Western Carriers Ltd — Q3 FY26

Western Carriers (India) Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=JvzKj6Abry4 Published: 2 months ago

0:00 Ladies and gentlemen, good day and welcome to Western Carriers India Limited. Q3 FI26 earnings conference 0:07 7 seconds call hosted by MEFG End Time India Private Limited. As a reminder, all participant lines will be in the listenon mode and there will be an 0:16 16 seconds opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an 0:25 25 seconds operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now 0:33 33 seconds hand the conference over to Mr. Arian Sumra from MFG and Time India Private Limited. Thank you and over to you. 0:42 42 seconds Thank you. Good afternoon everyone. I welcome you all to the Q3 and 9 months FI26 earnings conference call for Western Carriers India Limited. To 0:51 51 seconds discuss this call's business performance, we have from the management Mr. Kesia, CEO, CFO and wholetime director. Before we proceed with the 1:00 1 minute call, I would like to mention that some of the statement made in today's call may be forward-looking and may involve risk and uncertainties. For more details, kindly refer to the investor 1:08 1 minute, 8 seconds presentation and other filings that can be found on the company's website and on the stock exchanges. Without further ado, I would like to hand over the call to the management for the opening 1:16 1 minute, 16 seconds remarks and then we can open the floor for Q&A. Thank you and over to you Ganesa. 1:23 1 minute, 23 seconds Thank you Arian. Good morning everyone and thank you for joining us on the Q3 earnings call of Western Carriers India 1:30 1 minute, 30 seconds Limited. It's a pleasure to me to be joined by my colleagues Ashish Sapna and Sodia. We truly appreciate your time and 1:39 1 minute, 39 seconds continued interest in our journey. Over the course of this call, I will walk you through key developments and financial 1:47 1 minute, 47 seconds and operational performances for the quarter. And before opening the floor for questions, I would like uh to begin 1:56 1 minute, 56 seconds with a small global snapshot which I think is very important. What I will do is while we talk about global and India 2:05 2 minutes, 5 seconds I will interject with you know our company specific information and how it relates to the whole matter. So let's 2:12 2 minutes, 12 seconds begin uh with the big picture the global economy in 2026 according to the latest forecast from 2:20 2 minutes, 20 seconds IMS world growth is holding steady at around 3.3% this year with a slight slight dip to 3.2% 2% expected in the 2:29 2 minutes, 29 seconds next. Inflation is cooling all across most advanced economies thanks to coordinated monetary policy efforts, but 2:37 2 minutes, 37 seconds it's returning to target levels more gradually in places like the US. 2:42 2 minutes, 42 seconds Advanced economies are chucking along at a modest 1 and a half to 2% pace. While the emergent markets powered by tech 2:49 2 minutes, 49 seconds investments, fiscal support and private sector are providing the real engine of growth averaging about 4%. The World 2:57 2 minutes, 57 seconds Bank echoes this cautious optimism, projecting global expansion at 2.6% for 2026 with resilience amid trade 3:06 3 minutes, 6 seconds tensions, but downside risks from potential inflation surprises. 3:11 3 minutes, 11 seconds Of course, this global backdrop isn't without its risks. Escalating trade frictions, geopolitical hotspots, and a 3:19 3 minutes, 19 seconds re-evaluation of tech expectations could tilt things downward. On the flip side, policy makers are focused on building 3:27 3 minutes, 27 seconds fiscal buffers, maintaining price stability, and pushing structural reforms forward. 3:34 3 minutes, 34 seconds Now, zooming into our own industry, the global logistics outlook for 2026 and beyond. We are witnessing profound 3:42 3 minutes, 42 seconds transformation as an industry driven by increasing supply chain complexities, rapid adoption of AI and digital 3:49 3 minutes, 49 seconds platforms, and a heightened focus on sustainability. The 4PL market, which is all about orchestrating end-to-end 3:56 3 minutes, 56 seconds networks rather than just moving goods, is booming. According to President's Research, current estimates peg the 4:04 4 minutes, 4 seconds global POPL market at around 75 to 82 billion US with projections showing it 4:13 4 minutes, 13 seconds come climbing to about 130 to 150 US billion dollars over the next decade. 4:19 4 minutes, 19 seconds This means a growing ker of 7 to 8% from here onwards for the next decade. What's 4:27 4 minutes, 27 seconds fueling this is rising e-commerce penetration demands which is demanding seamless multi-provider execution and 4:35 4 minutes, 35 seconds real-time data integration. There is a major push for green logistics to meet emission targets and the need for 4:42 4 minutes, 42 seconds resilient networks in a world prone to disruptions. 4:46 4 minutes, 46 seconds North America and Europe still dominate adoption, but Asia Pacific is exploding thanks to manufacturing hubs and digital 4:54 4 minutes, 54 seconds commerce growth. Overall, the broader logistics outsourcing market is a massive 1.4 trillion in 2026 and 5:03 5 minutes, 3 seconds expected to reach 2.2 trillion in the next decade. Technology like in every other industry is a gamecher here. AI 5:12 5 minutes, 12 seconds for predictive analytics, machine learning for root optimization, cloud platforms for visibility, control towers 5:20 5 minutes, 20 seconds that integrate everything. These are all norms. Now, sustainability is a differentiator with companies prioritizing lowcarbon solutions to meet global and customer demands. 