Allcargo Terminals (NSE:ATL) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Allcargo Terminals Limited Q2 and H1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Sharu Garg from Stellar IR Advisors. Thank you, and over to you. Thank you. Good morning, everyone, and thank you for joining us today. We have with us the senior management team of Allcargo Terminals Limited, Mr., Managing Director Mr., Chief Financial Officer and Mr. Sanjay Punjabi from Investor Relations.

0:54 The management will be sharing operating and financial highlights for the quarter ended 09/30/2026, followed by a question and answer session. Please note that this call may contain some of the forward looking statements, which are completely based upon the company's beliefs, opinion and expectations as of today. These statements are not a guarantee of the company's future performance and involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward looking statements to reflect the developments that occur after the statement is made. With that, I would now like to hand over the conference to Mr. Pranav Chaudhry. Thank you, and over to you, sir. Thank you.

1:40 Good morning to everybody, and a warm welcome to everyone joining us on the Allcargo Terminals Limited Q2 and H1 FY twenty twenty seven earnings call. The results, press release and the investor presentation have been uploaded on the stock exchanges and the company's website. I hope you had an opportunity to go through them. During Q2 and H1 FY 'twenty seven, geopolitical instability continued to over onto the global trade, leading to the pressures on freight rates, higher transit times and localized container imbalance. However, India's extreme trade demonstrated strong value resilience, volume resilience. Both merchandise exports and imports maintained momentum. Core export momentum in engineering, pharma and electronic provided a volume volume based on multimodal logistics handlers, while domestic industrial demand, manufacturing inventory and elevated crude electronics demand kept to import volumes elevated.

2:34 For FY 'twenty one for FY 'twenty seven, combined merchandise plus service exports and imports, total exports for April to September twenty twenty six stood at 76,000,000,000 around dollars expanding 13.84 Y o Y over $418,310,000,000 in H1 FY twenty twenty six. Total imports for the first half stood at about $551,000,000,000 growing about 15.68% Y o Y over $476,000,000,000 in the last year H1. Against this backdrop, Allcargo Terminals delivered a strong operational performance during the quarter. Our container volumes grew by 12.6% year on year.

3:20 Revenue grew by 21.5% and Pratt grew by 84.9%. As mentioned during the previous quarter call, our strategy remains centered around five priorities: first, expanding capacity to create headroom required to capture incremental container volumes and support long term growth second, scaling volumes while protecting margins while the continued focus on improving asset utilization, operational efficiency and commercial discipline third, leveraging technology to enhance commercial productivity, improve visibility and strengthen the overall customer experience fourth, expanding our footprint and locations and trade corridors where we structure where we see structure opportunities arising from the growth of India's centralized rate and evolving infrastructure. And fifth, deepening customer relationship by delivering consistent service levels and becoming a large share of our customers' logistic requirement.

4:12 Looking ahead, we remain constructive of on the medium to long term opportunity. While global trade patterns may remain dynamic in the near term, India's expanding trade base, improving Portal's logistics infrastructure and increasing integration with global supply chain provides a supportive backdrop for content under demand. With capacity expansion underway, continued investment in technology and a disciplined approach to execution, we believe Allcargo Terminals is well positioned to capture the next phase of growth while continuing to improve profitability and create sustainable long term value for our shareholders. With that, I now hand over the call to Pritham, who will take you through the financial performance. Pritham, please. Good morning, everyone, and thank you, Pranav. Welcome to Q2 and H1 FY 'twenty seven earnings call of Allcargo Terminals Limited.

5:00 I will take you through the key financial operating financials and operating highlights for the quarter and the first half of the year. The company delivered a healthy operating performance during the quarter. Total volume handled in Q2 FY 'twenty seven stood at 190,100 teus, registering a 12.6% year on year growth. For actual FY 'twenty seven, total volumes stood at INR 366,599 crores, reflecting a strong 10% growth over H1 FY 'twenty six. Moving to the financial performance.

5:45 Revenue for quarter FY 'twenty seven stood at $2.52 crores, representing a growth of 21.5% year on year and 17.4% sequentially. For H1 FY 'twenty seven, revenue stood at INR $4.66 crore compared to INR $3.94 crore in H1 FY 'twenty six. EBITDA, excluding other income, stood at INR 59 crores in Q2 FY 'twenty seven, growing at 45.9% year on year and 24% sequentially. For H1 FY 'twenty seven, EBITDA stood at INR 106 crores compared with INR 75 crores in H1 FY 'twenty six.

6:41 Importantly, EBITDA per TEU for the quarter stood at 3,366, representing a robust growth of 40.8% year on year and 16.1% sequentially, reflecting continued improvement in realization, operating efficiency and gain from transshipment business. The EBITDA per TEU for Q1 and Q2 has an impact of transshipment volume, which benefited us due to geographical issues, which are prevailing. At the bottom line, net profit for Q2 FY 'twenty seven stood at 21 crore, a strong 85% growth year on year and 228% growth sequentially.

