Allcargo Terminals Ltd (NSE: ATL) Q4 2025 Earnings Call dated May. 15, 2025
Corporate Participants:
Suresh Kumar — Chief Executive Officer
Pritam Vartak — Chief Financial Officer
Analysts:
Suyash Saman — Analyst
Ankit — Analyst
Madhur Rathi — Analyst
Unidentified Participant
Amit Kumar — Analyst
Pranav Gala — Analyst
Parag Jaiswal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Allcargo Terminals Limited Q4 and 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 conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Suyash Saman from Stellar IR Advisors. Please go-ahead. Thank you.
Suyash Saman — Analyst
Good morning, everyone, and thank you for joining us today. We have with us today the senior management team of Allcargo Dominants Limited. MR. Suresh Kumar, our Managing Director; Mr, Chief Financial Officer; and Mr Sanjay Panjabi, Investor Relations, who will represent Dominals Limited on the call. The management will be sharing the key operating and financial highlights for the quarter and full-year ended, 31 March 2025, followed by a question-and-answer session. Please note this call may contain some of the forward-looking statements, which are completely based upon the company’s beliefs, opinions and expectations as of today. These statements are not a guarantee of the company’s future performance and involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statements to reflect developments that occur after a statement is made. I now hand over the conference to Mr Suresh Kumar. Thank you, and over to you, sir.
Suresh Kumar — Chief Executive Officer
Thank you, Suyash. Good morning, everyone. This is Suresh here. A warm welcome to all of you on the Q4 FY ’25 earnings conference to discuss Alcargo Terminal Limited’s quarterly and annual performance. I have, the Chief Financial Officer of Alcargo Terminals and Sanjay from our Investor Relations team along with me. We have uploaded the results, the press release and presentation on the stock exchanges on the company’s website. I hope you had an opportunity to go through the same. Let me begin with a brief overview of the economic and industry landscape. I’ll follow that with an update on our business performance.
After that, I’ll hand over to Priitan to walk you through the financial numbers. Looking at the global economy, the IMF projects a slowdown in growth to 2.8% in 2025 and 3% in 2026. India’s growth outlook, however remains relatively robust at 6.2% for 2025, primarily driven by private consumption. The outlook for global trade has significantly deteriorated due to the tariff issues and trade policy uncertainties. The WTO now anticipates a marginal decline of 0.2% in the volume of world merchandise trade-in 2025 before is recovering to 2.5% in 2026.
The new estimate for 2025 is nearly three percentage points lower than previous expectations, marking a considerable shift from the beginning of the year when continued trade expansion was anticipated. However, we anticipate some easing of this trend following recent developments between UK, China and the US, which you would all be familiar with. In India, merchandise exports in FY ’25 remained flat at $437 billion. Imports increased by 6.2% year-on-year.
Overall container volumes in India witnessed a healthy growth of close to 10%, increasing from 12.28 million TEUs to 13.5 million TUs in FY ’25. Coming closer to Terminal, FY ’25 marked our second year as an independently listed entity. We listed in August 2023. During the year 2024, we successfully renewed our CWC Mundra contract with additional capacity. We have also expanded our presence in JNPT by adding a new 25 acre co-located facility, which will give additional capacity of 1,70,000 TUs.
These expansions have increased our capacity by close to 30%. Further, we have made strategic investments in HORCL, Haryana Orbital Rail Corporation and increased our stake in our subsidiary PD Multimodes from 85% to 100%. In terms of operational performance in FY ’25, we have grown in volumes and we have grown faster in revenues and even faster in EBITDA with a 9% year-on-year growth driven by improved gross margins. We further strengthened our leadership team with key appointments in business operations, regional Operations and in HR. Our digital investments continue to enhance customer satisfaction as reflected in our industry-leading Net Promoter or NTS score of 65%. We remain firmly on-track to achieve our aspiration of handling 1 million laden TEUs and doubling profitability by FY ’27 and ’28. With this as a context and key highlights, I would now like to hand over the call to to provide you a detailed overview of our financial performance of Q4 and the full-year FY ’25.
Pritam Vartak — Chief Financial Officer
Thank you. Good morning, everyone, and thank you, Suresh. Welcome to our Q4 FY ’25 earnings call. I will be taking you through the financial highlights, starting with the quarterly results. In 4th-quarter of FY ’25, all cargo terminals handled 1,52,575 TEU, a slight increase compared to 1,53,439 TEUs handled in the same quarter for the previous financial year. On the financial front, we achieved revenue and EBITDA growth of 3% and 26%, respectively. Compared to Q4 FY ’24. Our realization per TU stood at INR12,107 and our EBITDA for TEU was 2184, representing a similar growth of 2% and 26% respectively, year-on-year.
