Snowman Logistics Limited (SNOWMAN) Q3 FY23 Earnings Concall Transcript

Snowman Logistics Limited (NSE:SNOWMAN) Q3 FY23 Earnings Concall dated Jan. 24, 2023.

Corporate Participants:

Prem Kishan Dass Gupta — Chairman and Managing Director

Rajguru Behgal — President

Sunil Nair — Chief Executive Officer and Wholetime Director

N. Balakrishna — Chief Financial Officer

Analysts:

Amit Dixit — ICICI Securities — Analyst

Lavina Quadros — Jefferies India Private Limited — Analyst

Deepak Krishnan — Macquarie — Analyst

Achal Lohade — JM Financial — Analyst

Rohit Ohri — Progressive Shares — Analyst

Harsh Shah — Dimensional Securities — Analyst

Yash Tanna — ithought PMS — Analyst

Atul Tiwari — Citigroup — Analyst

Jay Shah — Capital PMS — Analyst

Sumit Kishore — Axis Capital — Analyst

Bharat Sheth — Quest Investment Advisors — Analyst

Bharti Sawant — Mirae Asset — Analyst

Rahul Chandran — Sunidhi Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Gateway Distriparks Limited and Snowman Logistics Limited Q3 FY ’23 Earnings Conference Call. 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 the 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].

Today on the call we have Mr. Prem Kishan Dass Gupta, Chairman and Managing Director, Gateway Distriparks Limited, Chairman, Snowman Logistics Limited; Mr. Ishaan Gupta, Joint Managing Director, Gateway Distriparks Limited, Director of Snowman Logistics Limited; Mr. Samvid Gupta, Joint Managing Director, Gateway Distriparks Limited, Director, Snowman Logistics Limited; Mr. Sandeep Shaw, CFO, Gateway Distriparks Limited; Mr. Rajguru Behgal, President, Rail, Gateway Distriparks Limited; Mr. Manoj Singh, President, CFS [Phonetic], Gateway Distriparks Limited; Mr. Sunil Nair, CEO and Director, Snowman Logistics Limited; and Mr. N. Balakrishna, Finance Controller, Snowman Logistics Limited.

I now hand the conference over to Mr. Prem Kishan Dass Gupta. Thank you. And over to you, sir.

Prem Kishan Dass Gupta — Chairman and Managing Director

Thank you. Good evening, and a warm welcome to all the participants to the post results earning call of Gateway Distriparks Limited and Snowman Logistics Limited. We have uploaded our results, press release and presentation on stock exchanges as well as company website. I hope you all had an opportunity to go through the same. Due to global macro economic situation, there is still a dip in the throughput in Q3, particularly in the export direction. For various reasons, running of the train is to the ICD, because of the track work and POD [Phonetic] got delayed. But the company still continues to show a healthy growth of over 15% profit-after-tax, as the company continues to reduce its debt.

In Snowman, we are pleased to report that Q3 FY ’23 has been a quarter of outstanding financial performance for our company. Moving forward, we will be focusing on expanding our capacity and identifying new market opportunities to drive growth. Snowman will be establishing, custom-build facilities for multinationals and we have already started with one in Shoolagiri, Tamil Nadu. And there are other locations where the work in progress is there, which will offer a comprehensive range of services including storage, handling, order processing, warehouse management and secondary transportation.

Our strategy at both Gateway and Snowman includes, expanding into new industry segments and geographical regions to increase our market share and reach. By executing these efforts effectively, we aim to consistently meet the expectations of our stakeholders and drive long-term value for our shareholders.

With that, we would like to open the floor for an interactive question-and-answer session. We welcome any questions or comments you may have at this time. Thank you, and over to the moderator.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Amit Dixit from ICICI Securities. Please go ahead.

Amit Dixit — ICICI Securities — Analyst

Yeah. Good afternoon, everyone. Thanks for taking my questions. I have a couple of questions. The first one is essentially on the drop in volume, throughput volume both at CFS and ICT. If it is possible to explain the reason for that typically, what all centers did contribute to this drop and the outlook going ahead. That would be very helpful.

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah, Amit. See, as I mentioned the exports have dropped considerably. If you look in quarter-to-quarter basis, it is over 15% drop in the volumes of export. Imports have increased a little bit, but what happens is that because of this, our double-stack ability comes down. And because of that, the EBITDA per TEU also drops. So the volumes are mainly down due to the exports, which we have seen going down in the last quarter. We have seen some improvement in the current month, but this trend is to be seen how it turns out over the period of next two months. But we are hopeful and with the addition of Kashipur, as you know, we have to maintain the service level and we have to maintain the imbalance because of export and import. So our cost — our cost per unit has gone up, and that is because of — and because of that you can see the drop in the EBITDA.

On the CFS side if you see, I mean, we are maintaining the same EBITDA. If you exclude Punjab Conware, which was there for the full Q3 in 2021. I hope that answers your question.

Amit Dixit — ICICI Securities — Analyst

Yeah. But EBITDA per ton, if I look at on overall throughput, it has gone up slightly compared to last quarter, while — yeah, your volumes have gone down, but EBITDA per TEU has gone up actually. So while — so double stacking certainly doesn’t explain the whole story?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. Our EBITDA has not [Technical Issues] EBITDA also it used [Phonetic] roughly the same only, if you look at it. I mean, a little bit here and there changes depending on the volume mix. So it’s not a significant growth as such, yeah.

Amit Dixit — ICICI Securities — Analyst

Okay. On net debt to EBITDA, if I look at it after going down for many subsequent quarters, we have seen that this quarter has seen little bit of an inch up. Is it a temporary thing? Or there is a working capital buildup or whatever? I mean, or is it that it will, I mean, come down again, 2.6, 5.6, 5.7 [Phonetic] kind of a level going ahead?

Prem Kishan Dass Gupta — Chairman and Managing Director

So, yeah, I didn’t understand the question which figure are you referring to?

Amit Dixit — ICICI Securities — Analyst

Net debt to EBITDA.

Prem Kishan Dass Gupta — Chairman and Managing Director

Net debt to EBITDA. Yeah. No, so we’re not using any CC levels right now. Net debt to EBITDA, we’ve laid out debt plans. At Kashipur, we only took INR60 crores debt to finance the transaction that was done through internal accruals. So that’s the main change that you would have seen in the books on both cash-in-hand as well as the gross debt that we have. But if we look at our net debt, net debt is about INR349 crores, as on date. So if you look at net debt to EBITDA, if we take the annual thing will be below one.

