Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Snowman Logistics Limited (NSE: SNOWMAN) Q4 2026 Earnings Call dated May. 07, 2026
Corporate Participants:
Kevin Gandhi — Unidentified Participant
Jainam Shah — Unidentified Participant
Padamdeep Singh Handa — Chief Executive Officer and Director
Rajguru Behgal — Chief Business Officer
Vivek Turanga — Unidentified Participant
Vedant Punjabi — Unidentified Participant
Kundinya Nimagadda — Unidentified Participant
Analysts:
Aditya Mongia — Analyst
Kunal Tokas — Analyst
Unidentified Participant
Unidentified Participant
Unidentified Participant
Presentation:
Kevin Gandhi — Unidentified Participant
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. Please note that this conference is being recorded before we proceed. We request everyone to include their firm’s name alongside their name in the zoom display. Today on the call we have Mr. Prem Kishan Das Gupta, Chairman and Managing Director. Mr. Ishan Gupta, Joint Managing Director. Mr. Samvit Gupta, Joint Managing Director from Gateway District Parks Limited.
Mr. Kartik Sundaram Iyer, CFO. Mr. Raj Guru Begal, Chief Business Officer from Snowman Logistics Limited. Mr. Padamdeep Singh Handa, CEO and Director. Mr. Raghav Garg, CFO. We will now directly begin the question and answer session. Anyone who wishes to ask questions may use the raise hand option. If you wish to remove yourself from the question queue, you may press the option again. Participants are requested to unmute themselves before asking the questions. We’ll take a minute and then we’ll open the floor for the Q and A.
We’ll take the first question from Jainam Shah. Please introduce yourself and proceed with the question. Sir.
Jainam Shah — Unidentified Participant
Yeah. Hi team. Hope I am audible.
Kevin Gandhi — Unidentified Participant
Yes, sir, you’re audible.
Questions and Answers:
Jainam Shah
Yeah. So sir, first question on the volume part as of course the west issue conflict has to an extent affected our volumes even in the last fourth quarter. How has been the trend currently? Are we seeing any improvement over here or things are still under, you can say the under pressure as of now.
Padamdeep Singh Handa
Hi. No, the trend is continuing right now. So volumes remain a bit subdued and there’s no clarity also on when things will pick up. Exactly. So it’s a wait and watch kind of situation.
Jainam Shah
Okay. And any specific commodity or let’s say any specific import or export, what which has been impacted mainly because of this. Anything that you want to highlight on this?
Rajguru Behgal
Yeah, basically if we look at on the import side, all the cargo which is coming from U.S. Europe and Middle east is impacted. And after this West Asia crisis, the outbound commodity on the export side, which is food and beverage rice and basically frozen foods. So they are getting impacted.
Jainam Shah
Got it, Got it. Sir. On the expansion part as we have you can say are probably the Jaipur I said which has been stuck. Any update on that? And of course, what’s the status of the indoor ICD that we have recently added? What’s the progress over there?
Padamdeep Singh Handa
Jaipur, we have a next hearing in July which is listed for final arguments. So we’re hopeful for a positive order within that hearing or very short thereafter if it gets adjourned to another hearing and Indore is in progress. We’ve given a target of 2028 for commencement of operations. So no problems there.
Jainam Shah
Got it, sir. And apart from this, any other area that we are planning as of now to expand, of course the recent demand has not been that great. But anything else that we are planning as of now, anything that have been identified or to be added in the near term,
Padamdeep Singh Handa
We’re still on the lookout. We’re looking both owned as well as accessing some third party sidings. And regardless of the short term demand, we’re trying to create assets for long term. So we’re not stopping our search for land and the right locations for more ICDs.
Jainam Shah
Got it. And sir, what’s the update on the uncleshwar MMLP that we have entered into an agreement with the Savarya Group? How has been the volume ramp up over there and what is the outlook for FY27 for that particular ICD?
Padamdeep Singh Handa
Not ICD,
Jainam Shah
My bad.
