TCI Express Limited (NSE: TCIEXP) Q4 2025 Earnings Call dated May. 30, 2025
Corporate Participants:
Unidentified Speaker
Chander Agarwal — Managing Director
D.P. Agarwal — Chairman and Director
Mukti Lal — Chief Financial Officer
Analysts:
Unidentified Participant
Presentation:
Operator
Hello ladies and gentlemen, good day, and welcome to the TCI Express Q4 FY ’25 Earnings Call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please stick in an operator by pressing star then on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mohit. Thank you, and over to you, sir.
Unidentified Speaker
Yeah. Hi, good evening, everyone. Thank you for joining us today for the concluding FY ’25 earnings call of TCI Express Limited. First of all, I would like to thank management for providing us the opportunity to host the call. From the management side, we have Mr Chandra Agarwal, Managing Director; Mr, Chief Financial Officer; Mr Mohan Panda, Senior Chief Sales and Marketing Officer. So without further delay, I would now hand over the call to Mr Agarwal for opening remarks. Thank you, and over to you, sir.
Operator
The line for the management is disconnected. Ladies and gentlemen, kindly hold while we reconnect them ladies and gentlemen, thank you for patiently holding. The management is back online.
Chander Agarwal — Managing Director
Yes, Mohit.
Unidentified Speaker
Yeah. Hi, sir.
D.P. Agarwal — Chairman and Director
Yeah. Hi, good evening, everyone. Thank you for joining us today for the concluding FY ’25 earnings call of TCI Express Limited. First of all, I would like to thank management for providing us the opportunity to host the call. From the management side, we have Mr Chander Agarwal, Managing Director; Mr, Chief Financial Officer; Mr Pavit Rohan Panda, Senior Chair Sales, Senior Chief Sales and Marketing Officer.
So without further delay, I would now hand over the call to Mr Agarwal for opening remarks. Thank you, and over to you, sir.
Chander Agarwal — Managing Director
Thank you. Good evening, and welcome everyone to Q4 and financial ’25 earnings conference call of TCI Express Limited. I would like to thank all of you for joining us here today. I hope you and your families are staying safe and healthy. We have already circulated our earnings presentation on our website and stock exchanges.
And I hope you all a chance to review it. To start with, I will give you an overview of the business trend and performance and then we’ll hand over the call to our CFO, Mr Mukti, to brief on our financial performance for the quarter and financial year ’25. Our financial ’25 mark continues to progress for TCI Express, underscoring the company’s strategic focus on expanding its multi-immodal service portfolio with surface business continuing to remain the key contributor in the business performance.
Operational efficiency improved through technology and customer reach was further strengthened. The Surface segment was supported by addition of 10 new branches and while the rail and domestic ad segments expanded their service coverage with 25 new branches each during the year.
In total, TCI Express opened about 60 branches. The logistics industry’s evolving landscape and supportive government initiatives provided a favorable environment for sustained growth. TCI Express expanded its dedicated network for rail and air services, reflecting a clear commitment to multimodal growth. The Rail Express segment has introduced temperature-sensitive shipments, enhancing capabilities to serve specialized sectors with cost-efficient and environmentally sustainable solutions.
In the domestic Air Express division, over 1,000 new PIN codes were added, improving airport to doorstep delivery coverage, while the International Air Express Service demonstrated strong growth, further strengthening the company’s global connectivity. During the year, all key verticals contributed to overall business performance.
The Surface, and air segments each played a significant role in supporting the company’s operations. Continued investments in automation have supported improvements in operational efficiency and network flexibility, positioning TC Express to address emerging opportunities within the logistics sector.
Operational cost pressures persisted, primarily driven by increased toll fees and labor expenses alongside regulatory compliance costs. Nonetheless, the company’s asset-light business model combined with agile network management enabled stable freight rates and consistent service levels.
Demand across core sectors, including automotive and manufacturing showed marginal volume growth, reflecting cautious optimism in the economic environment. The company also intensified workforce development efforts, particularly in strengthening key account management capabilities to foster long-term client partnership and capture emerging market opportunities. Additionally, TCI Express has been recognized as the Great Place to Work for five consecutive years, reflecting its commitment to create a supportive and engaging work environment.
As part of our corporate social responsibility efforts, the company — sorry, the TCI Express Foundation in collaboration with TCI Foundation organized a free artificial LIMS camp at Prayagaj Mahakum, supporting over 1,200 differently abled individuals. The company also marked World Health Day and International Women’s Day, underscoring its ongoing commitment to health, inclusivity and employee well-being.