Amit Dixit — ICICI Securities — Analyst

No, the question was that if I look at quarter-on-quarter, it has after dropping for several quarters it has gone up, I mean, 2.88 from 0.67. So while I understood that the target is to maintain it at 0.65. So the answer was — the question was whether it’s a temporary phenomenon we expect it to normalize? Or is it the label that we are going to see below one, but in — but at around 0.9 or something?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah, yeah. So it will stay below on an annual basis, net debt to EBITDA will be around one only. Like I explained, this is because we used internal accruals, so that would decrease our cash, and we increased our debt to fund the Kashipur transaction. So that’s the main change, but it is normalized. There’s nothing — outlook on net debt to EBITDA hasn’t changed.

Amit Dixit — ICICI Securities — Analyst

Okay, great. Thank you. And all the best.

Operator

Thank you. [Operator Instructions] The next question is from the line of Lavina Quadros from Jefferies. Please go ahead.

Lavina Quadros — Jefferies India Private Limited — Analyst

Hi. Sir, just wanted to understand in the industry, are you seeing competitive intensity increasing like we’ve been reading that, I mean, you don’t need to mention any specific name on the competition side, but for example, we’ve been reading that Adani has bought some containers, looking to enter into logistics in a bigger way and a couple of other unlisted players are also entering in. Are you seeing this in competitive intensity or not really?

Prem Kishan Dass Gupta — Chairman and Managing Director

No, it’s the same as earlier. So no change on that side.

Unidentified Speaker —

There have been no new entrants [Technical Issues]. And basically the drop in our volumes is, as I explained the drop in exports, which we hope that it will pick-up. And Kashipur, this will be the first full month of operation. So this quarter we will have the volumes added to our total throughput on the ICD side. So, I don’t think that there is an intensity in the competition. And this competition was always there. And we haven’t seen anyone, I mean, to the best of our knowledge, we don’t have — we don’t see any intensity in the competition that any new further locations or any further products coming up online.

Lavina Quadros — Jefferies India Private Limited — Analyst

Okay. And sir, lastly, I know the DFC, I mean, Railway Ministry is best placed to answer this, but just in general, are you hearing any dates on the commissioning of the Dadri Rewari stretch at all, of the DFC?

Prem Kishan Dass Gupta — Chairman and Managing Director

See, Dadri Rewari, there was a trial that they said, but the full construction is yet to be done. And it is a matter of — we don’t have a timeline, yet when this Dadri Rewari — but the DFC from Rewari to —

Unidentified Speaker —

No, so Rewari to Dadri 2023 end is what we’re looking at, that’s the rough timeline. For the rest of this action will take longer, all the way to JNPT, that will take a couple of years, probably.

Lavina Quadros — Jefferies India Private Limited — Analyst

Yeah. JNPT like will take temporarily Mundra to Rewari for that. So, Rewari to Mundra is done, right? Basically, it’s a Dadri Rewari that’s left. I mean, Mundra, Pipavav.

Prem Kishan Dass Gupta — Chairman and Managing Director

It’s done till Sanand, so beyond that it connects to the port via non-DFC, right now. But essentially, yeah, Dadri to Mundra will then be connected by end-of-the year.

Unidentified Speaker —

There was a new development earlier, the trades which we used to send on the DFC, it used to connect from New Delhi, but now they have developed a stretch of around 40 kilometers, so that is a shorter distance to our terminal. So now these double — the DFC starts from a new Rewari section. So that is one development. And second is that earlier when we used to send a trains double-stacking via Viramgam, which we used to double-stack till 800 kilometers. So we were doing only after that to Pipavav. But now there were two over bridges. So they are like increasing the height of those over bridges. So by May, Viramgam to Mundra will also be double stacked. So that will help in improving our double-stack performance also.

Lavina Quadros — Jefferies India Private Limited — Analyst

Okay. Understood. Thank you.

Operator

Thank you. The next question is from the line of Deepak Krishnan from Macquarie. Please go ahead.

Deepak Krishnan — Macquarie — Analyst

Yeah. So, thank you for the opportunity. Maybe just a follow-up from the previous question as well. You said the competitive intensity is not increasing in the market. If you look at real tonnage body on a Y-o-Y basis is up 5%, but we see that both you and Conware [Phonetic] has seen like a close to about 10% decline on a Y-o-Y basis in terms of TEU. So anything specific that is happening, like is one player disproportionately gaining share or any competitive change that is taken place in the industry specifically?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. Hi, Deepak. So the tonnage which you are referring to, that is bulk commodities —

Deepak Krishnan — Macquarie — Analyst

No, I’m just talking about Indian [Phonetic] container tonnage.

Prem Kishan Dass Gupta — Chairman and Managing Director

No, see Indian container tonnage has no meaning, because I mean, there is no set formula to convert 20 feet or 40 feet container into a tonnage. So we have been saying that for long, but somehow, I mean some agencies convert that into tonnage, and that does not reflect the true picture because the tonnage — the container can be 10 tons, 12 tons, or it can be 30 tons. So I mean, how do we take the average, it is — it is, and even we don’t have that calculation. So we always talk in terms of a 20 feet and a 40 feet container. So that is what we report also, and that is what we talk about also. That number of TEUs handled by us in the ICD business or the CFS business.

Deepak Krishnan — Macquarie — Analyst

Sure, sir. And maybe just in terms of like at least six months now we have the Rewari to Sanand [Indecipherable] equivalent working, but we’ve really not seen any model [Phonetic] share gain towards rail in a big way. So how do you kind of look at it maybe from a shorter-term perspective as well as a longer-term perspective. When do you really see model share shift towards really picking up?

Prem Kishan Dass Gupta — Chairman and Managing Director

So there has been a shift like in the last two years. So in the last three months, six months, nothing major like that, and it’s not measured that frequently also. But overall, if you see since the start of COVID, there has been a significant shift. The next month — the next level will come when it’s connected all the way to JNPT.

Deepak Krishnan — Macquarie — Analyst

Sure. So —

Prem Kishan Dass Gupta — Chairman and Managing Director

When the full DFC is operational basically then that’s when the next level of growth will come from shift from road to rail will happen.

Deepak Krishnan — Macquarie — Analyst

And maybe any outlook that would [Indecipherable] for like FY ’23 or FY ’24 in terms of just rail volumes?