5:33 5 minutes, 33 seconds The global shift towards strategic integrated supply chain orchestration is creating enormous opportunities in our 5:40 5 minutes, 40 seconds country and abroad. Business aren't looking for siloed services anymore. 5:45 5 minutes, 45 seconds They want partners who can manage these complexities, mitigate these risks and deliver efficiently across borders. 5:54 5 minutes, 54 seconds That's exactly where 4PL providers like us come forward. We coordinate multiple carriers, optimizing multiple networks 6:02 6 minutes, 2 seconds and leveraging data to drive decision making, better decision making. India continues to stand out as a beacon of growth in an otherwise uneven world. 6:12 6 minutes, 12 seconds Projections for India's real GDP are strong forecasts ranging from 6 and a half to 7 and a half% supported by 6:20 6 minutes, 20 seconds robust domestic consumption, steady investment inflows and ongoing policy reforms. IMF sees us at 7.3% for the 6:30 6 minutes, 30 seconds fiscal while Moody projects us at 6.4 for fiscal 27 placing us among the fastest growing G20 economies in the 6:39 6 minutes, 39 seconds world driven by strong consumer demand and a very stable banking system. 6:44 6 minutes, 44 seconds Goldman Sachs has upgraded its views to 6.9% factoring in recent trade developments which I will touch on 6:51 6 minutes, 51 seconds shortly. structurally India's powerful advantages a young skilled workforce massive infrastructural expansion 7:00 7 minutes accelerating digital adoption adoption and reforms that are making it easier to do business inflation is 7:09 7 minutes, 9 seconds easing towards the Reserve Bank of India target creating a supportive monetary environment even as the global 7:17 7 minutes, 17 seconds uncertainties persist the Indian logistics sector is riding this economic wave and evolving very rapidly. 7:25 7 minutes, 25 seconds Markets estimate project the overall faith and logistics industry to reach between USD 380 to 450 billion by 2627 7:35 7 minutes, 35 seconds growing at a ker of anywhere from 8 to 10% fueled by e-commerce industrial freight and expo export growth. 7:43 7 minutes, 43 seconds Government initiatives are actually supercharging this. the PMGATI Shaki for multimodal integration, the national 7:50 7 minutes, 50 seconds logistics policy for efficiency gain and platforms like the ULIP for real-time visibility and transparency are game 7:58 7 minutes, 58 seconds changers. These efforts are already improving India's global logistics performance. We've climbed rankings and 8:05 8 minutes, 5 seconds are on track to reduce our cost from the current 13 14% towards singledigit benchmarks. Last mile delivery is a huge 8:13 8 minutes, 13 seconds frontier with customer expectations from speed and affordability driving innovation at breakneck speed. 8:21 8 minutes, 21 seconds Technology is transforming our operations. AI is being used for tools like demand forecasting, predictive 8:28 8 minutes, 28 seconds maintenance, root optimization, blockchain for secure tracking and sustainable practices like electric 8:35 8 minutes, 35 seconds fleet and green warehouses are becoming more and more standard. Excuse me. What 8:43 8 minutes, 43 seconds really excites me are the industry tailwinds now and growth opportunities for major recent developments. First, 8:51 8 minutes, 51 seconds the landmark India EU free trade agreement which concluded just weeks ago and is being dubbed as what people say 8:59 8 minutes, 59 seconds the mother of all deals. This pact covers nearly all tariff line eliminating or reducing duties on close 9:06 9 minutes, 6 seconds to 97% of EU goods exports to India and almost n 99% plus of Indian goods to the 9:13 9 minutes, 13 seconds EU. It's set to double EU exports to India by 2032 boosting bilateral trade volumes 9:21 9 minutes, 21 seconds dramatically for key Indian sectors like textiles, chemicals, engineering goods, farmer, leather, gems and jewelry, 9:28 9 minutes, 28 seconds marine products. It means super sharp competitiveness in Europe through simplified customs and better market 9:35 9 minutes, 35 seconds access for logistics providers like us who have a large share in the exent trade. This translates to surging 9:42 9 minutes, 42 seconds container volumes, more balanced trade flows, smoother crossber processes and heightened demand for end-to-end 9:49 9 minutes, 49 seconds logistics. You'll see increased multimodal coordination, compliance management and efficient fit execution 9:57 9 minutes, 57 seconds along the e India EU corridor opportunities that integrated po player like us are perfectly positioned to 10:05 10 minutes, 5 seconds capture. Similarly, the recent India US inter trade deal announced again just a few weeks ago is another major boost. 10:15 10 minutes, 15 seconds Under this framework, the US tariff on Indian goods have been reduced to 18% down from the earlier 50% 10:22 10 minutes, 22 seconds and in exchange for eliminating or reducing duties on US industrial goods and agri products like tree nuts, fruit, 10:29 10 minutes, 29 seconds soya, bean etc. India is also committed to purchasing over US 500 billion in US 10:37 10 minutes, 37 seconds energy, tech, agri and other products over 5 years which improves market access and pricing for Indian exporters 10:46 10 minutes, 46 seconds in textiles, leathers, gems, jewelry, engineering goods, marine products and beyond. This result would be stronger 10:53 10 minutes, 53 seconds exim cargo movement both ways incoming as well as outgoing, better container utilization across trade lanes, more 11:01 11 minutes, 1 second balanced back halls and fresh demand for sophisticated supply chain management especially in multimodal and cross border. 