Blue Dart Express Limited (NSE: BLUEDART) Q2 2025 Earnings Call dated Nov. 13, 2024
Corporate Participants:
Tushar Gunderia — Head of Legal and Compliance, Company Secretary
Sudha Pai — Chief Financial Officer
Sagar Patil — Head of Corporate Accounts
Analysts:
Amit Dixit — Analyst
Anshul Agrawal — Analyst
Unidentified Participant
Krupashankar N.J. — Analyst
Presentation:
Operator
So good afternoon, everyone, and welcome to the interaction with the management of Blue Dart Express. So firstly, I would like to thank the management for giving us the opportunity to host the call. So today, we have with us Mr. Sudha Pai, CFO, Blue Dart Express; Mr. Tushar Gunderia, Head of Legal and Compliance and Company Secretary Blue Dart Express; and Mr. Sagar Patil, Head of Corporate Accounts, Blue Dart Express.
So I would now hand over the call to the management team to provide some opening remarks on the Q2 performance, and then we can start with the Q&A session. Thank you, and over to you, sir.
Tushar Gunderia — Head of Legal and Compliance, Company Secretary
Yes. Hello. Good afternoon, everybody. Thank you, Alok, and good afternoon all. A very warm welcome to all of you into the quarter two financial year ’24 earnings call of Blue Dart Express Limited.
As you are aware, the Board of Directors of the company approved the second quarter financial results in its meeting held on 11 November 2024 and company declared its financial results for the quarter and the half year ended 30 September 2024, wherein the company posted profit after tax of INR608 million for the quarter ended 30th September ’24.
Revenue from operations stood at INR14,485 million. Blue Dart known for its exceptional service quality, strengthened by advanced automation and technology remains a cornerstone for its operations, providing customers with a seamless one-stop solution for all their logistics needs. The results have already been uploaded on the stock exchanges and also posted on the website of the company in accordance with the provisions of stock exchange listing obligations.
I now hand over the call to Sudha Pai, CFO; and also, Sagar Patil, Head Corporate Accounts for further proceedings. Thank you.
Sudha Pai — Chief Financial Officer
Thank you, Tushar, thank you. You have already summarized the results for the quarter and year end. We can straight away go into the question-and-answer.
Tushar Gunderia — Head of Legal and Compliance, Company Secretary
Yes. Over to investor.
Questions and Answers:
Operator
Sure. [Operator Instructions] So first question we’ll take from Amit Dixit. Please go-ahead.
Amit Dixit
Yes. Hi, good evening, everyone, and thanks for the opportunity. I have two questions. The first one is on database question. If you can let us know the number of parcels and tonnage that was carried…
Tushar Gunderia
Amit, if you don’t mind be little louder, audible — be little louder, please.
Amit Dixit
Yes. Sure. Am I — is it better now?
Tushar Gunderia
Yes, better.
Amit Dixit
Yes. Sure. So sir, the first question is more of a bookkeeping question. If you can let us know the tonnage and number of parcels that were carried in this quarter.
Sudha Pai
So in this quarter the tonnages we carried, it’s in terms of the, one second, in terms of the shipments it is 96.6 million, and in terms of the weight it is 3,43,676 million overall weight.
Amit Dixit
Okay. The second question is on the new jets. So just wanted to understand what is the current utilization level and have we broken even what was the performance of these jets in this quarter?
Sudha Pai
So the utilization on the new aircrafts you’re saying right?
Amit Dixit
Yes, on the new aircraft.
Sudha Pai
Our utilization on the new aircrafts has improved versus the previous quarter. And — but just a moment sorry, our utilization on the new aircraft has increased from the previous quarter. The fixed expense, the unutilized expense that was there in the last quarter was around INR11 crores and now it’s somewhere around INR8 crores. So definitely there is an improvement in the utilization.
Amit Dixit
And have these aircraft broken even?
Sudha Pai
Yes, it’s broken even. It has been — the breakeven had happened even in the past quarter, it was just that we needed a better utilization.
Amit Dixit
Okay, fine. So if you don’t mind, can you let us know the utilization in terms — can you quantify it? Let us know in terms of numbers, what is the utilization level in percentage or something.
Sudha Pai
We can get back, but it’s somewhere around like 82% to 83%, whereas the idea of being 90% to 92%.
Amit Dixit
Okay, ma’am. Thank you so much and all the best.
