Allcargo Terminals Limited — Q4 FY25 earnings call

Call held 15 May 2025

Management summary

Allcargo Terminals reported a mixed Q4 and FY25, with strong EBITDA growth of 26% and 9% respectively, driven by improved margins and operational efficiencies. However, net profit saw a decline due to one-off tax impacts and accelerated amortization. The company is strategically expanding capacity and investing in rail infrastructure to achieve its long-term target of 1 million TEUs and doubled profitability by FY27-28, while navigating a challenging global trade environment.

Highlights

  • FY25 Revenue grew 3% YoY, driven by improved gross margins.

  • FY25 EBITDA grew 9% YoY, with EBITDA per TEU increasing 8%.

  • Q4 FY25 EBITDA grew 26% YoY, demonstrating strong operational leverage.

  • Successfully renewed CWC Mundra contract with additional capacity, increasing overall capacity by close to 30%.

  • Achieved industry-leading Net Promoter Score (NPS) of 65%, reflecting enhanced customer satisfaction.

Concerns

  • Q4 FY25 reported a net loss of INR2.44 crores, compared to a net profit of INR9.2 crores in Q4 FY24.

  • FY25 net profit decreased to INR30.2 crores from INR44.7 crores in FY24.

  • Net profit decline primarily due to taxation on dividend received from subsidiary/JV and accelerated amortization of customer relationship intangibles for Speedy Mundra facility.

  • Global trade outlook deteriorated, with WTO anticipating a marginal decline of 0.2% in world merchandise trade in 2025.

Key financials

2 periods

Q4 FY25

  • Revenue Growth
    2%
    YoY +2%
  • EBITDA Growth
    26%
    YoY +26%
  • Net Loss
    ₹2.44 Cr

FY25

  • Revenue Growth
    3%
    YoY +3%
  • EBITDA Growth
    9%
    YoY +9%
  • Net Profit
    ₹30.2 Cr

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

high confidence
  • Capex Capex disclosed
    • JNPT expansion (25-acre co-located facility)
    • Mundra expansion (own land for consolidation)
    • Farrukhnagar ICD (strategic investment in HORCL)
    So we have done this IRR calculations, and we have done these calculations when we took this investment decision. As Suresh has said in his earlier discussion, this period -- these projects do have longer gestation periods. And it will take some time to realize. We have given time lines in terms of when Mundra capacity will get activated and when Farrukhnagar is also expected to go live. And these are the times when you can actually see the returns coming out of these investments.
  • Debt Debt disclosed
    So last year, we have ROCE of close to 26%. This year, we are around 20%. The key reason for increase in our capital employed is the investment which we have done in Haryana Orbital Rail Corporation. Suresh and me, I explained the rationale behind this particular investment, why we have done this investment. And to some extent, you are right. These projects, which we are talking about are infrastructure projects and has some gestation period. ... In terms of bank debt, we our working capital management is very healthy. Our receivables remain in the range of -- DSO remains in the range of 20-25 days. And our cash generation year-on-year has been consistent. In a period to come, you will see that based on our cash generation, we will be able to retire some high-cost debt, which we have taken. And we should be able to fund a lot of this investment through our internal accruals. So while borrowing could be necessary to get the leverage, we would ensure that we will remain in a healthy balance sheet management position.
  • M&A Speedy Multimodes Acquisition · Closed · Consideration ₹[object Object] (cash)

    Increased stake from 85% to 100%

    Further, we have made strategic investments in HORCL, Haryana Orbital Rail Corporation, and increased our stake in our subsidiary, Speedy Multimodes from 85% to 100%.
  • Liquidity Cash ₹70 Cr Short-term cash reserves parked in mutual funds.
    Plus, we have also our short-term cash reserves, we have parked in the mutual fund liquid investments that would be close to around INR70 crores. These are the key investments in our book.

Guidance & targets

Volume

  • Laden TEUs handled Volume · FY27-28 · High confidence 1 million
    Our digital investments continue to enhance customer satisfaction as reflected in our industry-leading Net Promoter or NPS score of 65%. We remain firmly on track to achieve our aspiration of handling 1 million laden TEUs and doubling profitability by FY '27, '28.

    — Suresh Kumar R.

  • Volume growth Volume · FY26 · High confidence 8% to 10%
    To get to that level, we might we would require 8% to 10% growth in volumes to keep our capacity utilization at a healthy level.

    — Suresh Kumar R.

Profitability

  • Profitability Profitability · FY27-28 · High confidence doubling
    Our digital investments continue to enhance customer satisfaction as reflected in our industry-leading Net Promoter or NPS score of 65%. We remain firmly on track to achieve our aspiration of handling 1 million laden TEUs and doubling profitability by FY '27, '28.

    — Suresh Kumar R.

