Tara Chand Infralogistic Solutions Ltd (NSE: TARACHAND) Q2 2025 Earnings Call dated Oct. 28, 2024
Corporate Participants:
Vishal Mehta — Investor Relations
Himanshu Aggarwal — Whole-Time Director and Chief Financial Officer
Analysts:
Nirvana Laha — Analyst
Naman Parmar — Analyst
Rohan Mehta — Analyst
Manan Vandur — Analyst
Unidentified Participant
Anant Sarda — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Tara Chand Infra Logistics Solution Limited Q2 and H1 FY 2025 Earnings Conference Call. [Operator Instructions]
I now hand the conference over to Mr. Vishal Mehta. Thank you and over to you, sir.
Vishal Mehta — Investor Relations
Thank you, Yusuf. Good evening, everyone. I, Vishal Mehta, on behalf of Stellar Investor Relations, welcome you all to Tara Chand Infra Logistic Solutions Limited Q2 and H1 FY 2025 Earnings Conference Call. We shall be sharing the key operating and financial highlights for the second quarter and half year ended September 30, 2024. We have with us today the senior management team of Tara Chand Infralogistic Solutions Limited, Mr. Himanshu Aggarwal, Whole-Time Director and CFO. Before we begin, I would like to state that this call may contain some of the forward-looking statements which are completely based upon our beliefs, opinion and expectation as of today. These statement are not a guarantee of our future performance and involve unforeseen risk and uncertainties. The company also undertakes no obligation to update any forward-looking statements to reflect development that occur after a statement is made. Document relating to the Company’s Financial Performance, including the Investor Presentation have already been uploaded on the Stock Exchanges and the company’s website.
I now invite Mr. Himanshu Aggarwal to share his initial remarks on the company’s performance for the second quarter and half year ended September 30, 2024 and then we will open the floor for Q&A. Thank you and over to you, sir.
Himanshu Aggarwal — Whole-Time Director and Chief Financial Officer
Thank you for the introduction, Vishal. Good afternoon, ladies and gentlemen. I, Himanshu Aggarwal, the Whole-Time Director and CFO of Tara Chand Infra Logistics Solutions Limited, welcome you and thank you to be a part of the earnings call for the quarter and half year ended 30th, September 2024. I hope that you all have had the opportunity to look at the investor’s presentation that was posted on the NSE website. Our Company migrated to the NSE Main Board in April 2024 and so I understand that some of you might be new to our company.
To start with, I would like to give you a brief about what our company does. Our company, Tara Chand Infralogistic operates across the length and depth of India through its three key segments or verticals. Segment-A is equipment rentals and infrastructure works. Segment-B is warehousing, handling and transportation, while Segment-C is steel processing and distribution. In the equipment rentals division, the company operates across India, serving India’s infrastructure development and industrial capacity expansion needs through a vast fleet of cranes, piling rigs, aerial working platforms, also known as man lifts and trailers.
In our Segment-B, we are providing warehousing and logistics solutions, specifically for the steel sector. The warehousing activity is primarily executed for public sector undertaking companies like Steel Authority of India Limited and Rashtriya Ispat Nigam Limited, popularly known as Vizag Steel, where the stockyards are either owned by the company or by the client. The company has a vast experience of more than four decades for steel handling projects, where we are involved in handling of more than 10 million tons of steel per annum.
On the equipment rental front, the company has more than 300 machines. The largest capacity crane in the company’s fleet is of 800 ton capacity, which has been acquired in July 2024 as a brand new fully loaded machine from Zoomlion China. Apart from cranes, we have got hydraulic piling rigs which are used for earthwork or ground work to be done for construction and civil works and we’ve got aerial working platforms that are used for working at heights above certain meters, more specifically 30 meters and above.
In FY 2024, our company had introduced the tallest aerial working platform in India with a working height of 68 meters and the same has been deployed on a long-term basis for a critical steel plant expansion project. The company has been active in the construction of large metros, the metro rail network that spans across the country. Also we have been a very active participant and have played a very important role for the construction of the first ever bullet train of the country, which is also known as the Mumbai Ahmadabad High Speed Rail project. Apart from that, in our industrial capacity expansions, we are actively working with the cement industry, steel industry, petrochemical sector with refineries and [Technical Issues].
Operator
Sorry to interrupt Himanshu, sir, your voice is very low.
Himanshu Aggarwal — Whole-Time Director and Chief Financial Officer
Hello. Can you hear me now?
Operator
This is fine. Yes, sir.
