Allcargo Terminals Q1 FY27 earnings call

Allcargo Terminals Limited reported a stable operational performance in Q1 FY27, with container volumes growing 7.2% year-on-year to 1,76,499 TEUs. Revenue for the quarter stood at INR 214 crores, an increase from INR 187 crores in Q1 FY26. EBITDA, excluding other income, was INR 47 crores, up from INR 35 crores in the prior year's quarter, with EBITDA per TEU corrected to INR 2,898. Net Profit (PAT) for the quarter was INR 6 crores, impacted by tax on dividend from joint venture companies and previous year's tax adjustments.

The company is focused on five strategic priorities, including expanding capacity, scaling volumes while retaining margins, leveraging technology, widening its footprint, and deepening customer relationships. Annual handling capacity was increased by nearly 20% in FY26 to approximately 1.03 million TEUs, providing necessary headroom for future volume growth. The long-term ambition is to become a 1.3 million TEU operator by 2030.

Allcargo Terminals continues to leverage technology to elevate operations, including the rollout of its proprietary myCFS app, which automates about 70% of the import workflow and is being extended to exports. The company is also implementing a smart yard management system across locations, with a pilot phase in JNPT, to improve asset utilization and reduce turnaround times. These initiatives contribute to improved profitability, customer stickiness, and cost optimization.

Key expansion projects are underway, including the Farukhnagar Private Freight Terminal (PFT) which is on track for completion by May 2027, with the PFT portion expected by March 2027 and the ICD portion by Q3 FY27. The Speedy JNPT expansion, a 10-year renewal, will add approximately 60,000 TEUs of annual handling capacity and is expected to be completed by Jan-Feb 2027. The company is also evaluating opportunities for new PFT and ICD footprints, including a potential facility near Kattupalli in Chennai, with clarity expected in the next quarter.

Profitability has been improving for the last 8-9 quarters, driven by a combination of commercial yield management, upward rate revisions, and operational efficiencies. Management estimates that roughly 50% of the EBITDA per TEU improvement comes from better yield management and 50% from operational efficiencies. The company expects EBITDA per TEU to remain around INR 2,400-2,500, with a target of INR 2,750 including the Farukhnagar project, and the tax rate is expected to remain at 25% going forward^⏳.

The company has a 3-year capex plan of INR 400 crores, with INR 100 crores planned for FY27. This capex will be funded through existing accruals (INR 50 crores), equity (INR 90 crores yet to be called), annual cash flow (INR 70 crores), and debt (INR 100-150 crores). Management is currently prioritizing these investment plans over declaring dividends, aiming to become a regular dividend-paying company once projects are executed and cash flow requirements are met.

Mr. Suresh Kumar will be stepping down as Managing Director by the end of August 2026, and Mr. Pranav Choudhary, formerly from Adani Ports, will take over as the new Managing Director from September 1, 2026. This transition is expected to bring new leadership to drive the company's strategic objectives for the next 3-5 years, leveraging Mr. Choudhary's experience from the port sector.