Allcargo Terminals Ltd (NSE: ATL) Q3 2025 Earnings Call dated Feb. 19, 2025
Corporate Participants:
Suresh Kumar R — Managing Director
Pritam Vartak — Chief Financial Officer
Analysts:
Shaukat — Analyst
Viral Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, thank you for patiently holding. The conference will begin shortly. Please stay connected. Do not disconnect. Ladies and gentlemen, thank you for patiently holding. The conference will begin shortly. Please stay connected, do not disconnect. Thank you ladies and gentlemen, good day and welcome to the Q3 and Nine Months FY ’25 Earnings Conference Call of Olcargo Terminals Limited.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on-date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing zero on your touchstone phone. Please note that this conference is being recorded. We are pleased to have with us management team represented by Mr Suresh Kumar, our Managing Director; Mr Preetam, CFO; and Mr Sanjay Punjabi, Investor Relations for Allcargo Limited. We will have opening remarks from the management, followed by a question-and-answer session.
Thank you, and over to you, sir.
Suresh Kumar R — Managing Director
Good morning, everyone. This is here. A very warm welcome to all of you on the Q3 FY ’25 earnings conference to discuss the company’s quarterly performance. As mentioned, along with me, I have, the Chief Financial Officer for Terminals; and Sanjay Punjabi from our Investor Relations team.
We have uploaded the results, press release and presentation on the stock exchanges and company’s website. I hope you had an opportunity to go through the same. I will share a brief overview of the economy, industry and our business, after which I’ll hand over the call to Prietan to discuss the financial performance.
The global economy is expected to remain stable, though the strength of growth varies significantly across countries and regions. The IMF predicts global economic growth to be 3.3% in the calendar year 2025 and ’26, below the historical average of 3.7% from 2000 to 2019. For us closer to home, the growth in India looks strong. The outlook remains strong.
The IMF has projected 6.5% growth for financial year 2025 as well as ’26, reflecting the country’s robust potential. The Indian economy is set to accelerate, fueled by government-led initiatives in manufacturing and infrastructure development. Coming into global ocean trade, heading into 2025, the global ocean trade continues to be surrounded by challenges from the last year, the ongoing disruptions in the Red Sea, the Panama, the geopolitical issues and potential US tariffs, the new one. The United Nations Trade and Development Agency expects global trade to expand at a mounted pace driven by recovery of demand. Some light on the merchandise trade during the first-nine months of the financial year.
Exports during April, December ’24 was USD321 billion compared to $316 billion during the period in the previous year. This is a growth of about 1.6%. Merchandise imports in the same-period was USD INR532 billion compared to INR506 billion during the same-period last year. Now let me take you through a few pertinent points about Olcargo Terminals Limited.
I’m happy to share with you that the last nine months has been highlighted by growth in a strong and consistent manner as reflected in growth in volumes by 2%, growth in revenue by 4% and growth in EBITDA by 5%. Our focus on improving profitability has enabled us to maintain EBITDA per TU more than 2,000 for the second-quarter running and the EBITDA per TU that we have in Q3 of INR2179 is the highest since Q4 FY ’23.
Other actions in the company include the Board approving the acquisition of the 15% stake in our existing subsidiary Speedy Multimodes via shared swap deal. Post-transaction, Speedy will become a 100% subsidiary of Terminals Limited. We are successful in securing extension of Speedy Mundra facility. This is a SAMO partnership with CWC and this gives us the second facility in Mundra for an additional period of six years.Keeping an eye on future, we have also expanded capacity by signing a lease for 22 acres adjacent to the existing facility in the important market of JNPT. With these as the highlights, let me now hand over the call to to give you a rundown on the financials for Q3 and for the nine months of FY ’25. Thank you.
