Adani Ports and Special Economic Zone Limited (ADANIPORTS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Adani Ports and Special Economic Zone Limited Q1 and FY '27 Earnings Conference Call hosted by IIFL Capital. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinion and expectation of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Mehta from IIFL Capital Services Limited. Thank you, and over to you, Vishal.

Yes. Thank you, Danesh. Hello, everyone. On behalf of IIFL Capital, I welcome you all. We have the management of Adani Ports and SEZ Limited represented by Mr. Ashwani Gupta, Whole-Time Director and CEO; Mr. Krishna Menon, our CFO; Mr. Niraj Bansal, Head of Ports; Mr. Divij Anil Taneja, Head of Logistics; and Mr. Rahul Agarwal, the Head of Investor Relations and ESG to discuss the 1Q FY '27 results and the outlook going ahead. So without any ado, I will hand over to Mr. Rahul Agarwal, the Head of Investor Relations and ESG. Over to you, Rahul.

Thank you, Vishal. Thank you, Danesh. Good evening, everyone, and welcome to Adani Ports Q1 FY '27 Earnings Conference Call. We will begin this call with opening comments from Ashwani and then open the floor for Q&A. Thank you. Ashwani, over to you.

Thank you. Good morning, good afternoon, good evening, based on the time zones you are all in. Thank you for your continued confidence in APSEZ and thank you for attending this conference. We are again here to demonstrate our ongoing confidence in the group's trajectory. Our resilient and diversified business model continues to deliver very strong growth despite multiple macroeconomic challenges. Quarter 1 FY '27, revenue and EBITDA both grew 19% year-on-year to INR 10,821 crores and INR 6,541 crores, respectively. The domestic ports business remained a strong growth engine, delivering 12% revenue, 11% EBITDA jump, while maintaining an industry-leading EBITDA margin of 74%. Mundra Port made a strong comeback with 7% growth in quarter 1. And as outlined in our Ambition 2031, we are rapidly expanding our domestic port capacity to 1 billion metric tonnes with major projects underway across ports, including Mundra, Dhamra, Vizhinjam, Ennore, Kattupalli. In international ports, which we were expecting, and it was showing a clear growth quarter-on-quarter. But this quarter, we delivered record revenue of INR 1,747 crores, up 80% and year-on-year, while EBITDA surged 256%, it is driven by addition of Australian operations, but also a very, very robust and strong ramp-up of Colombo Terminal. Cargo volumes nearly tripled 22.8 million metric tonnes from 7.7 million metric tonnes a year ago. The increasing contribution from high-margin Australian and Colombo operations resulted in a sharp improvement in EBITDA margins to 41.8% compared to 21.1% a year ago. In Logistics, we continue to focus on scaling up our asset-light businesses. Trucking revenue grew 26%. International freight network business revenue grew 28%. You have seen our FY '26 Logistics ROCE, which sharply increased to 10%, and we are continuing to focus on incurring returns on -- in this business. The third business, which is Marine. The Marine revenue increased 67% to INR 901 crores driven by diverse global fleet of 135 vessels. We are focused on expanding the global reach of our Marine portfolio. Recent milestones, including our partnership with Oceaneering International to strengthen deepwater engineering and offshore capabilities in Europe, as well as a landmark 10-year contract supporting Argentina's LNG export program. Our growth continues to be underpinned by prudent capital allocation and financial discipline. Despite sustaining a high-growth trajectory, net debt-to-EBITDA remains healthy at 1.9%. S&P Global Ratings upgraded APSEZ BBB with a Stable outlook, placing us at par with India's sovereign rating, while CARE Ratings and ICRA reaffirmed our highest domestic rating of AAA. Despite a challenging macroeconomic environment, APSEZ continues to deliver strong growth underscoring the resilience of our strategy and execution. We remain firmly on track to more than double revenue, EBITDA and cash flows by FY '31. Our scale and integrated Port, Logistics, Marine network with 95% of India hinterland coverage, driven by technology-led operations, lean organization and balance sheet capacity to fund the growth positions us to consistently to deliver 18% to 19% CAGR over coming years. Thank you once again, and we will now take your questions.

