Release Date: May 31, 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) maintained a market share of 16% in NCR and 22% in Ludhiana for Q4 FY24.
- The company is targeting double-digit growth for FY25 and FY26 in the rail business.
- EBITDA per TEU for the rail business was around INR9,800 to INR9,900 for Q4, indicating strong operational efficiency.
- The company plans to monetize some land assets, expecting an inflow of INR20 crores from Krishnapatnam.
- New warehouses in Lucknow and Kolkata are expected to be operational by July and September 2024, respectively, which will expand capacity.
Negative Points
- The Red Sea crisis negatively impacted rail throughput, particularly affecting low-value commodity bookings.
- Market share in Ludhiana decreased from 30% to 22% due to increased competition.
- Competitive intensity in the CFS business remains high, impacting top-line growth and EBITDA per TEU.
- The Jaipur ICD project is delayed due to legal issues, pushing its operational timeline to FY26.
- Double stacking dipped from 40% to 35% in the last quarter, affecting profitability.
Q & A Highlights
Highlights of Snowman Logistics Ltd (BOM:538635) Q4 FY24 Earnings Call
Q: How did the Red Sea crisis impact your business in Q4, and what are your CapEx plans for next year?
A: The Red Sea crisis primarily affected our rail operations, leading to a dip in freight rates and a reduction in low-value commodity bookings. The worst is behind us, and we are seeing an uptick. CapEx for next year remains focused on two new terminals, with general maintenance CapEx around INR20 crores. - Samvid Gupta, Non-Executive Director
Q: Can you provide the market share for NCR and Ludhiana for Q4 and the full year?
A: In NCR, we maintained a market share of 16%, and in Ludhiana, it was 22%. For Uttarakhand, our market share was 27% in Q4. Year-over-year, NCR's market share remained stable, while Ludhiana saw a decline from 30% to 22% due to increased competition. - Rajguru Behgal, President, Rail Gateway Distriparks Limited
Q: What is the EBITDA per TEU for the rail and CFS businesses?
A: Rail EBITDA is about INR9,800 to INR9,900 for the quarter and just below INR9,500 for the year. For CFS, excluding one-offs, it's about INR1,300 for the quarter and slightly above INR1,500 for the full year. - Samvid Gupta, Non-Executive Director
Q: What are the challenges and progress regarding the Jaipur ICD?
A: The legal process is ongoing, and we expect to be operational in the next financial year. The file has moved from Jaipur to Delhi, and we are confident of a favorable order. - Samvid Gupta, Non-Executive Director
Q: How do you see growth in the rail business for FY25 and FY26?
A: We are targeting double-digit growth, with volume upticks expected to continue. Some dips are due to geopolitical issues, but we are confident in structural growth in manufacturing and EXIM volumes. - Samvid Gupta, Non-Executive Director and Ishaan Gupta, Non-Executive Director
Q: What is the impact of the DFC on your operations and margins?
A: The DFC has increased our margins by enabling more double stacking and reducing transit times. It has also allowed us to be more competitive and attract volumes. - Samvid Gupta, Non-Executive Director and Ishaan Gupta, Non-Executive Director
Q: What are the operating margins for owned versus build-to-suit warehouses?
A: Owned warehouses have an EBITDA margin of around 55%, leased land warehouses around 35-36%, and build-to-suit operations around 14-15%. - Sunil Nair, CEO and Director
Q: What is the status of the Kolkata and Lucknow warehouses?
A: The Lucknow warehouse will be ready for use in July, and the Kolkata warehouse will be operational in September. - Sunil Nair, CEO and Director
Q: How has the Red Sea crisis affected your volumes, and what is the outlook?
A: The crisis has caused port congestion and irregular arrivals, but we are seeing some minor upticks. It is too early to predict a full recovery, and we need to wait and watch for another one or two months. - Rajguru Behgal, President, Rail Gateway Distriparks Limited
Q: What is the potential benefit of JNPT getting connected to the DFC?
A: We expect an increase in market share and operational advantages, such as better fleet utilization and targeting time-sensitive cargo. - Samvid Gupta, Non-Executive Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