Pritam Vartak — Chief Financial Officer
Thank you. Good afternoon, everyone, and thank you, Suresh. Welcome to our Q3 and nine months FY ’25 earnings call. I’ll be taking you through the financial highlights, starting with the quarterly Results. In Q3 FY ’25, we handled 1,49,000 TEUs compared to 1,58,000 TEUs in Q2 FY ’25 and 1,54 in Q3 FY ’24. Our Q3 FY ’25 revenue reached INR187 crores, a slight increase of 1% year-on-year, but down from INR195 crores in the previous quarter due to lower volumes in-line with portraying. Q3 FY ’25 EBITDA, excluding other income was INR32 crores, up 11% compared to the same quarter last year, flat as compared to Q2 FY ’25. Improved yield and operating efficiencies resulting in maintaining EBITDA per TU well-above INR2,000. For Q3 FY ’25, the same stood at INR2179, up 16% on year-on-year basis. Our Q3 FY ’25 net profit was INR12 crores, a 19% decrease year-on-year, primarily due to accelerated amortization related to change in useful life of CWC contract at SPT Mudra, which is an exceptional item and additional other income accounted in the previous year. Looking at nine months FY ’25 results, we achieved 2% volume growth. Revenue for this period was INR572 crores, also a 4% increase year-on-year. EBITDA reached INR95 crores compared to INR91 crores in the same-period last year. Net profit for nine months FY ’25 was INR33 crores, slightly down from INR35 crores — INR35 crores last year due to exceptional items. With this, I would like to open the floor for question-and-answer session.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question.Ladies and gentlemen, we will wait for a moment while the question queue assembles ladies and gentlemen, you may press star and one to ask a question. The first question is from the line of Shakat from Monarch PMS. Please go-ahead.
Shaukat
Thank you, sir. Thank you for the opportunity. Just wanted to understand what the timeline of the new projects, particularly that J&PT project that is coming in? And also if you can give us some light about how the IRR of these projects are, will it be ROCE dilutive? Most of these new projects that are coming up, the JMPT as well as Mundra thereafter that ICD projects, we believe that is ROCE accretive. But how these two projects are in terms of internal rate-of-return
Pritam Vartak
So thanks,, for the question. So this extension which we have already contracted for the lease land, which is very adjacent to our existing JNPT facility will be coming into effect coming into operations from first-quarter of next year, that is FY ’25, ’26. This is an already-existing facility, so we are not incurring substantial capex there. As declared, the capacity expansion could be in the range of 1,20,000 TUs to 150,000 TUs for this. So this — as I told, we are not expecting any substantial capex investment for this particular project. So there would be IRR, which would be in-line with what we are earning on our existing project.
Our projects like Farupnagar, where we will have to make our own investments, we are anticipating around INR150 crores of investments for project and estimated IRR would be in the range of 25% to 30% for these kind of capex intensive project. And how about Mundra projection that — what is the internal rate-of-return that you are targeting for that project? Mundra will also be a project where we will have to invest — we have invested into land and will also invest into the construction of PSL.
PSL and the IRR will be in-line with what I told you for other projects, which is in the range of 25%.
Shaukat
Got it. Another question from my side that January numbers — volume numbers were quite encouraging, 11% Y-o-Y growth. So how do you see these numbers going-forward, particularly in February and March? These numbers are sustainable in terms of growth and volume?
Suresh Kumar R
Yeah. Again, Suresh here. Thank you for the question. January volumes is a good strong growth in-line with market volume. We expect February, March to follow the seasonal patterns that we’ve seen in the last years, which is the Chinese New Year affecting the second-half of February. March typically because it’s year-end for a lot of companies, there is a certain amount of inventory action which happens, which will help in-building volumes. March traditionally has been a strong month for us. And therefore, we expect Q4 volumes to be similar to the volumes that we would have recorded in Q2, Q3, Q2 and Q1 of this year.
Shaukat
Got it, sir. Thank you. That’s all from my side.
Operator
Thank you. A reminder to all the participants that you may press star and 1 to ask a question. Ladies and gentlemen, you may press star and one to ask a question. Participants who wish to ask a question may press star and 1. Ladies and gentlemen, you may press start and one to ask a question. The next question is from the line of Viral Shah from Adion Tax Consultancy. Please go-ahead.
Viral Shah
Hello. Yes, sir, you’re audible. Hi, sir.
Pritam Vartak
Very good morning. Regarding of the income tax cut, such up so we — on income tax search and operation, which was conducted, I will just like to mention here that in the previous week, the income tax authorities conducted the search and search operation at our facilities and offices. The company fully cooperated with the investigating officers. Since the conclusion of the search till-date, the company has not received any written communication from the IT department regarding the outcome of the search operation. The company operations, I would say that are running smoothly and the entire management team continue to work wholeheartedly to ensure that the company keeps up on the growth trajectory. On the future course of action, I will say the law will take its own course and we will keep our stakeholder posted on all the future developments.