Himanshu Aggarwal — Whole-Time Director and Chief Financial Officer
Yeah. So, in the current financial year, the company has also entered the renewable energy sector, covering both the solar and wind energy domains. We have a very diverse team of domain experts, operators, engineers and technicians, which are spread across 21 states in our country that the company operates. Our total team strength is upwards of 700 people and at present the company is working across almost 70 live sites in the country.
Moving on to the financial highlights for the period ended 30th of September 2024. We are very happy and pleased to announce that this has been the highest ever quarterly and half yearly revenue and profit result for the company. In Q2 FY 2025, our revenue surged to INR60.4 crores, reflecting a remarkable 41% year-on-year growth. Our EBITDA stood at INR21.78 crore, which was a 61% Y-o-Year increase, which translated into the highest ever EBITDA margin for us which was at 36%. The profit before tax at INR9.62 crore was again 184% year-on-year increase, while the profit after tax grew by 168% to INR7.22 crores.
Similarly, in the half year ended 30th September 2024, the revenue climbed 30% year-on-year to INR107.7 crores, while the EBITDA saw 41% growth to INR37.72 crores, with the EBITDA margin standing at 35%. The profit before tax doubled to 15.7%, while the profit after tax grew by 81% to INR11.75 crores. This brought the earnings per share to INR7.6 per share, which was a 66% increase and it was complemented by a cash PAT of INR30.08 crores, which again is a 38% increase on a year-on-year basis.
On the financial prudence front, the company has been seeing that the receivable days have been coming down, as we saw that these receivable days are at 85 days as of 30th September 2024, compared to 100 days in the similar period last year. The company has a very healthy order book at INR104 crores as on the 1st of October 2024, which is a 31% year-on-year growth and this entire INR104 crores order book is executable in the current financial year itself.
On the revenue distribution front, 52% of the revenue came from our equipment hiring segment, while 44% of it was from the warehousing and transportation division and 4% from the steel and distribution segment. For the half year ended 30th September 2024, our equipment rental segment registered a high growth of 54% in revenue at INR52.2 crores and recorded an EBITDA of 50%. On our warehousing and transportation segment, it registered a marginal 1% increase in revenue at INR40.8 crores due to a one-off decline in our revenues during Q1 FY 2025. But with the situation already stabilizing in Q2 and monsoons also behind us, we are confident of stronger growth from this segment in our traditionally solid Q3 and Q4 periods.
Revenue for our third segment, which is the steel processing and distribution segment, grew by 25% year-on-year to INR8.8 crores on the back of a major new order which was executed in Q1 FY 2025 itself. In the equipment rental segment, the average monthly rental yield was at 2.96% for the half year ended September 2024, rising from 2.75% in the same period last year. This has been primarily due to the meticulous capex undertaken by the company in the previous and current year.
In the current year, the company has already undertaken a capex of INR94.30 crores, which is the highest ever in the company’s history. The positive impact of this capex is expected to further continue and boost the Q3 and Q4 performance of the company. Going forward, the company is actively working on expanding its footprint in the renewable energy sectors through its equipment rental division, while also maintaining its stronghold in the cement, steel and petrochemical sectors. Our efforts towards specialized services contracts are progressing well. We are in the final stages of closing certain tenders and we hope and anticipate positive contribution from them in the second half of this financial year itself.
With that, I would now like to give it back to Vishal and open the floor for Q&A. Thank you.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] First question is from the line of Nirvana Laha from Badrinath Holdings. Please go ahead. Nirvana, your line is unmuted. Please go ahead.
Nirvana Laha
Hi. Himanshu, sir. Am I audible?
Himanshu Aggarwal
Yes, I can hear you.
Nirvana Laha
Okay, thank you so much. Congratulations sir on a very good result in a weak quarter. I have about four or five questions. So, the first question sir is, today, JSW Steel has said that it’s planning to reduce their capex plans for FY 2025 by about 20%. So, I just wanted to understand, does this impact us in FY 2025? And are we seeing a similar slowdown across other clients in cement and steel?
Himanshu Aggarwal
Okay. So, thank you for the question. We are not very actively working with JSW per se at present and if you ask with regards to the slowdown with other clients, we haven’t seen anything come up as such as of now. Rather, on the contrary, we are seeing aggressive expansion across both the main sectors that we are working with, the cement and steel, where the demand is still pretty robust for at least equipment that they need in our rental division.