In view of the company’s consistent operational and financial performance, the Board has recommended a final dividend of INR2 per share. This brings a total dividend for financial ’25 to INR8 per share, representing an impressive payout Of 400% on the face value of INR2 per share, reaffirming its commitment to delivering value to shareholders. Looking ahead, the company is well-positioned to capitalize on industry growth supported by government initiatives such as increased capital expenditure and planned development of 12 industrial parks, which are expected to enhance multimodal logistics infrastructure and reduce supply-chain costs. Additionally, the Union budget ’25-’26 targeted tax relief measures are anticipated to both — both boost disposable incomes and consumer spending, stimulating industrial production and demand for logistics services. TCI Express remains focused on strengthening multimodal capabilities, expanding customer access and leveraging technology to drive operational excellence and differentiated service offerings. These strategic priorities will enable the company to sustain growth and create long-term value in financial ’26 and beyond. With this, I’d like to now hand over the call to Mr to talk about our financial performance for this quarter. Last quarter.
Mukti Lal — Chief Financial Officer
Thank you, sir, and good evening, everyone. Now I would like to discuss the financial performance of the company. Our Managing Director has already highlighted the development of development during the quarter and I would like delve into the financial aspects. During the quarter, our revenue from operations stood at INR307 crore as compared to INR296 crore in Q3 FY ’25 and INR317 crore in same quarter of last year-by registering a growth of like 4% on quarter-on-quarter basis and de-growth by like around 3% on a year-on-year basis.
And income for — total income quarter was INR313 crores as compared to INR299 crore in Q3 and INR319 crore in Q4 of 2024. EBITDA for the quarter stood at INR34 crores with a margin of 10.80%. Our profit-after-tax for the quarter stood at INR21 crore with a margin of 6.6%. Overall on the FY 2025, our revenue from operation is INR1,208 crores as compared to INR1,254 crores same-period last year.
EBITDA for the period was INR143 crore with a margin of 11.7% and profit-after-tax is INR91 crores with a margin of 7.5%. We ended the fiscal year with generating a cash-flow from operation of INR18 crore and continue to generate solid cash flows to build our strategic growth plan.
In FY 2025, the company invested INR37 crores in capital expenditure, primarily focused on expanding our branch network, upgrading shorting centers and ramping-up our IT infrastructure to enhance automation and operational efficiencies. These investments are aligned with our long-term vision to strengthen our multimodal service offerings and maintain a competitive edge in the logistics industry.
Now I would also like to about some highlights on our multimodal offerings like we achieved some points on Air International. We grow one of that business in almost 50% over a year-on-year basis, though it is a very small-business in overall pie. First, second milestone, we also like touched in, we transported almost 100 ton from the Delhi hub, which is also kind of like we from Delhi gateway, we transported almost 25% of overall international business.
And that also like customer rate has also increased in this part around 30%. So this is the highlight for Air Intern as well. AI domestic, we also you know, enhance our network and on that process we added 1,000 new PIN cores and mapped for the faster deliveries and pickups for this business.
And we also like putting dedicated vehicles for the carbon delivery. So that’s why we — this is also like investment we putting into air domestic. And same way we also putting separate vehicle and creating separate branch network for the Rail Express as well. So in Rail Express also like you know, done very well and the growth in this business is around 25%.
And we also like increasing new repetitive customer in Rail Express and that is like we are getting very good traction from the customer in this portfolio. So our commitment remains routed in balanced growth and revenue quality with the additional automation unlocking greater efficiency and flexibility across our network, we remain confident in our ability to capitalize on opportunities and solidify our leadership position with industry-leading services.
Thank you very much. And now I would like to open the floor for question-and-answer. Over to you, please.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star in two. Participants are requested to use handsets while asking a question.
Ladies and gentlemen, we will wait for a moment while the question queue assembles the first question is from the line of Rohit from Samatwa Investments. Please go-ahead.
Unidentified Participant
Good evening, sir. Thank you for the opportunity. Sir, my first question is on your automated sorting centers. So in the presentation, you have mentioned that the sorting centers reduce the sorting time by 40%. It also improves your throughput time. But if I have to look at the overall picture, it is yet to contribute in terms of margins.
So just wanted why are we — why is the margins not coming through? And on both these automated centers, if you could provide some monetary metrics for us to understand the growth that has happened over the past year, maybe in terms of ROIs, in terms of throughput, in terms of capacity utilization or something in monetary terms also?
So that’s my first question. Thank you.
Chander Agarwal
So I think the important thing to understand is that one sorting center or two sorting center, the incremental saving can only be seen when we create a total mesh network of 10 sorting centers, then the real savings is visible on a bigger scale. But if you look at it only from you know from one area standpoint of view, it has definitely benefited.
