Release Date: February 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Snowman Logistics Ltd (BOM:538635, Financial) reported a 5% increase in average realization per pallet.
- The company has added 20 new products to its existing set of clients, which is expected to generate additional revenue.
- Snowman Logistics Ltd (BOM:538635) is expanding its warehousing capacity with new facilities in Kolkata and Lucknow.
- The company is exploring asset-light models by leasing warehouses, which helps in reducing CapEx.
- Snowman Logistics Ltd (BOM:538635) is targeting a 10%-12% growth in the warehousing segment and a 15% growth in the transportation segment.
Negative Points
- The pallet-handled volume for Q3 was lower at 357,000 compared to 414,000 in the previous two quarters.
- EBIT margins for the warehousing business have declined from 22% to 18%-18.5% due to a change in mix.
- The transportation segment's EBIT margins have decreased to 1.5% due to the addition of new vehicles and associated depreciation costs.
- The trading and distribution business has shown limited growth, remaining in the INR35 crores to INR40 crores range for the last four quarters.
- The company is facing challenges in the CFS business due to increased competition and declining profitability.
Q & A Highlights
Q: Can you help us with the EBITDA number for rail vertical and the CFS vertical, please?
A: The rail EBITDA per TEU is almost INR9,700 and CFS is slightly below INR1,300. (Samvid Gupta, Joint Managing Director, Gateway Distriparks Ltd)
Q: Can you help us with a broad split of this other income?
A: It includes other income, slightly more towards the rail side. It's primarily all business-related other income, not any one-off sale. (Samvid Gupta, Joint Managing Director, Gateway Distriparks Ltd)
Q: How do we explain the Q-o-Q improvement in the margins?
A: It's a change of mix and increase in double stacking. The range will vary anywhere from INR9,000 to INR10,000. (Samvid Gupta, Joint Managing Director, Gateway Distriparks Ltd)
Q: Can you elaborate on the difficulties on the export front and the market share for 3Q?
A: The EXIM trade of India has dropped in Q3, reflected in our volumes. We anticipate a spur in demand post-election later in the year. (Prem Kishan Gupta, Chairman and Managing Director, Gateway Rail Freight Ltd)
Q: How do we look at the growth in both verticals in terms of volume and margins?
A: Growth depends on various factors. We are keeping ourselves ready to capture the growth, which in medium to long term will definitely be there. (Prem Kishan Gupta, Chairman and Managing Director, Gateway Rail Freight Ltd)
Q: Can you elaborate on the double stacking improvement and its impact on margins?
A: Garhi originating volumes are going up, improving margins and throughput. Double stacking has moved to about 42% from 35%-37% earlier. (Samvid Gupta, Joint Managing Director, Gateway Distriparks Ltd)
Q: What are the current volumes like for the Kashipur terminal and the status of the Jaipur terminal?
A: Kashipur is averaging about 3,000 to 3,500 TEUs. Jaipur is facing some land-related issues, and we are looking at alternative arrangements. (Samvid Gupta, Joint Managing Director, Gateway Distriparks Ltd)
Q: What is the market share in NCR, Ludhiana, and Uttarakhand regions?
A: In Q3, our market share in NCR was 16%-17%, Uttarakhand 27%, and Ludhiana 20%. (Rajguru Behgal, President, Rail, Gateway Distriparks Ltd)
Q: Can you explain the decline in pallet-handled volumes for Snowman Logistics?
A: The decline is due to seasonality, with Q3 being lean for ice cream and seafood. (Sunil Nair, CEO and Director, Snowman Logistics Ltd)
Q: What is the growth expectation for Snowman Logistics' top line and bottom line for each segment?
A: We expect 10%-12% growth in warehousing, 15% in transportation, and 20%-25% in the 5PL distribution business. (Sunil Nair, CEO and Director, Snowman Logistics Ltd)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