Padamdeep Singh Handa
Yeah, domestic volumes have started there and we’ve been consistently adding month on month. In this last quarter we’ve won a tender with ASIL or Mittal and started doing steel coil rake handling from there. So that’s an added new revenue stream for us which we weren’t participating in earlier. The ICD will probably take anywhere from three to six months. The construction is going on its own track. But by the time all the permissions come in place, it can be anywhere from three to six months.
Jainam Shah
Got it. So coming to the financial statement, what I see is that despite the growth has been quite muted for the whole year because of the effect of the CFS segment as well. Overall gross margin has been largely intact. But the one key thing that I see is that the employment process has risen by around, you can say 12 to 13% or last year on FY25 versus FY26 comparison. So fast. Any specific thing, are we adding head counts or is it the remuneration which has been increased or what kind of trend that we can expect?
Even if, let’s say volume has been stagnant, overall operation has been stagnant. What could have been the reason for the such a rise in the employee cost for the full year?
Padamdeep Singh Handa
Yeah, so it’s a mix of everything. So the headcount is also going up as we’re scaling up in domestic operations. That’s also, you know, a team is being set up. Unkleshwar is coming. So it’s a bit in advance this headcount is coming, but we’re preparing for the future and other than that also there’s some retention scheme bonuses and etc that we’ve added. So all that has contributed to it.
Jainam Shah
Got it, Got it sir. And sir, from the let’s say next over three to five years perspective even if you let’s say remove the existing impact, what kind of growth that we are, let’s say seeing from overall point of view from the railway segment and including that how has been the market share for us in the key regions that we have been operating in along with let’s say whatever impact that we might be seeing recently or maybe in future because of the connection of the DFC to the JVT which has already started.
Padamdeep Singh Handa
Yeah, it’s tough to give a guidance but as and when we add new terminals, depending on how many we add we would be trying to target a 15% growth for the rail segment. CFS is probably around 5%. Snowman also we’re targeting about a 15% growth so that’s consistent with our long term vision assuming lesser and lesser disruptions. Although it happens once a year some new disruption kind of comes in and sorry, the second question was what
Jainam Shah
The
Padamdeep Singh Handa
Market share, sorry the market share we’re not. Since last quarter or last two quarters we’ve stopped giving individual region wise market share. So we won’t be going ahead sharing that.
Jainam Shah
No issue answer on the JNPT part. Like how much volume would have been we would have been doing at the JNPT and are we going to have any positive impact overall with the DFC now getting connected to the gnpt.
Rajguru Behgal
So again so the last stretch of JNPT is still you know, not complete. So we are expecting that it should take another month’s time. So once that last section gets completed then only we’ll be able to give some kind of guidance, you know what will be the volume shift.
Jainam Shah
Got it? Got it sir. How much of the total cargo would have been on double stick for let’s say 4q or for the F26
Padamdeep Singh Handa
40% for the full FY also I’ll just request that there are the people waiting in line for questions so if you can come back in queue.
Jainam Shah
No issue.
Padamdeep Singh Handa
Thank you.
Kevin Gandhi
Thank you. We’ll take the next question from Aditya Mungya. Please unmute yourself and proceed Sir.
Aditya Mongia
Yeah, thank you for the opportunity. Could you, could you share more about the kind of capex that you spent this year? I think it’s a, it’s a large number, about 170 crores or so. So could you elaborate where the money has been spent and I like question over here. As you see through the DFC commissioning happening in what areas would you want to invest more to be well prepared for the opportunity ahead?
Padamdeep Singh Handa
The capex figure that we have for the container business is about 90 crores so I’m not sure where 170 is coming from unless you’re counting Snowman also but even then if we include Calcutta warehouse and everything it’s about 30 for Snowman.
Aditya Mongia
Okay.
Padamdeep Singh Handa
Yeah. So on the capex guidance for the year also is with the Indore project is a 150 crore project out of which we’ve spent about 50 for the land already. So this 100 will come in the next two years. Jaipur if it comes in then that will be another 70 crores to be spread across a year, year and a half over there. Other than that we are also buying electric reed stackers, electric vehicles also we’ve just placed our first order. We’re buying three rakes as well. So all this will add up to an additional about 125 crores.
