Transport Corporation of India Ltd (NSE: TCI) Q3 2025 Earnings Call dated Oct. 30, 2025
Corporate Participants:
Simran Sharma — Investor Relations
Ashish Tiwari — Group Chief Financial Officer
Vineet Agarwal — Managing Director
Analysts:
Unidentified Participant
Alok Deora — Analyst
Presentation:
Simran Sharma — Investor Relations
Good evening ladies and gentlemen I am Simran, the moderator and I’d like to extend a warm welcome to everyone joining us for the Transport Corporation of India Ltd. H1FY26 earnings conference call on behalf of the management we have with us Mr. Ashish Mr. Vineet Agrawal Managing Director and Mr. Ashish Tiwari Group CFO all participants are in listen only mode Please note that this call is being recorded with. Now I invite Mr. Ashish Tiwari to begin with his opening remarks thank you and over to you sir.
Ashish Tiwari — Group Chief Financial Officer
Thank you Simran and good evening to all of you thank you for taking out time and joining our quarterly investor call before we start the call I would like to make a disclaimer that some of the statements in this call may be forward looking and may not coincide with the actual performance so we will start with the presentation by Mr. Agarwal and followed by the question answer session I would invite Mr. Gal to just to present and and also the opening remarks thank you.
Vineet Agarwal — Managing Director
Thanks Ashish Thanks Imran it’s good to be back for the quarter I can see Alok has already raised his hand so he’s already number one on the queue but it’s. That’s okay so maybe I should just start with questions only but no, let me give some opening remarks and then share also share what’s been happening over the quarter so it was a interesting quarter I think the beginning of the quarter we saw some little bit of movement July, August and then of course once the announcements on GST came things started slowing down quite rapidly and the first few days of September etc.
Were quite weak then of course after 22nd of September we saw a massive rush from either from the automotive side or from the finished goods and the FMCG side and just the amount of movement that happened was just took us by surprise in our supply chain business we did record numbers and we are now that business is our largest business now as I’ve been saying that it would happen and essentially what we’ve seen is that the stocks that had been sort of the inventory that was there in the system across the board some of that got used and now and that towards the far end of the supply chain which is post the warehousing, the CNFS etc or the yards beyond that some of that started getting used up now we October also has had the same effect but now we are seeing a weakening of the push that was there it is not as strong as it was in the first, in this last 45 days.
But. And we do not expect November to be that great also because I think and December perhaps to be moderated. The one thing that we’re expecting things to shift is more on the production side where we believe that some of the raw material needed for production and then subsequently movement from the production units to the next stage in the supply chain is something that should happen more so in the next few months. We know capacity utilization on the industrial side is still around 77, 78% and that needs to keep persisting before some capex starts happening.
The other things that we are seeing of course is that there are supply chain restructuring that’s happening by companies where they are insisting heavily on cost reduction. Because I think a lot of the cost reduction initiatives that companies had started earlier have now been exhausted and they’re looking at other areas to where they can restructure some of this cost. So they are on the supply chain side pushing more towards how to rationalize maybe if it is warehousing, how to rationalize warehousing space, if it is the network design, how can they change that? Can they look at different kinds of suppliers? How do they diversify the supply base? Some of the sentiments because of the impending FTA etc is also having an impact on supply chain diversity.
So these are, these are some of the things that we’ve noticed. I’ll talk about something specifically in each of the businesses. One major impact of GST is the fact that we believe that some of the sentiments might have changed a little bit towards the positive side, if not a little bit more than little because there is an element of feeling that there is, we can get more out of our money or the money spent per 100 rupees that I spend, I can get more out of it. So at a consumption level that can help some triggers and but it is certainly a sentiment positive.
So let’s start with the presentation. I think there’s no change in terms of this. We are well aware of the logistics industries, drivers as a company we are very focused on providing a wide range of solutions through a very strategically developed multimodal network. And of course we are increasing technology in, in huge numbers in a huge way in a company. And of course we work in all the new as well as high growth sectors with a range of services, as you can see across the board and many of them very high value, high niche kind of services.