Our net loss for the quarter was INR2.44 crores compared to the net profit of INR9.2 crores in the corresponding period last year. The impact is mainly due to taxation on dividend received from our subsidiary and joint-ventures and also the accelerated amortization of customer relationship intangibles, which we have been doing this year. Turning to our full-year performance for FY ’25, we concluded the year with volume, revenue and EBITDA growth 1%, 3% and 9% respectively. Our realization per TU grew by 2% and EBITDA per TU increased by 8%. The net profit for the year was INR30.2 crores compared to INR44.7 crore in the previous fiscal year.
As discussed above, this decrease is largely due to accelerated amortization of customer relationship in for facility, tax-related demerger asset transfers in tax-related cost for demerger asset transfer in Nepal and the tax on dividend received from our subsidiary and joint-venture.
With that, I would now like to open the floor for the question-and-answer session. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.
Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. I repeat, if anyone wishes to ask a question, may press star and one a reminder to all participants, you may press star and 1 to ask a question a reminder to all participants you may press star and want to ask a question. Thank you. We have a first question from the line of Ankit, an Individual investor. Please go-ahead.
Ankit
Thank you. Good morning, sir. Sir, my question is related to the India, UK or FDA that has been signed recently. So how do we see a company being getting benefit from this agreement, sir? And will we see some improvement in the margins are if we see good set of numbers later on.
Suresh Kumar
Thank you, Ankar. I’ll take the second portion of your call first with regard to margins. In the last year, I’m happy to share with you that Altago Terminal Limited’s margins if you were to look at the EBITDA per TU numbers have remained consistent and have shown an upward trajectory compared to the previous years. This we believe are industry-leading margins, which we have already delivered through a combination of yield management and also cost efficiencies, scale efficiencies that we get specifically on our equipment side. We would like to continue.
We believe we can continue at this level, even though the market is extremely competitive in the key market and even in Chennai, where we have seen a lot of tariff pressure. On your first part of the question with regard to the trade agreement. We are awaiting the final details of the agreement and how it will kind of impact our key customers. We are constantly in touch with them to understand how they plan to leverage what appears to be from a macro point-of-view, an excellent arrangement, an excellent partnership which has been kicked-off. Like we have seen in trade agreements in the past.
The accelerated flow of XIM between the countries, between the trade partners is something which the agreement seek to achieve and we believe this will give an impetus to the XIM trade between the two countries, countries while we await details. I hope I have answered your call. Answered your question.
Ankit
Yes, sir. Yeah. Thank you so much for that. So my second question is related to the India, Bangladesh trade land trade issues that were going on recently. Is there any disruption in our business because of — because of that? Again, good point with regard to what’s happening at the India, Bangladesh trade front. It doesn’t have any material impact because the CFS which we have, which is the closest to the Fed area, we don’t do too much of volumes meant for Bangladesh. We don’t get a lot of volumes coming in from Bangladesh to our CFS facilities. So it hasn’t post any kind of an impact on our volumes as of now.
Okay. That’s great, sir. That’s great. Thank you so much.
Operator
Thank you thank you. Thank you. A reminder to all participants, if you wish to ask a question, you may press star and one. We have our next question from the line of Madhur Rathi from CounterCyclical Investments. Please go-ahead.
Madhur Rathi
Thank you for the opportunity. Sir, I wanted to understand in our investor presentation, we have given our installed capacity to be 800,000 TEU. That sure you have done only 620,000, but you are saying that we are operating at 90%. So is this because of the Adri terminal — the Adri JV volumes not considered or is there anything else that I’m missing?
Pritam Vartak
Madhur, thank you for the question and you’ve answered the question also while speaking. While we are talking about capacity, we talk about the capacities in the seven facilities, which includes Labri and the overall number of 8 lakh 15 and that is what is the reason for the utilization difference that you would notice. Also, the other thing, when we look at capacity that we talk about in the yard capacity, that is laden capacity volumes that we speak.
There is also MTs that we handle in the facilities, which take-up volumes, which take-up yard space, which we normally do not talk about. When we talk about the capacity that we have, we are talking about the laden capacity. Occasionally there is interchange in yard capacities between MTs and the laden volumes.
Madhur Rathi
Yes, sir, it answers my question. So we’ve given a very healthy outlook for the next two to three years. So I wanted to understand, although we are seeing some kind of volume, we are seeing like 15%, 15% volume growth over the next two to three years. So can we see a scenario of realization growth as well or because of too much competitive intensity as these ports realization growth should not be considered going-forward? Sorry, can you just repeat the question?