This includes a new warehouse also all this is coming in and on the new locations and all you asking where along the DFC we’re planning or. I missed that last part, sorry. As
Aditya Mongia
In more importantly also on the nature of rates that would be well equipped to kind of take the full benefit benefit of DFC how are you thinking through in any related capex plan? So obviously this is the rake part of things on the ICD part of things also if you would want to share the way you are thinking that’s why you want to be prepared.
Padamdeep Singh Handa
Yeah. So ICD wherever, I mean how we’ve historically done it is that when we hit about 70, 80% capacity utilization we extend the yard. So we are planning that in two of our locations, Gadi and Piala right now. Other places we have enough yard capacity right now to ramp up some more volume but our land bank is enough to cater to up to four times the volume that we currently do. So ICD of our existing capacity, existing land won’t be an issue. Ankleshwar would come in that will also add into the volumes.
And Indore and Jaipur also that’s our plan on the ICD front right now and if anything new comes in that will be another two years from now. So we’re still looking a bit long term on that.
Aditya Mongia
Sure. We finally as in both on market share as well as your double stacking coefficient if you can give a direction to how things are moving if not absolute numbers that will be useful. That’s been the Last question. Thank you.
Padamdeep Singh Handa
Double stacking. We’re at 40% for the year. Q4 was at 42% but so throughout the year it was kind of, you know, between 39 to 42 kind of thing. And it’s given an average of 40 on a market share basis. It’s pretty much intact of what we’ve been reporting in the last few quarters. No major change there. Thanks.
Kevin Gandhi
Thank you. The next question is from Vivek Turanga. Please unmute yourself and proceed. Mr. Turaga, please proceed.
Vivek Turanga
Sir. Am I audible?
Kevin Gandhi
Yes.
Vivek Turanga
So my question is with respect to Snowman. So what? Because you’ve been having this thousand crore revenue target and I know there are so many disruptions and it’s getting delayed and can, can you please throw some light on when will we reach that revenue and margins we will have once we go there? Because 5 PL I don’t think we will be able to do with all the customers. Only with a very high quality customers we will be able to do. So what will be the margins and how should we think? Because we are not able to model the company at all.
Padamdeep Singh Handa
Yeah, so it was a broad guidance. In that time things were looking a lot more positive. So we can’t give a proper guidance without evaluating what the situation, especially with this West Asia situation goes like. Thousand crores is still our plan. Maybe it gets deferred by a year or so on the margin front. As more 5 PL increases the percentage of EBITDA would go down but the overall EBITDA would go up. Our target would be that something like at 1000 crores it’s a 15% EBITDA margin on a blended basis.
And we have a 150 crore EBITDA.
Vivek Turanga
And that 150 crore is minus. You are taking for you when you calculate you take the leases away. Sir, because we pay the lease rent. So you’re not.
Padamdeep Singh Handa
Leases are below this.
Vivek Turanga
So if you can. The second question is, can you tell what is the market share? Sir,
Padamdeep Singh Handa
It’s very hard in Snowman to come up with a market share figure. If you look at our capacity, we’re at about 160,000 pallets. The next competition is at 80,000 pallets. And then after that it gets very fragmented to a lot of people having anywhere from 10 to 30,000. So Stowman is the market leader. But if you look at the unorganized space and include all kinds of potato, cold storages, B grade warehouses, everything, the capacity is so big that even all put together Snowman would only be about 3 4% of the entire market size.
Vivek Turanga
But in terms of the size you will be second. Even the second guy would be half of yours
Padamdeep Singh Handa
In the organized cold storage. Half of us? Actually they’ve reduced pallet capacity further now so they would be even less than half of us now.
Vivek Turanga
So if you don’t mind thousand crore by FY28 we can take or is difficult.