[Operator Instructions] Our first question comes from the line of Alok Deora from Motilal Oswal.

So firstly, congrats on a pretty decent set of numbers. So just had a few questions. If I just look at the details in terms of the volume firstly. So domestic volumes still kind of continue to be muted. So ideally this number could have been much better, had the volumes in the domestic side could have been better. So just if you could indicate what's going on there, specifically, I think Krishnapatnam has seen a big degrowth in this quarter on a Y-o-Y basis. And even in the Logistics business, if you can highlight what been on the volume side, because there also we have seen pretty strong volumes coming off. If you could just indicate this, then I can go to the next question.

As we keep our regular communication, I think it's good to see quarter-in-quarter, but as you know that, Maritime business is not about 1 month or 2 months or 3 months, it's a complete cycle. And as the world was disturbed starting mid of February, some of the after kind came in March, came in April, came in May and maybe a little bit of it is still continuing. Now I can go port by port for sure. As you correctly said, I think 2% is a very, let me say, a very average figure for us, but we would have done it better, but where we would have done it better whether that was in our hands or it was because of the external circumstances, I think more it was in the external circumstances. For example, if you remember last year, Mundra was struggling to grow. And the main reason was that one of our customers' power plant was almost non-operational throughout the year, and that's why and that plant is only and only dependent on the imported coal. And then in every quarter, we were explaining. And then now they started and you'll see the growth in Mundra. So I think, here in Krishnapatnam, a very specific reason, one of our customer plant was shut off, and there was a clear shortfall of the 2 million or 2.5 million metric tonnes and their plant has restarted, so it will be recovered. So I want to be very transparent saying where there is a real issue and where there is a spot issue for 1 month or 2 months or 3 months. But if you look at all the East Coast belt and if you compare Dhamra, Krishnapatnam, Gangavaram, even Gopalpur. And if you put all these 4 ports and if you put all the 4 competition ports we have gained the market share. So which means, we are better than the trade in this or East Coast region, which is the frontier for our growth. However, what are 2 ports can have this kind of spot issue, which happened in Krishnapatnam. Then on the container also, maybe that is the question which may come up from others. Containers also -- I think, there was a consequence of the disturbance which happened because of the Middle East crisis. And also, we wanted to support the Maritime business. We wanted to support our country and we wanted to support the Middle East by accepting a tonne shipment and keeping the containers because those shipping lines were not taking the containers to the Middle East, right? We kept the containers. We created a land in Mundra away from the port. We kept the containers to support the industry. Definitely now when those containers are going back, those are on shipments. So definitely, the whole capacity of Mundra is being utilized. So -- but even then, I think in EXIM, we have increased our market share from 2% to 5.9%. We have increased our -- we have shown the growth. But yes, I would say that April, May, June and especially April and May is not the right month where we can really do the apple-to-apple comparison. So spot issues in Krishnapatnam and in the container in Mundra. But rest all, I would say, whether it is liquid or it is on tonne shipment in Vizhinjam or Ennore or Kattupalli or it is liquid in Hazira, I think everything is in line with our -- in our expectation.

Sure. Yes. Just one question. So there have been news articles noting today on the acquisition of ABB U.K. port. So just any comment on there? Are we evaluating or any movement there or it's completely baseless. Any comments you would like to make here because that's a pretty big port and the investment also, which is indicated in terms of valuation, all those numbers are pretty large. So just your comments on that would be helpful.