Nirvana Laha
Okay. That’s great to hear, sir. In terms of depreciation for the quarter, this is the second quarter that there’s a quarter-on-quarter increase. So, I just want to understand, has the full impact of the depreciation come in now in this quarter with a capex or is it expected to go up further in Q3? And if you can guide how much the peak depreciation might be on a quarterly basis?
Himanshu Aggarwal
Yeah. So, to answer that, in our earlier call also on Q1 FY 2025, when we had talked about capex that was done as of 1st of August, it was about INR69 crores, of which a majority of the capex was actually done in July. So, the impact that you see of the increased depreciation quarter-on-quarter is because of the higher capex done in Q2 compared to Q1. And what we see right now is the trend of capex — of depreciation should remain similar because we have incurred already about INR94 crores of capex and the target for the financial year currently stands at INR100 crores. So, unless there is anything major that comes up which requires us to prepone our other capex to the current financial year, we do not see a much change coming there. So, the depreciation you can consider to be on a similar trend that we are right now.
Nirvana Laha
Sure, sir. But after August 1st also, I believe, another INR20 crores or INR25 crores of capex was happened, right, so that will flow through completely in Q3?
Himanshu Aggarwal
Yes. So, whatever is balance, the impact of the capex that is already done in September, the depreciation would have been already factored in. So, if you look at it, these are numbers for capex done up to the entire half year or the quarter ended 30th September 2024. So, the depreciation has been factored in accordingly. And on a similar line, we can see that the depreciation will be almost double of what you see or you multiply it, extrapolate it to the financial year, so we had about INR18 odd crores of depreciation as of 30th September, for the half year I am talking about. And so that would lead to about INR36 crores, INR37 crores of depreciation for the whole financial year, the way we see it right now. It could even be anywhere around INR1 crore or INR2 crores higher than that.
Nirvana Laha
Okay. Got it. And sir, this quarter, our other expenses increased by 43%, whereas revenue growth was about 1,000 bps lower than that. So, what was the reason for that? Was there any one-off for which line items like this?
Himanshu Aggarwal
The other expenses you said have increased by?
Nirvana Laha
I think about 43% Y-o-Y.
Himanshu Aggarwal
On quarter-on-quarter basis or are you talking about year-on-year basis?
Nirvana Laha
No, on a year-on-year basis. So, while our revenues I think have grown by around 33%, the other expenses since have grown by 40% plus. So, is there any one-off there or?
Himanshu Aggarwal
No, we see it is, if you look at it as a percentage of the — if you look at the expenses as a percentage of the revenue, then the increase is not any drastic. Rather on the contrary, we’ve seen certain expenses go down, like the manpower cost as a percentage of the revenue is lower on a year-on-year basis compared to Q2 FY 2024. Similarly, the cost of power and fuel has gone down by about 50%. The overall expense is very much similar to what it was last year. If I look at as a percentage of the revenue, no such one-off expense comes to my mind. But we did see a slower activity in our segment for warehousing and transportation in the first quarter, which has picked up in the second quarter but still marred a little bit by the monsoons. So, there the expense factor might have come into play. And there were certain contracts in the current quarter where the availability of our equipment was not there, so we had to hire machines from outside and put them into play, which would have led to that expense also coming into the picture. But that’s a regular business practice and it is not a one-off thing that as you kind of wanted to ask.
Nirvana Laha
Sure. And then from this Segment-B if I see, the EBIT has increased sequentially from about 6.7% to 9%. But compared to last full year then it was 14%, it’s still quite significantly down 500 bps. So, how do we see this recovering in H2? Are we going to trend at 9% or is there a hope that we can climb back up to last year EBIT levels for Segment-B?
Himanshu Aggarwal
Yes. So, definitely going forward, as things are now back into full swing as we understand and because there were certain challenges earlier, we faced at the Visakhapatnam steel plant due to labor constraints and then there were certain changes in management that have happened over Q2 there as well. But things are — production of the plants are in full swing now, so we do anticipate that the volumes would be back to where they were supposed to be and the growth that was expected in the volumes. Because if you would see, in last financial year, for the first half itself we had executed 3.88 million tons of steel and in this first half we have only done 3.4 million tons of steel, so which has been the reason for the depression on the EBIT margins. But those are expected to climb back to what we were at earlier in Q3 and Q4, where we tend to also have much higher volumes because of those two quarters being very high on demand.
Nirvana Laha
Okay. So, you are saying this is due to lower volumes and operating deleverage because of the lower volumes and no particular cost item has gone up?
Himanshu Aggarwal
Right, that’s correct.
