Transport Corporation of India Ltd (NSE: TCI) Q1 2026 Earnings Call dated Jul. 29, 2025
Corporate Participants:
Unidentified Speaker
Ashish Tiwari — Group Chief Financial Officer
Vineet Agarwal — Member, Managing Director
Analysts:
Unidentified Participant
Presentation:
operator
Ladies and gentlemen, I’m Simran the moderator and I’d like to extend a warm welcome to everyone joining us for the TCI Q1 FY26 earnings conference call. On behalf of the management we have with us Mr. Vineet Agrawal Managing Director and Mr. Ashish Tewari Group CFO all participants are in listen only mode Please note that this call is being recorded.
With that, I now invite Mr. Ashish Tiwari to share his opening remarks thank you and over to you sir.
Ashish Tiwari — Group Chief Financial Officer
Good evening to all of you I hope that you would have got the presentation copy it is also available on our website before we begin with I would like to make a disclaimer that this discussion might be forward looking in some of our statements and therefore the actual performance may not be coincide with the what what is being stated.
Now I will invite Mr. Vinit Agarwal for his opening comments and earning presentation thank.
Vineet Agarwal — Member, Managing Director
You thank you Ashish and good evening everyone. Thank you for joining us for the earnings call today It’s a pleasure to be here. I will start with a general commentary on what’s been happening in the last few months in the Indian market. As you’re aware that we do get sense of what is really moving and not moving in the country specifically since of a network of 1,400 odd offices in the last quarter we’ve seen that in some of the sectors like industrials have been quite weak though industrials have been sitting on a large order book as we all know but the flow has been quite limited.
And we’ve seen that across the board across the country where some of these companies have shown weaker movements now the reason for that could be many fold could be also government spending is still starting to pick up but private capex is still still a little weak we also know that there has been a weak summer and that has affected consumer sales in several areas like durables or the consumer FMCG side including industrial refrigerant gases etc the the agriculture sector has done relatively better in this quarter because of good monsoons and also because of the good winter crops so agri inputs whether it is fertilizer, seeds and so on so forth have done well including the tractors movement has been very good.
Finished goods as in processed foods etc have also been robust. We started to see some inventory build up for the festival season There are two areas that I’d like to talk about here specifically One is On the automotive side, in the auto sector we have seen that inventory buildup where a large amount of sales is not happening. But perhaps it is also built up for the fact that there is the festival season coming and also maybe because of the fear that the rare earth magnet shortage, etc. Could start hitting production over time. So that build up has been high.
Otherwise on the regular buildup which is around textiles and other consumer products etc. The pickup has been moderate and almost the similar levels as last year. There still remains a high degree of uncertainty when it comes to perhaps the impending tariffs etc. So when we talk to customers, they are a bit skeptical on what’s happening when it comes to their exports or imports. There is a bit of lag that we are seeing there as well. Those are some of my broad comments. I’ll talk about something some specifics over the course of the presentation. This is details about our company.
I think it’s quite well known most of these data is nothing has changed. Specifically we continue to increase our footprint from a warehousing perspective to about 16 odd million square feet right now. Growth drivers for the sector remain strong. There is no specific change around it. Customer demand is robust on a broad level on a long term basis as well. Industry has huge potential as we very well know. From a strategy perspective the company is very focused on providing solutions as well as with our other USP being strong multimodal capabilities, everything being tech enabled and really a very high degree of focus on high growth sectors.
We have the complete range of services under a single window. Unlike many of our competitors, we are able to provide almost everything under a single roof. There are lots of areas that we. There are a few areas that we do not operate and we are able to outsource that need if and when a customer wants that. Across industries we are present and in some places which are more intensive when it comes to cargo weight wise or concentration wise, which is for example commodities where we do not have that much of a presence. But otherwise we are present in almost all major sectors.
In terms of the I talked about, we are able to provide niche services to customers. However, we do have certain specific areas where we provide single window solutions and clearly bring in operational efficiencies wherever possible. I wanted to share a quick case study on quick commerce actually which is where we are doing process automation for perishable items. This is. This is a company which was employing for perishables whole degree of manual sorting, manual grading and really leading to a lot of manpower as well as stock shortages or even fill rates were not that great. So this meant that when we started looking at the process and we provided a solution where we do automated grading and sorting and packing and we’ve been able to reduce manpower by 81% and essentially the productivity has gone up many fold.