Prem Kishan Dass Gupta — Chairman and Managing Director

So for the current year, we’re looking at, I mean, like at least matching last year with a slight growth because of Kashipur. And then going forward earlier, we had given a guidance of about high it’s like around 18%. We’ll revise that to slightly lower. We’ll wait another quarter before giving a full proper guidance for next year.

Deepak Krishnan — Macquarie — Analyst

Sure. Those were my questions, and thank you for the opportunity.

Operator

Thank you. The next question is from the line of Achal Lohade from JM Financial. Please go ahead.

Achal Lohade — JM Financial — Analyst

Yeah. Thanks for the opportunity. Sorry, if I’m kind of asking this question. You said that basically the rail volume declining —

Operator

[Speech Overlap] use the handset, please. The voice is not very clear.

Achal Lohade — JM Financial — Analyst

Yeah. Is it better now?

Operator

Yeah, much better. Please go ahead.

Achal Lohade — JM Financial — Analyst

Yeah, sorry. So, thank you for the opportunity. My question was with respect to rail volume. Now, unlike in the past, this is the first time we have seen a drop-in the rail volumes for us. And as you said, the tonnage Indian Railways exempt tonnage, it doesn’t really matter. But if — is it possible to know, how the railways continue volume have been in terms of TEUs? How that growth or a decline, could be? What I’m trying to assess is that, have we gained, maintained or lost market-share on a Y-o-Y basis for 3Q?

Prem Kishan Dass Gupta — Chairman and Managing Director

So our market share is not lost. Overall, rail volumes have been flat. So overall, also, if you look at our market share, it’s grown on a nine-month compared to nine-month basis. NCI were at about 16%. And I think we used to be at 12% about a year, year-and-half ago. And then, the other we’re at about 35%, and this is after a fifth ICD has also come in. So market share is doing well. It’s just the macroeconomic situation with the decline in exports in a big way and also slower running of trains which was there in December. So just for example, a pendency that the Board have piled up so much because double-stack and hubbing operations were reduced due to the track work. We have about 3,000, 3,500 just lying at the port, right now.

Achal Lohade — JM Financial — Analyst

Okay. So if I get you right, you’re saying basically the double-stack got impacted, which resulted into higher pendency, which had an impact on volume handled being poor in 3Q. The market share what you gave on — yeah.

Prem Kishan Dass Gupta — Chairman and Managing Director

Along with the overall dip in exports [Speech Overlap]

Achal Lohade — JM Financial — Analyst

Overall dip in, correct. Correct. So markets somewhat you gave for nine months, can it be possible to know for third quarter specifically for NCR and Ludhiana?

Prem Kishan Dass Gupta — Chairman and Managing Director

We’re at similar numbers.

Achal Lohade — JM Financial — Analyst

In terms of Q-o-Q flat or Y-o-Y?

Prem Kishan Dass Gupta — Chairman and Managing Director

Overall basis, our market share is in NCR continues to be about 16%, and in Ludhiana, it continues to be 35%. So it’s remained the same almost Q-on-Q.

Achal Lohade — JM Financial — Analyst

Understood. And if you could talk about the EBITDA for these two segments, because I see that we have not disclosed that in the presentation this time while we had disclosed in the second quarter, we didn’t disclose first quarter. Can we just have some clarity as to how you want to present this on a consistent basis, please?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. So we didn’t give it in the second quarter also. I think we stopped splitting EBITDA this financial year. But if you just look at the historical trend we’re seeing along the same lines of where CFS is around 2,200 and rail is close to 9,000. So that same trend is carrying on right now.

Achal Lohade — JM Financial — Analyst

Understood. And with respect to the pricing, how the pricing situation has been in NCR and Ludhiana markets? Have you seen any drop in the realization? Any increase in the realization? How the competitive intensity is shaping up? Given we are hearing that one of your large competitors is talking about introduced schemes.

Rajguru Behgal — President

Yeah. Hi, Rajguru this side. So Ludhiana market has — now what interesting, because of this coming of investment of a Tata Steel in Ludhiana, and with the — with this what has happened is, there is an increase in import of scrap in Ludhiana market and resulting which we have also gained a good market share in terms of imports. So some of the shipping lines, which we — they were importing to other ICDs due to increase in the volumes, so we have started getting good market share in that. So that is one interesting fact, which has happened. And we are expecting this scrap market to remain stable for another three months’ time. And this should help in not only gaining our market share in the import segment, but also in the export segment as well in Ludhiana.

Achal Lohade — JM Financial — Analyst

Right. In terms of pricing and the empty handling, any comment on the same?

Prem Kishan Dass Gupta — Chairman and Managing Director

Empty handling that is, because as you know that railways has withdrawn, the discount which they were giving in running the empty containers. But we are tying up with the shipping lines. So we are also working on some capitalized model, wherein we will try and reduce that cost. And we’re also creating some space wherein we can store shipping line empty so that they can use them for the exports. So our focus is also in that area.

Achal Lohade — JM Financial — Analyst

Okay. You had talked about 18% volume growth for the Rail segment, including Kashipur. Any comment on the CFS, in terms of the volume and the margins for FY ’24?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yes. No, CFS is expected to remain flat. So there is a slight growth, if you look at the numbers without Punjab Conware. But what we reporting — what we’ve been reporting for the last few quarters will be the CFS numbers going forward also.

Achal Lohade — JM Financial — Analyst

Got it. So on a blended basis, we should look at further improvement in the margins given higher growth in the rail business, is that a fair assessment?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah.

Achal Lohade — JM Financial — Analyst

So for the third quarter, we were at around 5,400, excluding the other income. So that should keep on inching up.

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. Our target is 6,000.

Achal Lohade — JM Financial — Analyst

Target is 6,000. Understood. This target is for FY ’24, or the longer-term target?

Prem Kishan Dass Gupta — Chairman and Managing Director

There is no, I mean, there is no specific timeline to it. It’s just we’re doing everything we can to reach that number as soon as possible.

Achal Lohade — JM Financial — Analyst

Understood. Thank you so much. I’ll come back in the queue.

Prem Kishan Dass Gupta — Chairman and Managing Director

Thanks.

Operator

Thank you. The next question is from the line of Rohit from Progressive Shares. Please go ahead.

Rohit Ohri — Progressive Shares — Analyst

Hi, sir, couple of questions related to Snowman. So first with the BDP partnership. What sort of revenues do you anticipate? And what sort of margins are you expecting from this business?

