Allcargo Terminals Limited — Q3 FY25 earnings call

Call held 19 Feb 2025

Management summary

Allcargo Terminals reported a stable Q3 and strong nine-month performance for FY25, with revenue and EBITDA showing consistent growth. Profitability metrics like EBITDA per TEU improved significantly. The company is actively expanding capacity and consolidating its subsidiary Speedy Multimodes, while navigating global trade challenges and an ongoing income tax search.

Highlights

  • 9M FY25 Revenue of ₹572 crores, up 4% YoY.

  • 9M FY25 EBITDA of ₹95 crores, up 5% YoY.

  • Q3 FY25 EBITDA (excluding other income) of ₹32 crores, up 11% YoY.

  • Q3 FY25 EBITDA per TEU at ₹2,179, up 16% YoY, highest since Q4FY23.

  • Expanded capacity by signing a lease for 22 acres adjacent to JNPT, and extended Speedy Mundra facility for 6 years.

Concerns

  • Q3 FY25 Net Profit decreased 19% YoY to ₹12 crores, primarily due to accelerated amortization related to CWC contract change and exceptional income in prior year.

  • Global ocean trade continues to face challenges from Red Sea disruptions, Panama Canal, geopolitical issues, and potential US tariffs.

Key financials

2 periods

Q3 FY25

  • Revenue
    ₹187 Cr
    YoY +1% QoQ -4.1%
  • EBITDA (excl. other income)
    ₹32 Cr
    YoY +11% QoQ 0%
  • Net Profit
    ₹12 Cr
    YoY -19%
  • EBITDA per TEU
    ₹2,179
    YoY +16%

9M FY25

  • Revenue
    ₹572 Cr
    YoY +4%
  • EBITDA
    ₹95 Cr
    YoY +5%
  • Net Profit
    ₹33 Cr
    YoY -5.7%

What they filed

Q1 FY27: revenue up 14.5%, net profit down 30.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue195 187 186 187 207 +6%218 +17%208 +12%214 +15%
EBITDA32 32 34 35 40 +24%43 +31%44 +31%47 +37%
Net profit11 12 -2 9 11 −0%15 +28%9 +465%6 −30%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Farukhnagar project investment ₹150 Cr
    • Mundra project (land and CFS construction)
    Our projects like Farukhnagar where we will have to make our own investments, we are anticipating around INR150 crores of investments for Farukhnagar project... Mundra would also be a project where we will have to invest, we have invested into land and we will also invest into construction of CFS.
  • Debt Debt disclosed
    We are having a very strong debt equity ratio
  • M&A Speedy Multimodes Acquisition · Announced

    Consolidate Speedy Multimodes as a 100% subsidiary

    Other action in the company includes the board approving the acquisition of the 15% stake in our existing subsidiary, Speedy Multimodes, via a share swap deal. Post-transaction, Speedy will become a 100% subsidiary of Allcargo Terminals Limited.
  • Liquidity Liquidity disclosed Working capital is currently a negative working capital we are having. DSO of a company remains strongly in control.
    Working capital is currently a negative working capital we are having. We are having a very strong debt equity ratio and the return on capital employed is around 35%. So all these parameters we are going in a direction, in a right direction.

Guidance & targets

Capacity

  • JNPT extension capacity Capacity · FY25-26 · High confidence 120,000 to 150,000 TEUs
    So this JNPT extension, which we have already contracted for the lease land, which is very adjacent to our existing JNPT facility, will be coming into operations from 1st Quarter of next year, that is FY25-26. This is an already existing facility, so we are not incurring a substantial CAPEX there. As declared the capacity expansion could be in the range of 120,000 TEUs to 150,000 TEUs for this.

    — Pritam Vartak

Profitability

  • Farukhnagar project IRR Profitability · High confidence 25% to 30%
    Our projects like Farukhnagar where we will have to make our own investments, we are anticipating around INR150 crores of investments for Farukhnagar project, and estimated IRR would be in the range of 25% to 30% for this kind of CAPEX intensive project.

    — Pritam Vartak

  • Mundra project IRR Profitability · High confidence 25% to 30%
    Mundra would also be a project where we will have to invest, we have invested into land and we will also invest into construction of CFS and the IRR will be in line with what I told you for other projects which is in the range of 25% to 30%.

    — Pritam Vartak

Volume

  • Q4 FY25 volumes Volume · Q4 FY25 · Medium confidence similar to Q1 and Q2 FY25 volumes
    March traditionally has been a strong month for us and therefore we expect Q4 volumes to be similar to the volumes that we would have recorded in Q2 and Q1 of this year.

    — Suresh Kumar R

Operational

  • Farukhnagar ICD facility operationalization Operational · FY27 · High confidence December 2026, January 2027
    The proposed Farukhnagar ICD facility is expected to be operational December 26, January'27 and the HORCL project is proceeding as per plan to enable connectivity for us.

    — Suresh Kumar R

What to watch in Q4 FY25

JNPT extension operationalization

next quarter (Q1 FY26)
Current Contracted, under preparation
Target Operational by Q1 FY26

Why it matters

This capacity expansion is expected to add 120,000-150,000 TEUs and contribute to future volume growth.

So this JNPT extension... will be coming into operations from 1st Quarter of next year, that is FY25-26.

Risks & concerns

  • Global ocean trade disruptions

    medium

    Ongoing disruptions in the Red Sea, Panama Canal, geopolitical issues, and potential US tariffs create challenges for global ocean trade.