You know. The cost of labor has come down, the throughput has become faster. So in all angles in that one particular location, the benefits can be seen. Now even if you look at our sorting center in Pune, that area used to be always and still is a big problem for labor and that has been actually — we have mitigated that risk by putting the automated machines.
So of course, if you put 10 of these, you will see a much bigger impact than what — and a bigger tangible saving versus what you can see with only one or two centers?
Unidentified Participant
So what will be the timeline for us to get the entire chain? So you speak about 10, so we — maybe eight more are required. So what sort of capital outlay is required, and what are your timelines in terms of getting the full network in-place?
Chander Agarwal
Yeah. So basically, we’re looking for two more center in I think FY ’27 because construction has been started at Ahmedabad and Kolkata. And two center, I think we will be ready by FY ’27. And then subsequently, we’re looking for Chennai, Bangalore, Hyderabad, these kind of centers. So I think by 2030, we will be able to put all 10 in-place with the fully automation.
Second part, you know, even in-spite of — in these two center, we are able to reduce my overall direct cost. In overall terms, it is around 30 basis-point. Though margin is not improving, these are different task. I will be explained that also subsequently. But on that front, we are really getting the advantage for the hedge, we mentioned throughput and then decrease in the labor and increase efficiency there and ultimately saving in a direct cost.
Unidentified Participant
You spoke about margins not coming through. So what is the reason for that?
Chander Agarwal
No, so this is like, you know as second because operating cost has increased, that is also having different reasons as we earlier also mentioned in different calls. So one is increase in air cost, second increasing tall tax and labor cost. And then third, we also, as mentioned created a wide network for our multimodal services, which is rail and air services.
Because as you know, we have the only one-line of business. That is also sometime is a challenge. So that’s why we also want to be grow our — this multimodel businesses simultaneously. So we can we have whenever supposing we have some challenges on a the surface, then these business can be support, supposing we have a multimodal business has some problem, then we can — we have the support from the surface. Like you’ve seen in industry — industry-wise, people also like taking support on our different products. So that’s That’s why we also — like we are also in that you process where we’re developing these different other products, which is similar in nature for the expression industry and suitable for that industry. So wherever we are working, this is all like niche segment, specifically for our two services, one is rail and other one is C2C segment.
Unidentified Participant
Got it. Sir, my second question is, so recently, a lot of the e-commerce players originally where they used to do a lot of in-sourcing have now started shifting towards outsourcing. So do you see any advantage? Have you seen any new business from the e-commerce segment?
Because historically we haven’t been focusing a lot on the e-commerce market. So has there been any change in strategy for us to focus more on the e-commerce or maybe even quick commerce fulfillment centers, anything on these,
Chander Agarwal
All these businesses are very unprofitable, you know, and yeah, so I would like to stay away from them and they can give you top-line, but forget the bottom-line, even quick commerce and all that. So they are burning PE money, so it doesn’t matter. And in real sense, they have not ever made a single cent a single rupee.
Unidentified Participant
So going-forward, we’ll stay away from
Chander Agarwal
Yeah, yeah, absolutely. And I don’t see it turning profitable in any way, even if you have like 200 million ton volume or whatever, it’s not going to turn profitable because they have themselves skilled the market by lowering the prices. I remember that it used to be INR45, INR50 for e-commerce delivery.
Now it’s like INR4, INR5, rupees where it’s not practical to do it anymore by anyone.
Unidentified Participant
Fair enough, sir. Just one more question I have had was — so historically, we have been focused — our key focus area has been the SME segment, right? So I get it last one, two years SME has been underperformed. Manufacturing consumption has been a bit low. So what are our triggers?
So I just wanted to know what our trigger points basically that you’re tracking for our industry — the SME part to come back? Because I remember in one of your old calls, you had said we are — we are focusing more on. So historically, you said you want to focus on the relations and get ready to take some lower pricing.
So I just wanted to know-how are you tracking the SME and are you seeing any progress on that part?
Chander Agarwal
Actually, that’s a very good question because unfortunately, the SME was the hardest hit last year and that really affected our business. You know, I was reading the data that the inflation had touched almost 9%, and I think the interest rates were about 8%. So the most affected group of people were the SMAs.
And you know, since our business also comes 50% from those guys, we saw — we were quite surprised that this happened. And this was actually a side-effect of the fact that it was also election year. People like we forget election year and before that in September of ’23, all the cash was withdrawn, the INR2,000 notes were withdrawn and then came the elections.
And so basically liquidity dried up in the market and then there was high-interest rates and then high inflation and then SMEs got really badly affected. And you know, we — it’s very easy to lower the price, but it’s 10 times harder to bring it back up to that level that we want. So India is not — is a very sensitive market for pricing. Once you lower the price, it will be very hard to raise the price unless you are giving some sort of a discount in your billing or you’re giving some sort of a — you’re doing some sort of a different kind of accounting or something that is benefiting the customer.