Padamdeep Singh Handa
It’s a bit optimistic but we’ll have to wait and watch and see. But maybe more realistic is FY29
Vivek Turanga
Sir. Thank you. Sir, if you don’t mind, can you have better disclosure in terms of leases? Because some some facilities are leased, some are owned, some are different models. So to do the cash flow understanding of the cash flow, if you do not mind, if you can share with us what is below the EBITDA especially in terms of lease rentals that would help us get the real picture of the cash flows.
Padamdeep Singh Handa
We’ll think of it, how to report it. But basically we’re following the India’s accounting because
Vivek Turanga
This is difficult because other companies at least we can take the whole thing. But cash flow statement comes only in the end. So you can help us with that? Sure.
Padamdeep Singh Handa
Maybe we’ll come out with some system next quarter onwards.
Vivek Turanga
Thank you. Thank you very much. Thank you.
Kevin Gandhi
Thank you. A reminder to all the participants that you may please click on the raise hand option available on your screen to ask questions. The next question is from Kunal Tokas. Please accept the prompt and proceed with your question. Sir,
Kunal Tokas
Hello. Am I audible?
Kevin Gandhi
Yes sir, you’re audible.
Kunal Tokas
Thank you. First question. My questions are about Snowman. First question is about the margins. We can see that big margins went down across all segments for the full year. My question is specifically about the warehousing and the 5 PL businesses. So can you please explain why that happened?
Unidentified Participant
Typically in the warehousing we have had few RNMs and there were certain startup warehouses wherein the power cost was high initially that has resulted into a little depleted margin. Now those warehouses which were operational, which were done operational last financial year are running at optimum levels. And this, this was a temporary ramp up phase for the new facilities in Calcutta, Krishnapatnam that has led to the typical reduction in number. Okay,
Kunal Tokas
What was your capacity utilization for the full year?
Unidentified Participant
We were at around 86, 87% for the last financial year.
Kunal Tokas
Okay. Does this include the Krishna Patnam? Yeah, it
Unidentified Participant
Includes every facility which is onboarded. The moment it is onboarded, it is added as a capacity and the utilization goes down and then we ramp it up. So on an average in A year we were around 86, 87% between that.
Kunal Tokas
Okay. And can you provide an overview of the competitive intensity in the industry? Maybe some metrics about how much capacity is coming in, which players are adding capacity, where and is capacity leaving the market? As you said, the second largest competitor has reduced is their capacity. So that’s the important point.
Unidentified Participant
See we keep hearing about the news but I mean there’s nothing concrete which I can comment here about the competition.
Kunal Tokas
Okay. Can you provide the share of dry and coal in your warehouses? Because dry has lower margin as I understand it.
Unidentified Participant
So currently our dry utilization will be around 9 to 10% of the total capacity. And we are further reducing that.
Kunal Tokas
You’re reducing that?
Unidentified Participant
Yeah.
Kunal Tokas
That should result in increasing margins.
Unidentified Participant
Correct. It will lead to higher ASPs. I mean we have had fewer customers which have moved out. I mean which we moved out last year. They were utilizing or we were forced to utilize few of our frozen places to accommodate them. So it is now done with and it has shifted or the new cargo is from frozen segment. So it is going to add up on to the overall yields.
Kunal Tokas
And just last question on the balance sheet sir and then I’ll come back. What is the amount of lease increase in principal and debt interest in principle that is due in FY27. And are you, are you comfortable about that situation given that you had.
Unidentified Participant
Yes. 14
Kunal Tokas
Crore of cash on hand for March.
Unidentified Participant
Yeah. Yeah. So we have repayments of around 30 crores in next financial year. And including lease
Kunal Tokas
And debt principal,
Unidentified Participant
There is no repayment of lease. Like it’s basically accounting entry. Only the lease liabilities, you have to
Kunal Tokas
Pay the interest, right?
Unidentified Participant
No, no, we don’t need to pay. Basically we need to pay rents only. So. Yes, right. Release rent. So that is the part of our operating expenses only. So only the. That that comes into the P and L. Only the repayment is what you are asking. It is around 30 crores
Kunal Tokas
Only debt. What is the rent payment for the year? Because in the PNGL it’s. So
Unidentified Participant
Rent payment would be around 40 crores for the entire year.
