Detailed Narrative
Q3 FY25 Performance & Market Share Gains
Gateway Distriparks reported consistent Rail EBITDA per TEU at ₹9,600, aligning with H1 FY25 performance, and CFS EBITDA per TEU at ₹1,270. The company achieved a 40% double stacking rate, up from 38% last quarter. Despite overall market degrowth in Ludhiana (-20% YoY) and Uttarakhand (-30% YoY), Gateway improved its market share in Sahnewal from 24% to 26.5-27% and in Uttarakhand from 23% to 30%, while maintaining Delhi NCR at 17%.
Dedicated Freight Corridor (DFC) Progress and Future Impact
The Western DFC is currently operational up to Mundra and Pipavav, with the crucial JNPT connectivity expected by the end of 2025, potentially extending a few months beyond. Management anticipates this will reduce turnaround times to JNPT from 72 hours to 30 hours and is expected to boost Rail EBITDA per TEU to over ₹10,000. While the Eastern DFC is operational, Gateway has no immediate plans for operations there, maintaining its focus on EXIM trade via Western ports.
Snowman Logistics: Strategic Shift and Growth Outlook
Snowman Logistics reported a dip in EBITDA margin to 16% this quarter, attributed to increased labor and electricity costs, and a strategic shift following the termination of the Amazon contract. The company is actively cutting costs and correcting revenues during contract renewals, targeting a sustainable EBITDA margin of 18-20%. Snowman aims to achieve ₹800-900 crores in revenue by the end of FY27, driven by its Snow Distribute (5PL) business and new facility additions.
Expansion Plans and Capital Allocation
Gateway Distriparks is actively exploring 2-3 new rail-linked ICDs, with an announcement expected next quarter, but faces significant challenges in land acquisition. The Jaipur project remains delayed for over a year due to legal proceedings, requiring an estimated ₹50-60 crores upon resolution. Total CAPEX for 2-3 new terminals is projected at ₹250-300 crores, alongside a maintenance CAPEX of ₹30-40 crores for warehouse capacity and equipment replacement over the next two years. The company reported an Operating Cash Flow (OCF) of ₹250 crores and a CAPEX of ₹20 crores for the first nine months of FY25.
Market Dynamics and External Headwinds
The Red Sea crisis continues to impact global logistics, leading to increased freight rates, erratic container arrivals, and a shortage of empty container inventory, which has suppressed overall market growth, including in NCR (2% Q3 YoY). Ludhiana and Uttarakhand markets experienced significant degrowth due to their heavy reliance on scrap and waste paper volumes, respectively. Management noted ongoing discounting in the Ludhiana market, ranging from 5% to 15%, but stated that over 80% of their business maintains stable pricing.