Allcargo Logistics Limited (ALLCARGO) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to Q2 FY '21 Earnings Conference Call of Allcargo Logistics organized by Batlivala & Karani Securities India Private Limited. [Operator Instructions] I would now like to turn the conference over to Mr. Ankit Panchmatia. Thank you, and over to you, sir.

Yes. Good morning all. On behalf of B&K Securities, we thank the management of Allcargo Logistics Limited who give us an opportunity to host them. We welcome you all to the Q2 FY '21 Earnings Call. From the management side, we have Mr. Prakash Tulsiani, CEO, CFS Division; Mr. Deepal Shah, CFO; and Mr. Ravi, Chief Strategy Officer. Thank you, sir, for giving us the opportunity and over to you for opening comments.

Yes. Hello. Good afternoon, everyone, and rather good morning, and welcome to today's earnings conference call to discuss the performance for the second quarter ended financial year 2021. So as mentioned, I have with me my colleagues Deepal, who's the CFO for Allcargo; and Prakash Tulsiani, the CEO for CFS business. I would like to hand over to Deepal to take us all through the quarterly financial highlights. Over to you, Deepal.

Thank you, Ravi. Let me now take you through the key financial quarterly highlights, the consolidated one. Total revenue from operations stood at INR 2,337 crores for the second quarter ended September 30, 2021, as compared to INR 1,873 crores for the corresponding period last year, which is an increase of approximately 24.7%. EBITDA for the quarter was at INR 162 crores as against INR 130 crores during the corresponding period last year, which is an increase of 24.6% Y-o-Y basis. Profit after tax was reported at INR 58 crores for the quarter as against INR 67 crores during the corresponding period last year, which is a decrease of 13.2% on a Y-o-Y basis. This is primarily on account of increasing finance and depreciation costs coming out of consolidation of Gati and increased borrowing on account of construction of Logistics Parks and acquisition costs, or acquisition outlays in Gati. Let me also highlight the performance for the first half of the financial year 2021. Total revenue from operations stood at INR 4,414 crores as compared to INR 3,689 crores for the corresponding period last year, which is an increase of approximately 19.7% on a Y-o-Y basis. EBITDA for the first half of the year ended -- stood at INR 293 crores as against INR 271 crores during the corresponding period last year, which is an increase of 8.3% on a Y-o-Y basis. Profit after tax for the first half of the year ended was reported at INR 89 crores as against INR 131 crores during the corresponding period last year. This is a decrease of 33.1% on a Y-o-Y basis. Just wanted to add over here that from June quarter, we have consolidated Gati into our books. And that's why the numbers aren't exactly comparable from the previous year. Now I would like to hand over the call back to Ravi to take you through the key business highlights for the quarter.

Thank you, Deepal. Coming to the key business highlights for the second quarter, let's start with the MTO segment. Now for the MTO segment, the total revenue for the second quarter of FY '21 was INR 1,841 crores as against INR 1,697 crores for the corresponding period last year, which is an increase of about 8.5%. EBIT was at INR 79 crores for the second quarter ended as against INR 70 crores for the corresponding period last year, an increase of 13%. The EBIT margins stood at 4.3%. The return on capital employed for the MTO business continues to be good, and it stood at 27.43% on an annualized basis. The activation of business continuity plan across the global network helped the management in reduction of overall SG&A costs. This was further assisted through government subsidies in the selected international countries. And therefore, we had been able to navigate the impact of coronavirus pandemic in a better way. There have also been some incremental revenues coming in by handling specialized cargoes such as Personal Protective Equipment and other supplies linked with the COVID pandemic. Our Multimodal Transport Operations clocked a total volume of 1,91,731 TEUs for the second quarter as against 1,84,479 TEUs for the corresponding period last year. Coming to our Projects & Engineering Solutions. The total revenue for the second quarter stood at INR 69 crores as against INR 75 crores for the corresponding period last year. At EBIT level, it reported a loss of INR 11 crores for the quarter. P&E division's performance has primarily been impacted by lower utilization and hence, impacting the overall performance. However, there is a continuous improvement as we see with more and more projects coming to action and equipment utilization is getting along towards the better numbers. Coming to our Logistics Park business. The total revenue for the second quarter stood at INR 10 crores as against INR 2 crores for the corresponding period last year. This is an indication of increasingly more warehouses becoming operational and becoming revenue-generating as compared to the situation last year. That's all from my side on these businesses and I would now like to hand over the call to my colleague Prakash to take you all through the operational and financial highlights for the CFS and ICD division. Over to you, Prakash.