Sunil Nair — Chief Executive Officer and Wholetime Director

Hi, this is Sunil here. So with the BDP, we are setting up a best-in-class chemical handling warehouse, which is around 55,000 square feet warehouse in Shoolagiri near Bangalore. And we expect the warehousing plus transportation we will be storing as well as we will be distributing these chemicals within the radius of 300 kilometer from the warehouse. So both put together, we are expecting around INR12 crore of top line per annum from this business with a 12% margin.

Rohit Ohri — Progressive Shares — Analyst

Okay. So Sunil, any particular guidance that you would like to share on blended basis. Will you be able to maintain the normal range of 20%, 22% EBITDA margin?

Sunil Nair — Chief Executive Officer and Wholetime Director

Yes. So see, we — as you know, we had started distribution business as well, last quarter onwards. So the mix that we have today, we believe the similar mix will continue to grow, and anywhere upwards of 20% is what we are expecting in the coming quarter also.

Rohit Ohri — Progressive Shares — Analyst

Okay. Any price hikes that you’ve taken during the quarter under review?

Sunil Nair — Chief Executive Officer and Wholetime Director

So price hike usually happens in the Q1, where the agreements are due for renewal. So last year, overall, we have — if we compare Q-on-Q, we have a 7% price increase, ASP increase, average sales price increase over last year same quarter. Once this renewal is due in — from March onwards we start discussing with the customers. So we are expecting more or less similar increase in the ASP for next year as well.

Rohit Ohri — Progressive Shares — Analyst

Can you share ASP currently?

Sunil Nair — Chief Executive Officer and Wholetime Director

Yeah, sure. Our ASP current is 1,521, INR1,521 per pallet per month.

Rohit Ohri — Progressive Shares — Analyst

Okay. For month, okay. And last question is related to the net debt. What is that number? And what is the comfortable debt equity that you’re looking at?

N. Balakrishna — Chief Financial Officer

Hi, Bala here. So net debt of the company right now is INR86.57 crore. Debt equity ratio, we are at 0.25.

Rohit Ohri — Progressive Shares — Analyst

Okay. I’ll call back in the queue. Thank you. Thanks a lot.

Operator

Thank you. The next question is from the line of Harsh Shah from Dimensional Securities. Please go ahead.

Harsh Shah — Dimensional Securities — Analyst

Hi, my question is for Snowman. In the trading and distribution business, the margins on a Q-o-Q basis, we have seen jump from around 4.6% to 7.1% on an EBIT basis. So what would be the sustainable margin in this business?

Prem Kishan Dass Gupta — Chairman and Managing Director

See, that is because of the mix change. We have only three clients now, also depending on their and the three clients with different margins. So depending on the volume, it changes. But we are looking at 5% margin on an average basis as we scale up this business.

Harsh Shah — Dimensional Securities — Analyst

Sir, current mix we have a revenue of 25% from trading and distribution, if I talk about, Q3, you said that you will maintain similar mix, is that right? So this revenue will stay 25%?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yes, it will remain 25%, or it will grow further.

Harsh Shah — Dimensional Securities — Analyst

[Speech Overlap] In the previous quarter, we were talking about aggressive growth in the trading and distribution segment. I mean, we were targeting somewhere close to maybe INR500 crore, INR600 crore, if I’m not wrong.

Prem Kishan Dass Gupta — Chairman and Managing Director

No. I have no idea on these numbers. We’ll have to take [Speech Overlap]

Harsh Shah — Dimensional Securities — Analyst

So if we talk about what kind of growth are we expecting in this business?

Prem Kishan Dass Gupta — Chairman and Managing Director

So see, as I said last time, we are just setting up things and we have migrated to a ERP system, which takes care of this kind of business as well. We are putting the commercial processes in place. So we are expecting anywhere to the extent of 40% to 50% growth year-on-year in this store distribution model.

Harsh Shah — Dimensional Securities — Analyst

Okay. And for our warehousing business, I believe this quarter on Y-o-Y basis, we saw a decline in the pallet cut. Can you specifically, what could that number be?

Prem Kishan Dass Gupta — Chairman and Managing Director

The decline in pallet, build [Phonetic] pallets.

Harsh Shah — Dimensional Securities — Analyst

Yeah, warehousing [Phonetic].

Prem Kishan Dass Gupta — Chairman and Managing Director

No, there is no decline. Actually —

Harsh Shah — Dimensional Securities — Analyst

Q3 over Q3?

Prem Kishan Dass Gupta — Chairman and Managing Director

Q3 over Q3, there is an increase in pallet. [Speech Overlap]

Harsh Shah — Dimensional Securities — Analyst

How much increase that is?

Prem Kishan Dass Gupta — Chairman and Managing Director

One sec. I get back to you in a couple of minutes?

Harsh Shah — Dimensional Securities — Analyst

Sure, sir. That’s fine. And that was my last question, yeah.

Operator

Thank you. The next question is from the line of Yash Tanna from ithought PMS. Please go ahead.

Yash Tanna — ithought PMS — Analyst

Yeah. Hi, good afternoon. So we have seen about 13% degrowth in TEUs, this is rail TEUs, quarter-on-quarter. Well, it actually improved 11%, so what explains this?

Prem Kishan Dass Gupta — Chairman and Managing Director

This is basically change in volume mix. So the main difference that you’ll see these variations quarter-on-quarter. And import, normally has better pricing and imports have grown, whereas exports have declined. So that would explain my revenue per TEU might be higher.

Yash Tanna — ithought PMS — Analyst

Okay, all right. And does this mean that EBITDA per TEU would also be higher?

Prem Kishan Dass Gupta — Chairman and Managing Director

It’s along the same trend, because while imports are better imbalance has increased. So the cost of imbalances negating that increase in margins for the import like.

Yash Tanna — ithought PMS — Analyst

All right. And that’s why maybe the margins on a blended basis are flat.

Prem Kishan Dass Gupta — Chairman and Managing Director

Right.

Yash Tanna — ithought PMS — Analyst

All right. And you mentioned that exports are weak. And I couldn’t get you what trend you spoke about in December, January, how is it picking-up, or how are you seeing the market shape up in export?

Prem Kishan Dass Gupta — Chairman and Managing Director

So it’s still subdued only. So no sign — even in January, we haven’t seen any signs of exports picking-up yet, but hopefully after this quarter, we should see some growth again.