And again looking at the new sectors like chemicals, defense, aviation, industrials, we are present in all of them. As well as increasing a share very rapidly. Case study is for a renewable energy customer. This customer has just started its plant and the amount of growth that it was having and the amount of throughput it was generating from its plant was very high for either law for the road to catch up because they were moving most of the supply through the road network. So that was leading to shortages of trucks as well as the freight rates also moving up because of the demand supply gap.
Clearly this was also leading to more carbon emissions as well. And the warehouses were not able to keep up because there was so much capacity, so much raw material that was coming in and so much finished goods that were ready. And of course there was incompatibility with the types of raw materials that they have which is like chemicals and other other products that are there along with, with these chips, the solar modules, etc. So we started moving from south India to North India using container rail movements as well as we’re using a triple mode which is coastals.
So using our coastal services and moving it to, to across the country wherever they need it. Mostly it’s going to the north. We’ve settled a key manager, key account manager there and we’re managing warehouses across six locations including a cold chain warehouse for them. And of course the customer has seen about a 10 odd percent type of improvement in their cost as well as multimodal movement has reduced their carbon emissions. So this was a solution that we were able to provide because of the, the wide range of services that we have and that is unique to us and no other company in this country.
Going forward we have another interesting case study for a, for a quick commerce company where they required several deliveries from minus 15 to minus 20 across the different pods. That is point of deliveries that they had in the past. When you’re moving at such high degree, high precision in terms of temperature, you tend to lose the, the heat the. So you generate heat and hence you lose the cooling effect. So as you can see the yellow graph, the temperature kept going up as the deliveries kept increasing as you move from one to the, to the last one.
So we did some significant kaizen where we were able to create inside the truck separate cold chambers so that the temperature is maintained till the, the desired temperature range is maintained till the last point and replacement has reduced substantially because customers are, they’re at the beauty level. They’re seeing that the integrity of the material is maintained when they receive the final material also. So it has been a very, very interesting supply chain development where we are able to use cold chain to do this very effectively. Again these are places where we are able to deliver very high degree of customer satisfaction as well as retention as a company.
I think some of this is perhaps mentioned and known signal window solutions as well as bringing in all kinds of niche services to the customers. In terms of multimodal capabilities we’ve been continuously expanding that. In the last on the rail side if you see we have increase our rail movement substantially. We did 1400 plus rate movements last quarter last half year versus 1168. So a substantial jump that we’ve had a lot of it is in the automotive side on the on the left hand corner is the container movement. The TUS handled in the last half yearly is about another 5,7% increase over the last year as well as the number of cars handled CPU that is has also increased from 172,000 to about 190,000 in the last year half.
We continue to manage about 67 yards and about 70 terminals and we’ve saved about 90,000 tons of CO2 in terms of IT capabilities. We have now our center of excellence is now working has been working for several months on several interesting AIML projects and perhaps next time around in the presentation we will show you example of one or two very interesting AI projects. These are essentially areas that we’ve seen that have really a significant improvement when it comes to manpower productivity as well as in terms of process improvement. So we’ve been able to implement some of these quite efficiently.
And of course the rest of the things are our hygiene as we go forward Mentioned about all the high growth sectors we’re presenting. I think this is known. Let’s go forward. Highlights in terms of the quarter ended is that we have had 212020 first consecutive quarter of growth. We’ve invested about 170 crores in the last quarter in the last six months funds and out of that 140 has come from internal accruals. Liquidity position remains steady at 250 odd crores. In the freight business it is remains a bit weak. Still we’ve had no growth. The good thing here is that the shift from LTL FTL to LTL has started and we’ve seen a 2 percentage point improvement there to 38%.
Margins have yet to kick in because some cost structures are still under process. We’ve also some of the growth was subdued because a few contracts were shifted to the TCI ChemLog business. This had to happen at some point in time and it happened in this last quarter. So the growth is muted. It would have had an impact of 2, 3% about 1 or 2% in terms of the top 2, 2% perhaps additional on the top line growth challenges remain. However we are seeing as I’ve been saying that the this year perhaps is the end of perhaps hitting the bottom and we are going to see uptick here going forward.
