Gateway Distriparks Limited (NSE: GATEWAY) Q2 2025 Earnings Call dated Nov. 11, 2024
Corporate Participants:
Unidentified Speaker
Sunil Nair — Chief Executive Officer, Snowman Logistics
Analysts:
Bhoomika Nair — Analyst
Krupashankar NJ — Analyst
Ravi Singh — Analyst
Yash Tanna — Analyst
Amit Dixit — Analyst
Kevin Gandhi — Analyst
Nihal Shah — Analyst
Pranay Khandelwal — Analyst
Aditya — Analyst
Vipulkumar Shah — Analyst
Aditi Sawant — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q2 FY ’25 Earnings Conference Call of Gateway Distriparks Limited and Snowman Logistics 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. [Operator Instructions] Please note that this conference is being recorded.
The day on call, we have Mr. Prem Krishnan Dasgupta, Chairman and Managing Director; Mr. Ishan Gupta, Joint Managing Director; Mr. Sandeep Gupta, Joint Managing Director; Mr. Karthik Sundaram Aiyer, CFO, GDL; Mr. Rajguru Behgal, President, Rail GDL; Mr. Manoj Singh, President, CFS GDL; Mr. Sunil Nair, CEO and Director, Snowman; Mr. Padamdeep Singh Handa, Chief Commercial Officer, Snowman; and Mr. N. Balakrishnan, CFO, Snowman.
We will now directly begin the question-and-answer session.
Questions and Answers:
Operator
[Operator Instructions] The first question is from the line of Bhoomika Nair from DAM Capital. Please go ahead.
Bhoomika Nair
Yeah, good evening, sir. Thank you for the opportunity. Sir, if you can just start off by giving some color on the EBITDA per TEU for both rail and CFS? And the second question is more about, you’ve seen a good recovery in terms of the rail volumes between the first quarter and the second quarter, how are things panning out, out here, and what is the outlook in terms of volume growth that we are seeing, given this improvement? And if you can talk about how the rail infrastructure is improving. If you can just give some color on that, and then maybe I’ll come back with more questions.
Unidentified Speaker
Yeah, hi. On the EBITDA per TEU, so rail is at about 9,800. CFS, if you look at the pure operational one, it’s about 1,200, 1,300. There was some tapering on also. In terms of overall volume, Q2 is much better than Q1, like we can see in our number. This is not because the macros are really improved as such, it’s more us increasing our market share in certain markets, especially Ludhiana market with increased market share from about 21% to 27%, 28% from the last month. There has been pricing correction which has led to this, but we’ve been able to consistently do over 6,000 deals over there.
In terms of infrastructure, now the latest thing for us is that Faridabad is double stacked. This has happened about 10 days ago. So now we’re running direct double stack services rather than convenient, and other location is due to the turnaround time, service to the customers, and our supply reduction and cost. Most of the cost advantage has [Indecipherable] still there is some benefit, so we’re looking to increase our market share in this region as well now going forward.
Bhoomika Nair
So what is our market share from the NCR region? Sorry, I missed that number. You gave some Ludhiana market, right, 21 to 20, if I’m not wrong?
Unidentified Speaker
Yeah. And NCR got to about — from 17% to 18%.
Bhoomika Nair
Okay. Okay. Clearly, there has been a decent improvement in the rail performance both in terms of volumes as also in the EBITDA per TEU turning back [Indecipherable] kind of bouncing back to the 9,800. You spoke about the Faridabad double stacking starting off right now. So what are the kind of volumes that we are doing there and the benefits of the double stack, how can it kind of increase the EBITDA per TEU on a branded basis, if you can throw some color? And also, on the other terminals as well, how are you seeing the scale up in terms of volumes?
Unidentified Speaker
So, volume is still hard to say going forward, what it will be like, but hopefully making this EBITDA Q2 kind of numbers for the rest of the year, it’s still something overall in terms of the Red Sea crisis is continuing. If not, still shipping via the longer route and more low value commodity cargo is still not back to what it was last year, and then year-on-year you’re probably seeing a bigger [Indecipherable] because Q2 last year was up, the second half of the year was weaker last year, so hopefully we can better that with the second half standalone.