This kind of kaizen activity and sharing of best practices with the customer has helped us to acquire more businesses for this customer and for other customers as well. The. The. The challenge here has been that this is in a cold chain environment so or cold cold so more than not frozen but of course at a 1520 degrees Celsius temperature. So we are able to maintain the fact that the perishability is also maintained as well as operating under strict hygiene conditions. On a multimodal perspective, as you know that we’ve been last 10 years, 12 years developing our multimodal capabilities very strongly.
And in on the rail side the movement that we did increased from 540 to about 625 movements across the group which included the movement for our joint venture as well as for the rake movements that we do in in for automotive car carriers. This essentially means that in the 90 days of operation of the quarter we did 625. So almost what seven rakes a day kind of movement. Just stay back Ashish piece on the previous slide the the shipping fleet remains the same. You’re aware of the two ships that have been ordered which will be available only next year 26 FY27 August onwards.
In terms of container movement has also increased. 38000 containers moved last quarter versus 33,000 and number of CPUs handled were also almost the same level. We have been moving our customers more and more towards green logistics which is multimodal logistics and that helps them to save carbon emissions and also helps us to reduce our Scope 3 emissions. The number of terminals that we are managing has also increased. Yards have been increased to 67. In terms of the IT capabilities they remain strong. We are very IT focused. We driven some very cool AI based SOP workflow management processes.
Really improving the life of our work workforce by making it simpler and efficient. Also we are as I mentioned present in many of the high growth sectors from chemical pharma to automotive industrial. And these are all areas where we see good growth and we have our presence even in in the consumer side. We are doing fulfillment for E commerce companies as well as for quick commerce companies which is a great. Which has been a good growth area in the last quarter. We have in the last quarter as we have delivered 20 consecutive quarters of high growth on a year on year basis.
And this growth even though it has been a subdued quarter from an economic perspective we still continue to grow. The business is strong. We have a surplus cash of about 280 crores. Debt profile is still about 150 odd crores. I will not talk specifically about the the growth drivers in particularly per division but but let me talk about the businesses specifically freight division. As you’re aware we have 25 hubs. It is a business that typically mirrors GDP and we are seeing that there is with the industrials being weak with this business has also been affected and for the first time in many quarters we actually recorded.
Next slide please. Negative growth on the top line it’s more or less flat but at a standalone level and profitability is also weaker here. The good thing is that we are seeing a shift. The LTL increase has started again and from 36% we have inched up a little bit and this will continue to increase going forward. The weakness in the markets remains. I think we will get some benefit of the festival season but I do think water 2 will remain subdued as well. We have opened, not opened many branches this quarter yet. Our target though remains at 50 branches for this year.
Overall this business has been weak but we have to give it another quarter, another three, four months before it starts picking up supply chain business Next slide has been doing reasonably well. We as you know, provide end to end solutions for our clients. 75 to 80% of the business is automotive logistics so that has done that is even though automotive has been slightly on the weaker side we still have seen good traction generally our largest expansion has been on the warehousing side where we’ve been growing quite rapidly and acquired several large contracts in this space.
The capital employed here has also gone up because we’ve added 50 new trucks as well as a lot of warehousing equipment. The business grew at about 10 odd percent and the margin also grew. But the margin expansion has not happened at the same place because there’s been a lot of capacity addition and some of that is going to a few months for it to really kick in. As you can see that the ROC was a little bit compressed. We’ve ordered two more rakes that should come in the next two to next year. Plus these are rakes that for the movement of automotive finished goods.
We have three rakes. As you already know these two new rakes are specialized rigs where we’ve done gone ahead for design changes and we are now these rigs should be able to carry two levels of SUVs in the previously the rakes had one level of SUV. They’re typically double decker rakes. The bottom layer level has SUVs you can carry SUVs but the top layer you could not carry SUVs. We know as the market has shifted more and more towards SUV’s this rig has been redesigned and now we can carry SUVs on both levels. So this should be a competitive advantage to us when these rakes come in next year.