Nirvana Laha
Okay. And final question from my side, sir. If I look at your cash flow statement, in the cash flow from operations there is a profit on sale of assets which is recorded for about INR5.4 crore in the cash flow statement. But if I look at it in the P&L and H1, I couldn’t see it reflected anywhere, because your other income is only reflecting the interest income. So, I just wanted to understand that this INR5.4 crore of asset sale profit should have shown up somewhere in the P&L, right, so…
Himanshu Aggarwal
No. So, if you would look at it, our P&L shows other income of INR5.9 crores.
Nirvana Laha
Yeah.
Himanshu Aggarwal
Right, so that is, primarily a majority of that is from the profit on fixed assets, sale of fixed assets.
Nirvana Laha
Okay. But does also an interest income shown in the cash flow statement, which is INR5.9 crores which exactly correlates with the other income, so I was a little confused. I thought that the other income corresponds to this INR5.9 crore other interest income, right? Because if you total the two, there should be about INR11 crores of other income. But in the P&L I can only see about INR5.9 crores of other income, so wasn’t able to tally it.
Himanshu Aggarwal
Okay. I will get that checked up, but definitely the other income has the inclusion of the profit on sale of fixed assets. So, just what is the differential then, I have taken note of that and I will get back to you on it.
Nirvana Laha
Sure, sir. And our earlier growth guidance of 30% for the financial year, you see no reason to change that, right?
Himanshu Aggarwal
Absolutely. So, if you look at it, traditionally we have about 45% of our revenue coming from the first half and 55% from the second. And going by the current trend, if we look at it, we are looking to meet our aggressive target and sustain the 30% growth that we have already shown in the first half.
Nirvana Laha
Sure, sir. And if I might just squeeze in one last bit. So, the yield you said for H1 was 2.96%, the gross yield. In Q1 if I remember right, it was 2.98%, so there has been a little bit of slippage, is that in the normal course of business or do you see that rates are trending down now?
Himanshu Aggarwal
No. So, it’s the overall impact of the purchase of new equipment as well, because the new equipment that we purchase is of the higher capacity, of which the blended result of the yield is reflecting a very small 0.02% decline as per se. But that is because the occupancy took a little time based on the monsoons, the delay that was being caused. But we see that going back to normal or rising up rather in the Q3 and Q4 periods.
Nirvana Laha
Okay. That’s great to hear, sir. Thank you so much and all the best.
Himanshu Aggarwal
Thank you.
Operator
Thank you. Next question is from the line of Naman Parmar from Niveshaay Investment Advisors. Please go ahead.
Naman Parmar
Yeah. Good afternoon, sir. Thank you so much for the opportunity and congratulation on a great set of number. So, firstly I wanted to understand, what was the current utilization level in the crane rental division?
Himanshu Aggarwal
The utilization level for Q2 was about at 78%.
Naman Parmar
Okay. 78%? And secondly, your capex guidance was of around INR160 crores, I think. So, out of that, you have deployed around INR94 crores, INR95 crores. So, rest of the amount in how much time you expect to deploy and where you are expecting to deploy?
Himanshu Aggarwal
Okay. So, thank you for the question there. So, the capex guidance of INR160 crores, as we had explained in the earlier call also, is divided into two parts where we had kept INR100 crores for the current financial year and INR60 crores in the first half of the next financial year. And of the INR100 crores for the current financial year, we were anticipating to do it by December. But because of certain new opportunities that came up, we have preponed that capex and completed INR94-odd crores in the first half. And if need be, some of the other capex that we have kept for the next financial year might also have to be preponed, but that will come into effect only once we have more clarity on the orders in
Hand going forward.
Naman Parmar
Okay. And it is majorly done on which side, the INR100 crores?
Himanshu Aggarwal
On the equipment rental division.
Naman Parmar
Okay, on equipment? And on the Steel handle, why there was a degrowth on a Y-on-Y basis, there was any
Reason for that?
Himanshu Aggarwal
Yes. So, primarily in the first quarter we saw that there was, especially two months that were eaten into with regards to our operations for warehousing and transportation segment, because of a stand-off between labor and the authorities in April and May at the Visakhapatnam steel plant and the Visakhapatnam ports. So, that led to the activity slowing down considerably. And it was — actually, the resolution of the issue took a little longer because of the general elections also during the same period, but things came back to normal in June and then in July to the September quarter, there have been changes on the management front with regards to Rashtriya Ispat Nigam Limited, which has led to a slight, again, decrease in volume activity there, but it is back to normal now.