I think at first, let's be very straight and clear. We don't comment on speculation and the rumor, and I repeat that, and I emphasize on that. Then in every analyst conference, in every investors meeting, in every customers meeting, we have been communicating that we are studying, exploring the opportunities of M&As, which includes international expansion. This is the second statement, which we have been always saying, it's not today, which we have been always saying. Why? Because we believe the way our balance sheet is structured today, the way we will have the cash in the next 5 years, the way we will be deploying the capital for the organic growth, we have enough opportunities to go for inorganic growth through a meaningful M&A. So that's why we keep on evaluating the assets around the world. Now the third thing, which is also very consistent, which I am saying in every conference that there are the rules/playground to do an international acquisition. Why? Because last 2.5 years, I have been asked this question that how is your international performance? How is your international performance, whether you will be able to match with the domestic performance or not. And this quarter has demonstrated that we can operate international businesses also with the same Adani DAA to bring the performance. So that's the third thing. Now what is the playground for the international acquisition? And I repeat once again, the first rule is the asset should bring contribution to the top line and the bottom line, both. And once again, I repeat, top line and bottom line both. That is what. That's why, the greenfield is the second priority. The first priority is the existing business because I get -- I start getting the return from the first day, and this is not India, this is overseas. And that's why I have to be dependent on the business over there and the management team over there. That's the first rule. The second rule is my balance sheet is very much structured, and I think everybody is recognizing that in terms of exposure to the foreign currency. So whether it is U.S. dollar or it is now Australian dollar or it is Israeli Shekel or it is something else. Now definitely, why the rating agencies are considering as what the factor for us. But after having the Australian assets, which are revenue-generating and profit-generating assets, these are in hard currencies. The returns are in hard currencies. And that's why we have a sustainable growth. So similarly, if my balance sheet is structured, with 3 or 4 hard currencies. Definitely, it will help me in having a more confidence in the balance sheet. And that's why that gives my second rule, is the country we want to go in, we want to have the local financing in that currency. So that's the second rule. So first, it should bring contribution to top line and bottom line. Second, it should be financed in local currency. And the third is the return from that asset should be at or more than the average APSEZ. Of course, we can talk about currency depreciation. We can talk about rate of growth. We can talk about cost of capital. Considering all it should be at or more than APSEZ. This is what we proved in Australia acquisition. Number one, top line and bottom line; number two, the local financing; number three, is the -- is the thing which I just said; and fourth, we should have the local partner, but that is depending on the asset, we will go or not go. So once again, I repeat, we are selling a lot of assets around the world because it's a high time for us to plan the APSEZ' next step in terms of expansion. However, those assets will be only acquired if those are meaningful and ticking all these 3 boxes, which I just said.

Sure. Thanks for the elaborate answer. So I mean, you might not want to comment on individual transaction or portability. But are we looking at this kind of size of investment if there is an opportunity coming up like nearly sort of INR 60,000 crores, INR 70,000 crores kind of a size at one particular port or one particular opportunity? Or do we want to go little like how we have done previously, it's been at a much smaller size and scale and then we have eventually scaled up there.

I mean, we will evaluate from all perspectives. So at the end, whatever is the size, it should be at and more than the return which we are getting on average APSEZ.

Our next question comes from the line of Priyankar Biswas with JM Financial.

And I would say, like quite a strong performance on the EBITDA front. So my first question is, sir, when I look at your other income for Q1 of FY '27, it seems to be quite higher than what it was in, let's say, the comparable quarter last year. So is there some elements that are there? Or can we get something like what should be the underlying level of other income? So that's the first question. If you can explain on that.

I can take that. So Priyankar, basically, you see in this first quarter, we had a dividend that was declared by our JV companies, CT-3 and CT-4. Right? That is to the tune of roughly about INR 518 crores. That is the APSEZ share. Now basically, when that happens, the income is appropriated out of the PAT. So you will actually notice in the JV line, the JV line actually below EBITDA shows a loss, and that contra entry appears in the other income. So there's another income component of INR 853 crores, which includes INR 518 crores, which is the dividend income that we have received from these 2 JVs. Right? So it's just a contra entry. This similar thing, this -- the dividend for last year was actually declared in Q2. So you will see a similar phenomenon appearing in Q2 of the last financial year, but not in Q1. Therefore, when you compare year-on-year, you will see that aberration, where there's basically that contra entry, where the profit from the JV has been to move out of the EBITDA -- below the EBITDA line and therefore comes in the other income line.

