Yeah.
Vikram Suryavanshi
Yeah.
Deepal Shah
So the gross debt for the group all that we put together consolidated level is INR1,233 and the net-debt is INR614 crores.
Vikram Suryavanshi
So this kind. All right. And gross debt would be mostly working capital long-term would be a much smaller amount.
Deepal Shah
Yeah. So primarily on the gross debt, the breakup is around INR369 crores for long-term and short-term is around INR865 crores, which is primarily working capital directly linked to the business.
Vikram Suryavanshi
Right, right. And just lastly on the restructuring side, how is the timeline if you can explain and
Deepal Shah
So we have — as you are aware, we have already got a nod from the NCL. We have a shareholder you know meeting tomorrow for both Gati and Parol Cargo. Once we get the approval from the shareholders, we file it with the NCLT, our expectation is that somewhere by April, we should be able to kind of get this approval through. But of course, as you are aware that this is beyond our control and it will depend on the regulated authorities, but we are hopeful that somewhere by April we should be getting the approvals.
Vikram Suryavanshi
So post-approval, Al EQ will be separately listed and will that act first and then with the remaining entity will have 30 will be merged.
Deepal Shah
Yeah, yeah. So let me explain. So it’s a composite screen scheme — scheme. It’s not a tepid separate scheme. So in this composite scheme, the demerger of all cargo EQ — the EQ business into the international — the international business into separate happening. The contract logistics business from all cargo is getting moved to and Gati finally both these businesses after separating out will as it comes for cargo. All of these will happen with the scheme. So once we get the approval, the date when we actually file the document that will become the effective date. So there are two things. One is the appointed and the effective date. So at the business level the appointed date is October 3 and once filed actually the appointed date for the final merger of Gati into all cargo logistics clement. That’s the scheme for you. There is a proper presentation with all the detailing available on the website and it’s quite informative if you look at it.
Ravi Jakhar
Yeah. And just to reiterate, all the events would happen at one-time wherein the international as and that all consolidates into the single listed entity cargo Logistics.
Vikram Suryavanshi
Yeah, I think that is what I was wanted to get clarity. So it is simultaneously everything will happen.
Deepal Shah
So listing of — you were will take around close three months after the final filing. This is the timeline, if you wanted to get more detail on the timeline.
Vikram Suryavanshi
Okay. Now it got it clear. Thank you very much.
Operator
Thank you. For participants who wish to ask a question, please press star and 1. Thank you. Next question is from Mehta from Equitas. Please go-ahead.
Riya Mehta
Thank you so much for giving me an opportunity again. How would the ForEx rate impact our business? Do we have back-to-back arrangement or how does it work?
Ravi Jakhar
So most of our expenses and income on the global trade happen in US dollars, such as our revenue received from the customers as well as freight payouts to the shipping lines. And then we have certain local income, which is on local original destination handling charges and corresponding to this, there are domestic expenses such as local staff cost, et-cetera. So in general, we have seen that there is a good arbitrage, which is inherent in the business model and therefore it does not make a significant impact. On the overall basis, since we report our numbers in Indian rupees and there should be an impact on the dollars rupee size, which should be favorable to the company in the long-run.
Riya Mehta
Okay, got it. And in terms of freight rate, since we have seen that the volume has increased, but revenue has not increased to that extent, the realizations have dropped in. So that this is — what would be the contributors to it? One, my understand is that the XPL business is related to freight rate and the freight rates have gone down. Any other cause of why realizations have dropped
Ravi Jakhar
To realization in terms of the profit per TU for the FCL is driven by one freight rate, second composition of trade as well. Typically longer-haul trade tends to be more profitable compared to the short-haul rate. Some of these factors can lead to variations and fluctuations in the — in the profitability. But I would recommend looking at like a six to nine months average for directional trends in that.
Riya Mehta
And for LCL business, have you seen any reduction in our gross profit per TU?
Ravi Jakhar
No, we have not seen any reduction in gross profit per TU for the LCL business.
Riya Mehta
Got it. Any new geographies we are trying to new trail lanes which we are exploring.
Ravi Jakhar
So specific to this quarter is nothing. Since in the prior quarter, we had already initiated a few new developments such as our renewed management team in Argentina, Paragua and Uruguay and we have also seen some enhancements in Europe and some parts of Asia as well, but nothing specific corresponding to the current quarter.
Riya Mehta
Got it. And how are the freight rates currently panning out today?
Ravi Jakhar
Pounds, they typically tend to increase around June, July when people start preparing for the shipping to arrive in August, September for the Christmas supply-chain, they tend to drop. They continue to remain low until the Chinese New Year and pick-up a little bit. They tend to strengthen from April onwards until September. So the cyclicity is largely been there for the last 12 months as well, barring which there hasn’t been any significant change in the freight rates.
Riya Mehta
Got it. Thank you you.
Operator
Thank you. Before we take the next question, a reminder to participants that you may press star and 1 to join the question queue. The next question is from Nabi, who is an Individual investor. Please go-ahead.
Navi Vasudevan
Recently, we got the motivation from that they want to increase their share share capital up to double. So when they are planning to medge, then what is the po, what is the use of to increase the share capital of.
Ravi Jakhar
Your voice is not very clean. Can you please be a bit louder and slow? Three questions.