Naman Parmar
Okay. And lastly on, how much EBITDA you expect on all the three division to be sustainable in
The future?
Himanshu Aggarwal
So, we are currently at 35% for the half year and we see that as the sustainable level going forward.
Naman Parmar
Okay. 35% interesting. Okay. That’s it. Thank you so much for answering all the question. Best of luck.
Himanshu Aggarwal
Thank you. Thank you.
Operator
Thank you. Next question is from the line of Rohan Mehta from FICOM Family Office. Please go ahead.
Rohan Mehta
Hi. Thank you so much for taking my question. Is my voice audible?
Himanshu Aggarwal
Yes, I can hear you. Thank you.
Rohan Mehta
Great. So, I wanted to know, what is your current order book as on date? And how do you see order traction shaping up for the second half of the year?
Himanshu Aggarwal
Okay. So, thank you, Mr. Mehta, for the question. So, the order book stands at INR104 crores as of October 2024 and which has seen a 31% increase year-on-year. And going into Q3 and Q4, we see that we already have a healthy order book in hand, plus there are very strong inquiries for more of the projects that we see coming up in Q3 and Q4, which traditionally as I have already said, happen to be our better quarters contributing to about 55% of the overall yearly revenue. So, the traction is pretty good there as well.
Rohan Mehta
Got it. Got it. And on your net yields, what was it for the current quarter and what was it for last year,
September 2023?
Himanshu Aggarwal
So, the net yield for last year, I do not have the exact numbers, but if I recall, they were about 1.6-odd-percent last year and in the current year the net yield for September 2024 would be around 1.7%, 1.75%, roughly.
Rohan Mehta
Okay, okay. And where do you see this trending in the second half of the year?
Himanshu Aggarwal
So, with the capex that we have already executed and now things are stabilizing post monsoons and picking up with the kind of demand that is there and the pricing that we are seeing in the market, we do see an upward trend to the rental yields and that should take us to a better position going forward.
Rohan Mehta
Got it. Got it. And in your Segment-A, which is your equipment rental business, your profit before tax margins, that has fallen from 24% to 19%, but on an EBITDA basis the change is not much. So, I just wanted to understand what exactly is happening over there?
Himanshu Aggarwal
Yeah. So, the profit before tax that you have seen that there is a change there is, as I was explaining in an earlier question that, for certain of our contracts, because we are working with our clients in packages where we are picking up the entire package of the equipment required by them and if our machine which was planned to be deployed with them but continues at another project site or there is a delay in delivery from another location to the client. So, we have taken the — instead of losing the opportunity we take equipment on rent from other crane rental players and from the smaller ones who do not have access to such large organizations and who are not able to maintain the standard of compliance and the processes that are required to be there for managing such large clients.
So, we take up machinery from them and they work under us. So, it is basically like an aggregating kind of a model, so that was higher in the second quarter which has led to the expense side going high because they come up with a margin of only about 15% to 20% if it is a decent size crane. So, that that has led to that slight dip that you see.
Rohan Mehta
Right, right. And second half you expect this to normalize that, so on an EBITDA margin level where do you see, on a sustainable basis, your Segment-A?
Himanshu Aggarwal
So, we have been operating right now in the 50% to 51% EBITDA margins and those should be at least around 53% to 55% as we keep stabilizing this with our capex coming into play.
Rohan Mehta
Got it, got it. Thank you so much. That’s from my side. Thank you.
Operator
Thank you. [Operator Instructions] Next question is from the line of Manan Vandur from Wallfort PMS. Please
Go ahead.
Manan Vandur
Thank you so much for the opportunity. Can you hear me?
Himanshu Aggarwal
Yes, I can hear you, sir.
Manan Vandur
Yes, thank you so much. I have a few questions. So, first question would be, according to your guidance, if we have to reach around INR220 crores, according to the guidance, we will need around INR20 more crores of orders, okay? And so, when do you see this coming in, this kind of an order?
Himanshu Aggarwal
Okay. So, thank you for the question. See, in our — the operations that we are into, primarily Segment-A and Segment-B, there tends to be a regular flow of orders and what we have said is that INR104 crores is for the current financial year itself. So, apart from that, there are certain discussions and orders that are work in progress. And on a regular basis, certain equipment that has been working currently with clients were, for example, expected to be completing their project in November. But there are usually extension for another three, four months and those are what we have not factored into when we talk about the order book position as on date. So, we anticipate that, that would be covered through running the contracts that we already have, which will be going into extensions, plus the new inquiries and discussions that we are having with our clients.