So would it be right to say that, let's say, you have INR 853 crores and if I remove INR 518 crores, so roughly like INR 335 crores, that's like the steady state other income? [indiscernible] consider the number?

That is correct. So the INR 335 crores is steady state other income. And the JV figure, if I kind of add back that INR 518 crores the JV performance number would be INR 230 crores, 2-3-0, for this particular quarter compared to INR 157 crores in the previous year.

Okay. That's very clear. That's clarified. And I understand that there was a significant increase in transshipment particularly in this particular quarter. You have already giving the reasons why, let's say, there were some significant jump-ups in Mundra in particular. So if you can throw some color, like before the conflict in your containers, what would be the typical share of transshipment and what it was in, let's say, Q1? And also because you have stored these containers for a prolonged period of time, so is there some storage income or if let's say, more specifically some storage EBITDA, that would have come into this Q1 number.

Yes. So in the quarter 1, there is no storage income. As I said, we follow the guidelines that we have to support the industry. We have to support the industry by providing or extending the storage, storage thing, because of the congestion and the disturbance. However, we have a refrigerated transshipment. For sure, if I'm providing the electricity to the refrigerated container, I have to charge. So I will be very honest with you. So yes, there were charges, which came in, for example, refrigerated containers, for example, lift-on, lift-off because that is where I'm burning my fuel, I'm burning my manpower. But when it comes to storage, as you know, that we extended the free storage so that the trade can get the help. Sorry, please go on.

So if I understand, so essentially for ancillary services only it was charged. Not storage.

I mean, more or less where we were anchoring the cost by providing the emergency services, obviously, we were charging it. Where we thought we have to just put it on the storage on the ground, we were not, where the free storage was extended. Right? Rohit, how much we extended?

45 days.

45 days. And it's -- you can see the trade advisory. We circulated in public. And then answering to your question, and this is also very important because the question may come up from the other colleagues. So in Mundra, typically, the transshipment is 23%, whereas in quarter 1 FY '27, it went up to 27%. And this was mainly because of that. But our competitor nearly doubled or 2.5x the tonne shipment because of the capacity of the space available. But we focused on the shipments, where on one side, we can contribute to the trade, but on the other side, we should not lose on the revenue because our main revenue, as you know, comes from the EXIM percentage.

Okay. And sir, because you have delivered like INR 6,500 crores of EBITDA, so like even within this challenging quarter. So if I take even this run rate, like INR 6,500 crores, you were anyway reaching like 26,000 broad ballpark, like the quarterly in [indiscernible] So is there any chance like would you want to revisit your EBITDA guidance, like which already like '25 to '26?

See, the point is, there are so much uncertainties because of geopolitical situation and so on and so on. And now you have monsoon season in somewhere, monsoon is more, somewhere, monsoon is less. I think we want to see how this quarter goes. And then after half yearly, we will have a discussion on that. But today, what we are focusing on are the three things. First, we are maximizing the opportunity using this challenge, which exists. Of course, we are very sorry for the people who are affected because of this disturbance. But on the business front, we are maximizing the opportunities, as I said, whether it is refrigerated container and blah, blah, blah. The second is we are really minimizing the risk by doing a very systematic planning of our business. Our ports -- as you know, that our all ports are integrated, which means we can do a very fine balance between East Coast, West Coast and the South Coast provided it suits to the customer. And the third thing which we are doing and which we have accelerated more than before is execution of the capacity expansion, because we do believe that in the next 5 years, there are very less capacities which are being created in India. And with the trade growth, which we are seeing, because of the policy reforms, we see that trade will grow and India may be requiring more capacities than planned. And that's why whether it is Mundra or it is Dhamra or it is Kattupalli or it is Hazira, we are really pushing the execution of our projects. So these are the three priorities which we have kept so that we will be maximizing quarter 2. And then in first half, we will see where we land in terms of EBITDA. And then, sir, we will come back and share with you what do we do with the full year guidance.