Sudha Pai
Yes. Thank you, Amit.
Operator
Thank you. [Operator Instructions] Tushar, there are — there were couple of questions from investors who couldn’t join. One was on actually what’s the growth outlook now in terms of tonnage for this year, have we seen a strong buildup for the festive season of Q3? And also how it has been — how it is — how the outlook is for Q4 in terms of tonnages, because there are some mixed signals that there have been some sectors which are seeing slowdown and some are doing well. Just your thoughts on that.
Sudha Pai
So we generally do not give a forward-looking statements here. But the outlook is definitely as you said, it’s a festive season. One of the month of the quarter has already passed October and it’s a festive season and we definitely expect it to be the better than the previous quarter?
Operator
Sure. And just one question was related to the new aircraft only. So this 80%, 82% which the utilization has already happened, that of how — that 90%, 95% utilization, why — when can we expect it to achieve?
Sudha Pai
We expect as it’s a festive quarter and we expect it to have — to be best utilized from this quarter or perhaps into the next quarter at least like?
Operator
Sure. So just a reconfirmation on the tonnage number, it is 3,43,676 for this quarter.
Sudha Pai
Okay, the shipments is 96.60 million, and the weight is 3,43,676.
Operator
We’ll take one question from the call log. So we’ll take a question from Mr. Anshul Agrawal. Please go ahead.
Anshul Agrawal
Hi, thank you for the opportunity. Question is on margins, ma’am. So why are our consol margins not improving despite volumes growing over the last two, three quarters? I believe with the volume numbers that you’ve given us, volumes have grown almost by 11% Y-on-Y, but margins have been — consol margins have been around 15%, 15.1% versus last year the same number was around 17%. So is it because of increasing contribution from surface or what is it that is leading to margins not improving despite growth coming in?
Sudha Pai
So I mean you rightly gauge there, Anshul, it’s the product mix change. We are growing more on the ground than versus the air. That’s one of the reasons because we have invested into air that is reason number two, plus we have made some IT investments and one of the investment into the facility in North region like for which we are going — for which we are having a cost currently. So these are the broad reasons for margins to be — I mean to be at a lower side as per — versus the last year, right?
Anshul Agrawal
Got it. And incrementally, ma’am, we would expect surface to keep growing faster than air, right? So margin profile would sort of remain similar.
Sudha Pai
Yes. I mean if we take out this investment part, what I mentioned which is into the aircraft and which is into the new facility, our margin would be roughly around like 6.6% versus the — 6.6% here I am saying at a…
Anshul Agrawal
EBIT level.
Sudha Pai
Yes, EBIT level. At a EBIT level and then that’s where like — that should be different unless something great major dynamics in the marketplace happens, this is the trend that we expect to continue?
Anshul Agrawal
Sure. Just a follow-up on that, ma’am. I think if I recollect correctly, we were targeting a PBT margin level of around 8% and 8.5%, would that number, as you mentioned stand corrected or stand changed for the full year or the next year?
Sudha Pai
See, the — we expect the festives to help us to improve our margins there and ideally we should hit that now budgeted level of margins of around 8%.
Anshul Agrawal
Got it. And if possible, could you give us a — could you give us a ballpark revenue mix for our business right now segmented into say B2C, surface, air?
Sudha Pai
I’m sorry, we don’t give the product level, within the ground and air information in the public domain?
Anshul Agrawal
All right. Thank you. I’ll come back-in the queue. Thank you so much.
Sudha Pai
Thank you, Anshul.
Operator
We’ll take next question from Mr. Pulkit. Please go ahead.
Unidentified Participant
Thank you for taking my question. And ma’am, I think there’s been a lot of confusion because a couple of quarters back, you spoke about the two planes, the utilization is going up, the cargo mix being higher yield and as a result of it, margins likely to be better. But in the last quarter as well as this quarter, you’re saying that margins are expected to be in this range. So if you could just clarify that as a combination of, one, your air to surface move, which is margin dilutive and offset by higher utilization and better yield on the two aircrafts, what is the rough cut margins that we should be baking in, taking both of them together? That’s question number one.
Sudha Pai
So if I understand your question much better, you are saying that or perhaps can you help to rephrase your question please?