Otherwise the the challenges around MSME growth etc remain in the system. I think that is still our network expansion continues though we have not added too many branches this quarter but in the first half the branch network is definitely higher than last year. Also on the supply chain side the business is grown at about 17.8% over the quarter and about a 14% on the half yearly basis. As I said that the impact of GST dataization has been immense and we’ve been able to push through a lot of these quite rapidly. The movement has been handled quite rapidly and quite efficiently.
We’ve also seen good growth in warehousing where the warehousing growth is actually far higher than the overall growth and most of it is coming from quick comm. A lot of it is coming from quick commerce FMTG companies restructuring, some retail customers coming in and we are seeing that the margins are stable. Capital employed has gone up because We’ve added about 100 odd trucks as part of the capex plan in seaways the we had one several few less voyages because of ships were under dry dock one Also in the last quarter the growth in margins even though the revenue growth has been negative is because of the fuel prices being slightly lower.
I think that has helped us even with the limited volume grow volume we’ve been able to get better margins. Of course all the ships are depreciated and we do not have any interest costs etc so everything that we earn at the EBITDA level almost everything goes down to the bottom level. Bottom line the joint ventures have done reasonably well. The in the first half Concord has grown by about 28%. Profitability is a little tight but I think it’s also because of the various changes that are coming about slowly with also competition increasing a little bit more.
The likes of Adani and DP World etc are increasing their presence in in the container transportation business cold chain business grew at about 17 odd percent. Again good traction there. We’ve crossed about 100 crores in terms of capital employed. Yes got some interesting customers in the on the on the to on the quick commerce as well as on the retail side as well. Profitability is muted but I think this is expected for the next few quarters. Transystem growth is at about 11% and profitability is almost the same. At a standalone level we grew at about 5% odd but console levels about 7.6% for the quarter the bad level of growth for the quarter is about 6.4% and 5.8% for at the console level again it’s been a muted quarter for us because the start had been slightly weak.
We started to pick up towards the second half of the quarter but net net I think in terms of our guidance of 10 to 12% on the top line about 10 to 15 on the bottom line at a console level stats in terms of the other numbers I think Roc Rony everything else is the same, not much change next slide and this quarter we did not declare any dividend but we are observing the trends and we, we will figure out when to declare dividends perhaps in the next quarter or subsequently CAPEX up 167 crores in the first half the budget is 450 crores I think as I’ve been saying we should get to around 400 ish crores plus minus 20 crores.
The ship related costs have been essentially related to the two orders that we placed and those orders are, these are the installments of those orders so that has gone in terms of the 34 odd crores that has been spent. We’ve seen the good addition in trucks and rakes and we ordered two rakes also which will come sometime end of next year. That’s all in terms of our presentation. Happy to take questions, thank you.
Questions and Answers:
Simran Sharma
Thank you sir for sharing your valuable insights. Ladies and gentlemen, we will now begin with the question and answer 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 Devora so please go ahead.
Alok Deora
Hello. Yeah, good evening and thanks for the detailed presentation. So just had a couple of questions first on the freight business I mean you know the margins have been a pretty muted even you know if you’re, if you observe the last several quarters so just wanted to understand if things change for the better end if we get even a higher ltl mix where these margins could end up. I mean what is the potential for these margins? Because this segment forms pretty big part of our overall, you know, business. So just some color on that because this at the end of the day continues to be a commoditized business.
So are we seeing any real margin change changes here or it would be just a maybe a 50, 200 basis points improvement maybe one year down the line. That is number one.
Vineet Agarwal
Right? Yeah so so on that CD the peak margins in this business have been I think 4 1/2% EBITDA. So that’s the peak. However as you said maybe it is going to inch up and not jump up. So in the next next year onwards we should see that inching up starting with 100 basis points etc type of improvement. Secondly it is about 40% of our standalone business and even lower percentage of our consolidated business. So as a share of the business it is going down as you can see. And the, the, the so and you know there is not many assets in this business.
