Allcargo Termi

Allcargo Terminals Limited delivered a robust performance in Q3 FY26, with volumes reaching 1.76 lakh TEUs, marking an 18% year-on-year growth. Revenue for the quarter stood at Rs. 218 crores, up 17% from the previous year. The company's EBITDA, excluding other income, increased by 31% year-on-year to Rs. 43 crores, translating to an EBITDA per TEU of Rs. 2,412. Net profit for the quarter also saw a significant rise of 28% year-on-year, reaching Rs. 15 crores, reflecting strong operational leverage.

The company's strategic 3-year plan is yielding results, with capacity additions at JNPA in Q2 FY26 and renewed contracts in Mundra contributing to volume growth. The JNPA expansion, completed in August, added approximately 1.70 lakh TEUs of handling capacity. For the full FY26, the average capacity is expected to be in the range of 9 to 9.2 lakh TEUs. Management aims for a laden container capacity utilization of 85-86%, which would signify near-full operational capacity.

Allcargo Terminals is optimistic about long-term growth, aligning with IMF's global growth projections of 3.3% for 2026 and 3.2% for 2027. The Indian port volumes are expected to grow between 6% and 8% in the coming years, and ATL aspires to grow 1-2 percentage points faster than the market. The company's focus on customer equity and capacity expansion is expected to drive this accelerated growth, with current year growth at 7%.

A significant highlight is the company's debt-free status as of the call date, having repaid all borrowings. For future expansions, including the Farukhnagar ICD project and a potential new facility in Chennai, the company plans to invest approximately Rs. 400 crores by 2030. This investment will primarily be funded through equity (Rs. 120 crores from a rights issue and warrants) and internal accruals (Rs. 100 crores annually), with a minimal borrowing of Rs. 100-150 crores to cover any gap.

The EBITDA per TEU has shown a consistent upward trajectory over the last six to seven quarters, reaching Rs. 2,412 in Q3 FY26. This improvement is attributed to operational efficiency measures, cost management, and the benefits of operational leverage from increased capacity utilization. Management expects to maintain EBITDA per TEU around this level, balancing competitiveness with profitability. Rail-linked facilities like the upcoming Farukhnagar ICD are anticipated to bring a significant jump in EBITDA per TEU from April 2027 onwards, with revenue per TEU potentially reaching Rs. 40,000-45,000 compared to Rs. 12,000 for CFS operations.

The Farukhnagar ICD project, a key future initiative, is estimated to go live in April-May 2027, adding approximately 1.5 lakh TEUs of capacity. The company also secured a 10-year extension for its Speedy JNPT facility, with plans to upgrade it by March plus 3-4 months, enhancing its annual capacity by 60,000 TEUs. These projects, along with the search for a new facility in Chennai, are part of the plan to reach a total capacity of 13 lakh TEUs by 2030.

While acknowledging past 'turbulent times' and ongoing macro uncertainties, management expressed optimism regarding the impact of new trade agreements, particularly with the European Union and the United States. These regions contribute 30-32% of container volumes to India. Although the operationalization of the EU agreement may take several months, the company anticipates an uptick in trade and volumes, reinforcing its focus on operational excellence and customer service to capture market share.