Ravi, thank you very much, and good morning to everyone. As regards our CFS and ICD business segments, while the total volumes for the second quarter compared to the previous year in the same quarter, that is quarter 2, the numbers are lower at 59,000 versus 89,000 in the corresponding last year, the total revenue in line with the volume reduction have been at -- but of course, not hit exactly in the same fashion, has been at INR 96 crores versus INR 119 crores for the corresponding period last year. Here comes the most important part, and that is our EBIT, for the second quarter is higher than the last year's corresponding period and the margins also have been very good. So numbers which we have declared as EBIT for this second quarter is INR 33 crores versus INR 30 crores in the last year. EBIT margins have also stood up very well at 34%. And this is actually on the back of -- even though we had less volumes, it is cost reductions that we could go for. Of course, there was increased ground rents that we could get. So this is what has helped us, in an overall basis, that we have been able to deliver the INR 33 crores. On the other hand, how do we look at it currently? ports have started registering good volume growth in EXIM. And while there has been growth, this has been hampered or there's a hurdle of shortage of containers, blank sailing and higher freight rates. So that is the hindrance that we see in the current environment, while the volumes are still rising compared to the previous quarters. Then the return on capital is -- generally which we would have at anywhere between 28% and 32% is now standing at 45%. So overall, for CFS, it has been a good quarter. That is from our side. So thank you very much, and we're open for questions, please.

[Operator Instructions] We have first question from Mr. Prateek Kumar from Antique Stockbroking.

Congrats for good numbers again. Sir, can you, I guess, go through brief industry highlights, how now the macro environment is like for the 3 businesses. I mean, are these like strong numbers in terms of volumes in like MTO sustainable? And how should we see growth going forward?

Yes. So Ravi here. Yes, I'll start with the MTO business. Overall, we find that there's been a recovery, and we are expecting the trades to continue to witness a positive growth. Having said that, there's also a constant endeavor from our side to increase volumes, not just on the back of market growth, but also with strong focus on sales acceleration and therefore, increasing our market share. So we believe that we should continue to find good opportunities for growth. And given the current trends, it appears that the macroeconomic indicators are only getting better on the global trade. On the Project & Engineering business, like I mentioned earlier as well, now more and more projects are resuming, and therefore, we are seeing a good utilization for Crane. On a month-on-month basis, there's been a steady increase -- an improvement there. And that trend seems to be holding up for last more than 3, 4 months now. So it seems to be a stable trend. On the Project Logistics, there has been a relatively subdued demand, but we have a strong order book, which should help us continue to do well, but there has been a bit of a reduction in the overall opportunity available, if you look at the Indian project logistics landscape, and it may take some more time for the new projects to really start doing well and, therefore, generating greater opportunities for project cargo. Coming to the business around Logistics Parks, not any significant impact on the macroeconomic scenario. It's more about there's a huge requirement for A-grade warehousing in the country and most of the warehouses, which are under construction or nearing completion are already contracted with somebody. And usually, in that business, we're always trying to cater to requirements, which would come in the next 1 year to 3 years' time frame. And therefore, it's usually always forward-looking, and there is no derth of inquiries there. So that business also continues to be doing okay. On the CFS, I will hand over to Prakash to share some insights on how the business trends and the overall industry trends look like. Over to you, Prakash.