Suresh Kumar
Sorry. Sir, I wanted to understand regarding the realization growth that we can expect over the next two to three years. So per TEU, can we expect some realization growth or because of higher competitive intensity, it will stay at this level or can there be a scenario where it reduces due to a similar competition
Pritam Vartak
So if you see last year, which is FY ’24, I will just take you back, we had a reduction in revenue per TU as compared to FY ’23 in FY ’24. However, in FY ’25, we have been consistently able to improve our revenue per TU up from 11,837 per TU, we have reached to 12,107 per TU for full-year FY ’25. So there has been conscious efforts from our time — our sales team side to target the customers which are able to give us better revenue.
And as you pointed out that we are very close to the capacity, we have been targeting the customers which are able to give us better yields and that’s how we have been able to maintain our revenue for a year. In whatever expansions which we have planned going-forward, we don’t expect our revenue per TU to go down in an established market. However, if at all we have to get into a new market, there we might play in terms of the revenue per TU. But our plan for next year, we have been very much in terms of revenue or maintaining our revenue per TU going-forward.
Madhur Rathi
Got it. So for FY ’26, sir, when will be the and the GNPT expansion come in will be it in the first-half or this will be over the second-half of the year?
Pritam Vartak
So the JNPT expansion will happen in Q2 of ’25, ’26, the Mundra expansion Phase-1 will happen in Q4 of ’25, ’26. So considering this, what kind of volume growth do we expect in FY ’26 such. So we are targeting last year, if you were to look at it, our volume growth has been flat. Continuing we will continue to keep our capacity utilization close to current levels. To get to that level, we might — we would require 8% to 10% growth in volumes to keep our capacity utilization at a healthy level.
And then this also depends upon — you all know that there is a certain gestation period in terms of building up capacity. So once the capacities become available in Q2 and Q4, a better time to talk about this is once we stabilize six months down the line, part of it could spill-over into the next financial year. So considering that sir, the 8% to 10% volume growth that we expect, sir would that be possible from our current assets or even that would be kind of very optimistic. So I didn’t understand that.
Madhur Rathi
So we are expecting 8% to 10% volume growth for FY ’23, right?
Pritam Vartak
Yes.
Madhur Rathi
So definitely, I think majorly it will be dependent because will come in Q4 and Mundra will come in Q2. So majority of that should go in FY ’27. So I’m trying to understand, will our current asset-base allow us to grow by 8% to 10% such.
Suresh Kumar
So the current asset-base that we have in J&PT, which is one of our largest contributors will allow us the kind of growth that we are talking about. Mundra, our own facility is what I mentioned with regard to being ready in Q4. In the investor presentation, we have said that we have renewed our contract with CWC in Mundra with additional yard capacity.
That will give us capacity right now in Q1, Q2 itself and therefore for the growth that we have planned in FY ’26, the current FX plus JNPT plus Mundra CWC is adequate.
Madhur Rathi
Got it. Sir, just a final question from my end, sir for — sir, our EBITDA per TU realization, sir, is there any possibility over the next two to three years to improve this based on either better or like better utilization of resources or like increasing our realization? And sir, a would be, sir, historically, whenever the competitive intensity reduces, sir, what kind of realization growth can we expect for like every year?
Suresh Kumar
So I think Priitam touched upon this. In our existing markets, we have over the last four to six to eight quarters constantly looked at methods of strengthening our EBITDA per TU. And if you were to look at the eight quarter trends that we have from a level of around INR1,800, that’s the level in which our EBITDA per TU was, we are now operating at close to INR2,100 levels of EBITDA per TU. In the existing markets, we expect EBITDA per TU to hold at this level.
But when capacity gets created, we might have to look at bringing in volumes and therefore, there could be some leeway, which we might have to take on the EBITDA per TU. Having said that, for the current year, we are — our plan is to maintain EBITDA per TU at the current level because these are existing markets in which we are adding capacity. The other aspect in a three-year time-frame, there could be consolidation of facilities, which we will be able to look at. And if those were to happen, that will give us cost efficiencies, which will then translate into that you.
So in the short-term and if I were to define short-term as the current year, ongoing year, we expect EBITDA per TU to remain pretty much at the same levels. In a three-year time-frame, when we have larger capacity consolidation of facilities possible, we could look at better EBITDA per TU realization.
Madhur Rathi
Got it. Sir, just one final question from me, sir, what is this INR214 crore investment that we have on our books?