Manan Vandur
Okay, okay. Understood. Can we know our bid pipeline for the rentals?
Himanshu Aggarwal
I am sorry, I didn’t hear that.
Manan Vandur
So, in this also like we bid for tenders, like for orders for rental we might be bidding, right? So, do we have some sort of a bid pipeline that you can enlighten us with?
Himanshu Aggarwal
Strategically, I will not be able to give details on the pipeline per se, but as I stated that there are certain discussions that we have ongoing, plus we have the visibility from clients that certain contracts which are currently running with them will be extended further so that is where we have factored into. All those factors we have taken into place when we have talked about our aggressive 30% growth target that we which we see ourselves being on track to achieve in this financial year.
Manan Vandur
Okay. And so, in our current order book, around INR5 crores of something is at, it’s coming from renewable energy, okay, so because it says 5% of INR104 crores, so around INR5 crores something it might be there.
Himanshu Aggarwal
Right?
Manan Vandur
Are we are we planning to increase this because we see that Suzlon, Inox Wind, all these want to ramp up their execution timeline and we have a very big player over there in the renewable energy wind turbine side. So, how have we differentiated ourselves from that big player that we can grab orders in that area as well?
Himanshu Aggarwal
Okay. So, to answer that, we are spread across sectors where we have been actively progressing in this cement, steel and petrochemical sector with regards to the revenue mix. And we have recently entered the renewable energy space. We are well poised to take up more share of increasing our revenue mix towards the renewable energy sector, provided that our equipment that is already deployed in the cement and steel sectors, if it gets — it is getting rehired and they are becoming available to move to another project, then we are actively already working with the renewable energy clients as well with the timelines in place. So, with the kind of equipment that we have, it is such that it can be used across sectors, so we are very well placed there. Plus, we have got a young fleet of machine which is less than six years of age, rather the machines that are to be deployed for the renewable energy sector, they are within the two-year average age period. So, we are very well poised to take up any opportunity there if the requirement arises and if we wish to further expand our space, if we wish to further expand our revenue mix there. But going by where we are right now, we are pretty happy with what we are doing with the cement and steel industries as well. So, we are taking our time to ensure that we do not jump into any situation just from the perspective of being in fashion. So, it’s more about ensuring that we are stable across sectors.
Manan Vandur
Okay, understood. And do we have any further debt plans, like are we going to take on debt or something like that?
Himanshu Aggarwal
Nothing planned as such for an immediate increase on the debt side. We will consider that probably in Q4 as we understand the situation, because we have already done a considerable amount of our capex that we were supposed to do. So, at least in the current quarter, we do not see any major debt activity happening. If anything, that will come up in Q4, depending on the situation at that time.
Manan Vandur
Okay, okay. That’s it. Thank you so much. Thank you so much.
Himanshu Aggarwal
Thank you.
Operator
Thank you. Next question is from the line of Prem Sagar from Samor [Phonetic] Renewables. Please go ahead.
Unidentified Participant
Good afternoon, sir. My question is with respect to monthly rental yield.
Operator
Sorry to interrupt Mr. Prem Sagar, may we be please request you to use your handset?
Unidentified Participant
Hello?
Operator
Yes, please proceed.
Unidentified Participant
Yeah. My question is with respect to monthly rental yield that since company is owning crane and other equipments like trailer and pick and carry, so the monthly rental yield given presentation is 2.98%. So, is it of crane or other equipment or is it consolidated?
Himanshu Aggarwal
So, yeah, thank you for the question. It is a consolidated yield for all equipment that are working under the equipment rental division.
Unidentified Participant
Okay. And can you share the monthly rental separately for cranes and other equipments?
Himanshu Aggarwal
Strategically, from a business point of view, we do not do that and we do not look at giving out those numbers, because it is a mix of our equipment that we have and that is a business strength that we have, that we have a mix of equipment that can be deployed across sectors with across clients without giving out these kinds of details.
Unidentified Participant
Okay. Thank you, sir. That’s it from my side.
Himanshu Aggarwal
Thank you.
Operator
Thank you. [Operator Instructions] Next question is from the line of Naman Parmar from Niveshaay Investment
Advisory. Please go ahead.
Naman Parmar
Yeah. Thank you so much for the follow-up question. So, what was the order size for the bullet train that you have got in this quarter? And it was based on the tender? And how you received it?