Seaways continues to do well. I think the business is stable from all perspectives. Top line grew at about 10%. Fuel prices, bunker prices have come down a little bit. One ship went for dry dock in quarter one but two are more scheduled for this year. One is going to go at the end of July and one later in third half in the third quarter of the year. Margins expanded here as well because of the freight rates being stable and on the higher side and costs coming down. Depreciation has also come down as most of the ships have already been written off.
The ROC etc are in the excess of 50%. These margins are again I keep saying that they are they should moderate but we are fortunate that we are able to generate more juice out of the system still and I’m hoping that this will continue for another quarter or two. The JVs have done well. Concord Joint venture grew at 33% again robust contract growth as well as shift of some customers towards multimodal logistics. Profitability is a little bit on the flattish side but again the the growth has been high, maybe some pricing pressure. Also on the cold chain side again growth is about 18 20%.
Margins have improved. The joint venture with Mitsui for Trans System Logistics has grew to about 11% and and profitability remains intact quarter on quarter. The standalone growth was lower, the joint ventures did much better and Consol level we saw growth of about 9%. EBITDA growth is almost similar. The PAD growth is almost similar. We received dividends out of the joint venture so that has been positive. And Consol EBITDA includes the TLI share of profit minus exceptional items. EV EBITDA is similar. ROCs are elevated slightly higher excluding cash. The return on net worth is also higher.
In terms of nothing has changed from the quarter perspective more the cash equivalents as I said was 275 crores plus about 300 crores. The the nothing has changed on the shareholding side and yeah on the ESG side on the environment side I think you know our focus towards the multimodal logistics is certainly helping Us in terms of scope three emissions Scope one and two emissions are something that we have been constantly looking at reducing. Our fleet has been moving towards alternative fuel including CNG as well as adding some LPG trucks. We’ve also experimented with retrofitting EV trucks so we’re going to see how that grows or rather that performs and then we can look at other areas again very focused on the social and the governance part as well.
In terms of capex plans, the 450 crore plan remains stable. We’ve done about 60 crores but you know as we’ve always maintained the first quarter is usually the pickup that starts happening over the year in terms of some of the CAPEX will continue so we’re confident of getting to that 400, 450 crores of capex this year. Mostly this will get funded internally with some debt that we’ll take for trucks etc which is as you know cheaper to do that. In terms of the the outlook remains at 10 to 12%. We are seeing that though the first quarter has been slightly on the weaker side but but we should start see pickup subsequently.
As the other thing to note here is also that supply chain has become our largest division in this quarter and the growth that you’re going to see forward will come from some of the businesses that are the newer businesses like cold chain, like rail logistics, like the supply chain business. So hence we are confident of the 10 to 12% top line and bottom line. Happy to answer your questions. Thank you.
Questions and Answers:
operator
Thank you sir for your valuable insights. Ladies and gentlemen, we will now begin the Q and A session. If you have any question please use the raise hand feature. When called on kindly start by stating your name and organization before asking your question. Our first question is from Mr. Alok Tiwara so please go ahead.
Unidentified Participant
Hello. Yeah good evening and congratulations on decent performance. So just had a couple of questions on cws. So CWS again margins have been pretty stable and you know similar to the previous quarter. So how do we see this margins? Is it like the new normal or kind of a base level margins that could kind of continue and secondly once the you know what would be the status on the second hand chip which we were also scouting parallelly. Any update on that? And once these volumes from the new ships come into the system and into the operations then these margins can improve further or is it like this is the optimum level of margin which could be there?
Vineet Agarwal
Right. So I think you know there’s a lot of uncertainty in the marketplace generally with the Middle east crisis. Ashish, maybe you can put up that slide only it’s better rather than just leaving it here. So I, and that meant as, as I’ve been maintaining that some of these ships keep moving out of the Indian waters and I think that has had a positive rub off effect on us and hopefully that should continue for the time being at least. So I’m, I think you know, you, I would not like to call it as a new normal but I think there’s 35, 40% range is sort of maintainable for the next quarter at least a quarter OR 2.