  • EBITDA per TEU Profitability · FY26 · High confidence maintain at current level
    Having said that, for the current year, we our plan is to maintain EBITDA per TEU at the current level because these are existing markets in which we are adding capacity.

    — Suresh Kumar R.

  • PBT Profitability · next 3 years · High confidence doubling to ~90 crores

    Previously ~47 crores → doubling to ~90 crores

    Okay. So from current 47-odd, we are targeting nearly 90 or so.

    — Pritam Vartak

Capacity

  • JNPT expansion Capacity · Q2 FY26 · High confidence operational
    So the JNPT expansion will happen in Q2 of '25, '26. The Mundra expansion Phase 1 will happen in Q4 of '25, '26.

    — Suresh Kumar R.

  • Mundra expansion Phase 1 Capacity · Q4 FY26 · High confidence operational

    — Suresh Kumar R.

  • Farrukhnagar ICD project start Capacity · Q3 FY26 · High confidence start operations
    In terms of Farrukhnagar ICD, which we are planning, which is -- and HORCL rail connectivity is one of the factor of that particular project. We are looking to start this in the Q3 of FY '26, and we are expecting it to complete by end of FY '27 and operations in a right way could start in the year '27, '28.

    — Pritam Vartak

What to watch in Q1 FY26

JNPT expansion progress

Q2 FY26
Current Underway
Target Operational

Why it matters

JNPT is a major contributor to volumes, and its expansion is key to FY26 volume growth targets.

So the JNPT expansion will happen in Q2 of '25, '26.

Risks & concerns

  • Global economic slowdown

    medium

    IMF projects slowdown to 2.8% in 2025 and 3% in 2026, with WTO anticipating a 0.2% decline in world merchandise trade in 2025.

    Management acknowledged

  • Competitive intensity and integrated players

    medium

    Evolving competition from port players and integrated logistics providers, with potential for tariff pressure in key markets like Nhava Sheva and Chennai.

    Both acknowledged

  • Impact of asset-heavy strategy on ROCE and debt

    medium

    Analyst raised concerns about increased debt, depreciation, and potential dampening of ROCE due to longer gestation periods for new asset investments. Management stated current ROCE is around 20% and they aim for a healthy balance sheet.

    Analyst acknowledged

Q&A highlights

5 direct
Capacity utilization and installed capacity vs handled volumes Direct
While we are talking about capacity, we talk about the capacities in the seven facilities, which includes Dadri, in the overall number of 815,000. And that is what is the reason for the utilization difference that you would notice. Also, the other thing when we look at the capacity that we talk about in the yard capacity, there is laden capacity volumes that we speak, there is also empty's that we handle in the facilities, which take up volumes, which take up yard space, which we normally do not talk about. When we talk about the capacity that we have, we are talking about the laden capacity. Occasionally, there is interchange in yard capacities between empty's and the laden volumes.

Clarified that the reported 800k TEU installed capacity includes Dadri JV and considers laden capacity, explaining the difference with handled volumes.

Asked by Madhur Rathi

Realization per TEU growth outlook Direct
So if you see last year, which is FY '24, I will just take you back, we had a reduction in revenue per TEU as compared to FY '23 in FY '24. However, in FY '25, we have been consistently able to improve our revenue per TEU from INR11,837 per TEU, we have reached to INR12,107 per TEU for full year FY '25. ... In whatever expansions, which we have planned going forward, we don't expect our revenue per TEU to go down in an established market. However, if at all, we have to get into a new market, there we might play in terms of the revenue per TEU. But our plan for next year, we have been very much in terms of maintaining our revenue per TEU going forward.

Management confirmed efforts to maintain or improve realization per TEU, especially in established markets, despite competitive intensity.

Asked by Madhur Rathi

Shift from asset-light to asset acquisition model and impact on profitability Direct
So I would like to first start with your question around from capex light to capex heavy. So I would say we are we had when we started, we had an opportunity to be an asset-light company, wherein our Transindia Real Estate Limited, with whom we had a long leases, and those lease still continue. However, there are certain opportunities, which we can go with the opex model. ... The HORCL investment is very strategic in nature because it gives us a value proposition, which is different from the ICDs in that location by giving us direct access to the DFC. ... So when you look at us at ATL, look at us as an organization, which is about 1.5 years in a market, which is in the Indian EXIM space, which offers great opportunity for growth. It's an organization which has got 7 facilities across the country, 6 of them, CFSs and 1 ICD through our joint venture. There are a lot of opportunities that we need to kind of tap into to get to our growth aspirations.

Management clarified the strategic rationale behind asset investments (HORCL, Mundra land) for long-term growth and value creation, moving to an 'asset-right' model, while still pursuing opex models where feasible.