In terms of, like I said, the cost, we’re already getting the margins [Technical Issues] faster turn down than that in both cases, and some capacity increasing at Garhi [Phonetic] as well.
Bhoomika Nair
So Faridabad, what are the current volumes on a monthly basis, broadly?
Unidentified Speaker
About 2,500.
Bhoomika Nair
Okay. Okay. Got it. Secondly, in terms of new ICDs, which you can talk about, I know Jaipur was stuck for some issues out there. What is the progress, other terminals, you were looking at some — one more or two more terminals per se to drive much more growth in terms of the rail volumes, what is the status out there?
Unidentified Speaker
Yeah. Hi, Bhoomika. [Indecipherable] So, there are a couple of parcels of land which are not available to us, as reported earlier, and we are trying to get some additional land, but again, the continuity and the difficulty in getting additional land and the price at which it is available now is making it unviable. So, for the time being, we’ll wait for these two land parcels to be free from the authorities. So, right now, we cannot give you a date because we don’t know how long it will take to get these land parcels back.
So, depending on that, for the time being, there is a delay and there is going to be a further delay in knowing that these land parcels, and now these land parcels, we cannot go ahead and do a similar kind of thing in that facility. So, again, we are looking at some other places and we due to ongoing elections and something or other is happening, and frankly, the land prices have gone up. So, we are looking at one location actually, where we are close to not only identifying but stay under negotiation for the pricing. And if we are able to negotiate, that will be [Indecipherable] immediately.
So, for the time being, the expansion in the rail is this one plus. Whether you can say a strategy, whether now it is level set at Faridabad, we are going to get some additional volume that will give us some implications in the group. So, we will continue but it all depends on the EXIM volumes, because even today, we are 99% EXIM and only 1% domestic, though we have started looking for domestic movements also in particular, but that’s what the situation is right now.
Bhoomika Nair
Okay. So right now,, it will be more about consolidation of the existing terminals and driving efficiencies there, and perhaps some new terminals still sometime, how will you foresee, if I understood that correct?
Unidentified Speaker
Right.
Bhoomika Nair
Okay. Sir, just in terms of the CFS business, I know we were looking to monetize some of the land parcels, profitability is clearly dipped out there. But if you can just comment on where are we in the whole process, anything — any progress out there from a monetization aspect?
Unidentified Speaker
We are going through the process, and because of holidays and then the quarterly results, we will now get back to the process. And these things take time. I mean it does not happen overnight. So we will follow that due process, but I cannot give you on the timing right now. But yes, we have value for the land and the business, and we are looking at some options. Basically the whole of CFS business, but maybe if we get partial exit also, we’ll look at that depending on the valuation.
Bhoomika Nair
Sure, sure. I’ll come back in the question queue, sir. Wish you all the best. Thank you.
Unidentified Speaker
Thank you.
Operator
[Operator Instructions] The next question is from the line of Krupashankar from Avendus Spark. Please go ahead.
Krupashankar NJ
Hi, sir. Good afternoon, and thank you for the opportunity. My first question is on one of the notes which was given in the — under the results, talking about LMS fee for facility, and about INR48 crores of demand from the Northern Railway. Can you speak a little bit more about that, sir?
Unidentified Speaker
Sorry, sir, your voice is not clear.
Krupashankar NJ
Sorry, is it better now?
Unidentified Speaker
Slightly better, year.
Krupashankar NJ
Is this better?
Unidentified Speaker
Yeah.
Operator
Mr. Krupa, I request you to please use your handset.
Krupashankar NJ
Yeah, I’m on handset now.
Operator
Yes, please go ahead.
Krupashankar NJ
Okay. So I just wanted to check on the comment in the results about the demand for Garhi facility from Northern Railways regarding land latency to the tune of INR48 crores. Can you just highlight a little bit on that front, sir? What is exactly the issue over there?