The second hand ship is something. For example, let me tell you, we did bid for one ship in the middle but we did not get it because again the pricing went quite high. But the good part is that we are seeing some more action on this space and if we are able to find another ship we will keep a budget of 150 ish crores for that 150 crores and that would be over and above the 450 crores that we are planning. But again this is all tentative and you know, we do not know how things will pan out when these new ships come in which is FY27.
Mid of FY27 is typically it takes a few months for it to be utilized in terms of full capacity. However they also have depreciation and there’ll be an interest cost. So that will put down that might. That will have an impact on EBIT for sure. So let’s see how that plays out. But. But I do not think the impact will be significantly negative with the new ships at least for the time being. Then it’ll pick up.
Unidentified Participant
Sure. And just one last question. So the tax rate which we pay now is pretty low because of the. You know, because the series is based on the capacity the tax rate is calculated. So once those new ship comes into the system then the. What could be the effective tax rate? Like I mean I know it could be little.
Vineet Agarwal
No tax it is the same. No, it will not change because tonnage tax still applies to those ships as well.
Unidentified Participant
Yeah, no, so right now we pay around. I mean the effective tax rate would be at around 11 12%. So once the. So since the capacity has been same the tax rate is largely been at around these.
Vineet Agarwal
Oh, sorry. The tonnage tax is very minuscule. It’s like in lags.
Unidentified Participant
Okay, okay. So what should be the effective tax rate? What should be the effective tax rate we should walk around with for FY26 27?
Vineet Agarwal
The same, same tax rate
Ashish Tiwari
Probably that would like more or less depend on like what is the income share from the shipping division. Yeah, shipping is on a higher margin level right now. The other divisions like supply chain and they would also grow up. Right. So but it not be impacting much more. Maybe 2, 3% here and there would be okay to estimate.
Vineet Agarwal
Yes, I stand corrected. I think Ashish is writing this, right? Yeah.
Unidentified Participant
Got it, got it, got it. Thanks for the response and all the best.
Vineet Agarwal
Thank you.
Ashish Tiwari
Thank you very much.
operator
Thank you sir. The next question is from Mr. Sunil Kothari sir, please go ahead.
Unidentified Participant
Thank you. Thanks for opportunity. Congratulations. Sir. My question is little qualitative aspect I wanted to understand is the freight division of our competitor. I would say VRL the mainly they are making a very high profitability reason. Maybe because of they are owning the assets and looking at the interest rate, capital cost one should think about owning more assets rather than utilizing the operators. Your thought process will be really helpful.
Vineet Agarwal
Well yes, you know that’s their strategy that they own the assets and maybe they get some benefits out of that. So certainly I think you know it works for them. It could work for us. We could, we have looked at that alternative but whether we have the, whether we can manage it as well as they are we obviously those are things that we question what happens when there’s a slight downturn. Those ship, those trucks are going to be standing. Do they become white elephants? So there are lots of these questions that we think about when we look at some of the strategy around LTL freight transportation.
So currently we are looking, we are working on an asset light strategy and we’re looking to see how we can keep reducing our cost structure. But yes it’s a thought process that we definitely keep in mind.
Unidentified Participant
But there is no change in our thought process. We are sure, I mean we are comfortable with whatever strategy we are following.
Vineet Agarwal
Well you know I’ve seen our competitors go have a lot of variability in terms of their business volumes as well as during certain downturns. And so that sometimes has put us off and in the past we used to own split here as well but we moved away from it. Yeah so we, we do not see at a. This business is about 1700 crores and 40% of that in terms of LTL share means that it’s a 5,600 crore business. For 5, 600 crore business to create a whole fleet might not be worthwhile. So we’ll have to think about when and where how can use this if. If you have to add fleet as a strategy.
Unidentified Participant
Right sir. So second question is on the annual report. The, the release was we, we are investing. We, we have invested roughly 30 plus cr on some different funds, maybe venture capital related to technology. So if you can share your thought process. I’m not questioning your logic. I’m trying to understand what is your thought process by investing what we want to achieve.
Vineet Agarwal
Right. So the last 10 years we’ve been doing some of these investments and what has happened that you know, 10 years ago the kind of startup in ecosystem that was there was very small as you know and it started to increase subsequently. Now at that point in time we are bored. When we spoke to our board, we suggested that we need to see the deal flow, we need to see what’s happening in the marketplace. If you also recollect around that time and subsequently Rigo type of companies also started coming into the marketplace and our customers were asking us okay, what are you guys doing around it? So our learning to, to get our learning curve up and higher.