Otherwise, increasing prices is one of the hardest things to do here in logistics especially.
Unidentified Participant
Got it. So sir, just — so what are our top two or three segments? Is it auto, is it manufacturing? If you could just give me a broad critically the top three, how much does it contribute and which are those segments?
Chander Agarwal
Yeah. So consistently, these five top vertical is giving almost 55% of revenue to us and these are auto, pharma, engineering who is down. And yeah, it’s lifestyle products and electronics. These are the top-five segments is giving revenue to that. And all that also like replicating the SME customers also the same segment we are getting the business from them.
So most affected one is the like lifestyle products companies and slightly is auto. So these companies is really be affecting this SME business. Also, off that we also noticed eastern part of Inde is also not like doing well, where we like facing double challenge like movement from the other part of India is there in eastern part of India, but there is an empty vehicle is coming.
So one is less business. Second is also like increasing my weight-loss or like you can say like utilization of truck is reduced. So this is a — like you know, two wish about two for that urpas.
Unidentified Participant
Have you lost market-share in the SME segment? Is it would that be — because if you —
Chander Agarwal
Yeah. No. So if you see overall basis if you study the oil industry, this SME business is now reduced for everyone. Tonnage has not increased for the like part load and LTL for everything. Different segment has been increased in a different manner. If you see like third-party logistics increase because key commerce has increased for that purpose.
FTL has increased for the different purposes. So that’s why if you see overall basis, tonnage has decreased overall in-part load and this LTL basically, whether it’s a high-value with a slightly low-value, both has been reduced in this FY ’25. So there is no matter to be like you know, lose market-share, that is not the matter.
Unidentified Participant
Yeah. So are you seeing any recovery? Do you expect any recovery by the festive season? Are you seeing any signs of recovery?
Chander Agarwal
So you know that is there. So we also taken a strategy to be improved on first business and obviously in eastern part of India. So we can be again sort of two purpose, obviously, reduction of cost and business improvement. Second, we highly focused on creating a team and hiring new people or like you know, experienced people for our rail segment and air segment so that we can be grab this high-value, sorry means high-yield customer from that segment.
So we are working on two, three strategies and that has already like plays very well in this year onwards, current year onwards.
Unidentified Participant
Thank you. Can we?
Chander Agarwal
Yeah, please.
Unidentified Participant
Thank you. Thank you so much for answering all the questions indeed. Thank you so much.
Chander Agarwal
Thanks.
Operator
Thank you very much. The next question is from the line of Kadakia from SKP Securities. Please go-ahead.
Unidentified Participant
Hello, sir. I just wanted to understand for this year and for this quarter, how has been our volume growth and what has been our breakups in terms of our different segments, the surface segment, air international segment, et-cetera, if you can just help me with those numbers?
Chander Agarwal
Yeah. So tonnage is almost 255,000 tonne for this quarter and whole year is around 9.95 tonne for the whole year. And like these other businesses other than surface business all put together is around 17% to 17.5% for the whole year. Major chunk is coming from air, domestic and international put together. Second is like C2C and then followed by rail and you know, e-commerce and then culture and pharma. So this way it is like we’re splitting that
Unidentified Participant
Alright sir thank you so much
Chander Agarwal
Yeah
Operator
Thank you very much the next question is from the line of Sonam Gupta from TCI Express. Please go-ahead hello ma’am, please go-ahead
Chander Agarwal
You can take next question, please.
Operator
Sure, sir. The next question is from the line of. Ravi Kumar Naredi from Naredi Investment Private Limited. Please go-ahead.
Unidentified Participant
[Foreign Speech]
Unidentified Participant
[Foreign Speech] because it’s my opportunity but here, they cannot make their own network, they cannot hire their own people. [Foreign Speech], you know who a sort of a barricade here, but nevertheless, we are no less or we will go-ahead., we follow the market, just a market. That’s why we are like we go or Joe company, what I understand is showing straight-up the arrow. So that is questionable also sometimes.
So we are like an open book, everything is transparent, we know what is — we are the lifeline of the market. We’ll tell you exactly what is going on in a small village in Kerala to all the way to Latak. So that way we are feeling and sensing. So I think it’s — we have had our challenges as a country economically and I think now we are coming out of it.
[Foreign Speech] Yeah, thank you. I wish all the best, sir.
Chander Agarwal
Thank you.
Operator
Thank you very much. The next question is from the line of Krupa Shankar NJ from Avendus Spark. Please go-ahead.