That's very competitive. And if I may just squeeze last one in. So you had already spoken about your pillows of your M&A. So what is the -- like in case if you have to go for very large ticket size M&A as Alok was asking previously. So adding on to that, what would be your thresholds for net debt-to-EBITDA, like up to what level you are comfortable for a large M&A, because today you are 2.

Yes, let me put it in a different way. And I'm not talking about any particular asset, right? When we acquired Krishnapatnam, the EBITDA was 20%, 21%. Today, it is 74%, or higher 70s. When we acquired Karaikal, it was, I don't know, mid-20s and early 30s. Today, it is more than 60%, 50%, whatever it is. You look at Mundra, the return on capital in the first or second year was negative. Today, it is crossing 38%, 39%, 40%. So Port business is a business which is -- that's why the concession agreements are 30 years, 70 years, 99 years. It's a long-term business, and you know better than me. But if we are acquiring any M&A, whether it was Australia or it was the Astro offshore, which we did last year, you would have seen that we have a full confidence in how we will maximize the return on the investment. So if today, the asset value is INR 100, we will evaluate INR 100 not at INR 100, we will evaluate INR 100 or $100, depending on what return it will give me in 5 years, 7 years, in terms of that currency and that -- and then compare that currency with the Indian currency and then see what is the absolute amount of rate of return I'm getting on that. So that's the basic philosophy. Now the next question comes, what will be the net debt-to-EBITDA. Today, I am at 1.9%. If I do nothing if my only capability and capacity to invest in the organic growth, I will be negative in 5 years. So should I consider what I'm going to spend to buy an asset tomorrow morning or should I consider that the asset which I'm buying, how much return it will give me after 5 years, that will help me in keeping the growth for the future and having a healthy net debt-to-EBITDA. So that is something which is the thing which we have to consider that the value of asset is not about the value of asset today, the value of asset is what return it will generate for me, considering the power of my balance sheet in the next 5 to 7 years.

That was quite clear. That was all from my end.

And last question also, the value of asset can also be determined by how we position that asset, right? So one of the things, as you would have seen in Sri Lanka, we have a partner. So in Israel, we have a partner. So let's not start debating on what should be the ticket size. For me, ticket side is the consequence of an asset, which will give me maximum business return on the asset. Then I will decide how to address the ticket size because I have the confidence in the power of my balance sheet because in 5 years, I will be close to 0 net debt-to-EBITDA, if I do nothing.

Yes, yes. So essentially, like you would want a strong partner as well, typically in foreign assets?

It depends on the country-to-country. It depends. Like in Sri Lanka, we have Sri Lankan partner, in Isreal, we have Israeli partner. Because India is -- India is us. So we know how to manage it. But when you go to the countries, you have unions -- in hyper port, we have 8 unions. So definitely to have local management team, driven by APSEZ leader, CEO and CFO, Board managed by us, but the real day-to-day operations left to the management team and the partner to manage the relationship. That's all is the business model.

Next question comes from the line of Atul Tiwari with JPMorgan.

And congrats on pretty good set of numbers. Sir, my first question is on domestic port business. So your volume grew 2%, but your revenue was 11%, 12% growth. So what were the levers which you use to drive this kind of revenue and EBITDA growth?

Are you talking about domestic?

Yes, domestic port business.

Yes, yes, yes. So Krishna, you want to answer?

Yes, sure. So, fundamentally, there were 2 things. One, we had a moment where -- wherever the fuel surcharges were there, we want it on. We also ensured that the product and the volume increase...