We needed to invest because we needed to see what was happening. And we were seeing that some of the new startups that came in, they were, they were, they were better and respond more responsive when it came to customer service with more technology up front. They created some control towers, they had other areas where they were doing much better than us. And that prompted us to change and in fact create a center of excellence for logistics in our company where we are doing digital transformation projects, running AI ML projects, learning from some of these people and also incorporating using some of the services of companies that we’ve invested into and we work with them many places jointly also.
So the positive rub off of this has been quite high if we don’t even take the returns in perspective. And it has dramatically changed our perception of our customers when we show them some of these control towers. And I’ve shown in some of my past presentations over here also the impact that the control towers, et cetera that we’ve created for customers have had. We also have a national operating center where we are able to view all everything that’s happening around the country in, on various screens in our corporate office. So I think those are some really, really positive rub offs from this development.
Unidentified Participant
Basically we can buy or take service and pay that way. Also we can create this technology advantage.
Vineet Agarwal
Not always, you know, it’s not always too, not when it happened in the past. And some of these things that you’re looking at as forward technology, not backward. So when you’re looking at forward technology, you cannot buy it and use it. You can only Observe it.
Unidentified Participant
Okay, so this will be limited to some amount or.
Vineet Agarwal
Yeah, yeah. It’s not a very large sum anyway. So it’s something that we are very prudent about. We don’t go ahead and invest blindly.
Unidentified Participant
No doubt about that. Okay, thank you. Thank you. Thanks a lot.
Vineet Agarwal
Thank you.
operator
Thank you, sir. The next question is from Mr. Yashtana, so please go ahead.
Unidentified Participant
Yeah. Good evening and thank you for the opportunity. Viniti, one question I think you answered on the CVS segment on the sustainability of the margins. At least in the near term, we are forcing it to be there. Second related question to that was what if you can elaborate a little bit on the net capacity addition after the new ships, like how much of the capacity of these scrap. So what I’m trying to understand is what could be the net capacity addition in steelways in the next two to three years.
Vineet Agarwal
So fortunately for us, some change has happened in terms of the ship scrapping policy of the government and we have extension now till much later. So we do not see any scrapping for the next two, three years. But we’ll see net addition happening next year, which could be about 15, 20,000 tons of net addition next year. And of course, notwithstanding whatever we are able to acquire from a second handshake.
Unidentified Participant
Okay, got it. So earlier I think the plan was different. There was going to be zero net capacity, we had scrapping and now that scrapping will not happen.
Vineet Agarwal
Correct.
Unidentified Participant
Got it. So the net capacity addition can be 15, 20,000 plus any second hand ship that we acquire.
Vineet Agarwal
This is still FY28.
Unidentified Participant
Okay. So this, this new two ships plus is still FY28.
Vineet Agarwal
Yeah, I’m saying that there’s no scrapping that will happen till FY28.
Unidentified Participant
Okay, got it, got it. All right, thanks for that. And secondly, you mentioned that you know, the growth going forward, we come from SCM and I think we are growing very strongly in SCM for the last few quarters. So if you can help us understand what can the growth in SCM look like probably for the next two years.
Vineet Agarwal
Right. So you know, SCS business is very interesting because we, you can see some of our competitors also in this space and what they are doing versus what we are doing, I think you can easily see that we are focusing a lot on profitability as much as profitability, as much as on growth. Whereas some of our competitors are just going ahead rampantly and taking business at very low margins. So. And also in terms of the strategy, we have maintained a mid asset strategy where we don’t own any. We don’t own all the assets. We own some of the assets.
So that has helped us. Whereas some of our competitors are completely asset light. The third is the diversification. We have 75, 80% in auto, which is similar to other companies, but we have a very large diversified customer base. Some of our competitors are working with maybe, you know, 50, 60, 70% of their businesses coming from one or two customers. So there’s a concentration risk that they have. Last is the fact that we are running some very large warehouses for many of our competitors, many of our customers, and those are multi, multi location warehouses, multi level warehouses where we move from square footage to cubic footage as well.