Unidentified Speaker
Yes. The issue has been going on for the last 12, 13 years that we just made the notes to the government. We’ve already been taking the provision for the difference in amount that railways is giving. There’s one land parcel basically where there’s a deferring opinion between us and railways on what the start date was and what the amount being charged for it. So we are paying according to our calculations, but this is a routine ongoing matter. Don’t have any idea when it will get resolved by as such, but we’re not too worried about it.
Krupashankar NJ
Okay. So we don’t have to provision for additional INR25 crores. So INR28 crores sort of a number going in the coming quarters. We don’t have to do that?
Unidentified Speaker
No, we don’t have to.
Krupashankar NJ
Okay. Got it. So second question was on the NCR market per se. Just wanted to get a sense that is there — with respect to the EXIM imbalance, are you seeing that improving at the moment? And is there also the competitive pressures in the NCR market? Is there any substantial advantage coming in because of double stacking from the Faridabad facility given that it’s connected to the DFC. So something you can talk about on those lines, sir?
Unidentified Speaker
Yeah. So we are anticipating a definite advantage after this Faridabad has got double stacked because earlier there was too much pressure on a single hub. And the per TEU vulnerability of the very poor environment because all the double stacking used to be happening only at the one terminal, which is Garhi Harsaru. Coming up of Faridabad, we have this dual advantage in NCR that we will be able to pump in more trains towards NCR, which will help in not only the utilization of our asset in a better way, but we are also targeting some other business, which is in and around Faridabad because now we have a first mover advantage.
So there is no ICD, which is giving this double stack facility in Faridabad area and we have a good pipeline. And very soon, we are anticipating to increase not only the volumes at Faridabad, but that will also help in increasing the volume at Garhi Harsaru as well because of the new investment which is coming around Garhi Harsaru, one or two plants of major auto companies are coming up. Plus we are also exploring to target some other territory because of the new road infrastructure, which has also developed around Faridabad. So we are expecting to increase our market for that.
Krupashankar NJ
Okay. And with respect to the MP, just wanted to check on EXIM imbalance, how do you see that evolving at the moment? And going ahead, are you seeing the exports picking up and the imbalance correcting in the second half?
Unidentified Speaker
So we are not seeing a major problem as far as the imbalance is concerned because it is still in the ratio of like 55%-45%, 55% is the import side, and 45% is the export side. But with the increase in volumes at Faridabad as well as Garhi Harsaru and other locations, so we are expecting that we will be maintaining the same kind of imbalance, which is okay, it doesn’t have a major impact. Plus we will be also getting into some other business, other than EXIM. So we have some good pipeline wherein we will be shifting some empty containers and domestic and EXIM kind of business we are exploring. So that will help in further reducing the imbalance.
Krupashankar NJ
Understood. Thank you for answering my question.
Operator
Thank you. The next question is from the line of Ravi Singh from Cosmic Horizon. Please go ahead.
Ravi Singh
Hi, thank you for the opportunity. So I just — if I heard it correctly, you said the Jaipur and the other ICD that we were planning, that has been put on hold?
Unidentified Speaker
No, it has not been put on hold. Jaipur has been delayed because some land parcels have not been made available to us because of the underlying political advancement of those pieces of land. And on the other locations, we are actively looking at one of them, I said, is what we see coming in the near future. So none of the expansion plans what we have announced earlier are on hold. We are actively looking for many locations, but it is a question of when we materialize and when we get possession of them.
Ravi Singh
Right. Sir, and also on the domestic business, you said you’re planning to get into that now. So just wanted to understand the difference in the rates between EXIM and domestic, how is the freight rates different?
Unidentified Speaker
It’s on the similar lines only because we’re not doing third-party location domestic. We’re doing domestic within our own locations. So that will be running mainstream. But it helps instead of setting up empty containers that we can use for domestic cargo in return.
Ravi Singh
Right. Makes sense. Sir, also on the CNBC interview way back in August, you guys had mentioned that you’ll sell the CFS business for approximately INR1,000 crores within two quarters’ time. Then subsequently on the Q1 call, you kind of kept the time lines open ended. So just trying to understand where is the bottleneck really that we are facing? Is it the price or is it the buyers don’t want to buy the whole asset together? Some light on this? And also, if you could give us some sort of an outer limit so that we can model — to say, FY ’26 end or FY ’27 end, some sort of an outer date by which you could sell this business?