And on the CFS, as we have been talking about the volumes, see the volume increase is what will help us. However, currently, still, there are clearing of the documents and clearing of the shipments taking time. So that is helping us with our ground rent. So somewhere we are getting compensated very well. If the volumes are lower, at least, the ground rents are higher for us for the time being. What I see in the future is that the volumes, as Ravi also mentioned, the businesses are coming back. So clearly, there is an increase in volume. And that is month-on-month, we have seen approximately 10% to 15% increase, depending on the locations. And this is a great sign that the volumes are coming back. No doubt, the hurdle for the EXIM trade has been actually the shipping industry. Shipping industry pulled out certain vessels and they reduced the capacity. On the other hand, when pandemic happened and the lockdowns and -- across the world, I'm talking about, lockdowns happened or changes and people were actually very fearful saying that we don't know how the business are going to happen or turn out to be, they actually didn't clear the cargo. And the clearance took longer time. So what happened, the containers actually got stuck at the port or on the ship. So the entire cycle of the containers getting cleared in a particular number of days and going back into the rotation was hampered. And this is what affected the availability of containers today. So today, what has happened, there is shortage of boxes. So even if you want to export, they may give you a container 2 weeks from now, and then they will say, probably you'll have to wait for another 2 weeks to secure a slot on the ship. So this is creating the problem where the rates have gone up. And that is how the volumes are looking slightly lower, though the blank sailing earlier, which could be 3 of them in a week, now we see, I mean, 3 vessels probably blanking in a month. So that is the difference. It's come to 1/4 from whatever earlier it was. So frankly, the blanking has reduced. No doubt the freight rates are high, but still the shipping companies are charging more and more. However, the trade is happening. I expect the volumes to continue to grow and we will need to see that the vessels are coming back into rotation. But generally, overall, cautiously optimistic.

If you just look at the macro economic indicators on [Audio Gap] et cetera, it appears that the demand is coming back. The only word of caution we see is that there could have been a pent-up demand and backed by the [Audio Gap] demand. So we would be more confident about the demand if it sustains through another couple of months. That's what I would add. So if you can have a strong November and December as well for the Indian economy, in particular, that would really do a lot of good work to all the businesses and would lead to sustained growth trends. And we would be past this concern that was it only a pent-up demand backed by aggressive [Audio Gap] or is it an actual pickup in demand, which would be sustainable. Yes. So that's all on the macro view on all the businesses from our side.

Prakash sir mentioned about like there's still same one-off benefits related to ground rent. So in Q1, we -- in MTO segment, we benefited from, sir, I think, certain funding from government side or otherwise both in terms of revenue and profitability. While some of it has come off in Q2 in terms of average realizations and profitability per TEU, is there still some one-off element left in these numbers in MTO segment specifically?

So there is significantly reduced government subsidy support. And as the businesses are returning to normal, government supports are also reducing. So what we are seeing is with businesses returning back to normal, the government supports and subsidies which were available have gone down on a quarter-on-quarter basis and which is why you see higher volumes. And therefore, it's like the government's aim was to help businesses get back to normalcy and which is what I think it has fulfilled the purpose well and as we move forward, you would see reduce and over a period of time, the government aid should completely disappear and the business should return back to complete normalcy.

Next, we have questions from the line of Mr. [ Varun Patni ] from [indiscernible].

Sir, we see that all the businesses of Allcargo are doing well even in the times of pandemic. Also the future outlook looks great for the company. My question is, despite being profitable and sustainable, why have the promoters in all their rights decided to delist the company? And will the shareholders be rewarded with a good price, which takes into account the current and potential profits of the company?

Yes. So I would say that this is the prerogative of promoters. We can help you with the updates on the process, where the process stands. It is up to the -- all the shareholders, existing and active, to decide what's the fair value and that's what was defined by the price on the equity markets as well. From a company perspective, we can share an update with you on where we stand in terms of the delisting process. So the postal ballot was conducted. And I would request my colleague Deepal to give you an overview of the numbers around the postal ballot and where we stand in the process. Beyond that is the prerogative of the promoters. So over to you, Deepal.

Yes. Thanks, Ravi. Yes, you're right. As far as the company is concerned, we can only comment on what the process is because as per the request from the promoters, all we can do is we can run the process. So the postal ballot was conducted. And almost 99% shareholders, the votes are in favor in totality. The total voting is polled -- percentage of votes polled on outstanding shares is totally almost 87%. So that's fairly large. And out of that 87%, almost 99% have voted in favor. So it's a very fairly positive feedback that we got from the promoter -- from the shareholders about delisting. So I think that itself answers quite a bit in terms of how the general shareholders are skewing towards a delisting. So I think that will partially answer your question, but as far as the company is concerned, we don't have -- we cannot comment any further on specific reasons of delisting because that's promoters prerogative at the end.