Unidentified Participant
Okay, ma’am. I’ll try it again. One, you are seeing the shift which is more in favor of surface, which is putting pressure on margin. That’s one dynamic that’s playing out, and probably continues to play out, I don’t know, right? The other dynamic is that the two planes which are today deployed, which are the new planes, you had mentioned that initially your objective is to just fill those planes. Over time, you will look at improving yields once the traffic builds up, etc., and that is going to be margin accretive. What my question is, if I look at both these factors together, then what is the kind of margins that we can bake in, in the next five, six quarters for the company? That’s the question.
Sudha Pai
See Pulkit, the thing is that we do not make any of these forward-looking statements, but ideally, with the quarter-on-quarter improvement in the utilization as well as with the festive quarter coming in, we expect our margins to improve and that’s exactly was one of the questions which was recently said that you — which was just now asked that whether 8% looks realistic or we aim that one to be achieved like.
Unidentified Participant
Sure, ma’am. The second question is generally on the outlook. I mean, we’ve seen now almost seven, eight quarters where while our revenue has been inching up slightly, our EBITDA has been in the INR220 crores to INR220 crore kind of a range. Just based on the kind of business that you see developing, the kind of conversations you are having with your customers, etc., do we see this number improving from here on or is the business outlook such that we are likely to remain in the current range. And I’m not asking for a guidance, I’m just asking for feelers on what you are seeing or your business is seeing in terms of overall growth outlook for you.
Sudha Pai
So definitely, a, is driven by the festive period which is the partner that we are in plus the — plus the growth that we are seeing in the surface business. And lastly, it depends on the market dynamics, how the growth outlook in the market for the domestic demand is like. I mean, the feelers are that we have to improve on quarter-on-quarter, of course, we have our annual budgets to be achieved, and that’s definitely a stretch during the festive quarters like, it’s normally 10% to — I would say that 7% to 8% higher than the previous quarters, right. So we definitely expect that we should improve from this quarter onwards, much better into the next quarter, and that’s something I can share it the most like.
Unidentified Participant
Maybe, ma’am I’ll take the liberty of asking one more. Can you comment on those two planes? How is the current utilization there? How is the traffic developing there? Any color on that would be helpful.
Sudha Pai
So our utilization, as I said in one of the responses, our utilization has gone better there. Ideally, we had a fixed expense of INR11 crores in the previous quarter. This quarter it is at around like INR8 crores, INR8.1 crores, INR8.2 crores. So definitely the utilization has gone better. My aggre capacity cost has lowered from the previous quarter to this quarter. And we are expecting that one of the lanes, one of the smallest lanes that we are facing a challenge is inbounds from Guwahati, outbounds from Guwahati, Guwahati to Delhi lane there. There we expect utilization to get better. Yes, this could be few updates on this aircraft to — two new aircraft that has been deployed.
Unidentified Participant
Sure, ma’am. Thank you. Thank you for that.
Sudha Pai
Thank you.
Operator
Thank you so much. We’ll take next question from Mr. [Indecipherable]. Please go ahead.
Unidentified Participant
Yes. Good evening, ma’am. Thank you for the opportunity. Ma’am, I first wanted to understand if you could comment on the market share. Is there any way you can comment on the market share, whether for the quarter, for the first half or on trading basis, whatever fashion you want to give or whether we are maintaining improving market share in both the segments there as well as surface?
Sudha Pai
Market share information, we don’t really talk about it generally. Achil, I’m sorry.
Unidentified Participant
No problem. Ma’am, the second question, at least from an industry growth perspective, how do you see both the segments growing, what kind of industry growth you’re looking at? And specifically, if you talk about surface transport, how do you look at this particular segment in terms of capital deployment?
Sudha Pai
Yes, please.
Sagar Patil
Yes. So from industry growth point of view, we are servicing very niche areas, especially the express products, whereas the industry will be driven by a much larger perspective. So as we have seen and we do also see that in future, the e-commerce, which has been growing faster will continue to drive our growth and also as far as surface B2B is concerned, there also we are trying — we are — that has been our growth engine and we see — and we are also not the biggest player, but we see that is one avenue where we have some room for better growth and that is continuing in last few quarters that we have seen.
Unidentified Participant
Right. Any quantification sir with respect to these segments, what is the industry growth? Is it sub 10%, is it 10%, 12%?
Sagar Patil
Normally by segmented, we do not comment. But yes, we have seen the surface growing at around 14%-plus and we see that the growth can continue or be even better around those lines.
Unidentified Participant
Right. And have you seen pricing pressure in case of e-com or it is pretty much stable or any improvement there?