I mean very the no assets actually really only working capital is what we require here and rest of it is rentals a sector that is from a shared services perspective. So ROCs will continue to remain attractive. 15 plus if you’re hitting that. I think we are definitely looking at continuous recycling of that. However the moment the LTL business starts kicking in further that ROC has jumped as you can also see in 222022 and 23 to 27 and Ashish just put it on full slide please at 27 20% so that 2025 ranges can be achieved.
Alok Deora
And in C ways I mean the margins you know again continue to inch up. I mean we have been seeing a quarter by quarter improvement again in the margin profile. So you know the which margins which were to normalize almost like one year back that is kind of, I mean not come down rather has gone up despite the lower revenues if we compare it with the last few quarters. So what’s really happening there is are these margins sustainable and if these margins sustain or we have a very strong outlook then what’s happening on the second hand ship because that could earn us quite good money.
You know if those, if that ship also were to come by and get into the operations very quickly.
Vineet Agarwal
Well second hand ship is not easy to get. We as I’ve been saying that we’ve been trying very hard. We bid for a few ships also we did not get because they kept going up in terms of pricing. So very very unpredictable. And I think geopolitics plays a big part of this in this. So I, I we are not very hopeful on the second hand we are definitely short of this of the new ships that will come next year. We also have a little bit of a time till we are we need to retire some of the ships.
So in that context capacity addition will only be positive whenever that happens next year margins as I say that you know, sometimes we are also quite surprised sometimes. But this 35, 40 is our expected margin structure is what is, is what we feel is the is perhaps the most ideal number.
Alok Deora
Thank you. Thank you so much sir. All the best.
Vineet Agarwal
Thank you.
Ashish Tiwari
Thank you.
Simran Sharma
Thank you sir. The next question is from Mr. Pripashankar. Sir, please go ahead.
Unidentified Participant
Hi, good evening and thank you for the opportunity. My first question was on the revenue growth side. So Vinit, you did mention that you’re at aspiring for a 10 to 12% growth on the top line side for the full year. But on the first half it’s been almost about 5% sort of a growth. So the second half expectations while supply chain is firing all engines, what are the other segments? Because CVS you’re not getting incremental capacities. So is it right to assume that freight would bounce back shi. And that is what will drive your top line growth expectation.
Vineet Agarwal
So maybe I can hide behind some of the fine print which is whether it is consolidated growth or whether it is standalone growth of 10 to 12%. So at a console level it is about 8%. So we should hit 12, 10 to 12% in that because our Concord business is also growing. You know it’s already at 2728 increase and the other joint ventures are also firing all cylinders. But yeah, I think you know, if you look at, at a, at a standalone level perhaps 8 to 10% might be more reasonable and at a stand at a consolid level maybe 12ish percent could be more reasonable.
Unidentified Participant
On the CB side any near term headwinds that you are envisaging with respect to fuel cost or, or any other incremental capacities coming on board which can spanner with respect to profitability or growth perhaps?
Vineet Agarwal
No, not really. I think you know, headwinds are essentially typically. Ashish, can you move that the top part of the screen or just move it to full screen please? See, I think if the freight rates globally have muted, have muted a little bit but freight rates around the Indian coast is typically still high. So I think what typically that happens is that there is some of the international players that have moved some ships to international waters tend to bring it back to India and that could happen and that could be a potential headwind. But in terms of capacity utilization, we had full capacity.
We don’t have, I mean we have cargo but we don’t have capacity. So we are of course, you know, second handship still doesn’t make sense with the kind of pricing because you have to factor in a longer tenure for those ships. And not what you see today. So I would think that the headwind would be perhaps more competition but the next few months is typically the good period also. So maybe we should be able to sustain both from a demand perspective and from whatever supply comes in.
Unidentified Participant
Thank you.
Vineet Agarwal
Thank you.
Simran Sharma
Thank you sir. The next question is from Mr. Sunil, so please go ahead.
Unidentified Participant
Hi. Hi sir. Thanks for opportunity.
