Snowman Logistics Limited

Snowman Logistics reported consolidated full year FY25 revenue of Rs. 145 crores, with EBITDA of Rs. 25 crores, PBT of Rs. 3 crores, and PAT of Rs. 3.5 crores. The quarter included several one-off^📎 accounting entries, such as a Rs. 12.8 crores provision for stamp duty related to an internal group merger, which is not a cash outflow. A net goodwill gain of Rs. 131 crores was recorded for Snowman after a correction of minus Rs. 258 crores this quarter, which is a balance sheet item with no cash flow impact. Additionally, CFS revenue for the full year was adjusted by Rs. 46 crores due to a change in accounting method.

The company is actively expanding its cold storage network. The Kolkata facility is on track to commence operations in June 2025, adding approximately 6,000 pallets to the capacity. Phase 1 of the Krishnapatnam facility is also expected to become operational in July 2025, with Phase 2 planned for July 2026. Management expressed confidence in rapidly ramping up these new facilities, aligning with business growth.

Warehousing margins experienced a significant decline from 18-19% to 11% this year. This compression is attributed to a blended sales mix, growth in the lower-margin 5PL business, and the 'Park 'n' Pay' model, which involved outsourcing 60,000 pallets at lower margins. The shutdown of the Amazon business also impacted overall warehousing margins. New 5PL gross margins are now expected to be in the 6-8% range, depending on the product mix, a reduction from the previous 8-9%.

The transportation services segment saw a substantial decline in EBIT in Q4, falling by approximately 90% from Rs. 52.88 lakhs to Rs. 5 lakhs. This sharp reduction was primarily due to an additional cautious provision taken in Q4 and a slight dip in margins. Despite the EBIT decline, the underlying business revenue for the transportation segment remained flat for the quarter.

Snowman Logistics has successfully added two new 5PL customers this year: Unilever, for ice cream distribution in Northeastern states, and Kopi Kenangan, an Indonesian coffee chain. The company has also regained market share in key regions, with NCR at 17%, Ludhiana at 27% (up from 23-24% last year), and Kashipur at 37%. The double stacking percentage at Faridabad increased to 41% in Q4, with a target of 42-43% going forward^⏳, indicating efficiency improvements.

Snowman Logistics plans an annual CAPEX of Rs. 100-150 crores for FY26 and FY27, primarily allocated for warehousing capacity and vehicles. This CAPEX is expected to be funded through an 80-20 model, with 80% from debt and 20% from internal accruals. The company reported having over Rs. 100 crores in cash, which provides liquidity for its operations and investment plans.

Land acquisition for new rail-linked ICDs remains a significant challenge, with due diligence issues and title problems delaying expansion plans. Management noted that while they are pan-India leaders in cold storage capacity, regional competition exists at new locations. The 5PL segment currently faces no direct competition but is expected to see healthy competition as the industry matures and shifts from unorganized to organized players, necessitating continuous growth strategies.