As of now, we are waiting to hear from income tax department in terms of outcome of the operation, which we conducted.
Viral Shah
Okay, sir,
Operator
Does that answer your question?
Viral Shah
Yes,, okay.
Operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question a reminder to all the participants that you may press star and one to ask a question next follow-up question is from the line of Viral Shah from Adena Tax Consultancy. Please go-ahead.
Viral Shah
HRCL and Nagar DFC plan, when will this debt will be fully operational? And another question madam, can I go-ahead with it? Madam, my another question is, and our Nine-Month year-to-year revenue and profit at tax margin are as per our expectation or is for our below expectation?
Suresh Kumar R
So the HORCL project in which we have invested and we have a stake, this gives us DFC connectivity for the proposed Farupnagar ICD facility. The proposed ICD facility is expected to be operational December, January, December 26, January ’27 and the HOR field project is proceeding as per plan to enable the connectivity for us. So that is as per the originally planned timelines, both for the project and for our facility to start. With regard to performance for the first-nine months, I would request to share a few points.
Pritam Vartak
So in terms of — I will just revisit the numbers, which we have already talked about to answer this question. We have on a YTD year-on-year basis, we have grown our volume by 1.2% and the revenue has also grown by 4%. So there is a growth in terms of volume and there is a growth in terms of revenue as well. The important point here is our revenue per TU is now INR12,569 and that is showing a 5% year-on-year growth and 2% quarter-on-quarter growth.
The gross margin also stood at 34%, reflecting a 7% year-on-year increase and 2% quarter-on-quarter increase. EBITDA improved by 11% year-on-year, reflecting a positive impact of higher gross margins. So that way on a year two, year-to-date basis, PBT before exceptional costs increased by 6%, rising from INR41 crore to INR43 crores compared to the same-period last year. So also in terms of other parameters related to financial parameters, so DSO of a company remains strongly in control.
Working capital is currently is negative working capital we are having. We are having a very strong debt-to-equity ratio and return on capital employed is around 35%. So all these parameters, we are moving in a direction — in the right direction. Our profitability is stable, our gross margin has improved in this quarter and EBITDA per TU, which is at — close to 2,200, that is a substantial improvement over last year. So on that — on this financials parameter, company has performed very strongly for this nine months and also for this quarter and we hope to continue this growth in near-future as well. So that way, to answer your question, yes, the — on the profitability parameters and on the financial parameters, the company has performed as per the expectation of the management.
Obviously, we will like to grow stronger and we’ll have to — we’d like to have our volume to grow much higher once various projects which are in pipeline, that will — that will crystallize and we’ll have higher-volume and higher revenue growth in coming years.
Suresh Kumar R
Thank you. Thank you, and Mr Biral, just to add to it, apart from the financial numbers which has talked about, the nine months, we also had plans to build capacity and plans for the future. And I think those plants are proceeding well because we are running at capacity utilization close to 80%, 85% and therefore, for the future, it is important that we build capacity. The projects that you asked and the projects that we mentioned with regard to additional lease land capacity in J&PT, extension of our CWC partnership in Mundra, acquisition of additional land in Mundra, acquisition of the HORCL stake, all of these are meant to secure our future and ensure that the growth continues in a strong manner like what has described. I hope that answers your question, Mr Shah.
Viral Shah
Yeah, yeah, very much. Thank you, sir. Thank you very much.
Operator
Thank you. Ladies and gentlemen, you may press star on one to ask a question a reminder to all the participants that you may press star and one to ask a question. Ladies and gentlemen, you may press star and 1 to ask a question. As there are no further questions from the participants, I would now like to hand the conference over to Mr Suresh Kumar for closing comments.
Suresh Kumar R
Thank you. Thank you,. I would like to close by saying that we have had a quarter and the first-nine months of the year in which we have grown on all important parameters. Business fundamentals are strong. Our investments and plans for the future are well in-place and we look-forward to a strong quarter-four to sign-off the whole year-on a growth note. Thank you.
Operator
Thank you. On behalf of Allcargo Terminals Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.