Sagar Patil
That always is the case with this market with number of players and different segments when it comes to the weight breaks or the lanes. So that’s the part of life. So yes, we do see competitive pressure and we are also a very active participant in that.
Unidentified Participant
Right. And I recall earlier we used to kind of indicate e-com somewhere around 24% 25% of revenue, has that inched up? Has that remained pretty much in the similar fashion, sir?
Sagar Patil
It’s similar fashion, no major change. I mean, while we do not really actually talk about the segmented one, but yes, e-com remains the growth driver as well along with the service.
Unidentified Participant
Understood. And one more question, if I may with respect to the capital expenditure, if you could guide about what is it that you’re looking at for FY ’25 and ’26, and in what segments or which side of the business?
Sagar Patil
It will be — it will continue to be the — in the range that we have spent between INR150 crores to INR250 crores, which is more of a renewal and expansion combined because we are already there in most of the parts of the market in the country end.
Unidentified Participant
Right. And aggregate capacity utilization for both surface and air, would it be possible to get that sense?
Sagar Patil
It is optimum. I mean, we do not own any of the vehicles. So it’s all market driven, we don’t put capex over there. And the warehouses also since we are [Indecipherable] best product, we — it’s a fairly distributed case-to-case, there are number of facilities, number of locations. So it’s a business as usual when it goes to the expansion of those facilities.
Unidentified Participant
Right. So this INR250 crore, is there anything going for a freighter or anything on those? Like what’s the split here in terms of surface and air in this capex?
Sagar Patil
This is largely surface facilities, no specific about the aircraft or anything at this point of time.
Unidentified Participant
Understood. Thank you. I’ll fall back in the queue, sir. Thank you for the answers.
Operator
Thank you. [Operator Instructions] We will take the next question from Krupashankar. Please go ahead.
Sudha Pai
Yes, Mr. Krupashankar.
Tushar Gunderia
Yes. You are in the mute.
Krupashankar N.J.
Yes. Sorry about that. Am I audible now?
Sudha Pai
Yes.
Tushar Gunderia
Yes, you are audible.
Krupashankar N.J.
Thank you. Thank you for the opportunity. Sorry, I joined a little bit late. Can you probably repeat what would have been the tonnage for the quarter and number of shipments, if you can?
Sudha Pai
The shipments are 96.6 million and tonnages are 3,43,676.
Krupashankar N.J.
Okay. Thank you. My question was more true with on the — in the markets, newer markets which we had taken-up on e-commerce as such, for example, taking with a platform like [Indecipherable] and so on. Just wanted to get a sense, is e-commerce going to be the fastest growing segment — sub-segment followed by surface is that understanding correct?
Sudha Pai
Yes. That’s a trend at least what we are also witnessing.
Krupashankar N.J.
All right. So given that generally, we have seen that there has been some challenges relating to your yields on e-commerce as well, which you have said that it is quite competitive right now. Where do you think the buck stops? I think after a certain point, it becomes unviable to go below a certain level. So is there any thought process around what the management thinks that probably if the value of the shipment is X, we should assign a particular logistics cost range and that is where has to be the lowest logistics cost. Is that something which you guys do as an assessment.
Sudha Pai
So from financial aspect, definitely that’s one of the things that we keep on pushing to ensure that we have a profitable growth. However, we have to also Blue Dart is known for its timeliness in delivering the shipment. That remains the key line. So nothing comes at the cost of compromise on the quality. The quality comes first, and then comes the cost, and then we ensure that we have a profitable growth as well.
Krupashankar N.J.
Thank you. So is it very fair to assume that the pricing bank for a Blue Dart versus the rest of the industry would have that premium disparity which we have seen in Surface Expresses. Is that something which we should consider going ahead?
Sudha Pai
Well, it depends on various criterias like what lane we are looking at or which you — I mean it depends on various criterias there like. So not really sure that what you just mentioned would be the — yes, sorry.
Krupashankar N.J.
Right. Yes, I understand. So probably, let me rephrase it in a different manner. A specific probably where growth avenues, let’s take like a Tier 1, Tier 2 city where the growth has been substantially higher, but the market has become quite intense over there. We would choose to price our services according to the competitive environment. But whereas the areas where the niche is still existent with respect to requirement of a quality fast service and that is something wherein are the pricing disparity may continue. Is that — is this a fair assessment?