Asked by Purushottam

Accelerated amortization for CWC Mundra contract Direct
No, no, it's done. So March '25 was the last quarter. And going forward, we will not have significant depreciation for CWC Mundra.

Confirmed that the accelerated amortization for CWC Mundra is complete as of Q4 FY25, implying no further impact on future quarters from this specific item.

Asked by Amit Kumar

Competition from integrated players (Adani) and potential price wars Direct
Yes, very good point. I think the industry has evolved over the last 10 years, and we will now see new trends starting to happen. So 2015 to 2020, the large conversations used to be around DPD, and how will DPD impact the entire CFS business. Between 2020 and 2025, there weren't any significant changes in market trends. Over the last year, 1.5 years, the point that you said about integrated players, port players kind of forward integrating, backward integrating. These are things which are starting to emerge. ... The proof of the pudding finally is in terms of market share that we have. Our estimated market shares in the critical markets continue to remain stable, and we expect that to continue.

Management acknowledged evolving competition from integrated players but expressed confidence in their competitive moat (digital enablement, multi-point presence, group synergies, operational excellence) and stable market share.

Asked by Pranav Gala

ICD EBITDA per TEU vs CFS Partial
So we are operating one ICD as a joint venture in Dadri. The margins there are pretty much similar or comparable to our CFS business because we are not participating in the rail freight business out there. This is purely handling and storage. In a Farrukhnagar kind of scenario where we are also looking to get into rail freight from port to ICD, I would say the realization would include your rail revenue and margin on rail revenues as well. And pure play ICD margin remaining same as what we are drawing today. ... So currently, it would be higher than like 4% to 5% higher than what we have in our existing business.

Clarified that current JV ICD margins are similar to CFS due to lack of rail freight participation, but future ICDs with rail freight (like Farrukhnagar) are expected to yield 4-5% higher EBITDA per TEU.

Asked by Parag Jhawar

2 min read 6 chapters

Detailed narrative

Global Economic and Trade Outlook

The IMF projects a global economic slowdown to 2.8% in 2025 and 3% in 2026. Concurrently, the WTO anticipates a marginal decline of 0.2% in world merchandise trade volume for 2025, a significant downward revision from previous expectations. Despite this, India's growth outlook remains robust at 6.2% for 2025, primarily driven by private consumption.

Q4 and Full Year FY25 Financial Performance

For Q4 FY25, Allcargo Terminals reported a 2% increase in revenue and a 26% increase in EBITDA compared to Q4 FY24, handling 153,575 TEUs. Realization per TEU stood at INR12,107, and EBITDA per TEU was INR2,184. However, the company recorded a net loss of INR2.44 crores for the quarter, compared to a net profit of INR9.2 crores in the prior year. For the full fiscal year FY25, volumes grew 1%, revenue grew 3%, and EBITDA grew 9%. Net profit for FY25 was INR30.2 crores, down from INR44.7 crores in FY24, primarily due to taxation on dividend income and accelerated amortization of customer relationship intangibles.

Strategic Expansions and Investments

Allcargo Terminals has strategically expanded its capacity by nearly 30% through the renewal of its CWC Mundra contract with additional capacity and the addition of a new 25-acre co-located facility at JNPT. The company also made strategic investments in Haryana Orbital Rail Corporation (HORCL) and increased its stake in Speedy Multimodes to 100% for approximately INR100 crores. These investments are part of a broader strategy to achieve 1 million laden TEUs and double profitability by FY27-28.

Asset Strategy and Profitability

The company is transitioning from an 'asset-light' to an 'asset-right' model, making strategic investments in assets like HORCL and land in Mundra to consolidate volumes and secure future operations. While these investments may have longer gestation periods and impact ROCE in the short term (ROCE decreased from 26% to 20% YoY), management believes they are crucial for long-term growth and value creation. They aim to maintain EBITDA per TEU at current levels for FY26 and expect higher EBITDA per TEU from new ICDs with rail freight integration.

Competitive Landscape and Differentiation

Management acknowledges the evolving competitive landscape, particularly from integrated players and port operators. To differentiate, Allcargo Terminals focuses on digital enablement, multi-point presence across 80-85% of EXIM trade in India, group synergies for cross-selling, and operational excellence. They report stable market shares in critical markets and believe their competitive moat will allow them to benefit from any industry consolidation.

Future Growth Outlook and Capacity Plans

The company targets 8-10% volume growth for FY26, driven by the JNPT expansion becoming operational in Q2 FY26 and Mundra Phase 1 in Q4 FY26. The Farrukhnagar ICD project, a strategic entry into the northern NCR market, is expected to start operations in Q3 FY26 and be fully operational by FY27-28. The bulk of the volume growth towards the 1 million TEU target is anticipated in FY27 and FY28 as these new capacities stabilize.

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