Yes. So basically, if we look at the main driver for the revenue increase is coming from our performance on managing the mix, which was the consequence of the disturbance of Middle East crisis, which means we had, for example, if you see our liquid went up much more than the dry cargo. And as you know that we have a better realization on liquid and lesser on the coal. Same thing is with the container business, as I just said before, where we had the premium charges for providing the premium services/emergency services, even after getting 45 days of free storage. So that is something which came in. And the third thing is coming by focusing on the associated business services. So we introduced the associated business services in complementary to the port handling charges, which we're making customers much more comfort in having that. So those kind of associated business services also came into the picture. So I would say our endeavor to focus on revenue per tonne by maximizing the performance and keeping the cost almost flat, net of inflation is giving us EBITDA, which is at 74%. And we have been demonstrating it quarter-on-quarter.

Yes. Very clear. And sir, my second question is on Logistics business. So while, obviously, business has shown improvement in ROCE now in double digits. But over the past few quarters, the top line growth has been pretty muted. I mean, do we expect acceleration in that growth in foreseeable future now business is kind of mature and probably the growth...

I don't -- see, we have -- we have 4 quadrant in the Logistics business, right? And as we always explained. We have rail and ICD, which is asset-heavy business. We have trucking business, which is asset light. We have international freight network business, which is at asset 0, and we have EXIM business, which is asset-light. April, May, June, there was, as we all know, disturbance in the trade, all indeed just grew by close to 3%, which used to be like 6%, 7%, 8%, right? And when you look at our ICD structure, let me say, 2,000 to 3,000 containers of Morbi was almost 0 because the whole Moribi tile export was 0 because of the LPG shortage, right? And this is the reality. This is a fact. Then if you look at Tumb, which is ICD, you will see customers started shifting from container to bulk cargo. And then when it was coming as bulk onward was coming to Hazira and not coming to Nawashiwa and then the Tumb. So to answer to your question, I think we have a great opportunity in front of us, not only in EXIM, but also in domestic. We were waiting for a lot of shipping lines we start opening up their PL to our new ICs, whether it is Malur or Kilaraipur or Kishangarh or Patli. But I think our main performance where we expect in the next quarter or this quarter is Patli and Tumb and Virochannagar. So I would say that we said that 4 of our major ICDs should hit 80% of utilization, and we are still not there. And that's where I do believe that there's an opportunity.

Our next question comes from the line of Aditya Mongia with Kotak Institutional Equities.

The first question that I had for the management is, again, linked to acquisitions, I wouldn't the context is that you were able to acquire India assets at 10 to 20x rev EBITDA also because a lot of valuation could have happened, but then -- there was also in the case of you selling wiring them at a fairly high teens to bid in the future because it was at on the plate for the person investing in side. Have you see through opportunities globally? Where do you see these opportunities come inside from a marketing perspective in the first time having a lot of valuation can happen and you can get it cheap or in the second kind wherein basically, these are assets that are being run fairly well and the valuation is fairly limited, so you have to pay a lot more.

