AVG Logistics Q4 FY26 earnings call

AVG Logistics reported robust Q4 FY26 results with revenue of INR 176.61 crores, marking a 19.4% YoY growth. EBITDA surged by 45.21% YoY to INR 34.72 crores, with the EBITDA margin expanding by 349 basis points to 19.66%. PAT more than doubled, growing 104.78% YoY to INR 10.71 crores, achieving a PAT margin of 6.06%. For the full year FY26, total income reached INR 582.48 crores, a 5.07% YoY increase, with PAT growing 22.71% to INR 26.17 crores.

The company strengthened its multi-modal capabilities by entering the rail-based liquid logistics segment, which is described as a high-growth, high-margin area with few competitors. Management plans to increase its container tankers from the current 180 to 1,800 and aims for 8-10 liquid logistics trains by 2030, with one additional rake targeted for FY27. This expansion is crucial for offering safe, efficient, and sustainable transport solutions for chemical and allied industries.

AVG Logistics is actively deploying CNG, LNG, and electric vehicles, driven by customer demand for sustainable solutions and its own commitment to reducing carbon emissions. The company is investing in charging infrastructure to support long-distance EV operations, noting that EV profits are significantly better than diesel. A new joint venture, Carbonlite Logistics Private Limited (50:50 with Baidyanath Group), has been formed to focus on green logistics, with operations expected to commence within the next month.

The company secured a new 3-year contract (extendable to 5 years) with Haldiram Nagpur, a leading FMCG brand, dedicating 100 vehicles for supply across multiple states including Maharashtra, Gujarat, and Karnataka. This win, along with a focus on customer retention and identifying new logistics requirements, is part of AVG's strategy to expand its wallet share and strengthen long-term partnerships. Management expects additional vehicle deployments for this contract in the next 2-3 months.

AVG Logistics maintains a prudent and disciplined capital allocation strategy, with FY26 capex at over INR 60 crores and a target of over INR 50 crores for FY27, primarily for vehicle acquisition and infrastructure. Management aims for a 15-20% revenue growth in FY27 and projects a turnover of INR 1250 crores by 2030, driven by strong industry fundamentals, government support, and diversified service offerings. The company funds vehicle purchases largely through 80-90% bank/NBFC loans, ensuring profitability from day one.

The company's focus on operational excellence, prudent cost management, and improving asset utilization contributed to the significant margin expansion in Q4 FY26. Initiatives include improving fleet productivity, reducing empty runs, optimizing freight planning, and enhancing warehouse productivity. Management noted that fuel price increases have minimal impact due to escalation clauses in most customer contracts, allowing costs to be passed on within a week or 15 days.