We have next question from the line of Mr. [ Abhijit Savarkar ] as an individual investor.

Sir, congratulations for the good set of numbers. Sir, I have a specific question regarding the crane rental business. Sir, what is the percentage of total crane rental income in the total revenue? And what was the percentage utilization in crane rental business? And sir, in earlier call, you mentioned that you are not going to expand or you will make a divestment in crane rental business. What is the progress in it?

Yes. So just to add, yes, there's an intent to go asset-light, and therefore, we have constantly been focused on reducing the estimates in Projects & Engineering business. Having said that, we also highlighted in the earlier call that we had last quarter that the current environment is not conducive to [Technical Difficulty] as well. So there have been some impediments. But directionally, yes, we are interested in managing that business also as an asset-light business and reduce the asset base that we have. So that intent continues to be there, but the environment is challenging to achieve the objectives in that regard. In terms of utilization, the numbers have steadily improved. And for most part of the quarter, the numbers have been at 64%, 65% or higher levels of utilization, though they do vary and in some recent instances, we have seen a few weeks wherein the utilizations were even higher than 70%, 72% as well. But ballpark, they have mostly been in 60% to 68% range over the preceding quarter.

And sir, what is the -- in absolute term, what is the amount of rental income in Q2?

So Ravi, Deepal here. I'll answer.

Yes, Deepal will answer that.

The total Projects & Engineering, we look at it together as a segment, and we've reported for the first 6 months is INR 132 crores, which we've already reported. That's the total revenue reported for the Projects & Engineering Solutions.

[Operator Instructions] So we have next question from Mr. [ Krish Kothari ] from Shinobi Capital.

Could you tell me how the Gati integration is going and what your plan is over the next few years for Gati?

Yes. So just to share with you, we also have our call for Gati wherein we'll be talking about Gati business in detail, which is being scheduled for this week as well, and we'll share the invite soon. Overall, we believe that there's a huge synergy between Allcargo and Gati. Allcargo has always had strong presence in the EXIM trade. And over the last few years, we have participated in the domestic growth story as well by the way of our entry into Contract Logistics business. And with Gati, now we have our capabilities of getting to almost all the key countries across the world, and Gati brings in that capability to service almost the entire hinterlands. So with service to almost 19,000 pin cores, Gati delivers literally everywhere in the country. So therefore, there's an opportunity for us to offer door-to-door services using our own ocean freight business, our own CFS and our own domestic distribution as well now with Gati coming on board. So that is 1 possible synergy on which there has been some progress. Besides, you also try to do a lot of cross-selling between various businesses catering to the same set of customers. There are particular synergies with customers in auto, pharma, et cetera, wherein they are our customers for our contract logistics business as well as for export logistics business. So second is the opportunity for cross-sell. So first is door-to-door, second is cross-sell, and third opportunity is for us to pool in our resources and collaborate on the back end in terms of setting or doing some common procurement, aligning our businesses to work together on various functions, aligning our various functions within the finance department like internal audit, et cetera, so lot of synergies on the back-end side on offering door-to-door and on cross-selling. So these are the 3 broad synergies we've been exploring over the last couple of quarters since acquiring Gati.

And sorry, could you just -- so the integration -- so am I correct in saying that the previous sort of own promoters are out of the picture and now it's completely handled by Allcargo, right?

Yes, you are correct in stating that. Currently, the management is entirely governed by Allcargo and the management team at Gati.

Right. Okay. And sorry, and my next question is on the Allcargo business. I just wanted a sense of how you see over the next, say, couple of years or so, how you see LCL versus FCL? And if you're seeing differences in sort of the trajectories of each -- I mean I know that they're all eventually 1 business, but if you're seeing any differences in the trajectories of these 2 subdivisions?