Himanshu Aggarwal
I am sorry, sir, the question you asked is regard to the bullet train?
Naman Parmar
Yes, yes.
Himanshu Aggarwal
Okay. So, for this quarter we have not got any specific new order for the bullet train. We have been working at the bullet train project since 2021 since its very start and the work has tapered off over the years because the project has also been advancing pretty steadily there. So, but there is no specific new order in the last quarter, if that is what you wish to know.
Naman Parmar
Okay, there is no specific order. So, you can tell what will be the opportunity in this, sir?
Himanshu Aggarwal
In the high-speed rail or bullet train project?
Naman Parmar
Yeah, high speed rail, bullet train project.
Himanshu Aggarwal
Yeah. So, there the opportunity there remains pretty active with regards to their requirement for the equipment rental space with equipment like piling rigs, cranes, as well as our aerial working platforms being in high demand there. But at the same time, because we have been moving towards also the steel and cement sector, you would see that our revenue mix has somewhat come down from the infra sector and this project itself comes under the infra sector. So, we are not actively pursuing very much in such projects and limiting ourselves to only areas where we are seeing more value in the high-speed rail as well. So, there the crane requirement and piling rig requirements are there which we are working on and if something suitable to us is there, we will definitely go for it.
Naman Parmar
Okay. So, currently, majorly you are focused more steel and that part only if there will be an
Opportunity then you will go?
Himanshu Aggarwal
Yes, definitely.
Naman Parmar
Okay. Thank you so much.
Himanshu Aggarwal
Thank you.
Operator
Thank you. Next question is from the line of Anant Sarda from Chhattisgarh Investments
Limited. Please go ahead.
Anant Sarda
Am I audible? Hello?
Himanshu Aggarwal
Yes, I can hear you.
Anant Sarda
Hi. Congratulations on the result, Himanshu Ji.
Himanshu Aggarwal
Thank you.
Anant Sarda
I just have one question. Why are we hiring cranes from the market, why can’t we buy those cranes as we are doing? I understand that we have done a INR94 crores expenditure on capex this year, but your balance sheet is extremely strong and you are paying those debts as well. So, won’t it be a better choice to buy the cranes instead of rent them
From the market?
Himanshu Aggarwal
Right. So, thank you for the question, Mr. Anant. So, basically we had to go for renting them or taking from the market for specific projects where the client’s requirement was immediate. And buying a new crane of such size, it has its own timeline. So, to ensure that we do not lose out on the opportunity and to ensure that our rapport with the client that we have already established and their dependability on us for ensuring that they can get required solutions and services through us rather than having to engage multiple agencies, we have taken this step to ensure that we maintain our stronghold in that project and our concentration of equipment in that project by also keeping some — a couple of machines only. If there are suppose 10 machines as part of the package, one or two machines are from the outside agency and the balance are from us. So, the idea is to ensure that we maintain our rapport there without having to compromise on waiting for the machine and the client taking it from somebody else.
Anant Sarda
All right. Thank you. I have no further question.
Himanshu Aggarwal
Thank you.
Operator
Thank you. Next question is from the line of Karan Gupta, an Individual Investor. Please go ahead.
Unidentified Participant
Yeah, hi. Am I audible?
Himanshu Aggarwal
Yes, I can hear you.
Unidentified Participant
Yeah. So, my first question on…
Himanshu Aggarwal
There is some disturbance, I’m not able to hear you clearly, actually.
Unidentified Participant
Yeah. So my first question, the margin side is, warehousing and transportation margin is declining on a year-over-year basis and for the same for the steel processing distribution side. So, what was the reason for that? And [Speech Overlap] was on the margin side of warehousing and transportation, what are the steps that we should take to increase this
From this?
Himanshu Aggarwal
Right. So, to answer your question, so first on the warehousing and transportation side. As I highlighted earlier, the volumes have been lower due to certain disturbances seen at the warehouses or the stockyard, specifically in the Visakhapatnam Steel Plant, but they are stabilizing now, so we do see that the margins will rise again and be at a stable level of where we usually operate at about 22% to 23%. That is where we anticipate it going forward in the Q3 and Q4, they should be back to those levels. And in the steel distribution side, it is more of a conscious decision where we are only executing certain projects from a customer stickability perspective and reducing our share in revenue in that segment as you would see it has come down considerably to 4% only in the current quarter. So, that is where we would like it to be in that 4% to 5% range. So that — because it’s not a high margin business any which ways. It is more to — as a horizontal integration to our already active segment, which is warehousing and transportation.