Unidentified Participant
Yes. Yeah. Hi, good evening and thank you for the opportunity. I was briefly not part of the call. So if at all, you had mentioned what was the tonnage for the quarter and for the financial year
Mukti Lal
So it is for quarter it is 255,000 ton and for the whole year is 9,95,000 ton.
Unidentified Participant
Got it. So while we are seeing this coming in
Operator
Your voice is cracking.
Unidentified Participant
Yeah. Yeah. Is it better now?
Operator
Yes, or it’s still cracking a little bit.
Unidentified Participant
Okay. I’ll time a best to ask the question. If it is challenging, I’ll fall-back in the queue. While you’ve seen a good growth in the rail business and second is, you know, while we understand that the inflationary pressures have always been there, why not take a price hike which is — which is — which will can help us support our growth at this point till what point are you waiting for that price hike to come through, sir?
Chander Agarwal
Yeah, Prasangar. So basically, as people talking about price hikes because we did that exercise since last four, Five-Year and we — I think we are not struggling for the price hikes, we’re struggling and we like lacking in the tonnage. Pricing is not an issue for us. Even profitability is not an issue for us because in-spite of that reduction, we are I think in having the highest profitability levels.
So I’m saying so pricing is not an issue for us because we have not taken because volumes are already less. So we don’t want to be lose further volumes if supposing few customers is not ready to give that because we also in industry, we seen there, people has taken price hikes and customer has gone away.
So 1/4 they maybe have the profit, but in second-quarter they might not be like having that same profit level. So we are the like consistent company. We will be take the obviously price hikes but in a like right time, I think in this year, we strategically thought and planned for to be take the price hike almost 3% for the whole year.
Unidentified Participant
The inflationary pressure has been much higher than 3%. Would it be suffice to cover your incremental costs? Is the underlying market itself is weaker, does it make sense to continue on the spark? Because tonnage will be weaker only.
Chander Agarwal
Yeah. So very good question you asked. So basically, what we’ve seen in last year, there isn’t a cost pressure on front of toll tax and labor cost and air cost. So we strategically utilize that time to be analyzed all the thing, how we can be rationalize the cost. So this is a good thing in this year, first, tasks we’ve taken like you know, now in this year, we have not given any hike for the on account of toll increase or labor increases.
Second part, what we did, we started even rationalization of the cost because as you — everybody is aware, tonnage would not be like much in this year as well, what like everybody is anticipating. So that’s where we also like rationalizing our costs. So certainly, our cost will be reduced from this current level.
Third thing, we also negotiating for the like air cost and all. So that will be also benefiting in this year. So various things or initiative we have taken to control this first to — and then second part is to reduce that. Third thing, we will be like enhance the prices from the customers, obviously.
So we certainly improve this margin level from the — I think it’s bottom out like reduction of this compressed this margin bottomed-out and might be like from the first-quarter, otherwise in second-quarter onwards, we will be start to improve our margin level. And for the whole year, certainly we will be improved at least 150 basis-point to 200 basis-points in this whole year. For sure.
Unidentified Participant
Got it, sir. So one more question from my side is on the capex side. While the tonnage growth is a little bit weaker, can we slow-down on the capex part we have been because the capacities where you have expanded, it’s still not picked-up to a large degree. So can the macro factors push your capex to a certain degree?
Mukti Lal
So capex is completely for the long-term vision where we’re building up the shorting center for the next 20 25 years. So profit is less or high, this not matters. We — because this is also depending upon the particular buying the land parcel also because after a long persuance, we find the land.
So whenever we found the land, we buying that. So it is a little bit you know, also like time sometime is maybe happen immediately or may not be happen like you take like one, one and a half year also. So that depends upon. So it has really not impacted our CapEx plan at all. It will be go with as strategically what we thought.
Unidentified Participant
Last question from my side. Anything on branch expansion for FY ’26 and ’27, any target in mind?
Chander Agarwal
Same way. So we like we want to be increased 80 branches for the FY ’26, same way 100 branches for the ’27. Of that, out of that like 50 — half branch would be for the surface and half branch put together for the rail and air business because we’re creating a separate team, separate network for this business.
So that’s slightly also like cost pressure because this is a — this cost coming under as a recurring expenditure. So this way we’ll be expand in FY ’26 and ’27.
Unidentified Participant
Thank you for answering my questions, sir. And all the best.
Chander Agarwal
Thank you.
Operator
Thank you very much. The next question is from the line of Kevin Shah from Emkay Global. Please go-ahead.
Unidentified Participant
Hi, thanks for the opportunity. So I just wanted to —
Operator
Sir, your voice is very low.