11:09 11 minutes, 9 seconds These deals align perfectly with India's export ambitions creating tailwinds for India's logistics and volume ramp up and 11:18 11 minutes, 18 seconds these align perfectly with your company's vision and business for for western carriers and our customers. 11:26 11 minutes, 26 seconds previous for western carriers and our customers. 11:32 11 minutes, 32 seconds These favorable conditions support purchasing power, temper operating inputs such as fuel and finance and 11:39 11 minutes, 39 seconds create room for rate sensitive capex in assets and freight upgrades as we align 11:46 11 minutes, 46 seconds continuously for reliable cost effective logistics execution to ensure customer delight. Your company has already 11:54 11 minutes, 54 seconds completed a capex of more than 30 crores in this year mostly into heavy equipment, specialized containers and 12:02 12 minutes, 2 seconds road assets in line with our business policies as well as in line with the trade agreements. 12:10 12 minutes, 10 seconds Now speaking of government support, I would like to dive uh shortly into the 12:17 12 minutes, 17 seconds union budget which truly paces the logistics and trade facilitation sector at the very heart of India's infra and 12:25 12 minutes, 25 seconds economic growth. This isn't just about big numbers. The numbers are obviously very impressive with the public capex 12:33 12 minutes, 33 seconds hike to a record 12.2 2 lakh crores and nearly 5.98 lakh cr allocated 12:40 12 minutes, 40 seconds specifically to transport and logistics ecosystems including roads, railways, ports, waterways and multimot connectivity. 12:52 12 minutes, 52 seconds What makes this budget stand out for us is in the logistics world is the bold transformative reforms in customs and 13:01 13 minutes, 1 second cargo clearance processes. 1. These changes are designed to shift from an officer dependent, complianceheavy 13:09 13 minutes, 9 seconds system to one that's trustbased, digital first, operator centric, and powered by tech ultimately slashing delays, cutting 13:18 13 minutes, 18 seconds costs, and boosting efficiencies across the board. Let me walk you through some of excuse me, the key highlights that 13:26 13 minutes, 26 seconds will directly impact how we operate, partner and serve our global and Indian clients. First, in the spirit of 13:35 13 minutes, 35 seconds of a whole of the government approach, the government agencies are being encouraged to leverage authorized economic operator AEO accreditation for 13:44 13 minutes, 44 seconds preferential treatment and clearing their cargo. I'm happy to uh inform that your company is a is uh AEO certified. 13:52 13 minutes, 52 seconds It has been certified for years and this builds on the existing AO framework by extending benefits like longer duty 14:00 14 minutes deferral payments from 50 to 30 days for tier 2 and tier 3 AOS as well. energable manufacturer importers giving trusted 14:08 14 minutes, 8 seconds players more uh cash flows, flexibility and faster processing for integrated providers like Western carriers. This 14:16 14 minutes, 16 seconds means smoother, more predictable flows and handling shipments for accredited clients or government link cargo which 14:24 14 minutes, 24 seconds is the bulk of our customers. Next, the customer warehousing framework is undergoing a complete overhaul into a 14:31 14 minutes, 31 seconds warehouse operator centric system. We're moving away from the old model of heavy officer dependent approvals to one on 14:39 14 minutes, 39 seconds self declaration electric tracking and riskbased audits. This will dramatically reduce transaction delays 14:46 14 minutes, 46 seconds and compliance burdens allowing operators to manage bonded facilities more efficiently, turn inventory faster, and integrate 14:55 14 minutes, 55 seconds warehousing seamlessly into broader multimodal networks. 15:01 15 minutes, 1 second The current budget proposes an infrarisk guarantee fund aimed at mitigating construction phase risks for private 15:09 15 minutes, 9 seconds developers which should prove a bo for attracting private investment into logistics infrastructure. This can prove 15:17 15 minutes, 17 seconds a boost for the multimodal logistics parks which are key enablers of government's logistics national plans. 15:24 15 minutes, 24 seconds MMLP's success depends on high cargo throughput, seamless last mile connectivity, performance link incentives and above all land parcels 15:33 15 minutes, 33 seconds and their development. Under the Gati Shaki Yoja, several current MMLPs are newly launched or advancing towards 15:41 15 minutes, 41 seconds operationalization in this year and the next. This includes our very own Devalia MMCT which is near Mobi which we 15:50 15 minutes, 50 seconds discussed in detail last time and it's spread over as you know it's near Mobi spread over 32 acres is a state-of-the-art facility proving to be 15:59 15 minutes, 59 seconds a boon for the local industry around it including tiles chemical agree etc. Well 16:06 16 minutes, 6 seconds done parks like ours can help unlock major cost savings as well as substantially improve the t thereby 16:13 16 minutes, 13 seconds providing a major advantage to customers in its hinterland and subsequently to the end customers. 