Yash Tanna — ithought PMS — Analyst

All right. And on Snowman, one question. Are you giving any guidance on the blended basis? What will be the revenue or margin guidance? And could you break it up by volume and price hike?

Prem Kishan Dass Gupta — Chairman and Managing Director

So we will continue to have the existing ratio of Q3 ratio to be there in Q4 as well. And as I said from a pricing point of view, we will be able to comment only the first quarter of next financial year, because that’s the time we close agreements with our customers.

Yash Tanna — ithought PMS — Analyst

All right. So Q3 momentum will be maintained in Q4. I was actually asking more from a full year perspective, if possible.

Prem Kishan Dass Gupta — Chairman and Managing Director

We will talk about it in the coming quarter by the time we finish our budgeting process and all.

Yash Tanna — ithought PMS — Analyst

Sure. Thank you. Those are my questions.

Prem Kishan Dass Gupta — Chairman and Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Atul Tiwari from Citi. Please go ahead.

Atul Tiwari — Citigroup — Analyst

Yes, sir. Sir, in the last conference call, you did talk about adding new rigs on the leased basis. And like — I think you alluded to taking delivery of three rigs per year going ahead. But given the fact that we are now entering a phase of slowdown, and while all of us hope and wish that things recover very quickly, but we don’t know, because the global recession may continue for some time. So is there any rethink on that in terms of increasing the capacity on the rig side?

Prem Kishan Dass Gupta — Chairman and Managing Director

No, we’ll definitely add to our fleet, because of our expansion of networks. So Kashipur and Jaipur being added we will need more rigs. So three is definitely on the cards. And then we’ll take a call after that, because these are available on at least six months notice. So we can accordingly change our plan, if we need to reduce our outlook.

Atul Tiwari — Citigroup — Analyst

Okay, thank you. Thanks a lot.

Prem Kishan Dass Gupta — Chairman and Managing Director

Thanks.

Operator

Thank you. [Operator Instructions] The next question is from the line of Jay Shah from Capital PMS [Phonetic]. Please go ahead.

Jay Shah — Capital PMS — Analyst

Hello?

Operator

Yeah, hi. Yes, please go ahead.

Jay Shah — Capital PMS — Analyst

First, for the Gateway team. We had to — actually, we had spoken about even looking at the automotive sector for onboarding them as — as and how the DFC gets operationalize. So have we started looking or onboarding any customers from the auto sector led for the double-stacking or even for the normal stacking?

Prem Kishan Dass Gupta — Chairman and Managing Director

So we already worked with auto companies like Maruti is one of our largest customers. We work with a few others also an auto ancillaries. But this is on the container side. For this finished vehicle side, which is separate license, AFTU license, it’s called. That’s a more longer-term thing that we might have. We don’t have plans to start, finish vehicles auto rigs anytime soon.

Jay Shah — Capital PMS — Analyst

Okay, okay. That’s it from my side. And all the best for the future.

Prem Kishan Dass Gupta — Chairman and Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead.

Sumit Kishore — Axis Capital — Analyst

Thanks for the opportunity. On the last conference call, you had mentioned that no rail volume growth is expected to touch IT in next fiscal, as volumes from Kashipur get carried for the full fiscal and Jaipur for part of the year. How is that outlook looking like? And so that revenue growth for FY ’23 is likely to be 67%. And at the — we had a disappointment on export volumes in Q3. How would you review more groups for the balanced fiscal and next fiscal?

Prem Kishan Dass Gupta — Chairman and Managing Director

So for the rest of this year, we’ll be looking at like similar to last year’s numbers. And then earlier in the call, we said we’ll still take some time to evaluate as the macroeconomic situation has changed quite a bit in the last three months to six months. So by next quarter, we’ll give a guidance for next financial year. Kashipur and Jaipur, so Kashipur this quarter will get the full benefit of it. So those volumes will get added. And Jaipur by hoping its operations by end of this calendar year.

Sumit Kishore — Axis Capital — Analyst

Okay. So full benefit from Kashipur will just offset the decline that you have seen the — because you’re saying you are expecting number similar to last fiscal.

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah, something like that, maybe slight growth because of it.

Sumit Kishore — Axis Capital — Analyst

Okay. And just to understand in terms of the mix that you have on import and export, what was it like, in Q3, you say that there was a steep decline in exports. And what percentage impact on the — of the decline was because of this track we’re working fog related issues just slowing down speed of trains. Just to segregate that portion which can come back on track and is not good to macroeconomic factors.

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. So lastly, our mix used to — we had reached a mix of 50-50. Now our mix is something like 60% imports, 40% exports. So that’s been the shift. And the second part of your question, if I understood correctly, you are asking what is the impact of the fog and the slow running?

Sumit Kishore — Axis Capital — Analyst

Yeah. I mean, so if you segregate that what is attributable to macroeconomic and what is attributable to such issues.

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. So let’s say about 7%, 8%, we could have been better throughput, if the entire hubbing and double-stacking and the faster running of trains [Indecipherable].

Sumit Kishore — Axis Capital — Analyst

Got it. Thank you.

Prem Kishan Dass Gupta — Chairman and Managing Director

Thanks.

Operator

The next question is from the line of Bharat Sheth from Quest Investment Advisors. Please go ahead.

Bharat Sheth — Quest Investment Advisors — Analyst

Hi, sir, thanks for the opportunity. Sir, one question, like several North Indian company who are evaluating sending their goods ware to South India by using Mundra, Pipavav and then by sea freight. So are we getting any kind of those volumes?

Prem Kishan Dass Gupta — Chairman and Managing Director

No, we aren’t into coastal shipping, but once in a while we do some domestic movement between Mundra, Pipavav, JNPT ports with ICDs. And maybe someone else who is into that uses our service, but we don’t know whether it’s for coastal or not. We’re just moving it from ICD to port.

Bharat Sheth — Quest Investment Advisors — Analyst

But do you see any potential further any?

Prem Kishan Dass Gupta — Chairman and Managing Director

Any potential for what?

Bharat Sheth — Quest Investment Advisors — Analyst

Yeah.

Prem Kishan Dass Gupta — Chairman and Managing Director

Sorry, I didn’t get your question.

Bharat Sheth — Quest Investment Advisors — Analyst

So any potential for this rail container movement from say North India to this Pipavav or Mundra, is that where we will issue used for coastal or they may use for export also?