7:32 For H1 FY 'twenty seven, net profit stood at INR 27 crore compared to INR 20 crores in FY 'twenty six. Overall, H1 FY 'twenty seven reflects a healthy volume growth alongside continued improvement in profitability, supported by disciplined execution and better operating efficiency. With this, I would like to open the floor for question and answer session. Thank you very much. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, questions.

8:31 The first question is from the line of Kiran Gargi from Knightstone Capital Management. Congratulations on a good set of numbers. So my first question is how much of the revenue per TEU increase was due to higher share of transshipment container volumes? And how much was due to increasing rates? Okay. Kiran, we have reported 14,388 revenue per TEU for this quarter. Out of this, if you take out ITP impact, revenue per TEU would have been INR 13,900.

9:24 So that's the impact of on revenue per TEU. In terms of bottom line EBITDA per TEU, we have reported INR 3,365 as EBITDA per TEU, Around $4.50 is the impact on EBITDA per TEU for ITP shipments. And was there any increase in rates? Yes. So balance increase in realization from what we had reported in the earlier quarters around the level of 12,800 level is attributable to the increase in realization and also the better cargo mix.

10:16 So there are two factors which are driving better realization in this quarter. One is ITP and the other is increase in the rates, which we have done in the current quarters. Okay. So we could see normalization of revenue per TEU as we go ahead? So the rate impacts are there to stay for coming quarters largely. As we go along and as the Gulf related situation normalizes, the transshipment volume and the revenue would basically taper down going forward. Okay. And has there been any major change in the competitive intensity for any of the CFSs that you operate?

11:07 Not really. I think competitive scenario more or less has remained same as what it was before. Okay. And there has been increase in other expense and employee expense. Can we consider this as the run rate going forward? Other expenses, there are certain one offs, not in terms of employee costs. It's a normal employee cost, and you can expect that to be there going forward. Other expenses would come down because there has been certain onetime consultancy and related costs which we have incurred to the extent of 1 crore. And could you provide update on the upcoming new facility in Chennai for 120,000 TEU?

12:04 Chennai Kiran, this is Gurnav. Chennai, so we are working on finalizing the land. Probably, we should be doing that in by the end of this month and applying for the customs clearance. The construction would begin sometime in the first quarter of sometime in the first quarter of net financial year and about nine months' time, it should take to build the facility up and running. This facility would be very close to the two terminals of Patu Poli and Anode, where the next round of CapEx for container terminals are coming in and the growth would come into that sector. So we would be very, very close to these facilities. Okay. Thank you. All the best. And congratulations.

12:50 Very happy have you. Thank you. Thank you. Next question is from the line of Devansh Mehta, an individual investor. Hi, am I audible? Yes. So firstly, thank you for the opportunity. And some margins have remained strong over the recent quarters. So do you expect this trend to sustain going ahead? And what is the medium term margin outlook?

13:40 Devansh, as I answered the earlier question, so we have certain element of transshipment business, which we have done since earlier last quarter and this quarter as well. Roughly five 100 per TEU is a margin impact, which is there for the transshipment business. We expect this to continue for some time in the short run, maybe up to the next quarter. And as we go along, it might temper down. But otherwise, whatever impact which we have achieved in the last few quarters, that is sustainable because that is being based on the operational efficiency and better yield across the various products which we have.

14:25 So we expect that to continue, except the impact of transshipment. Going forward, we are also doing renovation at our SPD, JNBT facility. Currently, that facility has been underutilized because of infrastructure related reasons. As we go along, we'll be able to better utilize that facility. Currently, we are doing close to 8,000 TEUs there. We are expecting to do more than close to 18,000 TEUs once the facility operation is complete. So that particular initiative will basically make up to some extent of this transshipment business, which we are currently having. So to answer your question, the transshipment gains will taper down in the next few months.

15:11 However, other initiatives would continue to support the margin levels, which we have achieved. Okay. Thank you so much, sir. So the next question is like I'm so sorry, Devaj. We are not able to hear you properly. Can you repeat your question, please? Right. So am I audible now? Yes. Yes, So given the festive season, how is the next quarter shaping up keeping the transshipment aside? So what is the overall business outlook for the coming quarter?

15:58 Raj, the volumes remain really very, very positive. In fact, for this month of October itself, we have achieved highest volumes in the ATL history, supported by very robust growth in G and P volumes in Chennai and in Kolkata. So I think we are very upbeat on what is coming ahead of us, and we're fully geared to handle that. Understood, sir. Sir, so moving to the expansion front, are we on track with the upcoming ICD project? And how discussions with potential customers progress to secure volumes ahead of commissioning? So our Farooq Nagar ICT is on track.

16:47 The discussions with lot of potential customers have started, and we are getting huge positive responses from the customers. Everybody is waiting for the facility to start. The PFT should the construction of PFT should get completed by the end of the financial year. Some kind of operations, we would start on the PFT, albeit on a very limited scale because the ICT construction would go on. So the beginning of the next financial year. But hopefully, by the end of third quarter of the next financial year, we should have the ICT construction on completed. So the full fit ICD operations, we should look at in the fourth quarter of the current financial year. Okay, sir. So thank you for the outlook. And sorry for asking so many questions, but one last question from my end. So once the current CapEx cycle is completed, so does this company see scope for higher dividend payouts like supported by its strong cash flow generation?