Unidentified Participant
Is it better now? Hello?
Operator
Yes, sir.
Unidentified Participant
Yeah. So can you just provide a guidance for the — for FY ’26, given that you are not planning for a price hike, so mainly on the volume front?
Chander Agarwal
Can you come again? Sorry, I just missed what you said.
Unidentified Participant
Yeah, I’m asking for the guidance for FY ’26.
Chander Agarwal
Yeah. So ’26, what we’ve seen and what we like you know, discuss with internally and make a strategy, I think we will be achieving a tonnage growth is around in the range of 7% to 8% and overall revenue growth in the 10% to 12% for this year.
Unidentified Participant
Okay. And can you provide a mix of your SME and institutional business?
Chander Agarwal
This time in FY ’25, we completed with like 52% from the institutional and 48% from the SMEs. That ratio also like we will be again try to bring back to like 50-50, which we have since last two decades, we’re maintaining the same ratio. So we’ll be try to back to that normal one.
Unidentified Participant
Okay. That would be. Thank you.
Operator
Thank you very much. The next question is from the line of Kriya Sharma from J&K Securities. Please go-ahead.
Unidentified Participant
Thank you so much for giving me the opportunity. Hello, Chandra, sir. Murphy, sir. We have been an
Unidentified Participant
An investor of this company for last four years and we have followed the developments in the company and the industry in general. Sir, I regularly go through the financials of the company and of our investors also. I want to know why have we not been able to grow over the past 12 quarters while one of your competitors, Delivery Limited, has outgrown you by your distance.
Sir, I see that our tonnage has been absolutely flat during the last 12 quarters. And at the same time, our has dropped sequentially from INR13 to 12 quarter back to INR12 in Q4 FY ’25. At the same time, deliveries PTI tonnage has grown 92% during the same-period, I think with a growth in PTL realization simultaneously.
So can you please share the reasons behind this thank you.
Chander Agarwal
So first of all, we don’t want to comment on the competition here. We can give an answer on one-to-one basis. Second part, our realization has not dropped what you just mentioned. Our realization is intact, even grown on FY ’23, not grown in FY ’24 and 25 but it is not that line
Operator
Yeah thank you very much. Participants who wish to ask a question may press at this time. Participants who wish to ask a question may press at this time. The next question is from the line of Manish Koyal from ThinkWise Wealth Managers. Please go-ahead.
Unidentified Participant
Thank you so much. I have two questions. On the new businesses, are we probably incurring losses and what is the impact on the EBITDA margin from the new businesses? And second, when you guided for 100 and 150 basis improvement in margins. Is it from the level from what we have seen in-quarter four or is it on the entire FY ’25 basis you are expecting improvement in margins? Thank you.
Mukti Lal
Yeah. Thank you very much. So basically new businesses, we are not incurring any losses. Rather I am saying because there is also like gross profit is in a similar way like in the range of 32% to 35%. What we are also earning in surface is in the range of 30% to 32% and creating a separate network.
So it is the initial investment we’re making because supposing one vehicle is going and it is half empty or 75% empty for particular route. So it has to be there. We have to be bear that cost for the time-being. So we are strengthening this segment for the rail and air. Second part, what you asked for that, for the like whole year, we are targeting to improve the margin for the whole FY ’25.
Unidentified Participant
So what basis we have of FY ’25 on that entire year, you expect 100 basis-point to 150 basis-points improvement.
Mukti Lal
Yes, yes. And that would be driven by — yeah.
Unidentified Participant
So that will be driven by both taking price hike of 3% and controlling cost. Basically, we are not passing on more cost increases.
Mukti Lal
Yeah. Yes. So cost as we stop to be like increased, this is now we started restallation of cost as mentioned. Second, we started to ask for the price hikes. Third, we are making more focus on these high-yield businesses like rail and air. Fourth, we also focused on businesses in like eastern part of India where my ampetiness of truck will be reduced subsequently and that will be help to utilize improve my utilization of trucks.
So ultimately, it will be contribute to improve margins?
Unidentified Participant
And this year, what is the capex plan? Because the presentation mentioned that we have a plan of INR500 crores out of which we have spent roughly INR200 crores in three years.
Mukti Lal
So now the balance INR300 crores, how do you intend to — when do you intend to spend? And if you can broadly say how much would be going towards capacity creation and how much would go towards creating sorting centers?
So majorly for the capacity creation in terms of like branch network, we don’t need much capex. Obviously, one branch hardly having capex of 1.5 lakh or INR2 lakhs per branch, but major portion obviously going into in shorting center creation. So that we — in this year, we planning for the like INR80 crore to INR100 crores similar way of the next year also.