Suresh Kumar
Will explain that. Yes — so we have very recently made investments in Haryana Corporation, which goes along with our — which goes as a part of our strategy to expand, to create ICD at Paris and this particular investment is strategic to that particular objective. Apart from that, in earlier year, we had investments in joint-ventures and we have invested in our subsidiary. Plus we have also our short-term cash results, we have parked in mutual fund liquid investments that would be close to around INR70 crores. These are the key investments in our book.
Madhur Rathi
Got it. Sir, thank you so much and all the best. Thank you.
Operator
Thank you. We have our next question from the line of from Weiss Old Bird. Please go-ahead.
Unidentified Participant
Yes. Hello, sir. So I wanted to know why so many clip-ups from the asset-light model to the asset acquisition. So recently, we have also acquired speedy multimode, so which we have invested around INR100 crore, I suppose and we also had some write-off of INR2.5 crore recently because of the contract change to attend a change. So — but overall, all these things considering that we have moved out-of-the asset-light model, when we will be able to get to our marginal EBITDA that we had in the last two years ago.
So we had a very good EBITDA. But now if you see a lot of interest costs have also increased, if one tries to look at the quarterly results from June 2022 to March 2025, the company’s results have drastically declined a lot. So currently, we are — we are showing a loss net profit is minus 2.41%. So when things will improve and even if you look overall, the sales also sales growth has been not much, pretty much a flat sales growth. So would like to know when things will improve?
Suresh Kumar
So I would like to first start with your question around from capex slide to capex heavy. So I would say we are — we had — when we started, we had an opportunity to be asset-light company, wherein our TransIndia Realty Limited with whom we had a long leases and those lease still continue. However, there are certain opportunities which we can — we can go with the opex model, there are certain other opportunities, which we have to invest and we are open for that.
One of that example is, wherein we have seen that there is an opportunity to get into ICD space and to have our ICD very good rail linkage, which can help give us a strategic advantage and that’s why we have invested into orbitrary incorporation very recently. In terms of other capex investment which we have done is, we have done it in Mundra. In Mundra, there are — we are operating — currently operating two facilities, one is under Speedy and the other is under Oil Terminal. And there is a good case of consolidating this volume
Pritam Vartak
Onto our own land, wherein we can have a substantial savings in terms of rentals. So we have done this IRR calculations and we have done these calculations when we took this investment decision. As Suresh has said in his earlier discussion, these period build projects do have longer gestation periods and it will take some time to realize.
We have given timelines in terms of when Mumra capacity will get activated and when is also expected to go-live. And these are the times when we can actually see the returns coming out of these investments.
Unidentified Participant
Another question — another point which I just want to make is the JNPP expansion which we have done is purely on an opex basis wherein extra land which we have taken, we have taken on a lease basis. So wherever there is an opportunity available, we have made a choice whether to go for an opex model or whether to go for a capex model.
Suresh Kumar
So I would like to supplement what Preetam has explained this year. So in the growth of an organization and if you were to look at us as an independent listed entity, this is — we listed in August ’23 and therefore in August ’25, we complete two years. Very, very early stages of an organization, which has got an aspiration to handle 1 million TEUs in the first three to four years of its growth and get to profitability levels, which are twice of what it started with.
So when you look at us at ATL, look at us as an organization, which is about a year and a half in a market which is in the Indian space, which offers great opportunity for growth. It’s an organization which has got seven facilities across the country, six of them CFS and one ICD through our joint-venture. There are a lot of opportunities that we need to kind of tap into to get to our growth aspirations. The asset-light model has transformed into an asset-light model depending upon the size and the returns on the opportunity that we see.
The HORCL investment is very strategic in nature because it gives us a value proposition, which is different from the in that location by giving us direct access to the DFCC. This will give our customers a significant benefit in terms of time and we expect that this will be a value proposition, which will enable us to quickly run to capacity in a facility which we have planned of around 1,20,000 TU capacity. In Mundra, all the existing — most of the existing facilities are leased-out of the Adani AC said.
All of us know that the AC said these terms come to an end in 2031 and therefore, it is strategically important for us as an operator in the important Mundra market to have a fall-back in case the leases don’t get extended beyond 2031. We see an opportunity there to participate in creating our own facility and giving us an opportunity to consolidate the volumes that we have in the two facilities, giving us scale efficiencies. And the best way of doing that in a market in which land is a bit scarce is to get that thing done directly.