Unidentified Speaker
Well, I mean, we cannot say for sure when we could sell because when it was suddenly — we have just compiled the budget between the land and the ownership and the assets built on that and the business over there. So like I said earlier in this call that due to the holidays and the quarterly events, we
Announced today.
So we’ll be getting on to business conducting the potential buyers. But these things, I mean, first is we have to find a buyer. Second is, we have to find the right value at which we are willing to exit. So these are open-ended. I mean, I cannot give a time frame and it will be before the next quarter, six months
Or one year. And what I believe will be all five years of these things that will go along, and along whatever the market trends are and people investing very quickly in the business. So we will keep the investors informed on the recommendations and the government takes place and further development takes place.
Ravi Singh
Thank you. I’m wishing you all the very best.
Unidentified Speaker
Thank you.
Operator
Thank you. The next question is from the line of from Yash Tanna from ithoughtpms. Please go ahead.
Yash Tanna
Yeah, hi. Thank you for the opportunity. Am I audible?
Operator
Yes, sir.
Yash Tanna
Yeah. So my question was on Snowman. Last quarter, we mentioned that we have signed a new client in PL and the revenues probably will start from August. So is this increase in 5PL attributed to the new client or it’s the regular business?
Sunil Nair
Yeah, hi. This is Sunil here. Yes, the increase in this 5PL revenue is primarily from the new client. As you know, the majority of the business in 5PL to and this is a season for them. But the increase that you are seeing is purely the addition of the new client is 1.5 months of their revenue has come in this quarter, whereas in the subsequent quarter, we will have full quarter revenue registered.
Yash Tanna
Right, sir. Got that. And on the margins front, last quarter, we alluded the margin drop to certain one-off costs. And this quarter, again, our margins have dropped Q-on-Q. So if you can explain a bit if in terms of profitability, is this the bottom or we are yet to see some impact? And also, if you can call out the reasons segment-wise for the margin drop?
Sunil Nair
Yeah. So the primary impact that has come in margins are in the warehousing segment, which is affected mainly due to three segments where the sales have been less. One is QSR. So all the QSRs in the country are struggling a little bit with respect to their business that has impacted us as well. Their handling has been quite minimal. due to the season, there has been some impact in ice cream. And there is also the seafood exports have slowed down a little bit due to the pricing issue in the international market.
Yash Tanna
Right sir. So maybe our realizations have dipped year-on-year and Q-on-Q. Is it for the warehousing piece?
Sunil Nair
Yeah, realization for project is on the right track with just a couple of percentage here and there.
Yash Tanna
Okay. And when do we expect this to improve?
Sunil Nair
So we are seeing some traction now in this month onwards in terms of seafood and ice cream will start picking up only in the month of February. And that is what we…
Yash Tanna
Right. Got it. All right, sir. Thanks a lot. There’s one question on Gateway. So one of our peers have mentioned in their call that they will do double stacking to terminal somewhere in Barna, which is just 400 kilometers away from JNPT. And hence, they are going to double stack a significant volume that will be for JNPT before JNPT commissions on the DFC. So my question is because of this, are we going to see any impact on our business or our volumes?
Sunil Nair
So we’ve been following this model for quite some time since started to do this. So we don’t see any impact on JNPT volumes for us on that. It depends more on [Indecipherable].
Yash Tanna
All right. Thanks.
Operator
Thank you. The next question is from the line of Amit Dixit from ICICI Bank. Please go ahead.
Amit Dixit
Yeah, hi. Good afternoon, everyone. And thanks for the opportunity. Just a couple of questions from my side. The first one is if I look at the CFS realization, that has shown a significant drop, I mean if I compare it with any quarter. So just wanted to explore reasons for that and whether it is one-off, what kind of outlook do we see going ahead for this division?
