Key takeaways of the call

EXIM volume was up 28% and domestic volume was up 68%. Originating volume in Q1FY22 was 0.612 million with EXIM being 0.529 million and Domestic is about 0.080 million.

EXIM lead distance is 704 km in Q1FY22 and that of domestic is 1377 kms.

Strong domestic demand is good for the company. Revenue mix for the company usually be 80:20 in favour of EXIM and the domestic is picking up so the revenue mix will change to 70:30 (EXM:Domestic) by end of this year and it will be 60:40 in next few years.

To address that the company is investing in containers. It has bought about 24000 containers in last 3 year. Currently have 37000 containers. Trying to develop container manufacturing in India which is WIP as of now. The company plan to purchase about 8000 containers every year for next 5 years.

Earlier the company has guided 12% growth in topline and 100% growth in bottom-line. The start was good and the company is confident of achieving a PAT of Rs 1000 crore for FY22.

LLF uncertainty has gone now. The company got land rates from revenue authorities and the rework has given a LLF estimate of RS 375 crore for FY22. The company has provided an amount of Rs 113 crore in Q1FY22 towards LLF. One time cost towards long term lease of 24 terminals is about Rs 6000-7000 crore.

Bulk cement transport – the company floated a tender and 0.5 mln tonnage First Silo is set up at Coimbatore by the company.

The company has not increased freight rates but has increased the terminal charges. This has facilitated increase in margin.

EXIM per TEU realisation (RS 16000/TEUs) of Q1FY22 are sustainable as it was pushed up by imposition of terminal charges as well as higher loaded traffic and consequent lower empty running.

Similarly in domestic also more loaded traffic has driven the margin as it reduces empty running. All new containers are high capacity containers of 34 tonnes with 31 tonne payload. Earlier the rakes are 61 tonnes and increased to 68 tonnes and as of now about 60% of the fleet is upgraded to 68 tonnes.

The company is not immediately looking at any price hike.

DFC train operations started on July 29, 2021. The company's Kathuwas terminal got connected to DFC. DFC will bring the benefit of increase in asset utilisation, double stacking and the customer will get lower lead time and the volume will increase. The freight rates will not be any change and the payment to IR also no change.

The company will bring JNPT volume to Swarupganj (in Rajasthan close to Gujarat border), the second hub apart from Khatuwas (close to Delhi), and the first hub of the company. The company will do double stacking between Swarupganj & Khatuwas and that will improve the margin.

Allowing 25 tonne axle load by IR for wagons, the carrying capacity of wagon will increase to 80 tonnes. That increase the possibility of double stacking. This is now available only on DFC routes.

There the company will definitely get the benefit of operating these 25 axle load wagons. Currently the company has 12 rakes of 25 axle tonne wagons and the company will be procuring another 48 rakes by end of this year the company will be having more than 50 rakes of 25 axle tonne wagon rakes.

Capex for FY22 will be Rs 500 crore and of which about Rs 300 crore will be on rolling stock and equipment and balance on IT and Land. Further the company plans to incur a capex of Rs 500-800 crore for next 3 years. The company plan to procure about Rs 220 rakes in next 5 years but that depend on divestment.

Empty running cost in Exim was Rs 26 crore and it was about Rs 46 crore in domestic in Q1FY22.

Port wise market share of the company was 33.6%, 37.53%, 9.16% 6.78% and 6.63% for JNPT, Mundra, Pipavav, Chennai and Vizag respectively.

The running time from Mundra & Delhi will come down to 40 hrs from current 72 hrs and this will bring more volume.

The railway coefficient for JNPT was 19.6% and of which the company has a share of 62%. Similarly it was 67% and 64% for Mundra and Pipavav and of which Cocor's share is 43% and 54% respectively.

The company has done a record 807 double stacking in Q1FY22.

Rebates in Q1FY22 was just about Rs 26 crore.

Q4FY21 had the provision of Rs 74 crore of staff medical scheme and Rs 46 crore of provision of service tax.

Railfreight margin in Q1FY22 was 30% same as that in corresponding previous period.

IR has very good diesel locomotives which can carry 9000 tonnes which is more than the 4500 tonnes (45 wagons with 100 tonne payload) of 25 axle load wagon rakes in DFC. So the company can operate 25 axle load rakes in DFC despite electrification is yet to complete.

The Swarupganj logistics park is already commissioned.

Currently more double stacking is happening in import side and now the company is increasing it on export side. Similarly the company instead of directly routing the JNPT cargo to hinterland it will route it through swarupganj and that will increase the double stacking.