Wherever there is an opportunity to follow the asset-light model, we are committed to following that and that’s what we are doing in J&PT where we have got a lease of 25 acres adjacent to our existing facility. And there we had evaluated own investment versus lease model and it works out well given the commercials and given the location of the facility. So in the quest for growth, in the quest for profitability, I think it makes sense for us not to be tied down into only an OpEx model and to use models which deliver us the outcomes and the outcomes that we have defined for ourselves is 1 million laden TEUs by FY ’28 with an approximate doubling of profitability. So to look at the past numbers and look at the EBITDA, that’s a reference that you did is a good benchmark to do.
The alternative thing is to do is to look at the EBITDA trends of the industry itself. And I shared that with you right in the beginning, from a INR1,700 to INR1,800 that we were doing EBITDA per TU, six, seven quarters back, we have now strengthened ourselves to EBITDA per TU of 2100 on a certain additional volume base that we do and laying the foundation for strong growth. But I think as an organization, when we look-back at ourselves at the end of five years, we would be an organization which would have significantly grown in volumes and will have a healthy profitability line to talk about.
So that’s been a summary of what we have done and I hope we have — between me and Preetam have answered all the queries that you rightly had shared with us.
Unidentified Participant
Yeah. Thanks, sir, for the explanation, both of you. Sir, one more query, sir. So when will be in the next — see, we have bring in a lot of contracts. So did we miss anything? Because when I was looking into the notes by multimode, right, initially the contract was canceled and then we got the tender back. But is there any such instances that we are seeing where our contracts can get canceled, the long-term lease contracts as of now. So we are able to renew everything?
Pritam Vartak
Yeah. Thank you. Thank you for the question. So in Mundra, the speedy contract we have successfully renewed. The contract had come to an end in December 2024, we bid for it and we have successfully renewed that contract. So now we have an additional five years, a new five-year renewed contract in Mundra. In JNPA, our existing contract comes to an end at the end of this calendar year, which is December 2025. And as I have explained to you, we already have identified and we have additional capacity created and we are in negotiations with JNPA to see whether we can extend our contract there. But for the volumes and the growth that we have planned, there is additional capacity that we have already created.
Unidentified Participant
Okay, sir. Thank you.
Operator
Thank you. A reminder to all participants, if you wish to ask a question, you may press star and one. We have our next question from the line of Amit Kumar from Determinant Investments. Please go-ahead.
Amit Kumar
Yeah, thank you, sir. Just one point on this accelerated amortization. I understand this is with respect to the CWC contract that you have already sort of renewed. So does this — is this accelerated amortization done or does it still continue for some time?
Suresh Kumar
No, it’s done. So March ’25 was the last quarter and going-forward, we will not have limited depreciation for CWC the last.
Amit Kumar
Okay. And in terms of your Mundra facility, you’re basically saying that you have two facilities right now and with your own — which are leased and then with your own facility coming in, you will be sort of — you have an opportunity to sort of consolidate and drive efficiencies. But given the fact that the existing CWC contract has been renewed for five years, so you’ll have to sort of continue to run that facility for five years. So those efficiencies are in that sense, long-term in nature, but nothing is going to happen for the next five years.
Pritam Vartak
While we have renewed the lease, there is there are clauses which enable us to move-out of that lease with a certain notice period. Okay, okay, interesting. So, so I mean, you know in what sort of a timeframe should we anticipate that consolidation to happen? Is what I’m trying to understand. So I would kind of wait for a couple of more quarters for the situation to emerge.
So if we were to look at it, as an organization, we have created options for us to evaluate depending upon how the market trends emerge. And as the previous gentlemen had asked us about our capacities and license tenure. As an organization, we have secured capacity to ensure our growth. We have also secured options through which we can take this growth, asset-light to asset right. We also have called back-in case of any contract not getting extended.
This gives us enormous amount of flexibility to plan, look at how the market trends happen with regard to overall growth and take the right decisions, which we anticipate to do during the course of this financial year. Compared to 3/4 back when we were having a certain capacity, we have significantly secured additional capacity and therefore, we can take the right calls depending upon the trends in the coming quarters. I would like to talk about this in our future calls, maybe the Q3 conversation by which time we will have clarity about the speedy contract in J&PA. We will know what could happen with the Adani, as we said contract conversations which are happening there. And we would by that time have started the first phase of creating our capacity in Mundra. So allow us time to come back to you on this.
Suresh Kumar
No, this is not the number that I would like to give to you as an organization hungry for growth. We have all the necessary tools and foundation laid and therefore we are in a far more stronger and secure position now than at any point in time in the past.
Amit Kumar
Understood, sir. That’s quite fair. Thank you so much.
Suresh Kumar
Thank you.