Kunal Tokas
Okay. Okay, sir. Thank you. I’ll come back. Okay,
Kevin Gandhi
Thank you. The next question is from Kevin Gandhi. Please unmute yourself and proceed, sir. Mr. Gandhi.
Unidentified Participant
Hello. I hope my voice is audible.
Kevin Gandhi
Yes sir. You’re audible now.
Unidentified Participant
Yeah, sir. So basically a few quarters ago we had talked about that opportunity of LCL cargo. And the time sensitive cargo is huge once the JNPT DFC commissions. So. Okay, so like after a month ago like how much of the market opportunity do you see from that kind of a market and where are we in the phase of negotiations with the exporters? So just want to understand the market size of that opportunity. Thank you.
Padamdeep Singh Handa
Yeah, it’s hard to put a concrete number to it, but within NCR itself there’s about 6 to 10,000 tus of this kind of volume. Other parts also get consolidated at Navasheva like, I mean other parts of the country like up Rajasthan and all the volumes go by loose trucks to Navasheva. So this volume is significant but nothing’s happening on it right now. Especially with the whole West Asia thing. People are not looking for a change in model within their business and everyone just trying to secure their current volumes and gnpt.
Although they announced that the BFC is complete, it’ll still take a couple of more months for it to be operational, especially on double stack. So that’s still pending actually.
Unidentified Participant
Okay. Sir, this 6 to 6 to 6 to 10,000 tus which you mentioned is for the. Per month, right? Or it is per quarter.
Padamdeep Singh Handa
Per month.
Unidentified Participant
Per month. Okay. My second question was on the CFS sale which we have been actually talking about since long. So where are we in the process of like are we actually thinking about it
Padamdeep Singh Handa
For the last. Where are we now? For the last few quarters we’ve confirmed that we’re not looking actively for a buyer on it.
Unidentified Participant
Okay. And so my last question was just wanted to get the bifurcation of the CFS TEUs and the real TEUs or the total volume of 180 to 117 NTUs this quarter.
Padamdeep Singh Handa
Yeah, it’s reported in our press release. So for the quarter say we’ve done 1 lakh 88 thousand, 96 thousand is real and 91 thousand is CFS roughly.
Unidentified Participant
Thank you.
Kevin Gandhi
Thank you. The next question is from Vedant Punjabi. Please accept the prompt and proceed with the question.
Vedant Punjabi
Hi, I just wanted to. My question was regarding Snowman. Despite increasing revenue, I think 10% increase in revenue, there has been a 20% almost increase in COGS. So what is the reason for that? Because I think that is majorly affecting profitability.
Unidentified Participant
So as we mentioned earlier, I mean we have had couple of warehouses which were started in last financial year and there was an inflated cost due to that which achieved the optimum utilization towards the far end of the last financial year. Other than that there were certain high costs on DG which were reported in previous quarters as well due to power cut and all. We have had a huge expense on running our facilities on DGs. So that has also contributed to the reduced margin.
Unidentified Participant
So further, one more point. See you are seeing the 10% growth, that is the overall growth in revenue. So if you see only the trading part, which is trading and distribution. So there is a growth of 23. And all COGS is related to trading only.
Vedant Punjabi
Okay.
Unidentified Participant
Other segments are not attributing to that.
Vedant Punjabi
Okay. And lastly, given the current situation in West Asia, I mean a lot of the clients would also, I believe we all have a lot of international clients who would make sort of strategic initiatives. What other headwinds that you’ll see or foresee with those. With the, with this scenario.
Unidentified Participant
See, as of now the trade is moving fine. I mean we particularly, I mean cater to domestic distribution for our exim customers. Yes. There has been certain delays because of the availability of containers and the cargo has stayed a little overstayed with US and imports. We had to pull in faster. Rather over ordering is done as of now. But other than that we have not seen yet a very significant concern.
Vedant Punjabi
All right. Okay, thank you. Thank you so much.