16:21 16 minutes, 21 seconds Again budget 2627 envages a new east west dedicated freight corridor linking 16:27 16 minutes, 27 seconds Danuni outside Kolkata in West Bengal to the east in the east to Surat in Gujarat in the west. is uh uh crossing the 16:37 16 minutes, 37 seconds entire bet of the country with more than a 2,000 kilometer span. And this will greatly complement and enhance the 16:44 16 minutes, 44 seconds service offerings of the two existing corridors which are near completion and running efficiently, the eastern and the 16:51 16 minutes, 51 seconds western corridors. The freight corridors by design allow for far lower transits and far greater efficiencies than using 16:59 16 minutes, 59 seconds passenger corridors. They were pro proving to be a gamecher for multimodal logistics. The budget earmarks 10,000 17:07 17 minutes, 7 seconds crores for domestic container manufacturing. A fledgling sector in India which will be and should be a shot 17:15 17 minutes, 15 seconds in the arm and turbocharge local production we away from our import dependence mostly from Chinese container 17:22 17 minutes, 22 seconds suppliers for both our domestic and exam needs. In short, I feel the union budget isn't just allocating funds. It's 17:30 17 minutes, 30 seconds delivering a comprehensive forward-looking blueprint that makes India's logistics ecosystem 17:37 17 minutes, 37 seconds far faster, smarter, more trusted, and globally competitive. For us and our partners, these are the kind of 17:44 17 minutes, 44 seconds structural tailwinds that turn challenges into sustained growths. 17:50 17 minutes, 50 seconds for western carriers. I would like to now delve into uh uh you know the numbers the boxes that we've delivered 17:57 17 minutes, 57 seconds this year and look at how all of these uh positive tailwind are helping us move 18:04 18 minutes, 4 seconds in our container movement and what the numbers are. So giving you guys a feel of the numbers and I'll deep dive into 18:11 18 minutes, 11 seconds it as we go ahead is uh the comparative numbers uh for quarter 3 18:21 18 minutes, 21 seconds 25 26 compared to quarter 3 24 25 yearon year. So if you see uh the domestic 18:30 18 minutes, 30 seconds numbers that we've done is 23,565 for quarter 3 uh this year compared to 18:37 18 minutes, 37 seconds 20,516 for last year. This uh translates into 3,49 18:44 18 minutes, 44 seconds additional uh boxes which is a growth of 14.86% in the domestic business. 18:50 18 minutes, 50 seconds Similarly for EXIM, our number stands at 38638 containers compared to 33787 18:58 18 minutes, 58 seconds last year. This translates into a growth of 4,851 boxes and percentage wise is about 14 and 14.36%. 19:09 19 minutes, 9 seconds If you add both of them, we get an absolute increase of close to 8,000 boxes in the quarter and a net growth 19:17 19 minutes, 17 seconds combined of over 14 12% quarteron quarter showing the growth that your company has managed to do. 19:26 19 minutes, 26 seconds Uh to begin with our operational momentum 19:34 19 minutes, 34 seconds remained strong like I said in port three domestic containers continue to gain trans you know traction eggs in 19:43 19 minutes, 43 seconds containers as you can see continued to gain traction and if you look at uh driving in further delving in further 19:52 19 minutes, 52 seconds into both the sectors which is exit and domestic we can see that uh in exam you know exim business is showing signs of 20:01 20 minutes, 1 second you know sustained growth in quarter 3 the growth was over 14% like I said it is excellent sign for your company and 20:09 20 minutes, 9 seconds this trend is expected uh to continue as I will explain for the going forward the 20:16 20 minutes, 16 seconds western DFC is expected to be complete by March 2026 that is the end of next 20:22 20 minutes, 22 seconds month to J&P which is expected to give a very big boost to exim business on the 20:29 20 minutes, 29 seconds north to west corridor. It's a very positive sign for the country as well as for your company. We also have a very 20:37 20 minutes, 37 seconds strong order book uh for rest of the year and for the years going forward giving us additional confidence and comfort in growing our exam business. 20:47 20 minutes, 47 seconds Realization is also expected to improve as we grow back our exam business after uh what has been uh three or four 20:56 20 minutes, 56 seconds quarters of uh you know very hard geopolitical situation as you're well aware there is a decrease uh a slight 21:03 21 minutes, 3 seconds decrease in exim need by about 2% uh due to the less demand primarily in north India but we are seeing that the demand 21:12 21 minutes, 12 seconds is now starting to pick up in this this quarter similarly Talking about uh the domestic business, your company has 21:21 21 minutes, 21 seconds shown excellent growth 14.86 86 uh quarter on quarter to stand at 38,638 21:29 21 minutes, 29 seconds PUS versus 33,787 PUS in uh quarter 3 FY25 21:38 21 minutes, 38 seconds seeing robust we are seeing very robust customer demand uh for general containers as well as for shipping 21:46 21 minutes, 46 seconds specialized euse your company has procured substantial amount of specialized containers to meet client requirements 21:53 21 minutes, 53 seconds Our current fleet of specialized containers owned by the company is over 1,000 BUs. Total capex for the year uh 22:03 22 minutes, 3 seconds for H1 was over 30 crores purchase of which has gone into the purchase of these specialized EUs, specialized 22:11 22 minutes, 11 seconds handling equipment like deep sackers and of course uh you know in you know uh commercial vehicles. 