Operator
Thank you. A reminder to all participants, you may press star and want to ask a question. We have our next question from the line of Pranav Gala from Omkara Capital. Please go-ahead.
Pranav Gala
Hi, sir. Am I audible?
Suresh Kumar
Yes, you’re audible, Pranav. Please go-ahead.
Pranav Gala
Sir, sir, there were a few questions that I would like to post. One was, sir, like you mentioned about the move from being asset-led to asset-heavy. Sir, for — if I see our numbers since June 2022, we’ve not seen a lot of volume growth. So A, what are you expecting will change that will help us grow in terms of volumes because that’s what will help us grow our revenues plus profitability.
Suresh Kumar
Okay. So thank you for the question. So asset-light to a conscious asset right stance is what we have taken. With regard to volume growth, given the fact that our key two facilities in J&PT and Mundra last year have run close to capacity, 90% to 95%, the additional capacities that we have created in these markets will help us grow faster this year. So I told you about the 25 acre expansion, which is already in-place Q1, Q2.
So we are in the middle Q1. So Q2 onwards, it starts kicking-in. And in Mundra, the renewed contract and the renewed contract comes with additional 10 acres of land. So that will kind of help us add volumes in these two key markets. And these two markets contribute to almost more than three-fourths of the volumes that ATL does nationally.
Pranav Gala
Right, sir. But sir, when we say when we are taking up these assets and when we are going to the asset-right model, we are also increasing our debt, we are also increasing our depreciation. So don’t you think that will hamper our profitability and also our ratios of that in the ROEs and ROCEs will also get subdued because of the longer custinction period.
Pritam Vartak
Okay. So Pranav, just I will take this question. So if you look at ROCE, we have been on ROCE close to upward of 20% in the range of 24% yeah. So hello?
Pranav Gala
Yes, sir.
Pritam Vartak
So last year, we have ROCE of close to, 26%. This year we are around 20%. The key reason for increase in our capital employed is the investment which we have done in or within Corporation. Suresh and me, we explained the rationale behind this particular investment while we have done this investment. And to some extent, you are right, these projects which we are talking about are infrastructure projects and have some gestation period. And when we do the project calculation, to some extent, we factor all these parameters when we are choosing whether to make — we can make our own investments or we can have it on a opex model.
So as said earlier, not all the opportunities are available on opex model. Given the choice, we will go for opex model. However, there are certain investments if we want to participate in the growth, if we want to get into the new emerging market, those investments are necessary. So based on this particular — particular approach, we have going with the asset right model, not asset-light model or not asset-heavy model.
Wherever required, we will — we are open to consider making investments. In terms of bank debt, we — our working capital management is very healthy. Our receivables remain in the range of DSO remains in the range of 205 days and our cash generation year-on-year has been consistent. In a period to come, you will see that based on our cash generation, we will be able to retire some high-cost debt which we have taken and we should be able to fund a lot of these investment over internal accruals.
So while borrowing could be necessary to get the leverage, we would ensure that we will remain in a healthy balance sheet management position again.
Pranav Gala
The question was persisting to the fact that we are targeting doubling our profits by ’28, right? I’m assuming around INR80 crores to INR90 crores from the peak is what we are targeting. But when we get into these kind of assets where we will have to take things on our balance sheet, would that not hamper our profitability and does also hamper our cash flows because consistent — as of now, we’ve been making consistent CFOs. But going-forward, when we pick-up that increase the balance sheet size, you think that will hamper us as a company? That will delay, it will probably delayed by a year or two?
Suresh Kumar
So our projection of doubling the profitability is based on the projects which we currently are there — we — where we have the visibility, it is not about the projects where we don’t have the visibility. We have Munra expansion, we have project and we have expansion plans out also. So these are the key things which should take us there.
For JNPT, the expansion which we have done is based on the OpEx model, and so for Megar, we are evaluating whether we can — we will have to go for borrowing, whether we can bring a strategic investor, whether we can bring in equity, those options are open for us. So there are multiple ways by which we will look at raising the funds for the capex intensity project. And as you said, the increase in borrowing will not necessarily so it will not be borrowing all the way, it can be equity, it can be bringing in strategic investors.
All these options are open for us right now. Okay. So when we say strategic investors, will that be an investor — will there be further dilution in our company or will that be a separate subsidiary that we will be getting that? So these questions, currently, we are not in a position to answer because we have not reached that stage right now. At the right point of time, we will bring it in a public way.