And complexity is very high. And having WMS, warehouse management systems, etc. In place also. So given the fact that we are able to provide our and I talked a little bit about some of the IT solutions that we’ve been providing with control towers, etc, I think those are all the positives that we have in this business and the fact that we’ve been here for decades providing these services at a very high quality level. I think we’ve gained respect of many of our clients. So clearly this is something that will help. And I mentioned that warehousing is shifting.
There’s a more value addition that is coming where they want companies. The larger companies also want to work with larger companies like us. They want to work with organized players, people with best practices and those are positive growth drivers for us.
Unidentified Participant
Sure, sir, got the point. If one last question I can ask again on the CV side. So you mentioned that probably for one or two quarters we’ll be able to maintain these margins. But once these margins come to a steady state, maybe let’s say 5 to 10% lower on the EBITDA front versus the current level, which I think, and you can correct me if I’m wrong, if you think that you mentioned is a sustainable level. Does this, or do you think this is a risk for you, let’s say in FY27 or 28, where your operating profit, you know, will see no growth for these two years because that’s almost 50% of EBITDA currently these days?
Vineet Agarwal
No, no, we’re not so concerned about that because other businesses are also growing. I think also we should keep looking at our business. You should also keep looking at our business not from a standalone perspective, but from a console perspective because a lot of the growth is coming from the JV partners as well as the subsidiaries. And going forward also we’ve subsidized one of our chemical businesses which will possibly lead to a JV in the future. And when that happens that also we should see a growth because it’s a high attractive sector growth sector. So as a consolidated business you should see continuous EBITDA expansion taking place even if CVS comes down a little bit.
Unidentified Participant
Sure sir, got the point. Thanks and Mr.
Vineet Agarwal
Thank you.
operator
Thank you. So the next question is from Mr. Kripash Shankar. So please go ahead.
Unidentified Participant
Yeah, good evening and thank you for the opportunity. Congrats on a good set of numbers. One first question is on CVS business. Just wanted to get a sense that now that you revisited, you know, they’ve been challenged, there have been some growth because of Middle east issues and all. Are you revising your growth number for FY26 for the CBS business?
Vineet Agarwal
No, I think we had maintained a flattish number for that. And as I said, you know, we have two dry docks that are coming up. So those dry docks can have an, we should have an impact actually on some of the voyages that we undertake and hence the revenue can also come down because of that. So we have a. So right now we are 10ish percent. I think going forward we had set 50 to 5% range. So let’s see what happens after Q2. But right now we’re keeping it at the same level.
Unidentified Participant
Got it. The second question is on the Kemlog business as you were pointing out, you know, given that supply chain is going to be the key driver of growth for the business. Just wanted to get a sense on, you know, what sort of attraction are you seeing over there. And if, if I were to point out any, any vision you have with respect to what is wouldn’t be chemicals as a proportion of your total supply chain business which has been predominantly auto dominated.
Vineet Agarwal
So we are looking at this 10, 15% type of range in terms of growth maybe on the higher teen side also as we are able to acquire some larger contracts, we have to also see that a small increase in automotive business leads to a large increase in the business overall. So automotive tends to is doing reasonably okay for us. There is new contracts that we have are getting on not just new lanes from existing customers but also new plants that are coming up of different companies. So that is certainly on the positive side. Of course as you also know, we are in the entire supply chain of automotive from inbound logistics to outbound logistics.
So even if there’s increase in exports etc, that should also have a positive impact for us in terms of inbound logistics. Then there is also the new areas that are coming up whether it is EVS or growth in ancillary kind of automotive sector for example tractors or earth new equipment. I think those as and when let’s say infrastructure starts to pick up even more that should have a positive rub up effect. So. Yes. So overall this 15ish percent growth is something that we are looking to to definitely work on in the supply chain business.
Unidentified Participant
Got it. Lastly on. On the auto rigs addition what would be the quantum of capex which will be incurred towards addition of these two rigs? Because you’ve given about 128 crores as a budget does includes trucks and rigs. Just wanted to get a sense of what would be the only cost of.