Unidentified Speaker
CFS margins are under pressure not the EBITDA level, there is a drop because Bombay [Phonetic] also, in such case, is a 35-year-old facility. We are revamping it. So there’s a lot of R&M going towards that. And I think there’s a bunch of legal buttons going on with Punjab on there. So there’s some arbitration related costs. Again, that is impacting the [Indecipherable] is a five-year facility, we are revamping it. So there’s a lot of R&M going towards that. there a bunch of legal matters going on the Punjab — so there’s some arbitration-related costs again that is impacting the P&L. If you look at it pure operational basis, the dip is not as much. But competition is there and every day, we need to keep reevaluating and seeing what kind of pricing we’re working on. Labor cost is also exponentially high in Bhavahva, especially as every three years, it gets renegotiated with everyone at level. So those are the factors basically coming in covering it.
Amit Dixit
Yes, that is on cost side. But on revenue side, is it the increased competitive intensity that has caused the realization per TEU dropping below 70?
Sunil Nair
Yes. Basically, the 30-70 is — TPD is also increasing. ground rent is actually going down. That is a general trend that’s been happening for the last few years and rates are also slipping a little bit. And now we are recognizing revenue net of the discounts. So that is why the revenue might be less compared to last year.
Sorry, I forgot to INR20 crores is just a change in accounting standard that was shifting from gross revenue to net revenue. There were some discounts earlier which you were counting as part of net revenue, but that’s gone away. If you take that out, then the dip in revenue is actually only INR3 crores.
Amit Dixit
Got it. Got it. Yeah. The second one is on Kashipur. So maybe I missed your prepared remarks earlier. That’s why I’m asking it maybe again. Could you let us know the kind of business at Kashipur, how is it ramping up? Paper and pulp, I don’t think it’s in the best of help. So what kind of ramp-up expectations do we have from there in the near term?
Sunil Nair
So we’re not — as of last quarter, we’re not sharing individual terminal-wise data anymore. But Kashipur volumes have a lot of scope to increase. There are some key customers that we won and we can probably see that impact coming in Q4. Q3 is also a bit of a slowdown as it’s a waste paper heavy dependent market as most of these mills go on — most of these plants shut down for maintenance during Diwali. So we should see improvement there from Q4 onwards.
Amit Dixit
Okay, that is very helpful. Thank you.
Operator
Thank you. The next question is from the line of Kevin Gandhi from CapGrow Capital Advisors LLP. Please go ahead.
Kevin Gandhi
Hello, sir. I hope my voice is audible.
Operator
Yes, sir, you’re audible.
Kevin Gandhi
Yeah. Sir, since last two to three quarters, we are seeing the rail freight realizations going up by almost 8% to 10% each and every quarter. So just want to understand the reason behind that, the rail realizations. Thank you.
Sunil Nair
So if you’re looking on year-on-year volumes, on the busy season surcharge that has come in. So approximately INR2,000 to INR3,000 per TEU it’s gone up on the revenue side.
Kevin Gandhi
Okay. And okay. So sir, actually, I wanted to understand the reason behind that. So like due to the cost increase or are you seeing lesser of the competitive intensity that we are actually able to raise the prices?
Sunil Nair
So I just mentioned that the busy season surcharge, which railways put in, which is approximately — it’s 10% of the rail wallet charges that we pay in September 30 last year, it was implemented and now it’s there for the full 12 months. So last year, it was only there for Q3, Q4. So this year, it’s there in Q2. If you’re looking at a comparable number, it wasn’t there last year. That’s probably the difference in the revenue per TEU that is coming. Competition intensity is there. So discounting has actually gone up for us. But we’ve handled more TEUs in Q2 rather than Q1. So you’ll probably see some effect of that.
Kevin Gandhi
Okay, sir. Got it. Thank you.
Operator
Thank you. The next question is from the line of Nihal Shah from Prudent Corporate Advisory. Please go ahead.
Nihal Shah
Hello. Thank you for the opportunity. So we know that last year, the second half for the impact of the Red Sea issue and now we are heading there. So given that soft base, how much of a growth can we see in the second half? Because if we compare the second half of last year and first half of this year, the volumes have remained the same. So can we going ahead, estimate a higher volume or it should remain at these levels because Q2 has been better than Q1.