Pranav Gala
Okay. And sir, other question was that — sir, what is the competition that we see going-forward that will hamper us to not reach our target? So I’m saying these integrated peers who are larger in size, especially Adani now that he’s got a lot of back-end going on, he is backward integrated. Do you see them as a threat when it comes to the — even after the Western BFC opening up in the near — at the end of this year, do you see that as a threat to our business or other CFS businesses as a whole, because they will be able to offer competitive pricing undercut our pricing is what I’m trying to understand, the basic competition and the threats to us.
Pritam Vartak
Yeah, very good point. I think the industry has evolved over the last 10 years and we will now see new trends starting to happen. So 2015 to 2020, the large conversations used to be around DPD and how will DPD impact the entire CSS business. Between 2020 and 2025, there weren’t any significant changes in-market trends. Over the last year, year and a half, the point that you said about integrated players, port players kind of forward integrating, backward integrating, these are things which are starting to emerge. But the larger point in this is, if you were to look at the CFS play itself, the number of operators is pretty much capped across the country for various reasons.
So it could be the red zones and the kind of licenses which are available. So there is no additional CSS entities which are starting to happen, except a few maybe in Hundra or some such regions. Having said that, that we realize and we appreciate the change in competition. Competition is not necessarily in the form of existing CFS. It could be because of backward integration and services which the terminal operators and other large players could offer.
So how are we building our competitive moat when it comes to these things? Over the last two years, we have consistently been talking about digital enablement of services for our customers, which is in a way a little ahead of the curve when it comes to what other CFS have been offering. So this is one competitive differentiation. The second competitive differentiation that we have done is also our ability to offer multi-point presence in the country. So if you were to look at it, there are a very small set of CFS who have a national or a geographic presence similar to ours, we are present in ports which cover about 80% to 85% Of the trade-in the country. The third advantage or the third differentiation that we offer our customers is in terms of as a group, we have demerged from the Allcargo group and we are an independent entity and there are other entities in the group. But there are synergies in terms of working and solutions that we can offer for our customers, which also give us the ability internally in the group to cross-sell services and for the customer, it means integrated services. So we are in a position to offer that. And lastly, the operations excellence that we have been talking about with regard to transport contracts with regard to equipment contracts and with regard to new technology implementation. We have always focused on that and try to differentiate ourselves from operators who possibly do not have that kind of a vision of the industry. So while the nature of competition evolves and that’s how any market is, we are prepared for that with our own set of things and have listed down four things that we have done as a company to kind of offer value to our customers, which is different from what the other CFS have done. The proof of the pudding finally is in terms of market shares that we have. Our estimated market shares in the critical markets continue to remain stable and we expect that to continue. And if there is an emerging trend of any consolidation which happens in the industry, as a large player in the industry, we stand to benefit from that. And as industry watchers, you know-how consolidation can happen in-markets and whenever consolidation happens, those who have competitive differentiation tend to benefit and we believe we will be one of those operators who will benefit from any consolidation in the industry. The other portion is the steps that we have taken to be actively present in the ICD market. From just one ICD through the JV that we have at, we have taken a significant position with regard to ICD play in the country, which will also enable us to be present in the northern important NCR market. And therefore, it will broad-base the cargo volumes that we will handle from being West and south to West, South and north and is always there. So in the next two to three years, you will see broad-basing of our cargo profile in terms of a geographic region, which also will help us and everybody knows that the ICD margins typically are better than the CFS margin and that is also something that will help us in our three-year plan. So a little long-winded answer to your question, but I think I’ve touched upon all the key things that we are doing as a company to be competitively different, fuel the aspirations that we have and to grow our profitability along with volumes.
Pranav Gala
So what would be the percentage of volume that the group will be a part of our group of our volumes?
Suresh Kumar
So that volumes could be around — yeah, around 10% of our volumes could come in from our group businesses.
Pranav Gala
Okay. And sir, one more thing why I asked this competitive question was majorly because, sir, so recently had put up their CFS up for-sale. Now that’s also because on the back of competition or probably they are not seeing the — they might not be seeing fruits coming out of that is what my assumption. I don’t know about that. But do you see price wars coming in later on?
Suresh Kumar
A good question. I would not really know the background to the GDL scenario. But when we look at our numbers, which is what we shared earlier during the call, revenue per TU, EBITDA per TU, we had taken a position to focus on them and improve them through a combination of factors. And the results are there for UTC over the last four to six quarters how the revenue per TU and the EBITDA per TU numbers have strengthened. In terms of reporting, while there is a PAT number for the quarter, which looks the way it is, the clear understanding there is, this is on account of a one-time dividend impact on tax.