So I would say that we -- I think, one, there's a big qualifier that we are assuming that the -- all the economic crisis led by COVID pandemic is likely behind us, and we are trying to be cautiously optimistic like my colleague pointed out earlier. So we cannot really forecast the macro economic environment, particularly in such a scenario wherein there is not much certainty around how vaccines would come by, how the pandemic second waves could happen. Assuming that things go well from here, I would say that there are opportunities for growth for both large exporters and importers as well as for smaller exporters and importers, so -- and which is where broadly your split between LCL and FCL comes into play. So from a macro economic environment perspective, both LCL and FCL should have some factors driving growth. From our capability perspective, now we are strong across both these segments. We have great economies of scale and a global network to deliver FCL cargoes. And we continue to be globally market leaders in LCL. So I do not see a reason for having very divergent trajectories between the 2. But of course, the growth will depend largely on the opportunity that we get from the macroeconomic perspective.

Okay. And so, if I could just ask 1 more question on the margin front. Are you seeing -- I mean, really, it's more on the competitive landscape actually. Are you seeing pricing pressure of any kind or particularly excessive competitive pressures? Or on the flip side, are you seeing some easing on that front?

So I would say that, broadly, it has remained similar. The biggest challenge has been on the extremely high freight rates, which are on historic highs across sea trade lanes, which is really a cause of concern. And this is all driven by the imbalances on the export-import trade, the volatility in volumes and shortage of containers, blanking, there are multiple factors driving it. And therefore, I would say that the larger concern is around the freight rates, which should possibly stabilize in the coming months. On the margin side, we do not see any benefit or any [Technical Difficulty]. So there's no significant change in the situation on margin front, I must say that. We continue to see steady patterns here, yes.

Sorry, could you just repeat that last line?

I just think we continue to see steady patterns in margins. We do not see any significant upward or downward changes.

[Operator Instructions] We have next question again from the line of Mr. [ Krish Kothari ] from Shinobi Capital.

I just wanted to follow up on the trade situation. Are you -- what is it that you think needs to happen for those rates to come down?

Okay. Can I take this question, Ravi?

Yes, you go ahead, Prakash.

You are talking about shipping rates, right?

Yes. So no, I mean, you were talking about how the higher freight rates has been a constrain in -- yes.

So the shipping rate is high today because there is lack of ships on the -- floating around in the sense, operating. What they have done is they've pulled out capacity. Obviously, where the demand is while coming back, the supply has reduced. When such a thing happens, the price only goes up. On top of that, the container availability for shipments is also very low because of the break which happened in the cycle, of the boxes which come in and get cleared, let's say, in typical time of 10 days overall, now are taking probably 20 days, so automatically, the supply is reduced. When do we expect this to be back? I suspect if the ships are coming back, when there are certain carriers who had pulled out the ships, if they come back, these rates could come down just after Christmas. But if not, then post Chinese New Year, which will be in February, we expect something to happen. So right now, there is shortage, the rates are high. And even if you get a container and you pay the rate, you will not be guaranteed space on the ship. So it's quite a tough environment for EXIM trade.

Okay. So is it -- am I correct in saying that some of the supply that's come off is a consequence of changes in the regulations that came with, I forget what those regulations were called, but basically, I think from Jan of this year, they had some new related to environmental controls and things like that. So certain ships that weren't up to the mark in terms of complying with the regulations had to be pulled out of circulation. Is that -- so is it an adjustment that's happening where once those ships come back on, you should see an easing? Or is it something more structural where for the foreseeable future, there's not going to be much of a change in supply of ships and containers more broadly?

See, the regulation which you're talking about in the month of January, that the ships had already met the conditions. Otherwise, they won't be allowed to sail around. They won't be allowed. Now what has happened is post April, so it's a pandemic effect. So what there is today is, the rates are being high and the vessels blanking and containers not available is the effect of the pandemic. The shipping line is hot that with this pandemic, the volumes will really, really go down and they need not have so much capacity or ships sailing around. So they pulled out capacity. Some of them went into, as I would say, breakage and recycling or whatever. But the turnaround in the market has been stronger than the expectation. So automatically, the capacity is lower. It's got nothing to do with that January thing. That was met by all the shipping lines. Otherwise, they won't be allowed to sail even on January 1 or 10th of January, whatever the date. This all has happened in April.