Sudha Pai
Well, yes, would say that yes.
Krupashankar N.J.
Sure. So in that context, why I’m driving this part is just to understand that the pricing hike which we have announced starting in from January and that the volume growth generally for the industry is facing a lot of challenges, be it on e-commerce or Surface Express. The pushback would be quite high from a customer standpoint and given the inflationary part is eating up on our margins, how confident are we with respect to the price hikes over the next coming in from January onwards? That’s something which I wanted to pick your brain on.
Sudha Pai
See, as you rightly said that the inflationary trends are at a very rampant speed. And we expect again like to have our price increases as per the annual calendar, which is Jan to December. And I guess there has been an press release as well confirming the GPI percentage somewhere between 10%.
Sagar Patil
10% to 12%.
Sudha Pai
Yes, 10% to 12%, so that’s the — that’s the outlook what we are having for next year as far as GPI and to cover the price increases.
Krupashankar N.J.
Sure. So it’s very fair to assume that as an industry, there will be certain price hikes coming in irrespective of tonnage growth. Is that something which you’re picking based on your conversation with the — probably your customers?
Sudha Pai
The — sorry, I didn’t get that question. Can you say that again, please?
Krupashankar N.J.
Sorry. So what I was trying to highlight is that few of your peers have also communicated from January onwards, there’ll be few hikes taken. But as an industry as a whole, is it fair to assume that irrespective of the volume growth coming in the next financial year, there should be price hikes taken just to offset the inflationary pressures. Is that something which is well understood by the customer? Because the pushbacks typically are quite strong, which differs a large portion of price hike. So just wanted to get a sense that now the industry has taken a stern view, the Express logistics industry has taken a stern view with respect to pricing. Is that a feeler which you’re getting with your interactions with customers, they are ready to give out that hike.
Sudha Pai
Say in the longer-term, that would be the phenomena because somewhere the cost increases, the rental increases, the minimum wage increases, the increase in the fuel prices, these all things somewhere maybe a month later or a quarter later and so on, it has to be passed on to the customers. And that could be an industrial trend as well. So we expect that I — we do have challenges with the customers, explaining them the reason for the increase in the cost and so on, but then overall, looking at the service quality, looking at the timeliness which Blue Dart is known for, sometimes we are able to convince the customers to accept this.
Krupashankar N.J.
Okay. Thank you for answering my questions, and all the best.
Operator
Thank you so much. [Operator Instructions] So one question was on the — what was — when was the last price hike taken and were we able to pass it entirely?
Sudha Pai
So the price hike — we have our annual GPI Excel. However, for certain customers where the contractually they fall within a quarter or within the second quarter of the year and so on, we accordingly have a negotiation and discussion with the customers and it’s an ongoing exercise, it’s not that we start-off in January and close in January or like close within the Q1. It happens, it closed continuously throughout the year depending on the customer contract, although the intention is that, yes, we have our all GPIs and it’s a desirable thing as well to have all the GPIs frozen right in the quarter one itself, at least for the contracted and the regular customers.
Operator
Sure. We’ll take the follow-up question from Mr. Amit. Please go ahead.
Amit Dixit
Yes. Thanks for the opportunity again. Just pushing further on this price hike, do we foresee some resistance from the customers considering the operating environment we are in? And do you think that this price hike, if accepted initially can come at the cost of volumes because our volumes have grown quite a bit in — if you compare Y-o-Y or Q-o-Q. So in Q4, do we see volumes coming under pressure if this price hike is accepted or vice versa?
Sudha Pai
Say, overall there is a — overall if there is a great boost in the domestic demand, and if the industry trend is that the cost increases or the GPI from most of the competitors as well as us stands in between 8% to 9% to 10%. Maybe — there may be — for a shorter period of time there may be the volume challenge, but overall like if you look at how the overall economy has to work, the price hikes cannot be evaded, can we say a no to our minimum wages, we can’t say it.
Can we say no for a rental increases, no. We try to defer it. We try to ensure that minimum wages are something which we can’t even defer it. So similar would be the outlook on the GPI part with the customer. Maybe there would be a deferral, maybe they would accept it, the volumes would go lower and so on. But then overall looking at what is the USP of Blue Dart, it’s a timeliness. Considering that factor, we expect that the volume would trend equally along with the price increases. That’s at least the expectation.