22:19 22 minutes, 19 seconds Capex is obviously being driven by our long-term commitment with large customers including the,089 cr of work 22:28 22 minutes, 28 seconds order that we got from vidant earlier last year as well as the other mega orders like gindle stainless for both the domestic as well as exam business. 22:38 22 minutes, 38 seconds Our service offerings from our own MNC at Dealia like I touched on at Mori continues to expand with our fixed 22:47 22 minutes, 47 seconds services pan India including uh CMLK in the north, Bangalore in the 22:54 22 minutes, 54 seconds south as well as Kolkata and Gojhati in the east. Valia gives us a lot of scope on growing business from western India 23:02 23 minutes, 2 seconds which fits very well for our long-term vision. looking at some of the new businesses that we have done in this 23:09 23 minutes, 9 seconds year. Obviously, I touched on ICD Bealia which is a leading MMC which we launched in July of last year. Specially designed 23:19 23 minutes, 19 seconds heavy containers made for carrying uh metals is a mandate basis. So what we've 23:25 23 minutes, 25 seconds received this capex has gone into a major boost for our company's growth. 23:32 23 minutes, 32 seconds We have also commenced rail services to monta which is uh something which we started this financial we have some good 23:41 23 minutes, 41 seconds increase in PPD as well as import to use at various ports in the country we seeing a lot of demand hence the major 23:49 23 minutes, 49 seconds capeex we planned last year and intention of further capex for the remaining financial is there the mmc is 23:56 23 minutes, 56 seconds giving us a lot of focus on growing businesses from western India this financial which is fitting very well with our long-term vision of getting 24:05 24 minutes, 5 seconds more business from the western part of the country as you know we are getting long-term commitments with large customers and India which we have 24:13 24 minutes, 13 seconds already talked on and both these projects are now in full steam and gathering for the pace going forward. So 24:20 24 minutes, 20 seconds as you can see uh uh some some on on the operation side things are looking very very good. Uh 24:30 24 minutes, 30 seconds coming to the numbers I wanted to touch on them. Uh you know western carriers has delivered a resilient performance 24:38 24 minutes, 38 seconds uh and grown quarteronquarter revenue from operations for quarter 3 FI26 is 24:45 24 minutes, 45 seconds 478 crores. Evida stands at 24 crores, profit after tax at 11 crores. If we 24:53 24 minutes, 53 seconds compare quarter on quarter, which is a good key sign given the geopolitical situation, you can see that the revenue from 25:02 25 minutes, 2 seconds operations from quarter 2 to quarter 3 has expanded almost 9% at 478 crores 25:10 25 minutes, 10 seconds compared to 440 crores the previous quarter. Similarly, the AIDA has expanded from 19 crores in Q2 to 24 25:19 25 minutes, 19 seconds crores giving a quarteron quarter growth of 27%. 25:24 25 minutes, 24 seconds Aid thea margin which has also grown with the numbers has grown from 4.3% in 25:32 25 minutes, 32 seconds the last quarter to about 5% in this quarter. PAT has similarly expanded 22% 25:39 25 minutes, 39 seconds from 9 crores in quarter 2 to 11 crores in quarter 3. So and similarly we see 25:45 25 minutes, 45 seconds that our PAT margins have also improved uh from 2% to 2.3%. 25:51 25 minutes, 51 seconds So these these are all uh good signs. It shows that we are making uh progress in the right earnness. Our asset light 26:00 26 minutes multimodal model once again has proved to be resilient. It is enabling us to deliver high service reliability across 26:08 26 minutes, 8 seconds all customer segments. We are seeing great scope uh going forward. The volumes are growing and expanding during 26:16 26 minutes, 16 seconds the quarter and looking ahead to quarter 4 and remainder of the year. Our focus remains crystal clear. It's consistent 26:24 26 minutes, 24 seconds execution, techdriven operational efficiency and continued enhance enhancement of our capabilities to 26:32 26 minutes, 32 seconds deliver customer delight. These priorities help us cater effectively to our customers evolving needs while 26:41 26 minutes, 41 seconds continuing to generate sustainable long-term value for our stakeholders. 26:46 26 minutes, 46 seconds Thank you once again for your continued trust in Western carriers. We can now open the floor for Q&A. 26:54 26 minutes, 54 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 27:01 27 minutes, 1 second star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you 27:08 27 minutes, 8 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll 27:16 27 minutes, 16 seconds wait for a moment while the question queue assembles. 27:26 27 minutes, 26 seconds Our first question comes from the line of Pratik Sha from Investing Alpha. Please go ahead. 27:33 27 minutes, 33 seconds Hello. Yeah. Hi sir. Thank you for the opportunity. Uh I hope I'm audible. 27:40 27 minutes, 40 seconds Yes, please go ahead. 27:42 27 minutes, 42 seconds Yeah. Uh so my first question is on the PNL side. So the gross margins have declined from 14% to 12% year over year. 27:51 27 minutes, 51 seconds So which cost components drove this drop? 28:01 28 minutes, 1 second Yeah. So uh Pratik there is a uh there is like I pointed out there is a slight decrease in the exim lead by about 2%. 