Navi Vasudevan
We recently got the notification from that they want to increase the share capital of two years. And planning to merger with, what is the purpose of to increase the share capital?
Ravi Jakhar
Okay. Yeah. So increase in share capital is more of a technical requirement for enabling the scheme of rearrangement, which we have initiated in late 2023 and my colleague Deepal spoke about that it would get most likely by April. So the increase in share capital is more of a requirement to enable that scheme and which is why it has been done.
Operator
Yeah. Participants who wish to ask questions, please press star and 1. Next question is from Riya Mehta from Equitas. Please go-ahead., you may go-ahead with the question.
Riya Mehta
Yeah. Actually, I just wanted some clarity on the term LCL yield Index and FCL yield index, how do we calculate this? I understand the base is last year, but what does — what does this mean?
Ravi Jakhar
The LCL yield index is the gross profit of the LCL business divided by the total volume of LCL business in cubic meter and we show a 12-month trend with the — so for — if you see the data for January 2025, which they would be published in the coming week or so, you would see January 2024 as the base 100 and we would show whether it has gone up or down on a monthly basis for the 12 months. For the SPL business as well, it is — the yield is the total gross profit from the SCL business divided by the volume in SCL and TEUs. So it is $1 dollar per TEU and dollar per cubic meter shown on a base of 100 for the last 12 months.
Riya Mehta
Got it. So are we saying that on an SCL volume we have seen almost 19% growth in the gross profit?
Ravi Jakhar
Let me just see what — what number are you referring to?
Riya Mehta
Is the FCL is Y-o-Y, I say it’s 119 for the yeah.
Ravi Jakhar
So corresponding to what would have been in the December 2024 it has become let me just check you the right mind yeah, so the FCLE shows the data over the last 12 months, we would also advise. So actually our team has uploaded the numbers from the stock exchanges as well and we’ll come back to you with the exact numbers to be confirmed.
Riya Mehta
This is not for the quarter.
Ravi Jakhar
If you’re looking at the monthly update, then it would be for the month.
Riya Mehta
Now I’m looking at the quarterly update. So
Ravi Jakhar
Yeah. So for the quarter, it would be an average of the October, November, December to October, November, December, but let me just get a retake of where we come back to you.
Riya Mehta
Yeah. Thank you.
Operator
Thank you. To ask questions, please press star and one. Next question is from from Capital. Please go-ahead.
Chinmay Nema
Good afternoon, sir. Sir, just two questions from my side. Firstly, could you share what is the debt that is attributable to your contract logistics business?
Ravi Jakhar
Sorry, what attributable to the we couldn’t hear the word the problem
Chinmay Nema
With the debt level gross and the net-debt in the contract logistics business?
Deepal Shah
And the third — the total debt at contract losses is INR37 crores.
Chinmay Nema
Got it, sir. And could you share the cash-flow from operations for nine months from this business?
Ravi Jakhar
From this business EBITDA is 38 crores
Deepal Shah
So the operating cash-flow is around INR23 crores, which is coming from EBIT and non-cash expenditure. But, this is growing — just I’ll give you a full color on this. As you’re aware that this is a growing business. So there are further investments for capital, expenditure and also increase in working capital due to increase in business. So because of that, there has been some investments. So net free-cash flow is almost — it’s negative actually, minus 4 for the nine months.
Chinmay Nema
Understood, understood. And going ahead post the demerger of the international supply-chain business, how should one think about the debt levels of the of the remaining entity?
Deepal Shah
So basically, Gati is contract will move to Gati. And what we are seeing, if you look at the December debt level, post the merger, what our estimate is, if you look at December numbers and if you look at the demerger, the total of gross debt at Gati and which will merge into Logistics Limited and the ASCPL, which will merge, which will be INR235 crores with some cash available of INR141 crores, leaving the net-debt of INR94 crores in.
Chinmay Nema
Got it, sir. Understood. Thank you.
Deepal Shah
INR1,000 crores of gross debt and about INR500 crores of cash taking to INR500 crores. Correct debt. Correct and why the number why the number is not adding up to 500 versus 640 is because that’s some in you know intercompany entities which will knock-off once these are entities are merged with each other.
Chinmay Nema
Got it. Got it. Thank you.
Deepal Shah
But these are estimated numbers. I mean, we’ve just done a ballpark breakup of post. Of course, these are moving numbers once we get the scheme. But the numbers which we mentioned are fair representation of what — how this will happen, right? Yes, so just basically trying to get us yeah, yeah, yeah.
Operator
Thank you very much. We’ll take that as the last question. I would now like to hand the conference back to Mr Ravi Jakar for closing comments.
Ravi Jakhar
Yeah, thank you all for joining on this call and we intend to share as much information as possible. So if you have any further queries for request for data, information, et-cetera, please reach-out to our Investor Relations team and wherever it is already in public disclosure, we would be happy to explain to you. And situations where there is information, which is not in public disclosure, we would evaluate and see if we can include that in subsequent quarterly disclosure so that each and every shareholder or analyst can benefit from the disclosure. On that note, thank you very much. Thanks once again for joining us. Thank you.
Operator
Thank you very much. On behalf of all cargo Logistics, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.