Okay. Understood. Understood. And can you tell me this new product that you have, ECU XLERATE? So what exactly is that?

So basically, it's [Audio Gap] service. We identified opportunities to provide a right balance between service cost and time lines to our customers. And therefore, this is more like moving cargo from Asia to Americas on ocean and then moving them into Europe by air and looking at similar air sea combinations, which allow for a very effective and efficient transit time and also the rates are far lower than the air freight rate. So this service has worked out well for a variety of customers who were not able to work on an ocean freight through and through because it was not viable for them and air freight was very expensive. So this service has been appreciated by those set of customers. So this is more like an air sea combination that we offer across various routes.

Okay. Understood. Understood. And I'll ask 1 more question. On the sort of global scenario, I mean, given obviously that you all operate pretty much throughout the world, are you all seeing any opportunities for acquisitions of maybe smaller companies, not necessarily in India, but just globally that may have suffered because of the pandemic and are struggling to survive and therefore, may be available at a sort of particularly attractive or at least reasonable prices, whereas maybe like a year or 2 years back, that wouldn't have been the case?

So from our perspective, we view acquisitions as a strategic opportunity in terms of trying to fill in the gaps that we see within our own network and capabilities. So if you would notice historically, we have done acquisitions across different geographies to build up a global network. At this point in time, we have a strong global network, and we do continue to look for some specific strategic acquisition opportunities. But if you look at -- there are multiple challenges because each company is linked with a particular network. And therefore, it's not a straightforward 1 plus 1 equal to 2 acquisition. And therefore, the acquisition is more driven by strategic requirement. So while we are globally present, there could still be some pockets where we are not very strong. And we would look at acquiring a compatible company in that particular market, which can fit in best into our network and add volumes and bring in greater synergies. So that is the broad principle along which we look at acquisitions. Pandemic-led opportunity is not something which works out very well from our perspective. So those could be specific people who have not been able to keep up with the technology, have not been able to provide the right service and are possibly not the best candidates for acquisition as far as the global operations are concerned. So we do not see any specific acquisition opportunity driven by the pandemic situation.

We have next question from the line of Mr. Prateek Kumar from Antique Stockbroking.

I have a few follow-up questions. Firstly, on, sir, what would be the industry growth -- as we have reported 4% growth for MTO, what according to you would be industry growth for the segment?

Well, so from -- if you look at the segment has not really tracked that well. So it is tough to comment upon the numbers, but I would say that broadly, our performance should be in line with or it should be volatile on a month-to-month basis but for longer trend, our growth rate should be better than the industry growth rate. So that's the sense we have from our competitive positioning. But would be tough to comment upon the exact numbers for the industry growth rate.

And in MTO segment, sir, we recently read about this ECU Worldwide launching online service support. Is this something new? Or have we done? Or this -- I mean, any views -- any comments on that? Global logistics platform.

So yes, yes. So ECU 360 is our digital platform, which connects our customers to -- and provide the services offering to the host of services, which allow them to manage the interface more conveniently. It has things like ranging from online quotes and quotations to booking, track and trace and support. So this product has been there for some time, and we keep on rolling out new countries, and it has recently been launched in India and has been -- initially it was in a pilot phase and now it has been rolled out in the country, and we are looking at offering it to all the customers so that they can have more efficient and easy connect and they can manage their business with us in a more efficient and effective manner. So this is our customer-facing digital platform, which continues to be rolled out across different geographies. It was being widely used in some of the markets already like [Audio Gap] and now rolling out in new countries. So we might have seen some coverage around the ECU 360 platform, no doubt, in India, which is 1 of the focus markets for ECU 360 at this point in time.

Right. And can you highlight on the time lines of closure of delisting process? When the postal ballot is done now what happens next in terms of steps?