Amit Dixit
Okay. The second one is essentially on Air Express since we are seeing that Surface Express share, while we don’t know, I mean, qualitatively or quantitatively how much is the share, but we know for sure that from the discussions we have had that it is increasing. Now in this scenario, do we see that some — how do you — actually, how do you see the competition from large e-commerce players having their own logistics ecosystem and airlines also utilizing their belly cargo for Air Express. How does — how is the competition evolving over there? And do you see that because of the low yields that we are getting now, some of these guys ultimately could actually give it to third-parties like you or something like that?
Sudha Pai
See, that — those challenges do continue to trend in our board room discussions with the new airports coming in with the — more of a belly space being available. And the trend that we may have — we may not have a dominant position as we are — we were having in the past on the air part. Those discussions do continue and do dominate the discussions. But ultimately what we have so far note is that with this commercial network space and so on, it’s an opportunity but ultimately, Blue Dart has its own network. It has invested again into two aircrafts to make its network more robust.
So service quality is something where we are currently able to hold on because of these investments. And yes, I mean, there would be a bit of an ups and downs, but the current trend is like our network — investment into network helps us to maintain the service quality, and ultimately the customers.
Amit Dixit
See, one more, if I can squeeze that the freighters when initially they were contemplated, we thought that we will serve the Northeast market because it was quite attractive some of the Tier 2 cities. So does that thesis still hold or after a while you find that the market is no longer as attractive as we thought it to be or maybe because of the overall slowdown, we are seeing that maybe what kind of potential we contemplated might just come at its deferred for the time being.
Sudha Pai
So our utilization, as I mentioned in few of the earlier responses, our utilization has improved on our — on these two networks that we have invested into, which means that our investment in Northeast continues to improve, of course, the pace at which our expectation is that it should improve versus the pace at which in reality it is spending. Maybe there is a bit of a gap there. However, currently, we will — we intend to stick to our laid down network, which includes investment into Northeast.
Amit Dixit
Okay. Now since we have reached already 80% to 83% utilization and 90% to 92% is ideal, which you said that we might see it getting achieved in Q4. Is there any plan to go for new freighters at this point in time?
Sudha Pai
For the new…
Amit Dixit
New freighters, yes.
Sudha Pai
No. Not currently in the pipeline?
Amit Dixit
Okay. All right. Thank you so much and all the best.
Sudha Pai
Thank you.
Operator
Thank you so much. We’ll take next question from Mr. Anshul. Please go ahead.
Anshul Agrawal
Hi, thank you for the opportunity again. So my question is on the capex spends that we envisage for this year, the next year and you alluded that it’s on — it’s majorly on surface facilities or Surface Express. Now considering we are asset-light in this segment, would you be able to throw some light on where exactly the spends will happen? Some broad color.
Sudha Pai
Those investments would be mainly on the hubs and the service centers that we would need for ensuring that we have a better auto sorters, which improves the speed of servicing to the customers like that would be the broad investment that we are planning on the surface part.
Anshul Agrawal
Okay. Yes. Clear. Thanks.
Sudha Pai
Thank you.
Operator
Thank you. We’ll take next question from Mr. Achil. Please go ahead.
Unidentified Participant
Yes. Thank you for the follow-up opportunity, ma’am. If you could help us understand the extent of fixed cost at the company level on a quarterly basis. Is there any way to know that?
Sudha Pai
We generally do not publish any further breakdown of the cost, which is into semi-variable, variable or fixed cost. We do keep it as our internal and my [Phonetic] review. I’m really sorry for that.
Unidentified Participant
No, problem, ma’am. I was just referring to the INR11 crore and INR8 crore number what you had mentioned. If you have a similar number at the company level, I think you mentioned that for the particular freighter.
Sudha Pai
Yes. This is particularly to give our investors an overviews about [Speech Overlap] are getting in terms of utilization because that’s one of the key question that we get that how are our two aircrafts that we have invested into. So which is why we gave that information. But overall at a fixed cost level, it would be roughly as a percentage of the total cost base, we can say that it’s around 50%, 50% of my total cost base. And I hope this helps, Achil.
Unidentified Participant
Yes. [Speech Overlap]
Sagar Patil
[Indecipherable] because the cost that is fixed from a monthly perspective, what we show things from a quarterly perspective or yearly perspective. So in the long run, everything is variable. So it’s a very subjective interpretation. But yes, month-on-month, when you look at it, 50% broadly is what we see, but then that can always be a variable because it can always move the manpower, the contracted vehicles out and depending on how the volume comes in.