Vineet Agarwal
Thank you. Hello. Yes. Please go
Unidentified Participant
Broadly to you always as a long term minister I, what, what is impressive is the way you put a case study, the way you create a long term relationship and bonding with your customer and stickiness. I just wanted to understand which are the factors other than pricing, where customer leaves us and whether they leave for just prices or they create their own setup and they learn from us. What are the factors which you will be careful about or your experience talks about that our customers leave us and we lose the business.
Vineet Agarwal
Yeah. Well you know our analysis is that 60, 70% of the customers leave us because of pricing. Then of course no company is perfect. If I can tell you that every person everywhere is perfect and is we don’t lose because of our behavior towards the customer, I’ll be wrong. It happens in all organizations so some of it happens in our organization also. Sometimes we don’t realize what we do but we are, we do not deliver to customers satisfaction and expectation level. So we do certainly lose out there. Sometimes we lose out because customers don’t want to give a lot of business to us.
They also want to diversify their portfolio to keep other, other players in the mix so that, and they might give us a higher pricing compared to the others but they will still not give us the entire business because they want to keep a diversified mix. So those are probably the main reasons why customers leave us in terms of solutions, et cetera. We have a wide range and a and the teams are such that they are able to orient towards customers needs but sometimes we can fail also.
Unidentified Participant
Thank you. Thank you.
Simran Sharma
Thank you. So the next question is from Mr. Naman so please go ahead.
Unidentified Participant
Yeah. Hi, good evening and thanks for giving me this opportunity as most of the questions has already been answered. So I just wanted to know that as the company has just entered into the eastern region with the new warehouse in the Kolkata region. So like how should we expect. It. To affect our financial performance? Like what are the company’s plan in relation to this new warehouse and like if you could just give some color it would be good for my understanding.
Vineet Agarwal
Well, you know this is just a regular warehouse expansion that we’ve done. It’s a 285000 square feet facility, a very large one, especially in the eastern zone. We did not have such a large facility there, so we were invested into it and we brought this up stream. But it won’t have a significant impact on the company as a whole because it’s just one more capacity addition out of the 16 odd million that we have in terms of space. So these are small incremental things that we keep doing. It’s part of the capex plan. So yeah, I do not have any.
We do not. It leads to business obviously, but will it have a significant impact? No, not really.
Unidentified Participant
Okay, thank you. And just one last question. Like with the GST rate cuts coming into effect and inflation at like touching new lows, how do you see the demand trying to evolve and what are your strategies to compete with your competitors?
Vineet Agarwal
It’s a very broad question. I think our strategy is well known. We are, we are a multimodal, integrated multimodal logistics solution provider. And we are across the board in terms of all the services that we have. And we cross sell and upsell our services to our customers. So that’s the broad strategy. We, with all the services we have, customers, they are getting positively impacted by gst. They will use our services. So overall I think I do not see any, any specific, broad, specific things I can point out and tell you that, okay, this is what is going to dramatically change because of gst.
But there are services that they need from us. Whether it is warehousing or whatever, we are able to provide them.
Unidentified Participant
Okay, thank you. This was all from my side and best of luck for the future. Thank you.
Simran Sharma
Thank you sir. The next question is from Mr. Raghunath, so please go ahead.
Unidentified Participant
Good afternoon, sir. Sir, post implementation of GST there was expectation that there will be a consolidation in the industry wherein the smaller players will exit. Sir, is that still playing out.
Vineet Agarwal
slowly? Not too fast, but yes, slowly it is happening.
Unidentified Participant
Okay, thank you sir.
Vineet Agarwal
Thank you. So the next question is from Mr. Pratib, so please go ahead.
Unidentified Participant
Yes, sir. Good afternoon. So one on freight. I mean what has to happen or what is happening that giving us a confidence that margins kind of come back next year? Is it just LTM which will drive this or do you see on ground? I mean either the competition or SME segment kind of coming back?
Vineet Agarwal
I think it’s a combination of many things. You’re right that some of it will be driven by ltl growth and that ltl growth is also because of MSME growth, some, some aspect of pickup should happen. As I said, capacity expansion will only start when there is a capacity utilization remains at a higher level.