Prem Kishan Dass Gupta — Chairman and Managing Director

Absolutely, right. Right now the Indian Railways Network is not good enough to have that movement, because the running time is very slow. And whether it is from Mundra to South or the coastal or from North to South, this domestic business, while there might be requirement, but the pricing and the turnaround of the asset is not good. So we have a — have been watching it, and we will keep an eye on it, but right now we don’t have any plans to go into that sort of domestic movement.

Bharat Sheth — Quest Investment Advisors — Analyst

Even with DFC you are working in full fledge, don’t you think that turnaround time has improved?

Prem Kishan Dass Gupta — Chairman and Managing Director

No, DFC will be only from the Interline [Phonetic] to Mundra, Pipavav and Nhava Sheva from a — on the western side. So it is not going to be from North to South or from West to South or East to South. Those circuit timing or whatever the — those DFC will — are a long, long way.

Bharat Sheth — Quest Investment Advisors — Analyst

Sir, I’m not talking — sir, I’m not talking for this DFC circuit, sir. I’m talking I mean using DFC and taking it to the port and they move it through — by coastal to South India?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. It is possible, but I think people just normally send it by road, because once the container goes there from Mundra to say Cochin, for example, there is hardly any return cargo. So people don’t prefer the coastal shipping route, right now.

Unidentified Speaker —

There are some movements happening, I understood your question now. So there are movements happening in that, lag you know that from North to the Western ports and from there on the coastal vessel. But we studied that in detail and we don’t have any interest in doing that.

Bharat Sheth — Quest Investment Advisors — Analyst

Fair. Thank you, again.

Operator

Thank you. The next question is from the line of Bharti Sawant from Mirae Asset. Please go ahead.

Bharti Sawant — Mirae Asset — Analyst

Hello, am I audible?

Operator

Yes.

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah, hi.

Bharti Sawant — Mirae Asset — Analyst

Hi.

Operator

Please go ahead. You’re audible.

Bharti Sawant — Mirae Asset — Analyst

Yeah. Thank you for taking my question. But my question pertains to the discussion, if you’ve already had with regards to volume decline that we saw in the rail business, so can you just explain what kind of volume growth would we have witnessed in imports — on the import side and what is the impact on the export side?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah, just one second. So imports are more or less the same say slight single-digit growth. But exports have seen a decline of 15% to 20%.

Bharti Sawant — Mirae Asset — Analyst

Okay. And had — is the track issue now sorted which impacted, because you also mentioned that because of the track issues your overall volumes have declined by about 8%. So had this not been there, you would have been more like flattish compared to last year. So —

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. The track work is complete now.

Bharti Sawant — Mirae Asset — Analyst

So effectively Q4 because you are guiding for a flattish Y-o-Y growth FY ’23 full, which indicates roughly 13% decline for Q4 compared to the run rate of 90,000 odd TEUs for Q4 of last year. And if the track work is complete, are we expecting significant weakness in the EXIM volumes, EXIM trade?

Prem Kishan Dass Gupta — Chairman and Managing Director

See, right now, it cannot be said for sure. This year the Chinese New Year is now 22nd of January. So the imports will also slow down in the next two weeks to three weeks. And thereafter, the pipeline looks good. But on the export side, we are not seeing much improvement though, I mean, if you compare on a month-to-month basis between December and January, there is a growth of 5%, but after having gone down by 15% to 20%, 5% growth is welcome, but I mean, we cannot say for sure how it will, shouldn’t take shape in the next two months or what will be the total impact in the quarter end.

Bharti Sawant — Mirae Asset — Analyst

So there is more to the weakness. It’s not just the track issues, which is impacting the export lag, but it’s that have more — as an overall weakness, which is impacting the volumes for us.

Prem Kishan Dass Gupta — Chairman and Managing Director

See the track issue will clear the pendency which is at the imports. And exports, if they keep on growing, like in January, that is — that will add to our volumes. Imports, right now they are good, but the arrivals are good, but they will slow down in the next two weeks, three weeks, but again after that there are signs of — or we have the visibility that until end of March the imports will also grow. So to give you a certain figure, it is not possible right now, but we will be having higher volumes because of clearance of pendency because of some uptake in the — both export side and the import side. And we can only hope for better things to prevail in the present macroeconomic situation. And then let us see how the budget comes out, because a lot of export and import will also depend on the budget announcements.

Bharti Sawant — Mirae Asset — Analyst

Understood. Just two more questions from my side. One on the Kashipur and Jaipur, what is the annualized volume contribution we are expecting from Kashipur terminal in the next financial year, once fully operational? And once Jaipur is operational, what could be the volume contribution that can come from that terminal?

Prem Kishan Dass Gupta — Chairman and Managing Director

Kashipur about 3,000 a month, so say 36,000 for the year. Jaipur it will take more time. Since it’s a greenfield project, there is a process of shipping lines opening the BL point. They have to start positioning their empties. So it’s a — it will be a slower ramp up. So this financial year, we can pretty much say no volumes from Jaipur, [Speech Overlap]

Bharti Sawant — Mirae Asset — Analyst

But Kashipur is already doing roughly 3,000 TEUs a month.

Unidentified Speaker —

Yeah. So the full impact will come next year in FY ’24, from Kashipur, which is what we are saying is 36,000 TEUs per annum. And Jaipur, we expect to start by Q3 of this year or which will be — sorry, Q3 of FY ’24. So when to — it will be a slow start to build up the volume. So we cannot say it will be a significant contribution in — for FY ’24. Yes, for FY ’25, it will definitely be addition both from Kashipur as well as Jaipur apart from our existing terminals.

Bharti Sawant — Mirae Asset — Analyst

And last question on the rail margins. The rail EBITDA per TEU, historically, over past two years specifically, so you have been doing about 9,000 per TEU or in excess of that. With Kashipur and Jaipur, do we expect to continue with this run rate? Or would there be some dilution?

Prem Kishan Dass Gupta — Chairman and Managing Director

No, temporarily, there might be some dilution because to place the empties for imports or to vacate the empty containers from the terminal. So these costs would it be in Kashipur, we are sure that this quarter there might be some additional cost. But from Q1 next year, we will be able to have similar kind or even higher margins. And once the volumes are established, that will help us in double-stacking from [Indecipherable] through all the ports. Bringing in — on single player from Kashipur to Delhi and then sending it out to the ports. Similarly on Jaipur, whenever it comes in, it is already on the double-stack route. So it will only add two double-stack percentage that we normally have, because leaving from body [Phonetic] it can be topped up from Jaipur and send to the ports.