28:09 28 minutes, 9 seconds So the volumes have grown up and you know the volumes have grown up uh their bidder the margins has improved the PS 28:17 28 minutes, 17 seconds have improved. So we are on the right track now to regain uh you know the margins and profitability of earlier years and quarters. 28:30 28 minutes, 30 seconds Okay. And uh another question is uh as the largest platinum associate partner of Encore, are there any changes in rake 28:39 28 minutes, 39 seconds allocation or tariff structures or even volume commitments that may affect FI27 economics? 28:49 28 minutes, 49 seconds Uh no Pratik, we we maintain and have received all support from Concore being their largest business associate uh and 28:58 28 minutes, 58 seconds AP uh over the last several years and decades and uh we don't see any hindrance in the relationship going 29:05 29 minutes, 5 seconds forward. In fact, it is getting better as the volumes keep growing and it's a win-win relationship for both us and 29:14 29 minutes, 14 seconds Concord as we work very closely with them in trying to increase our service offerings both for domestic as well as 29:21 29 minutes, 21 seconds exempt cargo and so we don't see any major headwinds in that regard at all. 29:32 29 minutes, 32 seconds Okay. And so with 16 leased warehouse in 12 states what uh what is the plan for 29:39 29 minutes, 39 seconds expanding warehouse capacity or even automation to support higher margin 4PL operations. 29:48 29 minutes, 48 seconds So Pratik our warehousing play is completely dependent on the customer uh basis the customer's requirement. We 29:56 29 minutes, 56 seconds create a customized uh solution of which warehousing is a part and parcel of it. 30:02 30 minutes, 2 seconds We do not uh uh build or operate warehousing as a business per se but rent out or rent out warehousing as per 30:12 30 minutes, 12 seconds requirement for 4PL as well as first mile and last mile of the customer. 30:16 30 minutes, 16 seconds Automation is something which is a key focus for us. So we've been working on large warehousing play and automation 30:25 30 minutes, 25 seconds including the best WMSs uh to ensure the FIFO terms etc that the customer needs and so we our warehousing 30:34 30 minutes, 34 seconds play is very well aligned to what our customer needs. It's it's close to the market that they need to service. The size depends on the on the requirement 30:43 30 minutes, 43 seconds of the customer and so forth. So it's a very flexy play and we don't build uh you know a large warehousing play and 30:51 30 minutes, 51 seconds then look for customers. We actually get customers and then do it. 30:58 30 minutes, 58 seconds Got it sir. So one last question. So do you plan to explore any acquisitions? 31:06 31 minutes, 6 seconds [cough] 31:06 31 minutes, 6 seconds There are [clears throat] no current plans Pratik but uh you know we are neither actively looking nor actively dissuading. If something comes up, we we 31:15 31 minutes, 15 seconds will always take a look at it obviously from a business perspective but we are not uh in the market currently scouting for something actively. 31:23 31 minutes, 23 seconds Understood sir. Got it. Thank you. Thank you Pratik. 31:28 31 minutes, 28 seconds Thank you. Our next question comes from the line of Costa Bubna from BMSPL. Please go ahead. 31:37 31 minutes, 37 seconds Yeah. Hi. Hi Kesh. How are you? 31:41 31 minutes, 41 seconds Good morning Costa. I'm good. How are you? 31:44 31 minutes, 44 seconds I'm good, thank you. Thank you. So I had a few questions. 31:48 31 minutes, 48 seconds Uh first on on the latest concour of concourse, you know, they spoke about intensifying focus on multimodal 31:57 31 minutes, 57 seconds logistic parts, enhancing first mile last mile connectivity and their own integrated logistic offerings. Uh, so 32:05 32 minutes, 5 seconds how does this I mean could this pose a risk to our business model or is there I mean could you could you tell me what 32:14 32 minutes, 14 seconds this really means what they're trying to do? Have they had conversations with you? Uh that's the first question. 32:22 32 minutes, 22 seconds Sure. So cost of it's uh it's actually complimentary. It's not something that as a policy they do not compete with 32:30 32 minutes, 30 seconds their own business associates. We work with them in getting you know further businesses. So it's not that Concore is competing with us or any other business 32:39 32 minutes, 39 seconds associate for that matter of fact. They are wanting to expand their service uh you know profile which is absolutely 32:46 32 minutes, 46 seconds fine. They are well within their rights to do that. It doesn't really affect us directly nor does it really affect our 32:54 32 minutes, 54 seconds relationship with them as we do you know uh rail part is one part of the business that we do. We do basically complete 33:02 33 minutes, 2 seconds supply chain management. So we are absolutely you know absolutely aligned with them and we are well aware of the service offerings that they've offered 33:10 33 minutes, 10 seconds because whatever they offer is basically a pass through the business associates itself. So it's not uh it's not a major 33:18 33 minutes, 18 seconds concern for us. It's actually a helpful thing. 33:22 33 minutes, 22 seconds Okay. And uh now you know so we speak about the DFCC getting commission then 33:29 33 minutes, 29 seconds you have repeatedly said you know the market will market conditions will get better once uh the trade deals or some 33:39 33 minutes, 39 seconds clarity comes on the trade deals. Now we've got that also more or less clarified. 