So yes, some of it is that I think the, the consumption story that we all want to be kick started, hopefully some of that will also come through, which means a trickle down effect of that infrastructure spending by the government should continue at the same pace. And I think next year’s budget should also keep pushing that agenda. And that means there’s a very high degree of movement that happens towards infrastructure related companies, especially engineering companies and electronics etc, so those will drive certain growth. So yeah, so I think overall there are lots of tailwinds that should help us in terms of overall growth.
Unidentified Participant
Correct. And say in the last few quarters or maybe year or two, we were investing a lot in terms of branches etc to capture more of LTL that I believe is yet to ramp up and play out.
Vineet Agarwal
No, we did about 40ish branches last year. This year has been a little slow, but I think it will start ramping up more towards I would say next year.
Unidentified Participant
Just one clarification on CVS you mentioned we’ll also have to retire some capacity next year. I mean by.
Vineet Agarwal
So not, not next year. It was supposed to be next year but it has been extended by the government.
Unidentified Participant
Extended by how much? Sorry, I think by three or four years. Okay,
Vineet Agarwal
Three years, right Ashish? Sorry.
Ashish Tiwari
Yes, 20, 28.
Unidentified Participant
Okay, fair enough. Thanks. Thank you.
Unidentified Participant
Thank you. So we have the next question from Mr. Divyansh. So please proceed with your question. Mr. Devranch, are you here?
Unidentified Participant
Yeah. Hey. Hey Vineet, can you hear me?
Vineet Agarwal
Yes, hi. We can.
Unidentified Participant
Yeah. Hey, a couple of questions. I joined a bit late. So with the GST announcement, what at least what came in media is that people stop. The OEM stopped shipping the vehicles to the dealers because their GST structure they wanted to optimize on it. So the question is that did that lead to let’s say more revenue in our SCS business because we were storing the vehicles in the yards. Is there any linkage to that which, let’s say drove revenue in SCS division for us in this quarter?
Vineet Agarwal
See, we do not make that much money or that much revenues if the vehicles are just standing in the yard. Obviously the movements help us to drive revenue growth. So yes, this stockyards increased in the last three, four months because capacity that was being produced and inventory needed to be kept in different places, which we did maintain and some revenues did. We did derive some of that, but it was not significant enough to say that this was the uptick the uptick is because of the movements as you saw the number of rakes that we were able to load.
I mean at some point we were loading four rakes a day. Four five breaks a day across the country. It was that kind of. In fact in the last week of September we all loaded almost seven, eight rakes a day. That kind of movement was happening for us. So it is not because of the. Just the warehouse.
Unidentified Participant
Storage. Yeah got it. And just these let’s say how has been. Let’s say this Diwali season has the. Because now let’s say given the 22nd of September was the cutoff date and then Diwali demand and everything which would have spilled over post 30th September. So any let’s say insight that you can give on this quarter? How has it been both on let’s say freight because of SME business getting any upshoot or any. Anything on the auto business.
Vineet Agarwal
As I said, you know this has continued till in October also but I we do not see that kind of movement in Novemb perhaps a little bit in December simply because it is the end of the financial year for several MNCs. It’s also the end of then March is better because it’s a financial year for Indian companies. So I think overall net net we do not think that the kind of jump in volumes we saw will get repeated very soon. Not till March. However the the sentiment has changed to some extent and that should help the MSME etc growth that you talked about got.
Unidentified Participant
And just the last question. We were planning to get an approval for SUV AFTO or train rakes. Not sure if anything was mentioned but I haven’t last let’s say two, three con calls. Nothing has been mentioned. Just wanted to check on that.
Vineet Agarwal
We did place an order I think we mentioned it in the last quarter call that we placed an order for two such rakes that will get delivered at the end of next year.
Unidentified Participant
Next financial year or less.
Vineet Agarwal
End of. I think it’s next.
Ashish Tiwari
Next financial year.
Unidentified Participant
Yeah 27.
Ashish Tiwari
Yeah made of. Let’s say made of FY27
Unidentified Participant
Got. Got under. Yeah that’s it. Thank you and all the best.