Unidentified Participant
Okay. So, for the warehousing side this will be back to the normal level of 20%, 22%?
Himanshu Aggarwal
Right, yes.
Unidentified Participant
Okay.
Himanshu Aggarwal
That is what we anticipate with the stabilization happening with our clients that it will be and activity is already back to normal, so the margins will also, volumes going up the margins will stabilize.
Unidentified Participant
Okay. And return on capital on this warehousing [Technical Issues]?
Himanshu Aggarwal
Hello?
Operator
Sorry to interrupt, Mr. Karan, your voice is…
Unidentified Participant
Yeah, return on capital, yeah return on capital in warehousing side? Am I audible? Hello?
Operator
Yes, you are audible now.
Unidentified Participant
Yeah, yeah, yeah. So, I’m just asking the return on capital on the warehousing side in transportation?
Himanshu Aggarwal
We do not have a separate calculation done for that, I will have to get back to you, sir, on that.
Unidentified Participant
Okay. And any way to increase the rental yield in our hiring business, equipments hiring?
Himanshu Aggarwal
So the way we look at it…
Unidentified Participant
I am just trying to ask one thing, understand one thing, in faster utilization of our rental equipments, like one crane is working in one site. So, is it possible to allocate in two, three projects or the faster utilization of the cranes, is that kind of thing can happen?
Himanshu Aggarwal
Usually, because it depends on the size of the crane. If it is a mobile crane which moves on tires like our cars do, we are able to utilize cranes across projects at a faster pace because the machines can move on their own and once the work gets done at a certain project, the way we work is, we always have the pipeline in place where we know that the machine is expected to be available from a certain period. So, we have another work in hand for that machine before it is getting released. So, that is the process followed and that enables us to ensure faster utilization of the machine post it becoming available. But with the larger machines which are crawler mounted, which have to be moved through other means which is on other trailers, it is a process which takes its own time and there is movement as well as the process of getting the machine assembled at the new site location. So, at present, we are trying to achieve — we are already achieving, what we understand, very high efficiency of putting machines on back on rent once they are moving out from another project. So, that, that we do not see making a big impact to improve on the yield side. But as I said, with the demand increasing in Q3 and Q4 and traditionally those quarters being the better quarters and the capex that we have already done stabilizing now, we do anticipate that the yield figures will go up.
Unidentified Participant
Okay, okay. So, to increase the yield side, we continuously have to put the new equipment on the site or it is kind of incremental for the old equipment also?
Himanshu Aggarwal
It is not necessary to add new equipment to improve the yield. It is basically incremental for the old equipment as well, because yield is a factor of the numerator being or revenue and the denominator being the value of assets. So, the older equipment providing similar revenue or close to similar revenues to a newer equipment give us better yield anyways, because their value has depreciated and they give us a better rental yield on their value front. So, it is a combination of both, so this is a blended yield of all the equipment that we have, as I had answered the earlier question also. So, we do not necessarily need to add new equipment just for increasing rental yields. It is that in the larger picture, the demand and supply situation that we are seeing is, we’ve got sufficient orders in place which have enabled us to take on such aggressive capex to meet our clients demands and now we are looking at building from here.
Unidentified Participant
Okay, okay. And the utilization is 78% to 80% around?
Himanshu Aggarwal
Yeah, that was in the first half of the financial year.
Unidentified Participant
Okay, yeah, yeah. So, will it maintain in the second half also?
Himanshu Aggarwal
Yes, ideally we are looking at taking it up to anywhere above 85%, which is for the Q3, Q4 period and that should definitely be the case.
Unidentified Participant
Okay. And the life of the assets will be seven, eight years?
Himanshu Aggarwal
So, the cranes tend to have a life of 15 to 20 years, depending on the size and make of the crane, so that’s how they are placed.
Unidentified Participant
Okay. Thanks. That’s my questions. Thank you.
Operator
Thank you. [Operator Instructions] As there are no further questions, I would now like to hand the conference
Over to Mr. Himanshu Aggarwal for the closing comments.
Himanshu Aggarwal
Yeah. Thank you once again. I would like to thank everyone who has taken out the time to join in today and it is always a pleasure to interact with people who have always shown faith in our company and who continue to understand and further understand what the company does. We hope to continue doing the good work that the company has been trying to do and look forward to meeting you all once again in the next quarter. And before that, wishing you all a very Happy Diwali in advance and a very Happy New Year ahead. Thank you.
Operator
[Operator Closing Remarks]