Gateway Distriparks hosted a conference call on April 26, 2022. In the conference call the management was represented by Prem Kishan Dass Gupta, Chairman & Managing Director; Ishaan Gupta, Joint Managing Director; Samvid Gupta, Joint Managing Director; Sachin Bhanushali, Chief Executive Officer; Sandeep Shaw, Chief Financial Officer and Manoj Singh Senior VP – CFS.

Key takeaways of the call

CFS throughput for Q4FY22 was down by 6% to 87487 TEUs and that for FY22 was up 17% to 373906 TEUs.

Rail business throughput was up 16% (to 90385 TEUs) and 34% (333270 TEUs) respectively for Q4FY22 and FY22.

Rail Logistics business have done exceptionally well in FY22. And this is due to lower passenger operation by IR releasing rail network capacity for container transportation as well as 750km out of 1100 km of WDFC becoming operational thereby reducing transit time providing better predictability and asset utilisation.    However, delays at Chinese ports especially on south of China due to Covid have impacted the sea trade and the situation are expected to return to normalcy soon.

EBITDA per TEU of Rail business in Q4FY22 was Rs 10357, a growth of 7%YoY and 15%QoQ.  However for FY22 it was Rs 9485/TEU, a growth of 7%.

Q4FY22 margin (EBITDA/TEU) got a bump on account of  EO income of Rs 12 crore reported in Q4FY22 on account of profit from sale of land (small parcel of land acquired by Haryana government in garhi haus for a road project).

On annualised basis the EBITDA margin/TEUs looked at is Rs 9000/TEU plus or minus 5%.  

IR rebate of 5% on laden containers and 25% on empty containers is withdrawn by May 1, 2022 (on laden) and from Aug 1, 2022 (on empty containers) by Indian Railways.  The same will be passed on to customers.

NCR and Punjab the company able to outperform the industry growth in Q4FY22 and able to increase market share.  In NCR the ICD business of the company grew by 36% against 15% growth of the industry. And similarly the company grew by 25% vs 18% of industry in Ludhiana.  The market share of the company in NCR improved to 15.85% and that in Ludhiana was at about 35%.

Post surrender of Punjab Conware CFS by Jan 31, 2022, the company shifted lot of business to its own CFS in Mumbai, whose volume has jumped from 8000-9000 TEUs to about 14000-15000 teus in Mumbai. Punjab Conware used to do a volume of about 5000 teus.   

Depreciation on Punjab conware CFS was accounted upto Jan 2022 (only for one month in Q4FY22). That's why depreciation was lesser in Q4FY22.

On DFC are able to offer better transit time to customers.

Trucking rates gone up by 25% due to fuel price rise.  Long haul no major change in trucking rates.  No change in rail haulage charges. Now the driver of growth will be assured transit time available for the customer. So there will be modal shift from cfs to icd/rail container transportation.

1.5:1 is net debt to EBITDA is the company will be comfortable with.

Volume drop is about 10-15% due to closure of south china ports and Ukraine war. But seeing firming up of exports. Adequate empty containers in ports and hinterland but bookings are not happenings.  On 90-95% of Q4FY22 volume is expected for Q1FY23.

Capex - two terminals Rs 60 crore each; Rs 80 crore in equipment and vehicles along with maintenance capex.  Total capex will be Rs 200 crore.   

Double stacking share in Q4FY22 was about 38%.

The company will be under MAT for this fiscal and next fiscal.  

EO Income of Rs 12 crore in Q4FY22 are part of other income.