Kevin Gandhi
Thank you. The next question is from Kundinya Nimagadda. Please accept the prompt, unmute yourself and proceed.
Kundinya Nimagadda
Yeah, hi. Thanks for the opportunity. So two questions from my end. Firstly, you know, segment, obviously you report a decent set of numbers even when compared to what the railways had reported during the past quarter. So just trying to understand, I mean, how much of this is market share driven and what is the kind of impact that you saw in the month of March and how is it now? Obviously LVOS is reporting a greater set of the claim. But how is the business for you? If you can throw some color on that, please.
Padamdeep Singh Handa
So not too much market share gains related. It’s just that some of the commodities that were hit badly in March were a lot food related like rice and onions and bananas and all that when we had less exposure to those commodities. But then the whole shipping cycle has become affected because of this. So it’s not just the volumes to and from Middle east, it’s the entire Europe us. Like Rajguru was explaining earlier that everything has gotten disrupted. So maybe the initial originating volumes didn’t get affected as much first, but then the subsequent volumes were affected.
And April is also seeing that trend actually. So we’re not sure when it’ll clear up. It really depends on when Iran and US come to a resolution. Hello.
Kevin Gandhi
So you’re on mute.
Kundinya Nimagadda
So. So is April as bad as March or is it deteriorating further?
Padamdeep Singh Handa
Similar lines, I mean within range, not, not extremely worse. But yeah, there’s impact.
Kundinya Nimagadda
Okay, understood. And my Second question is on both realizations and margins. So both on a QOQ and also on yoy basis I see that on party you the realizations and margins are lower about 4,5 odd percent. So what drove this decline and how much of the margin front, at least that you can attribute to export import imbalance or impediment. If you can speak a little bit about on that front, please.
Padamdeep Singh Handa
There’s imbalance, there’s you know, some year end costs that come in with accounting. There’s impact of domestic business we’ve started. So although it’s less in terms of percentage right now, the revenue and EBITDA is lower on the domestic side which we said would happen. And
Vivek Turanga
Over
Padamdeep Singh Handa
Time as more domestic happens, as more short distance happens, our revenue and EBITDA per TU might go down, but it should help contribute to the overall ebitda. But obviously with fixed costs being there on an overall volume decline for the quarter, we are seeing that impact.
Kundinya Nimagadda
Okay, so just trying to understand this a bit better. So two parts to it, you know. One, the realization front on a yoy basis is still down domestic. My assumption was that, please correct me if I’m wrong, my assumption was certain it would not have been material yet in share of mix. So just trying to understand what drove a decline realization. And even on the year end cost front. Right, and that would have been there even last year in the fourth quarter. So what has changed there?
Padamdeep Singh Handa
No, so there’s more empties, more under frame. So you might see the number of TUs not dip as much, but the number of latent TUs or the number of latent TUEs towards are more profitable segments like 40ft that can get easily double stacked. That was impacted a bit. So it’s not one clear cut answer that we have that this is what caused a lower ebitda. But rising costs were also there. Like in March there was a situation where a lot of our trains were stabled. So those stabling costs come in. And then also for domestic there’s some upfront costs.
Sorry, there’s some disturbance from your side. I’m saying there are a lot of costs loaded up front for the domestic business, like taking containers on lease for business that’s not come in yet, but we want to be prepared for that. There’s a cost to move those containers from different parts of the country. So like one side haulage has been paid on an under frame basis. One side empty haulage has been paid to bring those containers to us, but without any corresponding revenue. So those type of Hits have also come in Q4.
Kundinya Nimagadda
Understood. So I mean I’m assuming at least the latter part which you indicated one side one time movements are like you know one one time expense. I mean it’s not something which is going to be recurring a thing. So how should we look at the Trend therefore in FY27 per se.
Padamdeep Singh Handa
Again it depends on the West Asia thing. So it’s a bit too early to say what will happen on a normal basis. Suppose this wasn’t there. Then we would go back to previous quarter’s numbers. But it’s very hard to predict right now what will happen
Kundinya Nimagadda
So. Got it sir. Thank you and all the best.