Bharti Sawant — Mirae Asset — Analyst

So what is the potential EBITDA improvement one can look from a three-year to five-year perspective once these terminals are operational and even DFC is operational?

Prem Kishan Dass Gupta — Chairman and Managing Director

We are aiming at INR10,000 per TEU.

Bharti Sawant — Mirae Asset — Analyst

Okay. This is with DFC, right? DFC and terminal?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. This is with DFC and including our two terminals and macro being improve, seeing some improvement.

Bharti Sawant — Mirae Asset — Analyst

Understood. That answers my questions. Thank you.

Prem Kishan Dass Gupta — Chairman and Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Rahul Chandran from Sunidhi Securities. Please go ahead.

Rahul Chandran — Sunidhi Securities — Analyst

Hello, everyone. Am I audible?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. We can hear you.

Operator

Yes, you are audible.

Rahul Chandran — Sunidhi Securities — Analyst

Yeah. So my question is again pertaining to the EBITDA per TEU asked previously. So I wanted to gauge like the DFC is operational from quite some time. Then do we don’t see any stable — any increase in the EBITDA per TEU, because this quarter alone I thought that we had an increase in realization, then we would have a within the EBITDA per TEU, but as said by Samvid, it’s in the same range. So using guidance with certain you know, certain things like, when will it be on an incremental side. And after this, I have one more question.

Prem Kishan Dass Gupta — Chairman and Managing Director

See, basically there are some factors, and one of the biggest factor is the imbalance between import and export during this quarter. Otherwise, we had already touched INR9,500 per TEU. And we are trying to get back to that with our new terminals. And our target is 10,000 per TEU, but — and one of the things we have not mentioned about from slow movement you to track work and all that is that, we had some acquisition expenses, which were in certain or which were booked during Q3. So that brings down the EBITDA a little bit, but we’ll definitely be there at 9,500 very soon.

Rahul Chandran — Sunidhi Securities — Analyst

Okay. And the second question is, sir, that you are planning two more ICDs, as you had written in your the press release. So have you identified any places for those? Or are you still looking out for those things?

Prem Kishan Dass Gupta — Chairman and Managing Director

We’re still finalizing, but it’s along the — our strategies to increase as much along the Western DFC.

Rahul Chandran — Sunidhi Securities — Analyst

Okay, okay.

Prem Kishan Dass Gupta — Chairman and Managing Director

So it might not be directly on the DFC, but it’ll get connected to the Western DFC to one of our hubs.

Rahul Chandran — Sunidhi Securities — Analyst

Okay, okay, perfect. Yeah, this answers my question. Thank you.

Operator

Thank you. Next question is a follow-up question from the line of Yash Tanna from ithought PMS. Please go ahead.

Yash Tanna — ithought PMS — Analyst

Yeah. Hi, so my question is on the Snowman business. So on the distribution business — hello, am I audible?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah.

Operator

Yes, you’re audible.

Yash Tanna — ithought PMS — Analyst

Yeah, sorry. So on the distribution business, what kind of return ratios are we looking at? And if you could also highlight what kind of opportunity we have in this business as we have mentioned that we are the first ones in the country to do this 5PL sort of a thing in cold chain.

Prem Kishan Dass Gupta — Chairman and Managing Director

Yash, I’m not understood the question with respect to return ratio. But if you’re asking about the margins, I can say that at a gross level, it is around 10% margin, and at a net level 4% to 5% margin is what we are commanding now and this should be maintained as we grow.

Yash Tanna — ithought PMS — Analyst

Okay. And on the size of opportunity, if you can highlight a little bit on the 5PL side?

Prem Kishan Dass Gupta — Chairman and Managing Director

So size is very difficult to estimate. This is one of the most wanted service that the industry we’re looking for. And this is very well-known model globally. There are companies which are as big as INR2 lakh crores of Indian rupees turnover in the US, which are running similar business model. But in India, it is a new thing, and we are very specific to food. It is — there is no research work as of now to quantify the market size.

Yash Tanna — ithought PMS — Analyst

All right. Thank you.

Prem Kishan Dass Gupta — Chairman and Managing Director

But I can say that, we do hold inventory of close to INR12,000 crores worth of inventory in our cold storages. And we are just trying to speak to those potential customers who would value the value-add that we can offer in this model. So maybe in couple of quarters down the line, we’ll be able to have some estimate on this.

Yash Tanna — ithought PMS — Analyst

Got it. Thank you.

Prem Kishan Dass Gupta — Chairman and Managing Director

And there was a question earlier, which we had paused, because I didn’t have the information handy. So the build pallets, we built 3.34 lakh pallet positions in Q3 this year as compared to 2.87 lakh pallet position last year Q3, an increase of 16% pallet positions.

Operator

Thank you. The next question is a follow-up question from the line of Achal Lohade from JM Financial. Please go ahead. Achal, your line is unmuted. Please go ahead with your question.

Achal Lohade — JM Financial — Analyst

Thank you for the follow-up opportunity. You have mentioned 3,000 per month kind of a volume from Kashipur ICD. Is it possible to know what is the broad market, I hear what it has been the growth, how do you look at, what is your market share, we are talking about there?

Unidentified Speaker —

[Indecipherable]. So if we talk about the overall market cash spent of Kashipur, so we are looking at the volumes of apart from the 3,000, which approximately we’ll be doing. We’ll be targeting the volumes of Moradabad, which is doing around 6,000 containers. And then Pantnagar ICD, which is doing around 2,000. So 8,000 to 10,000 is the target catchment we are looking at. Plus, in addition to that, we are also — we have mapped some of the customer, which are going as far as Dadri. So if you put in all together, so the size is between 12,000 to 15,000, which we will be targeting and we are expecting that we should be able to onboard many customers, because when we have started our services, there is lot of excitement in the trade and there has been lot many queries which are pulling in, because many of the customers which are having their units near our existing terminals like Gurgaon and Ludhiana. So they also have their suppliers and OEMs. And they know our company and they were waiting for these services. Especially for the JNPT and Pipavav services which were not prevalent in this area. So we are the ones who have already started these services from that location. And we are very confident that we should be able to gain a sizable market share in this entire catchment.