Earlier, we’ve taken a target to finish this INR500 crore by ’27. I think now we need to be — extend one more year. So we will be revised revising I think Avin after quarter two by seeing this year’s capex, how it is shapping because it’s slightly like deferring or due to that land purchase.
So we are looking for land purchases in various places, supposing that you strike that deal, then we will be definitely in this year maybe have around INR100 crore-plus kind of capex in this year and next year again is INR100 crores.
Unidentified Participant
Right, sir. Thank you so much.
Chander Agarwal
Thank you.
Operator
Thank you very much. The next question is from the line of Kunal Bhatia from Dalal Roja Stock Broking Limited. Please go-ahead.
Unidentified Participant
Yeah, hi, sir. Thank you for the opportunity. So you mentioned in this year the issues regarding three specific things. One was the toll tax cost and labor cost, which went up. Could you elaborate a bit more on how much was our operational efficiency impacted because of these three elements?
And if you could give us some sense on the quantum of the same?.
Mukti Lal
So basically, this is a very good question. So if you see like cost has increased by 250 basis-point, of that 100 basis-point is increasing due to labor cost increase and toll cost increase in overall year basis, I’m saying, 100 basis-point increase because this due to low tonnage transportation, my utilization of truck has been dropped from 83.5% to like 82.5% for the whole year for this FY ’25 and 50 basis-point due to other reasons of increase of the air cost and higher network costs.
So these are the contributing factors we have for the FY ’25.
Unidentified Participant
Okay. And sir, coming next year you have given a guidance of 7% to 8% volume and 10% to 12% of overall revenue. So what are the key factors you are baking in to achieve this growth? Because, sir, there has been a lag in terms of the kind of growth achievement we have been having. So if you could give us a bit more insight into this kind of guidance?
Mukti Lal
So well, basically in FY ’25, we also seen various uncertain kind of business you know in FY ’25 where we like plan for some x business and has happened like X minus X minus anything. So — and good month has also not played very well for all the whole industry players as you’ve seen everywhere.
So same way, we are confident and we plan and discuss with the customer and as I said, we more focusing on like Eastern part of businesses. We also adding new sales team to be focused more to get the new business. Obviously, we will be get the like combination of business from the existing customer as well as new customers.
So we’re focusing more into in new businesses also. And as mentioned, it is also for the new — this new high-yield business also like rail and you know, Air International or air businesses and C2C business.
Unidentified Participant
Okay. And sir, in the current year in terms of the business from the SMEs, did we lose out in terms of market-share to any other player from our existing customer or have we sort of lost any market-share there? Could you give some sense on that?.
Mukti Lal
So SMEs businesses for every industry player is reduced actually because they are in a problem and they are weaker slightly. But in — I think now it is bottomed-out and that will be start to improve. So what we noticed from the everywhere and from the customer side, SME business itself is reduced actually.
So it is not no matter of like losing market-share and all. It is overall basis is reduced for everyone.
Unidentified Participant
Okay. So meaning my question was more towards, are they trying to sort of downtrade to any other players in the industry or obviously taking into account that even their business is impacted or they do have some cost issues. So have you observed that kind of a trend happening in the industry.
Chander Agarwal
So for you talking about SME customer,
Unidentified Participant
SME and otherwise.
Chander Agarwal
So have people sort of downgraded to other logistic players? Not really, because in Express interest, this is a good thing. As I mentioned, we are not struggling for the like — than the rate price and all because it is hardly anything for the customers in terms of their product value.
It is hardly 1.5% for their product value. So they are really not excited to be reduced the prices in-market.
Unidentified Participant
Okay. Okay. Yeah. Fine, sir. Thank you so much.
Chander Agarwal
Yeah. Thank you.
Operator
Thank you very much. The next question is from the line of Amit Kumar from Investments. Please go-ahead.
Unidentified Participant
Yeah, thank you so much for the opportunity, sir. Can you hear me?
Chander Agarwal
Yeah, please. You are clearly audible, yeah.
Unidentified Participant
Sir, with respect to the tonnage guide that you have given 7%, 8%, but what are you actually seeing? I mean, April and May, both are — in May is almost over. So in the first two months, are you seeing any sort of green shoots of recovery in terms of that tonnage?
Chander Agarwal
Yes, same but not much. It is in a single low-digit growth in — we have seen in these two months. You rightly said is May also like completing soon? Yeah.
Unidentified Participant
So you know, so when we are sort of looking at a high-single-digit, you know growth on an overall basis, I mean, then obviously, the second-half of the year will probably contribute more to that. Any sort of you know driver or any sort of conversations with clients, which makes you believe why that is going to be the case?