See, I mean APS is that, and I think under the visionary leadership of our Chairman. We have more than thousands of examples where people thought it cannot be done and we put it and we did it. And the recent 1 is our international business, where our EBITDA jumped by 256%. The logistics business where now the growth is 10% -- the point is we must think of mid, long term on any asset, which is force because the maritime industry. It's not a consumer industry where I will get the return tomorrow morning. The strategy should be -- the first thing is the asset location should be strategically located on the trade route. Now how many trade routes we have. We have 1 trade route east to west There, we already have now Australia, India, Africa and E. talk about Already some of the have already started, not in the name of IMAX, but we see clearly a trade going on that. Then another route is not to south, Panama, where we are not interested and we are not ready to go there. Then the third route comes is the meditarian, which is, again, taking care of 1/3 of the global route. So the point is, first, we have to see the location of the asset. Second, what we have to see is the return on asset, which will be determined by how much revenue we can generate by having the extra cargo, how exact Argo can come? We have a global relationship with the shipping lines. which serves in Tanzania with servers in High fog in servers in Australia, we served us in 15 ports in India, that kind of alliance, which we have with the shipping lines is a distinctive advantage. That's number two. And number three is that all over the world, the ports are operated as terminal operator and terminal operator do not give the right realization on the asset. What gives us realization in India because we manage the whole ecosystem. What is the ecosystem. Ecosystem is all about providing the marine services. Ecosystem is providing the railway services ecosystem is a warehousing. If you see our results of quarter 1 -- if the volume grew by 2%, why we grew 12% EBITDA. This is only because we are focusing not only on volume, and that's where I've been saying that EPS has been projection as integrated transport company where we are creating more value, more and more value for the customer without a direct link with the volume. And if we are able to copy pace this example, in the asset, which we are going to acquire in the country, definitely, there's a scope of improvement. And last but not the least, and this, I've been saying again and again, we cannot compare percentage of EBITDA in India versus another country because we have to take care in the factor is the cost of capital, the inflation and the currency depreciation. And if you do that, we explained very clearly in case of Australian asset acquisition, that even if we bought it at a multiple of 17 at that time, but if you take out all the currency depreciation cost of capital and so on, it would have landed up in the 13 to 14 multiple. That's why you see that how much return we are getting from this asset. So I can assure you, whatever asset we will buy, whatever asset we will acquire around the world, especially either it is in Mediterran or it is on the east to west corridor. We will talk about, once again, these 4 rules. The first rule is country is geopolitically and macroeconomically strong. Number two, it contributes to our top line and bottom line -- number 3 is we will be able to have the local financing, especially because of our investment rating. And last but not the least, that the return from this asset to long term is at or more than APSEZ. Hope it answers the question, sir.

Our next question comes from the line of Mr. Achal Lohade with Nuvama Institutional Equities.

Thanks for the clarification on the acquisition thought process -- the question I had was in terms of the -- you mentioned about Mundra Port container more of transshipment, almost 4 percentage points higher than usual, right? So erratically, for a transhipment cargo, the realization actually will be lower, right? So this delta in terms of realization, what we see is largely on account of these extra charges or extra income in the quarter. How do we see that in terms of sustainability?

Yes. So thank you. Thank you for that. See what we have to see. If you see our volume of container handled in April and May, you will see that volumes are not as average we do in Mudra. Like in Muda, we do roughly 740,000 to 750,000, right? But if you look at April and May, we even didn't touch 700,000 or we were very close to 700,000 right? Now the shortfall was definitely be as I said before, because we were providing services to support the maritime in the country. However, the more the vessel remains and the jetty, then naturally the charges are applicable. It's not that we were charging extra charges. It is just by the tariff that if vessel instead of 3 hours is standing there for 8 hours, definitely, there will be additional charges, which will be charged. So that's why we did not went to the extreme because for us, the volume and the revenue should be balanced. And that's why our transshipment ratio in quarter 1, '27 was roughly 27%, which is roughly 23% to 24%, whereas our competitor nearly doubled or 2.5x. So that's why we keep a very strict discipline between the ratio of EXIM and transshipment. Whatever comment was increased was recovered in the revenue because of the additional charges because of the reason I explained just now.

Got it. Just a clarification in the guidance, we have removed the line on the CapEx. Any particular reason if you want to clarify, sir?

So Achal, we do not report balance sheet in the first quarter, right? So therefore, we will report the CapEx number in the second quarter. So that will be consistent with our balance sheet disclosure that we will make in the second quarter. but it's in line with the guidance. It is actually slightly ahead of the guidance at this point.

I think the question is, yes, we keep the guidance for CapEx also, even if the reality is we are ahead because of the reason I just explained before.

Got it. Just a clarification. Sorry, I'm happy on the Mundra question. What's the capacity utilization for container in Mundra in 1Q?

We are getting very close.

Okay. And when is the next capacity addition happening, sir, if you could clarify? That's my last question. In this calendar year, very soon.