Padamdeep Singh Handa
Thanks.
Kevin Gandhi
Thank you. Participants who wishes to ask questions may please click on the raise hand option available on your screens. We’ll take the next question from Jainam Shah. Please accept the prompt and proceed. Sir.
Jainam Shah
Yeah, thanks for the opportunity. So my question is more on the debt part as we see is that our Debt was at 550 crore. Now it’s at around 170 crore at the gross level at the Gateway district. Work standalone. During these last four, five years we have invested in Snowman, we have invested in ICD Jaipur. We also acquired the ICD Kashivur. Going forward as of now we have only one ICD wherein our capex is moving. So is it safe to assume that this debt will be eventually zero? And if let’s say we are and we are not going to let’s say any increase in stake in Snowman, how we are expected to use the cash flows that we are generating on a consistent basis.
Because our overall bottom line Is at around 270 crore so good amount of cash flow we are generating how we will be utilizing this cash flows
Padamdeep Singh Handa
If we have enough capex plans like we’re taking three trains so that will equal to about 55 crores of capex. A lot of our fleet is aging and we’re moving towards EV. And each EV landed cost comes to about 90 lakhs per trailer and we have to set up the corresponding infrastructure for it for power. So we’ll be investing in solar as well. Across our locations more electric REIT stackers are there new warehouses within our existing icd. So I mean there is a significant CAPEX plan even without new ICDS Indore and Jaipur, whenever it comes in that will also contribute to it for the foreseeable future we have enough plans.
While gross debt will also keep coming down and like we’ve announced in the past, we’re not looking to increase our stake in Snowman in the near term. So there would be use for it and we’ll continue like dividend we’ve said that is also going to be part of it.
Jainam Shah
Got it, got it. So just last two things from my side. One is on the taxation part I guess. Is it safe to assume that eventually in over next 3, 4 years our text would be eventually go towards 18% the metric that way conversion is happening as I see in the past and from the commentary as well.
Padamdeep Singh Handa
So tax rate yeah there’s been a change basically. So Matt reduced by 1% but there was a question of old regime, new regime because the ATIA tax benefit has gone away for us. So we’re missing out one year of ATIA tax benefit which would have been FY27 for some of our facilities. But we’re going to have enough MAT credit that we’re not going to pay cash tax for the next say three years at least, maybe even four. So till then book accounting will be different but cash tax will be utilizing a MAD credit and paying mad.
Jainam Shah
Got it, got it. And so just last one thing we have been guiding around 15% kind of a volume growth. What we have seen in the industry is that over last 10 to 15 years time industry growth on a CGI basis as somewhat near to around 10%. And if we see our growth over last four years FY22 to FY26 it has been around 4,5%. Of course there has been some external factors that has impacted operations across the years. But how we are confident of having 15% growth is it because of addition of capacity in increasing the market share or overall market as well growing into it.
So what’s your point? Like let’s say how we are confident of achieving this 15 growth in the railway over a medium term point of view.
Padamdeep Singh Handa
So rail has been growing at about 10% but because of CFS. So combined CFS has been more about flat.
Jainam Shah
I’m just talking about the railway throughput. In FY22 we did 3:33 000 throughput. In FY26 we did around 3,94,000 which is coming to around 4.3% CA. It’s just the railway throughput that I’m talking not including the CFS.
Padamdeep Singh Handa
Okay, so from last year we’ve had about 10% growth and the overall market didn’t grow by 10% so we added market share as well as some domestic volumes and we’re going to continue to expand on our domestic volumes and new locations. So when unkillishwar will come in say within this year, indoor the following year, in the say two years from now. Jaipur will also probably come in two years from now. So all this will continue adding to our 15% growth that we’re targeting and we want to add more locations as well.
Jainam Shah
That was really helpful. That’s it for my side. Thank you so much and all the best.
Kevin Gandhi
Thank you. The next question is from Kunal Tokas. Please accept the prompt, unmute yourself and proceed.
Kunal Tokas
Hello, I’m audible.