Chander Agarwal
So you know, again, it’s really very early to predict that, but obviously we have taken that and we make a planning for the same and taken discussion with the customer throughout across India. So by that, getting their feedback, we’ve taken this target. And obviously like we started to grow.
So obviously ahead with the festival season and there is we are not seeing any kind of disruption due to like last year election was there and all. So this year, we are not seeing hopefully nothing and will be fair year and tonnage must be like increase in this year. And obviously, price hikes also would be there.
So with that revenue growth would be in a double-digit for sure.
Unidentified Participant
So I appreciate the element on price hike. I just wanted to get some sense on volume. This is. Thank you so much.
Chander Agarwal
Thank you.
Operator
Thank you very much. The next question is from the line of Pravesh from Ryan Capital. Please go-ahead.
Unidentified Participant
Thank you for taking my question. Could you just briefly elaborate like what percentage of the growth that you’re assuming is from the new 80 branches plus 60 branches this year that you have added versus from the existing ones for the 7%, 8% volume guide for next year.
Chander Agarwal
Yeah. So because as major branches added for these two products, Rail and Air Express, so that is also growing very well in these two months. And subsequently also like we increase the more utilization of these branches by putting more person on specific person for these two products.
And surface business, as usual like we added only 10 branches in last year, whole year. So it’s like very — it is not significant amount we are generating from these branches. As usually, whatever branch we adding for like sundry — for these surface customer is for the sundry businesses. So that’s why it is not much significant on that.
Yeah. And obviously like next year — next year we are planning to add 80 branches. So that also like on the — over the period of full-year. And again, I said 50% for these two products and 50% for the surface. So maybe like you rightly said it may maybe help to grow — taken the like 2%, 3% total tonnage improvement in the overall year.
Unidentified Participant
So the other segment mix we have been mentioning on the calls at 17% 17.5% for quite some time. So is there any particular portion in the other segment that’s declining given that rail and Air Express has been growing well for us?
Chander Agarwal
Yeah. So basically, you know we were earlier having this e-commerce around 4%, now it is reduced to 2% because our focus on — not on that e-commerce. Because earlier we also doing B2C deliveries for the small customer. Now it is not lucrative and also e-commerce also expanded in a Tier-2, Tier-3 cities.
So our — that portion has compressed from four, I think two or three year back, it was around 4%. Now it reduced to 2.25% only. So that’s the percent. So whatever we increase in this year, it is compressed by this e-com business.
Unidentified Participant
Understood. My second question is on the update on the ESOP policy. Could you please explain the rationale and also what is the new basic schedule? Thank you.
Chander Agarwal
No, so ESOP, we have not did anything. We just like changes some time limit like earlier, we give an option to be like wested these and within two months, which we I think increased to four months and time period like supposing we give an option in this year we allowing — this has to be like exercisable in a three — next three years, which will be slightly flexible like we extended period, I think from three to five years.
So these are these kind of like regulatory kind of things to giving more flexibility to our employees. So that’s the only thing. Understood. Thank you, sir, and congratulations on induction on the board. All the rest.
Unidentified Participant
Thank you.
Operator
Thank you very much. The next question is from the line of Rohit from Samatwa Investments. Please go-ahead.
Unidentified Participant
Hi, hi, sir. Just had couple of follow-ups. So first on the rail and the air segment, have we added any new personnel at the top management level?
Chander Agarwal
No. So as you are aware, we already created at top-level, Mr Shop is the like COO of this multimodal business and we’re adding further also and like Head of — Air Head of rail business. So we’re adding that we already did in last year. This year, we’re creating like people on-field, more people on the field, specifically in sell-side that we like hiring from the instrument and all and we’re putting that team.
So upper top is already there, but now we’ve been putting more people on the field.
Unidentified Participant
Got it. Sir, and my last question will be to set-up a new automated plant, what will be the total capex for one plant?
Chander Agarwal
Yeah, it is around in the range of INR20 crores to INR25 crore for the alone for this sorting short-term only.
Unidentified Participant
Got it.
Chander Agarwal
It means automation cost for. And land and construction cost is different depending upon the location and yeah.
Unidentified Participant
Thank you so much and all the best.
Chander Agarwal
Thank you.
Operator
Thank you. Thank you very much. As there are no further questions from the participants, I now hand the conference over to Mr Agarwal for closing comments.
Chander Agarwal
Thank you, everyone, for joining us today. We have tried to address all your questions. If you have further inquiries, please connect with our Investor Relations team and we will be happy to address the same. We look-forward to meeting you in the next quarter. Please stay safe and healthy. Thank you.
Mukti Lal
Thank you very much to everyone.
Operator
Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Chander Agarwal
Thank you okay.