And if you were to look at it, the dividends that we have got have been used for expansion in terms of the new projects that we have, which I think as a growing company, which is just into its second year of operation is the preference for us. And therefore the numbers at a PAT level might not really look the way in which the revenue per TU and EBITDA per TU have grown. So I hope that understanding is very clear. And in the quest for growth, we are doing these things. And with regard to competition, I told you GDL, whatever is the background to that, we don’t know.
But what we see is somebody who’s got five facilities and some of those facilities are located in-markets that we are operating. If there is a reduction in capacity, which is the consolidation point that I mentioned, it only helps us as an established operator to aspire for better yield. So we are well-placed and that’s what is a takeout for us.
Pranav Gala
Thank you so much.
Operator
Thank you. We have our next question from the line of Parag Jawal from Nightstone Capital. Please go-ahead.Hello, Prag. Parag, are you there?
Parag Jaiswal
Can you hear me?
Operator
Yes, now we can hear you Parag. Yeah.
Parag Jaiswal
Thanks for the opportunity. Could you share when will HORCL start contributing and what’s the kind of ramp-up schedule for that? So just maybe a slight addition to what your question would be. So with the strategic investment which is done, which will benefit our.
Suresh Kumar
Yeah. In terms of HRCL railway project start per se, I believe that they have — they are starting in phases that Phase-1 is already started, which is linked to the project and the next in-line is connectivity next phase improves all cargo terminance connectivity. It should be — it should be there by within next 10 or 10 or so months. In terms of ICD, which we are planning, which is — and rain connectivity is one of the factor of that particular project.
We are — we are looking to start this in the Q3 of FY ’26 and we are expecting it to complete by end of FY ’27 and operations in a right way could start in the year ’27, ’28. So these are the — these are the — this is the schedule which we are following for ICD. Got it. And you mentioned that ICDs have higher EBITDA per TV. You give an approximate idea of how much is the difference versus CSS? So we are operating one ICD as a joint-venture in margins there are pretty much similar or comparable to our business because we are not participating in the rail freight business out there.
Parag Jaiswal
This is purely handling and storage. In a kind of scenario where we are also looking to get into rail freight from port to ICD. I would say the realization would include your rail revenue and margin on rail revenue as well. And pure-play ICD margin remaining same as what we are going to do? Okay. So at EBITDA level, with rail rate, what would be the rough-cut number?
Suresh Kumar
So currently it would be higher than like 4% to 5% higher than what we have in our plan.
Parag Jaiswal
Got it. Okay. For fiscal ’26, you mentioned the volume growth of roughly 8% to 10%. I wanted to slightly longer-term, next three years, what’s the kind of volume ramp-up that you are looking at? You also mentioned 1 million. Is that the kind of volume that you are trying to achieve over the next three years?
Pritam Vartak
Yes, that’s the aspiration to be a 1 million TEU operator from the current 6.7 lakh that we have delivered last year, grow that by 10%, then with the capacity increases and Nadar get to a million. But that on an annualized basis that translates to roughly 17%, 18%.
Parag Jaiswal
So the bulk of the volume growth will happen in ’27 and ’28, is my understanding correct?
Pritam Vartak
Yeah. So significant jump once you have new facilities. So if you were to look at the plan that we have, there is an additional facility that is on the three-year roadmap in Chennai. The capacities that we have created in Mundra and JNPT and the new ICD facility in. So these are a combination of existing markets and new markets. So J&PT, Mundra where we are already there. Chennai, as you would be familiar, there are two clusters of port. There is the first while port, which is where our CFS is
Suresh Kumar
Closely located now. And the new cluster of ports, which is coming in, that is what our target is. And Farut Nagar is an absolutely new geography other than the fact that we are present in Badhri. NCR is a very, very big market where we do not have a presence and that will also contribute.
Parag Jaiswal
And one final question from my side. You mentioned doubling of profitability in next three years. Are you talking about EBITDA or PAT? We are talking about PBT.
Pritam Vartak
Okay.
Parag Jaiswal
So from current 47 on, we are targeting nearly 90 years from now.
Suresh Kumar
So yeah, yeah. Okay.
Parag Jaiswal
Thank you.
Operator
Thank you. Ladies and gentlemen, this would be the last question for today. And I now hand the conference over to the management for closing comments.
Suresh Kumar
So thank you, everyone, for a very detailed set of questions. I’m happy that we had the opportunity to share our results for last year, the last quarter and more importantly, take you through the aspiration that we have for the next three years and the foundation and the building blocks that we have already put in-place and what we are planning in the coming quarters. I look-forward to updating you about this progress in our subsequent quarters. Thank you very much.
Operator
Thank you. On behalf of all Cargo Terminals Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.