Achal Lohade — JM Financial — Analyst

So, if I understand you correctly, sir, what you are saying that 3,000 is a base for them. On top of that, so the entire market size in and around Kashipur ICD is somewhere around 20,000 TEUs per month is that a fair assumption of that we currently have a share of 3,000 TEUs? Is that right understanding?

Prem Kishan Dass Gupta — Chairman and Managing Director

It’s about say, 18,000 TEUs roughly, including the road movement, which comes to ICDs in the NCR region like Dadri, Rajguru just mentioned. But some of it is going directly to the port or coming directly from the port to these locations because of not so reliable services. So we are going to offer a product where I mean, we will have the deliveries or evacuation by our standards. And so that the customers get their deliveries on-time, both on the export and import side. So that is what we are targeting that first target would be people who are moving by road, whether via NCR region or directly to the ports. So that will be easy to get. And then, of course, once people see the service, service levels, then definitely the terminal will address the volumes itself.

Achal Lohade — JM Financial — Analyst

Understood. So 18,000 is basically the total size, which includes a road. As of now, how much of this is coming on rail, at present? Would that be 10%, 20%, 30%?

Prem Kishan Dass Gupta — Chairman and Managing Director

Let’s say about 10,000.

Achal Lohade — JM Financial — Analyst

10K by rail, as of now. Understood. And — yeah.

Prem Kishan Dass Gupta — Chairman and Managing Director

[Speech Overlap] 3,000 [Phonetic] plus Kashipur.

Achal Lohade — JM Financial — Analyst

Including 3K of Kashipur. So when you guiding for 3,000 per month for FY ’24, you’re not assuming any scale up for these — is — have I got it right?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. We’re giving this as the base volume —

Achal Lohade — JM Financial — Analyst

Base numbers.

Prem Kishan Dass Gupta — Chairman and Managing Director

So overall market scenario. So once that improves our guidance for this will also improve.

Achal Lohade — JM Financial — Analyst

And is it possible to give some sense in terms of how competitive rail would be compared to road given it’s long-lead for JNPT and Mundra? Is there any scope to improve the per TEU margins there in Kashipur?

Prem Kishan Dass Gupta — Chairman and Managing Director

Per TEU margins will be roughly the same only, because there are two other terminals also and that’s concord [Phonetic]. Maybe some scope slight improvement because NCR has many more terminals compared to this region. But there is scope to offer a better service level compared to road, especially for the JNPT and Pipavav region, which right now wasn’t being serviced by the earlier CTOs here.

Achal Lohade — JM Financial — Analyst

Understood. And just a clarification, when we talk about rail volumes, it includes delayed and plus empty, right?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yes. We are talking about only rail. 10,000 is rail, but [Speech Overlap]

Achal Lohade — JM Financial — Analyst

No, no, in general. Not, not, specifically for Kashipur, when we report the volumes that is laid and plus empty, right?

Prem Kishan Dass Gupta — Chairman and Managing Director

Yes, yes.

Achal Lohade — JM Financial — Analyst

For both Rail and the CFS business.

Prem Kishan Dass Gupta — Chairman and Managing Director

Yes.

Achal Lohade — JM Financial — Analyst

Got it. And if you could give some sense about the capex for FY ’23 and ’24 and in which areas?

Prem Kishan Dass Gupta — Chairman and Managing Director

So Jaipur ICD is continuing. Kashipur more or less everything is done. There’ll be some minor improvements we’ll be doing that. So Jaipur total is a INR90 crore project, out of which INR30 crore was for the land. And say, we’ve spent about INR5 crores, INR10 crores already. So that’s the plan for say the next six months to nine months. And as and when then we add other ICDs like who were talking about, that will add incrementally. Rigs will be on lease most probably, but we can look at buying them also. So that depends on — if we do that, then that automatically gets added to capex.

Achal Lohade — JM Financial — Analyst

Right. Still, I mean, if you can give some ballpark number, FY ’23, how much — how much have you spent in nine months? And how much would we spend in total for full year and FY ’24? A ballpark number would do excluding the two potential terminals what you’re talking about.

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah. Other than Kashipur we’ve spent about INR50 crores in nine months. And then, we will be spending maybe another INR20 crores within this financial year. And then next financial year, you can assume probably about INR75 crores capex.

Achal Lohade — JM Financial — Analyst

Which will take care of the Kashipur, or which will take care of Jaipur, as well as the other maintenance capex excluding the two potential locations you’re talking about.

Prem Kishan Dass Gupta — Chairman and Managing Director

And possibly buying the rigs now, because rail is an asset which is depreciated over 15 years though the life is 25 years to 30 years. And interest rate, so you know have come down. Even though, I mean gone up in the last couple of quarters. Still, I mean, if you add interest and depreciation, it will be almost equal to the lease. But then this asset remains with you. I mean, for almost 25 years, 30 years, whereas interest will be for seven years and the depreciation is over 15 years. And then after that, whatever the next 10 years, 15 years, the rates are, you know, there’ll be no cost. So we are evaluating that and we might get into buying some rates. Right now, we have 21 own rates and then leased rates. So we give a mix-and-match and keep on changing the tech — I mean, that the change in technology will be getting an upgraded versions of the trains with high speed and high loadability. So that is a continuous process, and which we’ll keep on doing. Just, so that you know the first rate that we have — we had purchased of routine 16 years back is still running and in good condition, and it will run for about 10 years. So it’s — towards examining whether we should buy or whether we should use it here.

Achal Lohade — JM Financial — Analyst

Right. But is the availability of rate is a challenge in terms of buying or leasing or not fairly?

Prem Kishan Dass Gupta — Chairman and Managing Director

No, it’s not a challenge. I mean, there is some talk [Phonetic] that the resets are not available or these shortage of rates, but I mean — and nothing like that. I mean, the lead time is this, anywhere between six months to eight months or nine months maximum rigs are available.

Achal Lohade — JM Financial — Analyst

Understood. And last, I know you have clarified in the past, but we’re not looking at any domestic business, right? We are fully on EXIM side.

Prem Kishan Dass Gupta — Chairman and Managing Director

Yeah, just little bit within our terminals, if something comes. And if we have the spare capacity, then we’ll do it. Domestic is a more longer-term thing we’re looking at once a network is more presented more regions, then domestic makes sense.

Achal Lohade — JM Financial — Analyst

Understood. Thank you and wish you all the best.

Prem Kishan Dass Gupta — Chairman and Managing Director

Thank you.

Operator

[Operator Closing Remarks]