Vineet Agarwal
Thank you.
Simran Sharma
Thank you sir. We have no further questions. We can wait for some time as the management suggests.
Ashish Tiwari
Yeah we can wait for some minutes. Maybe a minute or two.
Simran Sharma
Mr. Divyansh is back with us.
Unidentified Participant
Hey many. Just one question on the TCI Concord business. Just wanted to understand how does it work. So Concord will get the business or TCI generates the business and let’s say uses concourse infra cloud is a. Let’s say sales cycle or revenue generation happen there.
Vineet Agarwal
Yeah, exactly what you said in terms of the business is generated by tci. And of course sometimes we take the help of Concord also, but. And then we use the service, the infrastructure of Concord, whether it is the rakes or whether it is the terminals to fulfill the customer contact. Sometimes the containers don’t even need to come to the terminals. It could be picked up from the factory of the customer and delivered to their customer to their factory directly via trains. Or sometimes there’s a first mile, last mile element into some of the contracts. And sometimes we do only piecemeal.
Also it could be two containers, five containers and things like that also. So. So there is a multiple types of models that we operated in the joint venture.
Unidentified Participant
So when you said that let’s say that container that Adani’s entry is affecting it was for Concord business. Right?
Vineet Agarwal
Exactly Yeah,
Unidentified Participant
But then if TCI generates the business, it can also use Adani as a.
Vineet Agarwal
No, we cannot for the joint venture. We. We are. Since it’s a joint venture with our own. With a. With Concord who is an asset owner. We are. We will work.
Unidentified Participant
But can we do it in the SCS business? That was my question. Maybe not concur, but. So we are bound to use either Concord or no one else. Something like that.
Vineet Agarwal
Right of first refusal with Concord.
Unidentified Participant
Got it. And then so how do you see this playing out? Let’s say private player typically is more efficient than a government player. Do you see any headwind coming? Because you are saying that let’s say reaching 12% through subsidiaries growth. And if Concord is facing competition from let’s say Adanis of the world. So how can we. Is there a plan to counter that thing?
Vineet Agarwal
Well, you know, Concord itself is helping us counter that with their strategies in terms of pricing or in terms of the availability of certain terminals. And of course, you know, customers also like us because we provide an end to end solution. So there are. There are. We have a usp. So I think we are continuously working on that. There will be some pressures and also there are certain niches. You know, each company works on different areas and not necessarily on every area. So some things we do better, something somebody else does better.
Unidentified Participant
Got. Got it. And just. Thank you.
Simran Sharma
Thank you, sir. The next question is from Mr. J. So please go ahead.
Unidentified Participant
Yeah. Hi, good afternoon. Hawaiian models.
Vineet Agarwal
Yes,
Ashish Tiwari
Yes, please go ahead.
Unidentified Participant
Yeah, so this question relates to the supply chain segment. What we are seeing is that over last three, four years our growth has been in mid teen. Now it has also crossed you can say 30% in this quarter. Of course with the GST impact however our margins has been steadily coming down from six and a half to five and a half percent kind of a thing at the bit level on the console part of course the capacity addition might be you can say having some cost sources, no revenue recognition by what we can expect when we can expect margin to rebound or is is it the new normal to look at this five and a half of six percent kind of a margin.
Ashish Tiwari
I think it’s also including the cold chain so while the external margins are okay they are constant and stable consolidated margin have a cold chain impact where we do have a investment last year so probably their EBIT margins are a little bit on under pressure.
Unidentified Participant
Got it. Thank you so much.
Simran Sharma
Thank you sir. There are no further questions now I’m handing over the floor to Mr. Ashish Tiwari for his closing comments.
Ashish Tiwari
Thank you Simran and thank you everyone for joining today out of your busy schedule. I know that it’s a quite hectic for you to join Call there various calls. I hope that we have answered all your questions. In case you have any further question please write us to email ID which is given on the investor call. Our next call would be next year for quarter three so I want to wish you very Happy New Year in advance and Merry Christmas. Thank you.
Vineet Agarwal
Thank you. Best wishes.