Sunil Nair
Yeah. So it’s hard to say, but the Q2 trend, if it continues, then H2 will be higher than H2 last year. So that is something we’re hoping for. But because Q1 was low, we’re not sure what the year-on-year for the full year will look like — but hopefully, this positive trend continues and we should see volume uptick from here. Thus, we’re taking some more corrective action in certain markets where our market share is low. So even if the macros aren’t growing, we should see our market share increase.
Nihal Shah
Okay. And so does this also mean that if the market share and the revenue increase, does that give a positive impact — does that have a positive impact on our EBITDA per TEU as well, which is, I guess, suffering in the last four quarters?
Sunil Nair
So EBITDA per TEU at this level is probably quite healthy for us. And with Faridabad coming in and double stacking increasing, that is some uptick can be there, but we will have to also pass on some discounts to gain more market share, which we’ve done in Sanimar. So while EBITDA per TEU might go down slightly, our overall EBITDA as a whole will go up.
Nihal Shah
Okay. And on that, so what was the portion of double stacking in this quarter?
Sunil Nair
78%
Nihal Shah
Okay, thank you very much.
Operator
Thank you. The next question is from the line of Pranay from Alpha Invesco. Please go ahead.
Pranay Khandelwal
Hi, everyone. [Indecipherable]
Operator
Sorry to interrupt you, sir. I would request you to please use your handset.
Pranay Khandelwal
Am I audible now?
Operator
Yes, sir, much better.
Pranay Khandelwal
Yeah, my questions have been answered. So, thanks for the opportunity.
Sunil Nair
I’m sorry, we are not able to hear you.
Pranay Khandelwal
My questions have been answered. So you can move on to the next participant. Thank you.
Operator
[Operator Instructions] The next question is from the line of Aditya [Phonetic] from Kotak Securities. Please go ahead.
Aditya
Hello, everyone. Thank you for the opportunity. My question was more on the double stacking number, which is 38%. Could you give us a sense of where did this number kind of peak out in the recent past? And how can we aim to go back at the same level?
Sunil Nair
I think it was about 44%, 45%, so it should grow now with direct double stacking. We’ve also started focusing a bit more on 40 volumes, especially on the lightweight side. Most of the restrictions are going away, but there are still some restrictions on double stacking combination, which have been in place for the last 1.5 years or so. That’s why the number is slightly lower, but the industry is taking [Indecipherable]. Hopefully that come back plus Faridabad, we should be crossing 40% then.
Aditya
Okay. And if this change what you have a 600 basis points higher double stacking, what could be the impact on margins or ability to change to retain some benefits?
Sunil Nair
It’s hard to quantify it, but it will definitely improve the percent of double stack, but it depends a lot on the volume of that month, 40, lightweight, heavyweight, how many — is it 40 on 40 or is it 40 on 220? So there are a lot of variables that go into this, but it is definitely true that more double stacking equals to more savings.
Aditya
Understood. Maybe I’ll probably kind of put this in a different perspective. Our margins, obviously, are where they are, and double stacking is one endeavor. And you’ve talked about a few other endeavors to improve margins. You’ve talked about using mixed trains, doing more empties, so on and so forth. I’m just trying to get a sense of how much more use on margins can be seen by these endeavors that you’re thinking through over the next one to two years?
Sunil Nair
So, a full attempt INR10,500 to INR11,000 EBITDA per TEU is something we can look at, Faridabad double stacking, and JMPT being on [Indecipherable] customers to gain more volume rather than focusing on just the margin per TEU. So we’ll find the right balance and focus on overall EBITDA.
Aditya
Understood. And the other question that I had was, from a competitive perspective beyond con call, which is the other players — which are the other players, if any, who are kind of starting to challenge your market share? And who would those names be, and which all markets are seeing an increase in competitive intensity?