Kevin Gandhi
It’s a little feeble. Your voice is feeble
Kunal Tokas
Now.
Kevin Gandhi
Much better. Please continue.
Kunal Tokas
Okay, thank you. My questions are about snowman again. What’s the capex target for this year?
Padamdeep Singh Handa
Yeah, so we’re looking at more BTSs this year but we do have some plans to buy land and probably one owned warehouse we’ll target plus some vehicles, maybe around 50 crore. Capex is the guideline for FY27.
Kunal Tokas
Okay. And coming to the transportation segment, it has been a thorny segment to operate. Can you provide us with some metrics that you monitor to gauge the performance of this business, whether it is doing well or whether it is not doing well? And when might you consider a divestment of this business and moving on to outsourcing of transportation activities? Is there a strategic value that your segment still adds to the business? And why or why not would outsourcing be a viable option?
Unidentified Participant
To start with the the transportation segment is under constant stress and we do have a proper metrics in which we do measure the kilometers driven by run by each vehicle, the sort of fueling we are doing in terms of percentage to revenues and multiple other parameters on which we monitor it on daily basis. In fact, we are moving on to an online platform of transport management system wherein we will be able to get it up to a trip level of accuracy which will be in the Q1 of this FII. So in a month’s time we’ll be live on that portal which will help us to further drill down on profitable and non profitable lanes.
That’s going to give us some sort of a guideline on how do we revamp the entire strategy around it. Coming to your other question, we already are. I mean we do own few vehicles which is close to 250, 260 today. And then we do have another 200 vehicles which we run on lease. So we already have an outsourced model which is operational. And the third question was why should we not only do a leasing that increases the risk, I mean we need to run and operate our own vehicles alongside what we do with Our leasing partners that dilutes my risk of overall operations among the partners may walk off with the entire fleet.
It becomes difficult to revamp that at the pace we want it and then the entire setup has to be redone. So considering all those business risks and mitigations, we will continue to invest. As we just mentioned that we are planning to buy a few more vehicles this year adding up to the fleet this year and that’s how it is going to continue.
Kunal Tokas
That was very helpful. Sir, a question about the 5PL business. Are there any other companies doing 5PL in cold chain in India? Large players?
Unidentified Participant
Not sure about any large player. There are certain 3 PL companies who do own stocks which makes it 4 PL but they don’t have their own warehouses and also it cannot be considered as a 5 plus.
Kunal Tokas
Okay, and the margins in the 5 PL business went down as well. Was that just a result of the ramping up of the business?
Unidentified Participant
See, the margins are almost flat itself. I mean if you see it on the gross margin level it is approximately same as it was last financial year and they are certain to remain in the similar zone.
Kunal Tokas
I was looking at the EBIT margins that went down around 40 pips 6.2.
Unidentified Participant
That is specific. As I mentioned some of the imports were pulled in in the last month of the last year. That has led to one time procurement. So some of the costs were added there. Other than that. Yeah.
Kunal Tokas
Okay. And so this is the last question about the pricing scenario in warehousing. How is that looking?
Unidentified Participant
It’s quite positive. I mean the industry is moving and responding to the price increases. We have had couple of price increases required this year and with Haryana changing the wage laws and all that has been passed through and customers, customers have accepted that. So we are seeing a positive response on that.
Kunal Tokas
Are there more price hikes planned in the near future?
Unidentified Participant
Sorry, I didn’t get the question.
Kunal Tokas
Are there more price hikes planned in the near future?
Unidentified Participant
Yeah. For every contract renewal we are making sure that we ask and pass on the costs which have increased during the last financial year and expected to increase in the current financial year. So we are very determined to get the price hike for every contract renewal as and when they come.
Kunal Tokas
Okay sir, thank you very much for answering my question. Have a good time.
Unidentified Participant
Me too.
Kevin Gandhi
Thank you. Ladies and gentlemen, that was the last question for today. Participants that have missed out can reach out to SGA team for any further information. With that we conclude this conference. Thank you for joining us and you may exit the meeting now. Thank you.