33:45 33 minutes, 45 seconds Uh so I mean now I wanted to understand how do these factors 33:53 33 minutes, 53 seconds affect the long-term rates in domestic and exempt because that would then you 34:02 34 minutes, 2 seconds know be the main factor to helping our overall profit profitability apart from volume growth. So now that these things 34:10 34 minutes, 10 seconds are falling in place, I wanted to understand uh you know not I mean I know 34:18 34 minutes, 18 seconds it's uh it won't be accurate to give guidance but I mean how do you see all of this playing out for the company now? 34:29 34 minutes, 29 seconds It's a fair question and uh you know you're right. I've been pointing out and hoping for this uh for several quarters 34:37 34 minutes, 37 seconds as you can see once uh you know the geopolitical situation has stabilized in the last quarter going forward. You can 34:44 34 minutes, 44 seconds see it immediately reflecting in our numbers not only in the exam numbers uh which is completely aligned to the 34:52 34 minutes, 52 seconds geopolitical situation but also we've been able to do very large growth in our domestic numbers which has not much to 35:00 35 minutes do with uh you know global geopolitics that's something that we've worked on very hard for the last four six eight quarters in growing our service 35:08 35 minutes, 8 seconds offerings domestically so we are in a situation where we are seeing a tremendous growth we Like I said, uh 35:16 35 minutes, 16 seconds almost 8,000 TUS plus is what we've done quarter on uh you know year on year on quarter 3 and these numbers are you know 35:25 35 minutes, 25 seconds tremendous given uh the situation that it's not still 100% uh normalized in the geopolitics but we can see that the 35:33 35 minutes, 33 seconds growth is coming and what happens is when you have growth in both domestic and exim it becomes a perfect tailwind. 35:41 35 minutes, 41 seconds uh it improves your uh margins, it improves your realizations and more important than that is it improves your 35:48 35 minutes, 48 seconds service levels to your customers because you have more and abundant uh service profiles running for them. Uh the 35:55 35 minutes, 55 seconds routines become quicker, the transits become uh more efficient and we are able to track and trace it much more quickly 36:03 36 minutes, 3 seconds for the customers when uh as compared to when their geopolitics is not good. you know there is less of uh port delays 36:10 36 minutes, 10 seconds there is less of congestions uh the transits are better so it's a win-win both for the customer and for us as a 36:17 36 minutes, 17 seconds company and I see this basically surging further in quarter 4 basis what we were 36:24 36 minutes, 24 seconds able to do in quarter three so this pretends uh really well for us as a company as well as for the country I 36:31 36 minutes, 31 seconds feel could you kind of share some indication on how Will you know even this east to 36:39 36 minutes, 39 seconds west connection of the DFCC the commissioning of uh the current DFCC is about uh the west line I think right 36:46 36 minutes, 46 seconds which is about to be fully commission how will this have an effect impact on our on the rates could you could 36:53 36 minutes, 53 seconds okay sure so cost of see rates is basically just one part of the the 37:00 37 minutes matrix here what happens is I'll give you a simple example say you send a in which is running on the regular route 37:08 37 minutes, 8 seconds not one of your dedicated freight corridors. 37:12 37 minutes, 12 seconds The concept of a dedicated freight corridor is defined in its name. That means the freight corridor is dedicated 37:19 37 minutes, 19 seconds for freight. A non freight corridor DFC movement is something which is competing with passengers or passenger trains and 37:28 37 minutes, 28 seconds that rail line. That means by design it is going to be much much slower than a DFC. What happens with the DFC is your 37:36 37 minutes, 36 seconds movement is far quicker, far more efficient and far more guaranteed. What it does is you are able to get more and 37:44 37 minutes, 44 seconds more business to uh to be hived off from your road transportation. It increases 37:51 37 minutes, 51 seconds [clears throat] competition. It reduces price for the customers. So it's a win-win for the customer, for the country as well as for companies like us 38:00 38 minutes that we are able to get more business opportunities from areas which had not looked at railways as a serious uh 38:09 38 minutes, 9 seconds requirement so far. When it comes to margin, margin cost of depends completely on the route at the time, the 38:17 38 minutes, 17 seconds seasonality and the amount of volumes that you are able to generate. the higher the volumes, the better the frequencies and the more the operations 38:25 38 minutes, 25 seconds efficiencies that you can bring around, the better your margins are. So, it's it's it's hard to give a holistic answer. It's not a a simple answer to 38:35 38 minutes, 35 seconds give, but uh I would like to say if you're able to generate better and uh better volumes and run your supply chain 38:42 38 minutes, 42 seconds more efficiently, your margins will tend to go up. 38:46 38 minutes, 46 seconds Okay, just on your point, if you could just let me ask my last question. uh basically you if if I'm not mistaken most of your volumes come from bulk 38:55 38 minutes, 55 seconds commod like steel etc. Right. Currently uh we have a mix of products cost we we 39:03 39 minutes, 3 seconds have metals, we have industrial chemicals, we have FMCG, pharma etc. So we are quite uh