    Management acknowledged

  • Income tax search outcome

    medium

    Income tax authorities conducted a search operation, and the company is awaiting official communication regarding the outcome, though operations are currently smooth.

    Management not addressed

Q&A highlights

3 direct
Timeline and IRR of new projects (JNPT, Farukhnagar, Mundra) Direct
So this JNPT extension... will be coming into operations from 1st Quarter of next year, that is FY25-26. ...Farukhnagar... estimated IRR would be in the range of 25% to 30%... Mundra... IRR will be in line with what I told you for other projects which is in the range of 25% to 30%.

Clarifies the operational timelines and expected profitability (IRR) for key upcoming capacity expansion projects, which are crucial for future growth.

Asked by Shaukat from Monarch PMS

Sustainability of January volumes and outlook for Feb/March Direct
January volumes is a good strong growth in line with market volume. We expect February, March to follow the seasonal patterns that we have seen in the last years, which is the Chinese New Year affecting the second half of February. March, typically because it's yearvend for a lot of companies, there is a certain amount of inventory action which happens, which will help in building volumes. March traditionally has been a strong month for us and therefore we expect Q4 volumes to be similar to the volumes that we would have recorded in Q2 and Q1 of this year.

Provides management's outlook on near-term volume trends, acknowledging seasonal factors like Chinese New Year and year-end inventory actions, and guiding for Q4 volumes.

Asked by Shaukat from Monarch PMS

Income tax search on February 10 Partial
So on income tax search and seizure operation which was conducted I will just like to mention here that in the previous week the income tax authorities conducted the search operation at our facilities and offices. The company fully cooperated with the investigating officers. Since the conclusion of the search till date the company has not received any written communication from the IT department regarding the outcome of the search operation. The company operations, I would state that are running smoothly and the entire management team continues to work wholeheartedly to ensure that the company keeps up on the growth trajectory. On the future course of action, I will say the law will take its own course and we will keep our stakeholder posted on all the future developments. As of now, we are waiting to hear from the Income Tax Department in terms of outcome of the operation which was conducted.

Addresses a significant recent event (income tax search) and management's current understanding, indicating cooperation and no immediate operational impact, but awaiting official communication.

Asked by Viral Shah from Aadinath Tax Consultancy

Operational timeline for HORCL and Farukhnagar DFC plant and 9-month performance expectations Direct
The proposed Farukhnagar ICD facility is expected to be operational December 26, January'27 and the HORCL project is proceeding as per plan to enable connectivity for us. So that is as per the originally planned timelines, both for the project and for our facility to start. With regard to performance for the first nine months, I would request Pritam to share a few points.

Confirms the operational timelines for key infrastructure projects (HORCL and Farukhnagar ICD) and directs to the detailed financial review for 9-month performance.

Asked by Viral Shah from Aadinath Tax Consultancy

2 min read 5 chapters

Detailed narrative

Q3 & Nine Months FY25 Financial Performance

Allcargo Terminals reported a 1% YoY increase in Q3 FY25 revenue to ₹187 crores, though it was down from ₹195 crores in Q2 FY25 due to lower volumes. EBITDA (excluding other income) for Q3 FY25 stood at ₹32 crores, an 11% YoY increase and flat QoQ. The company achieved an EBITDA per TEU of ₹2,179, marking a 16% YoY increase and the highest since Q4 FY23. For the nine months ended December 31, 2024, revenue grew 4% YoY to ₹572 crores, and EBITDA increased 5% YoY to ₹95 crores. Net profit for Q3 FY25 declined 19% YoY to ₹12 crores, primarily attributed to accelerated amortization and the absence of exceptional income recorded in the prior year.

Strategic Capacity Expansion and Investments

The company is actively expanding its capacity and infrastructure. It has signed a lease for 22 acres adjacent to its existing JNPT facility, which is expected to become operational in Q1 FY26 and add 120,000 to 150,000 TEUs without substantial CAPEX. The Speedy Mundra facility's contract has been extended for an additional six years. Furthermore, the Farukhnagar project, a CAPEX-intensive initiative, is anticipated to involve an investment of ₹150 crores with an estimated IRR of 25% to 30%, and is expected to be operational by December 2026/January 2027.

Acquisition of Speedy Multimodes

Allcargo Terminals' board has approved the acquisition of the remaining 15% stake in its subsidiary, Speedy Multimodes, through a share swap deal. This transaction will result in Speedy Multimodes becoming a wholly-owned subsidiary of Allcargo Terminals Limited. This move is aimed at consolidating operations and streamlining the corporate structure.

Global Economic and Trade Outlook

Management noted that the global economy is expected to remain stable, with the IMF predicting 3.3% growth for calendar years 2025 and 2026. India's growth outlook remains strong, with the IMF projecting 6.5% growth for FY25 and FY26, driven by government initiatives. However, global ocean trade continues to face challenges from ongoing disruptions in the Red Sea, the Panama Canal, geopolitical issues, and potential US tariffs, though global trade is expected to expand at a moderate pace.

Income Tax Search Update

The company confirmed that income tax authorities conducted a search operation at its facilities and offices on February 10, 2025. Allcargo Terminals fully cooperated with the investigating officers. As of the call date, the company had not received any written communication regarding the outcome of the search. Management stated that company operations are running smoothly, and they are awaiting further details from the Income Tax Department.

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