Sunil Nair
Vyana has five IPs competing for the same volume, so that’s a very competitive market. In terms of Garhi Harsaru, we are in a decent position, where our government only has a competing terminal. Faridabad also has three terminals overall, but if you include slightly, going up to, say, 15, 17 kilometers, those are more competitive than, say, Garhi or Kashi [Phonetic].
Aditya
Understood. Maybe the last question from my side. The CSS sale of assets, whether partial or full, is this an event that one can think through happening over the next six to 12 months? Or can it take much longer than that?
Sunil Nair
Very hard to say. I mean, we’re kind of — like we said earlier in the call, we’re still evaluating. We’ll start speaking to some people. And maybe we can let you know in three months, next call or the call after that, we’ll have a better update for you. But it’s not going to be a quick process. So we don’t see anything happening within this financial year for sure.
Aditya
Okay. Just on the cold chain business, obviously, the company, I think, continues to kind of add stake over there. What is the end game in terms of shareholding the company wants to reach over there? And if you could kind of just update us once again as what’s the rationale of using the cash of the company to kind of buy stake inside. That’s the last question. Thank you.
Sunil Nair
We are acquiring the shares within our acquisition. So, on our last financial year, we acquired 5%. And similarly, we can acquire up to 5% this year, it goes a little above 50%. So, one is that from an associate company, it becomes a subsidiary. Second is, we have to get through RLE and we are in a position to
Buy the shares and not be in a position. So, it’s a gradual process, putting in money in one go. And we see that going forward, Snowman has a very good potential with revenue as well as profit growth. So, it makes sense to be saved at this level and cannot say for the next year, but 50% is the minimum that we — above 50% is minimum that well achieve this year.
Aditya
Got that. Thank you for the responses. Those are my questions.
Operator
Thank you. [Operator Instructions] The next question is from the line of Vipulkumar from Sumangal Investments. Please go ahead.
Vipulkumar Shah
Hi, sir. Thanks for the opportunity. Most of the questions have been answered. I have just one question. When this full DXU will be operational, what kind of double-stacking we can look at from 38% where we can reach 60%-70% is possible?
Sunil Nair
So, the way we measure our double-stacking is that how much is carried on the second stack. So, it can’t exceed 50% that number. What we can increase is the number of 40 seats that we go. But, I mean, overall, it is a very sad one, most of that is possible not to reach 50%. So, proposed DFC to Bombay may be up to 45% is something that we can target.
Vipulkumar Shah
Thank you, sir.
Operator
Thank you. The next question is from the line of Aditi Sawant from ADM Advertisements [Phonetic]. Please go ahead.
Aditi Sawant
Yeah. Hi. Thank you so much for the opportunity. Just one change in my name. So, my firm name is ADM Advisors. So, yeah, the first question is, I just wanted to understand that on the growth in terms of — what kind of growth are we expecting in the second half of this year and say for the next year?
Sunil Nair
This is for Snowman or Gateway?
Aditi Sawant
Sorry?
Sunil Nair
Is the question for Snowman or Gateway?
Aditi Sawant
On a consolidated basis.
Sunil Nair
We are expecting some growth in the second half, but by how much we can’t really say. We expect some improvement over the Q2 numbers. So, Q3 and Q4 last year were lower than Q2 in terms of throughput. So, we should see some improvement there. Yeah. So, as I mentioned earlier, some of the 5G customers are just onboarded in this quarter. So, we expect those revenue for the second half of the year.
At the same time, our Lucknow project is up and running now. It was made partial a couple of weeks back. So, that could also be put to function. Next month, which is December mid, we will have our Faridabad facility also functional. And by Jan end, we’ll have our Visakhapatnam facility function. So, putting all these together, we expect a reasonably good growth over the first half of this year in the second half.
Aditi Sawant
Okay, sir. I got it. And the last question is like post-Faridabad, double-stacking, so what would be the impact on our business if you can just give some
Idea?
Sunil Nair
This only happened about 10 days ago. So, we’ll wait and watch. And by next quarter, we’ll get you some more details on how the development will grow and operation.
Aditi Sawant
Sure. Sure. No issues. Thank you so much. That was helpful.
Operator
[Operator Closing Remarks]