spread out in our uh you 39:11 39 minutes, 11 seconds know uh material and customer offerings because what I was going to ask was is that as the DSC gets commissioned and more industries look towards rail 39:19 39 minutes, 19 seconds transport, how do you see this mix changing to what other industries etc. That's what I was going to ask. 39:27 39 minutes, 27 seconds Yes. So, cost of metals remains a large uh focus area for us primarily because they are custom suited for large 39:34 39 minutes, 34 seconds multimodal supply chain operations. But our offerings over the years has changed. If you if I give you an example 39:42 39 minutes, 42 seconds of my multimodal cargo terminal at uh Mori, you will see that uh it's not uh at all getting much revenues from metals 39:51 39 minutes, 51 seconds but is more focused on industrial products like tiles, chemicals, uh uh food grade products etc. So you know it 39:59 39 minutes, 59 seconds depends on what business you're doing and so a business which was um almost not existing is now growing rapidly for us especially in the domestic business. 40:09 40 minutes, 9 seconds So our focus remains on growing our business holistically. We don't look at growing our business only in the metal sector. Wherever there is an opportunity 40:18 40 minutes, 18 seconds to add value to the customers and run a supply chain efficiently, we try to track it. Our our considerations are very simple that we should be able to 40:27 40 minutes, 27 seconds add value to our customers. If we are not going to add value or improve their supply chains, we don't waste our time on it. 40:35 40 minutes, 35 seconds All right. Thank you so much for the detailed answers. Best of luck and talk to you soon. 40:40 40 minutes, 40 seconds Thank you Kosovo. Thank you for your time. 40:43 40 minutes, 43 seconds Thank you. Our next question comes from the line of Sunidi Johi from NM Capital Advisers. Please go ahead. 40:52 40 minutes, 52 seconds Hi, am I audible? Yes ma'am please go ahead. 40:58 40 minutes, 58 seconds Thank you for the opportunity. Uh so just wanted to understand since the operating cash flow uh remains subdued 41:05 41 minutes, 5 seconds uh what structural changes or uh billing cycle uh improvements are planned uh to restore a positive operating cash flow. 41:15 41 minutes, 15 seconds Yeah, fair question. So the cash flow you know is due to the situation is due to the increase in working capital requirements as the business has been 41:24 41 minutes, 24 seconds growing. uh like I pointed out we've grown about 9 to 10% uh quarterto quarter so that basically for us the raw 41:33 41 minutes, 33 seconds material in our industry is basically working capital so that's where it is uh you know gone in it is expected to 41:39 41 minutes, 39 seconds improve uh very dramatically and quickly as our realization uh increases so 41:47 41 minutes, 47 seconds that's uh that's what it is we we expect our realizations to improve in this quarter and the next and we hope that the cash flows then will start turning. 42:00 42 minutes Okay, understood. And uh with the metals forming 55% of the FY25 revenue, how 42:08 42 minutes, 8 seconds exposed is the company to volatility in metals demand and uh what diversification road map is planned ahead? 42:18 42 minutes, 18 seconds Fair question Suni. So even though 55% of our metals of our business is coming from metals, I want to point out that it 42:27 42 minutes, 27 seconds is quite well hedged in itself that we do metals of all types. We do aluminium, we do zinc, we do steel, we do you know 42:37 42 minutes, 37 seconds other aggregates etc. And all of these metals have a very different uh you know cycle. If you track LME, you know, the 42:45 42 minutes, 45 seconds aluminium prices or the steel prices are not all moving up and down at the same time. So the metals itself creates a hedge because we work on all the metals across the spectrum in the country. 42:56 42 minutes, 56 seconds Similarly, the 45 50% odd of our cargo which comes from non-metals is something which is growing and growing 43:04 43 minutes, 4 seconds exponentially. You will see those numbers stacked in our domestic business. Like I said, businesses like tiles, uh, food gate products, 43:12 43 minutes, 12 seconds industrial chemicals, etc. are growing leaps and bounds. Uh, it's a business which has been growing very fast for us. 43:20 43 minutes, 20 seconds So these industrials and chemicals etc. 43:22 43 minutes, 22 seconds is a business that going forward will uh sort of the growth will outpace the growth of the metals industry. So we are 43:30 43 minutes, 30 seconds basically you know growing towards a 50/50 mix going into the next two or three years. 43:38 43 minutes, 38 seconds Great. Thank you so much and all the best. 43:41 43 minutes, 41 seconds Thank you Sunundi. Thank you for your time. 43:44 43 minutes, 44 seconds Thank you ladies and gentlemen. We take that as the last question for today. I would now like to hand the conference over to Mr. Arian Sumbra for closing comments. Over to you. 43:56 43 minutes, 56 seconds Thank you. I would like to thank the management for taking the time out and to all the participants for the questions. If you have any further questions, feel free to contact us. We 44:05 44 minutes, 5 seconds are NFG in time investor relation advisers to western carriers in the limited. Thank you so much. Thank you sir. 44:14 44 minutes, 14 seconds Thank you on behalf of Western Carriers India Limited. That concludes this conference. Thank you for joining us and 44:21 44 minutes, 21 seconds you may now disconnect your