Yes. So from a process perspective, postal ballot has happened, which means that the promoters were seeking shareholder approval, which has just come in, which means that promoters had expressed their intend to delist citing reasons of multiple businesses being together and shareholders finding a high impact cost. And it seems that the shareholders echo the sentiment, which is why there's been a significantly favorable voting in favor of delisting. Now from a process perspective, it is up to the promoters to decide when they want to file for an application for delisting. So once the formal application is filed, this is almost like an automated process, which takes about 6 to 7 weeks for the delisting to conclude. When promoters would like to file would depend upon a variety of factors, including their [Technical Difficulty] because they would need to provide the funding to be -- to kick start the process. So it is tough for company to comment upon where it is but from a process perspective, is at a stage wherein promoters have to now take the next action.

And after that 6 to 7 weeks the process gets closed and once you start receiving the reverse bid from investors?

Yes. So the reverse bid process, there's -- so from the timing of promoters actually making the formal application for delisting, it is a 6- to 7-week process broadly for the reverse bidding to compete and delisting to conclude.

And in terms of Logistics Park business, can you just highlight on time lines on -- I mean there, we were also under construction and doing construction of various warehouses. So looking to complete that in this year? Or I mean should we extend it to next year?

No, so construction deadlines have been for this year as well as FY '21 and some construction will continue beyond that as well. We were trying to fulfill some [Technical Difficulty] conditions [Technical Difficulty] mentioned the Blackstone transaction. [Technical Difficulty] are for December, some are for March. Due to COVID pandemic, there have been some delays beyond our control, and we have been talking to Blackstone to seek more time on that and they would evaluate it and get back to us. So there is a discussion going on. We just want to conclude all the conditions within the time lines. There have been some delay [Audio Gap] COVID pandemic. So we continue to do our best on that.

Next, we have from the line of Mr. Sushil Choksey from Indus Equity.

Congratulations team for a good set of results. I have [Technical Difficulty] question. Ever since [Technical Difficulty] how the container ships skippings have [Technical Difficulty] on a global basis?

See global basis, I don't have the number, but at least in India, if you take JNPT, Sushil, we will have approximately 3 to 4 vessels skipping in a month. During the pandemic, when I say during the pandemic, the peak of it, which was between March and July, there were 3 to 4 a week. Now it has come down to 3 to 4 a month. If you go to see across the board, I would say, in the global scenario, I estimate approximately 15% to 20% of the total capacity has been pulled out. Sorry, Sushil, go ahead.

Which size of vessels are these?

Oh, these are typically the large ones, which are going between China and Europe, China and -- U.S. actually is moving, China and Europe typically and China and the rest of the world other than U.S. So what has happened is...

On average, carrying how many containers?

On an average carrying anywhere around 9,000 to 12,000 containers.

Okay. So the 50,000 boxes in and out of India are [Technical Difficulty]?

Yes, yes. Overall, everywhere it is affected. And moreover, there are certain shipping lines who have changed the routings also. What did they do was instead of coming many ports, I'm not talking about India, but many other ports, instead of going direct services, they have started feeder services because of lack of mother vessels.

We are strong in Europe and Latin America, and we have a good hold in China. Based on the current round of COVID which has been spoken about some -- mainly Europe, and now U.S. is indicating high numbers, the data on the street, from financial market is different, what is your sense of business in October, November?

If you were to ask us about India, I'm talking more from the Indian part of the volumes, I will leave Ravi to answer the balance, but I'll give you a sense of it. India, I am seeing the volumes actually increasing month-on-month. Well, are we going to reach a peak because -- or rather we'll plateau? The reason is because now we are getting through the festival season in India. So will we peak out or stagnant at a particular number? That could be a possibility. That could be a possibility that the volumes stay stagnant for a month or 2, and then again, we pick up. Exports are rising, but unfortunately, boxes are not available. Rest of the world, U.S. is doing extremely well. I'm referring only China now because that's the manufacturing hub as on date. So if you see China to U.S., the volumes are high, the shipments are available, the rates are skyrocketing, similarly elsewhere in the world because of the diversion of containers into U.S.A., then automatically, the others are not getting the required inventory as they would -- that demand would be there.

So I have asked you a question in interim, year-on-year freight between China to U.S. or India to U.S., what percentage growth would be on a number on a box?