Unidentified Participant
No, fair point. Where I was coming from, like in terms of employee cost I presume when you’re saying 50% of the cost, you’re excluding the freight and servicing cost, are you including everything in that total cost?
Sudha Pai
Total cost…
Unidentified Participant
Including the freight and servicing cost.
Sudha Pai
Yes.
Unidentified Participant
Understood. Ma’am, second question I had was with respect to the white space. So like you mentioned Northeast, we intend to continue investment in the Northeast pocket. Are there any more such white spaces left where we still have to kind of invest? And if yes, what is the quantum and where?
Sagar Patil
We do not see any major white spaces even in terms of Northeast, it’s not that we have entered those markets. It’s only that we have improved the service quality by having extending our own network so that we [Speech Overlap] to 24 hours. So it’s more of the [Speech Overlap] major white spaces where we have [Technical Issues]
Unidentified Participant
Understood. And just last question, if I may. Is it possible to get some sense about the mix in terms of various industries for us, FMCG, pharma, etc, governments, etc.?
Sudha Pai
We generally do not…
Unidentified Participant
Understood. Thank you, ma’am. Wish you all the best.
Sudha Pai
Thank you, Achil.
Operator
Thank you. [Operator Instructions] Sir, we’ll take a couple of questions which were there in the chat box earlier. So one was what is the — what has been the growth in the air segment and how has the industry grown? One is how the company has grown in air and what about the overall industry?
Sudha Pai
We generally avoid giving details on air versus ground segment-wise information.
Operator
Just I think one last question from the chat box. So a lot of the other companies are talking about pretty slow volume growth in 1H and even they are also mentioning about the price hikes is kind of not possible in the current environment. So while we have announced the price hike from January onwards, what’s the probability that we might not be able to take the price hike in an entire way or the price hike might be delayed? Any comments on that?
Sudha Pai
Yes. I mean it really depends on how the demand for the market is, how is the overall economic scenario? While we also intend that the price hikes should materialize as has been communicated, but it really depends on lot of other factors as well. But we are optimistic that the price hikes that we have communicated to translate into the reality.
Operator
We’ll take one question from Mr. Dhruv Jain. Please go ahead.
Unidentified Participant
Yes. Thanks for the opportunity. I had one question with respect to margins. So obviously, we’ve been in a weak operating environment with respect to volume growth. But assuming that say about two quarters from now if double-digit growth for the industry as well as for Blue Dart comes through, what is the peak PBT or EBITDA margin, whatever number you are comfortable with that you can get to? I mean, if you’re not comfortable giving an exact number, if you could just give us a directional number in terms of how much improvement that we can see, given the fact that you’ve already invested in a lot of freighters in all the other assets. Thanks.
Sudha Pai
So Blue Dart per se to look at the past trends had been consistently, I’m being very conservative, we’ve been on a single-digit margin. We expect to remain within the same range between 7% to 8% to 9% like that’s the outlook that we are having.
Unidentified Participant
But would there not be any scope for operating leverage to play-out?
Sudha Pai
For the — sorry, operating…
Unidentified Participant
So in a sense that would it not be the case that your cost don’t grow as fast as your revenue growth. I know you have to invest some bit of it in your business again, but would there not be some scope for operating leverage in terms of margins improving for you from where you are currently?
Sudha Pai
Well, we do have — we do keep a tap on the operating leverage and to ensure that the margins improve. However, we would be investing into the surface facilities as a part of our capex spend, which would again keep us our — keep our annual — the margins at the single-digit level…
Sagar Patil
You’re talking about PBT margin man or EBITDA margin?
Unidentified Participant
EBIT margin? EBIT — consolidated EBIT margin, right?
Sudha Pai
Yes.
Unidentified Participant
Okay. Thank you.
Sudha Pai
Thank you.
Operator
Thank you. As there are no further questions. I would now hand over the call to the management for any closing comments.
Tushar Gunderia
So nothing specific from our side further. I mean, if there are no questions, we can close the call or let us.
Operator
Sure. So thank you so much for giving us the opportunity to host the call and thanks everyone for joining in.
Tushar Gunderia
Thank you. Thank you, Alok for organizing. Thank you all. Thank you, investors.
Sagar Patil
Thank you.