Vineet Agarwal
Some of it will be partial this year in terms of advances etc and some of it will happen in the when the rakes actually come on board which is next year. But the overall budget for this is between 35 and 40 crores.
Unidentified Participant
Understood, thank you and all the requests.
Vineet Agarwal
Thank you.
operator
Thank you sir. The next question is from Mr. Deepak so please go ahead.
Unidentified Participant
Hello sir. Am I audible?
Vineet Agarwal
Yeah .
Unidentified Participant
Firstly on the seawage business can you mention the volume growth that we did in this quarter and going ahead with the capacity that we have and considering the voyages that will be that we’ll be taking for the full year what kind of volume growth or revenue growth that one should anticipate for the division?
Vineet Agarwal
So there was some positive volume growth as we did some more voyages over last year and hence the growth that you see is a combination of both volume as value and value. In the coming quarters we should see a little bit less volume growth. Hopefully the value growth should continue. So we should probably look at. But. But some of it might come down also with the dry docks that are scheduled. These are the larger ships that go for dry dock and when they go the volumes come off a little bit more that are being planned.
I’m sorry. So that’s why I said you know for the full year.05 to 5% kind of range in terms of revenue which is a combination of both volume and value growth.
Unidentified Participant
Understood. And on the capacity that we have today can increment what kind of incremental volume growth can be done from the existing capacity in the ship in the seaway side.
Vineet Agarwal
Not much. You know I think we are running at mostly all capacities. Sometimes you can get more additional return cargo but. But otherwise not very easy. Just to give you an example we move cargo from Kandla to Cochin and to Tutory Corinne. Now we are seeing some benefit of some of these solar plants that are coming up in Tamil Nadu. Whether we can move some of the solar panels on to through containers onto our ship and then actually take it from Kandlar on our rakes to deliver to Rajasthan where these solar plants are big solar capacity addition is happening.
So these are very interesting things that are happening. Whether it lead to a dramatic increase in volume, not really. It will just be a filler in many cases. So we do not expect much in terms of volume expansion with the existing capacity.
Unidentified Participant
And sir, on the margin side, if you.
Vineet Agarwal
Sorry to interrupt you but you know just the example I gave you is, is unique because no other company can do something like that. Where we are picking up up from the factory by road, taking it the the solar cells in containers to port in Tutikoren, putting it onto our ship, taking it to Kandla, putting it onto a rig, delivering it to the site at in Bikaner or wherever it is, putting it onto the terminal that we are operating, putting the containers there at the terminal and delivering it to the site as and when the customer needs it.
So again these are some unique services that we provide from an end to end solution perspective. Perhaps we don’t articulate it as much but this is something that is really unique to us. Sorry, go ahead.
Unidentified Participant
Sure. So that’s quite commendable. Well noted on the margin side in Cwase. Just wanted to understand from you the demand supply scenario in the routes that we offer it. And you know what, what in your reading, you know what, on what basis will this supply increase? I understand that the international freight rates are one component. So if you can explain, you know, how. How does the demand supply game work here in the routes that we work.
Vineet Agarwal
Essentially when the freight rates globally tend to go down, we see capacity coming to the Indian sector because it is a little bit more stable. But as and when the freight rates go up, the capacity moves out from here. So new addition, new capacity keeps coming back and forth. You know, there are lots of permutation and combination in international marketplace when it comes to shipping. If there’s a Gulf crisis, sometimes those ships come back to India. So if there is a Gulf crisis and somebody’s able to capitalize on that, then the ships move out of India.
Bunker prices play a role. Bunker prices have been coming down as you can see in the graph also. So that typically helps us. But then customers also know that bunker prices are lower so they will demand for lower prices on terms of freight rates. So and then you have the end to end rates. You know, we don’t necessarily do terminal to terminal as many of our competitors we do end to end. So how much margin can we capture on picking up from the customer’s doorstep to the delivery of the doorstep? So all of these factors come in from margin perspective and then hence on the demand supply perspective also.
Unidentified Participant
Is there any industry study which you can talk about on the demand supply scenario today? Because what is helping us in terms of margins and higher prices is the demand supply being favorable. So how should we look at this going ahead?