17:47 So Devang, so that question we've been asked people have been asking us a lot of such a lot of these questions. So I think today, we've got a lineup of about if you include Farooq Nagar, the Chennai capacity that we have to do, JNPT expansion, the facility expansion that we plan to do, speedy renovation that we're trying to do. Within all of that, about 400 of CapEx requirement, plus I will not be able to disclose more than this, but I am actually also looking at a lot of other growth opportunities in terms of M and A and organic growth. So we will have to just see you will have to give us time to just see over the next six months how does these opportunities evolve for us to evaluate our dividend payout.

18:37 Plus also, we have not levered at all. So I think when the growth opportunity comes to us, we would also like to get take a bit of debt with us, maybe go up to one:one level. So I think between this INR400 crores available to us internally right now and about INR200 crores, INR250 crores of ability to raise debt, we are trying to look at end of one year, one to one point five years, a little time where if we have the ability to deploy INR650 crores cash, I think time is good for us. Right, sir. So thank you, for the opportunity and all the rest for the coming quarter, sir. Thank you, Dharmesh. Wish you very happy, Dharmesh. You. Next question is from an individual investor. Please go ahead.

19:36 Hello. Thanks for this opportunity. Am I audible? Yes, you are audible. Thank you, sir. Just wanted to understand on how the industry is shaping up for PFS, iFPV players. Is there like an overcompletion in the market? Could you shed some light on that? Thank you for the question. CFS and ICDs are a reflection of the port in the country, which is a reflection of trade, exempt trade in the country. So the sentiment remains absolutely bullish because the way port factor or port demand in India, the port cargo in India is going into the rate of 10%, 12%.

20:21 I think similar volumes are seeing both in the CFS industry. Without as I was mentioning in the previous question, October, we've seen highest level of performance from ATL. And given the capacity the capacity utilization that we have, we're pretty much running at 90% to 8095% capacity at every terminal that we've got. So we usually optimistic in terms of capturing the next year of growth for us by putting in capacity expansions and new facilities. And so yes, CFS and ICT story will India will continue to be there. It's a reflection of the story of the country's trade and growth in the portfolio.

21:10 So is the company focusing on any more territories in the CFS business? Chinook, we are evaluating everything. We any opportunity that we have in the inter land, we were trying to look at, plus increasing the capacity at our existing within our existing portfolio or existing terminals. But we keen are to evaluate everything, wherever opportunities there, potential comes for me. Sorry. So as we are evaluating, so are we also evaluating for any type of tie ups for our CFR and IT business? Are you thinking of any JVs as such? Is there a possibility?

21:56 Yes. So, generally, to answer your question, so as I said, we are open to all options. We're evaluating all options. We're evaluating JVs, we're evaluating tie ups. The multiple discussions are going on. But under something is fortified on table, which is committed, we won't be able to share that with you. But yes, everything that is within our scope to increase the volumes, increase the market share, that's on the table. Perfect. So I think it's an open possibility. Okay. Not an issue, Dan. And just one last thing, like how to see the company like two, three years down the line? Like what's our vision when it comes to revenue and volume? Like can you give us some light on that?

22:46 We've already shared that as part of our investor deck. I think largely, it will be the growth trajectory will be in that of line of that five year plan that we've shared. Correct. Okay. No more addition to that. Okay. No problem, sir. Thank you so much for your time and all the best for your time. You, Chen. Happy Devali to you. Happy Devali to you too, sir. Thank you. Next question is from the line of Utsav Bahati, an individual investor.

23:34 Hello, sir. Am I audible? Yes. Yeah. So thank you for the opportunity. My question was regarding the MyCFS app. So I I think the investor presentation, you know, it was saying that we have onboarded 70% of the customers. So, I mean, are we getting any benefit out of the MyCFS app in terms of employee cost and all? And will be onboard 100% of the customer? How are we looking at that? So that's the target itself to onboard as many customers as possible. The priority was to onboard the large customers and automate maximum processes, which we can automate. Currently, we have automated close to 70% of our processes on MyCFS.

24:36 Certain processes continue to remain manual because of various interactions related to customs. But otherwise, we are very much on the path to make myCFS as a mobile interaction tool for our CHA and forwarder customers. And the happiness index of customers we have been checking now and then. And there has been positive response for my cases, which we have deployed. The rather than employee cost saving, this particular app is more ease of doing the business and also improves our customer stickiness. Thank you.

25:31 As there are no further questions from the participants, I would now like to hand the conference over to Mr. Pranav Chaudhry for closing comments. Over to you, sir. Thank you. Thank you for all your participation. It was wonderful to talk to you. And wish you all and your families a very happy Diwali and a prosperous New Year. God bless, everybody. Thank you. Thank you. Thank you very much, sir. On behalf of ATLAS Terminals Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.