Vineet Agarwal
Well, you know clearly the demand supply factors are essentially because of several. I mean the growth in this sector is. Is many fold reasons and I don’t have any specific study to quote. However if you look at the studies done by the government themselves from Kati Shakti perspective, etc, the investment that’s coming in the shipping side essentially the enhancement of multimodal logistics in the country to shift from road to rail and to sea is essentially to bring down cost of logistics as well as to bring down carbon emission. So both of these factors are at play.
When you look at coastal shipping, the share of 6% as a freight overall freight is extremely low compared to let’s say 15 to 20% in China. So it is a, it is I think a given that some of this will happen. The push is there but it’s also sometimes chicken egg. You have to have some supply available for, for the market to shift there. Because in the past there used to be ships that were standing for cargo. Now when more ships came in there used to be a more predictability in terms of frequency. So customers felt more confident that look I’m sending my cargo, it will get loaded into any ship that’s in the next two days or three days.
That’s the maximum my container needs to wait. Otherwise we just keep moving on. Otherwise some other ship will be available. In the past it could have been seven days as the cargo was waiting. So the supply came in and hence demand got created. And now when demand there’s demand exists then supply will get created. So it’s a chicken egg situation and sector is bound to grow because of all the reasons I just told you.
Unidentified Participant
So just to touch upon the other segments in the subsidiaries. Firstly what is the growth is. You know the growth there that we’re doing is quite good but the margins are on the lower side. So if you can touch upon what is leading to lower margins in the subsidiaries.
Vineet Agarwal
Some margins are anyways weaker on types of businesses we are in. So in the Concorde type of business the margin is anyways going to be Slightly weaker because it’s rail logistics as bulk logistics, some of it is commodity logistics. So there it will be lower. In other businesses we have healthy margins I think. So it’s not, not so much of a concern. I mean in the cold chain business is more on the growth stage, it’s more on the investment stage and hence you’re seeing that the margin is slightly on the lower side but the, the gross margins are still on the higher side.
Unidentified Participant
And in the transfer transystem JV is what are, what is happening on the growth and profitability side if you can, what should we expect in this year?
Vineet Agarwal
Growth is essentially on how Toyota is growing. That’s a large customer base there and other Japanese OEMs. So we see that should be reasonable this year as well. And hence we are quite confident that at least it should be flattish from top line perspective and even from the bottom line perspective not expecting too much growth because the volume growth is coming up soon. You know, Toyota is going to set up a new plant. Let’s see if we get that business. That’s again two years from now. So in a business as usual scenario things look to be very similar as how it is.
Unidentified Participant
So last question. In the standalone freight business I understand that the macro is weak and there’s a lot of competition. So what is a company doing to get, get out of this degrowth phase from this quarter that we had? So what are the initiatives that we, we are taking to come back to the growth phase and similarly on margins if there are there any levers on pricing that we are looking at mix improvement etc. So if you can just mention some improvement levers for the freight business. Thanks.
Vineet Agarwal
Well, certainly we, you know the focus continues to remain on LTL business. So that that’s a higher margin business and that’s a business that can reduce our cost structure also because there’s more throughput that will happen through the and help the fixed cost reduce the fixed cost. So, so yeah, so that is the focus on LTL remains to how to keep the growth momentum there. Clearly there are challenges in the economy. We are aware of that. So some of it will be unfortunately fortunately factored into that but we are conscious of it and there is more salesforce being deployed but we have to keep a balance.
There is also competitive pressure that comes in. Some of it comes from as I mentioned, sometimes from the express type of companies. But. But yeah the challenges are there and I said maybe another quarter or two before we can really see some turnaround.
Unidentified Participant
Thanks.
Vineet Agarwal
Thank you.
operator
Thank you sir. As There are no further questions. I now hand over the floor to Mr. Ashish.
Ashish Tiwari
He was. He raised the hand.
operator
He already got his answer. His question was related to tli.
Ashish Tiwari
Okay. Okay. Thank you. So this time not much questions. Thank you very much for joining the call. If you have any question which has not been answered or you could not ask the question, please write us on the email which is given on the presentation. Wish you a very happy festival season in advance. See you in the part or two. Thank you.
Vineet Agarwal
Thank you.