Allcargo Logistics Limited (ALLCARGO) Earnings Call Transcript & Summary

Good evening, everyone, and a warm welcome from Allcargo family. Myself, Ankit Panchmatia, and me and my team manage the Investor Relations for Allcargo. Firstly, I would like to thank you for coming and gracing us with your presence today at the 2022 Allcargo Analyst Meet. I would like to take this opportunity to remind everyone that today's discussion may be forward-looking in nature based on management's current beliefs and expectations. It must be viewed in conjunction with the risks that our business faces that could cause future results, performance and achievements to differ significantly. I would request you to refer to the detailed safe harbor statement in the presentation. Now I would like to introduce you to our leadership team, participating with us on the dais today. We have with us Mr. Adarsh Hegde, our Joint Managing Director; we have Mr. V.S. Parthasarathy, popularly known as Mr. Partha, our Vice Chairman; Mr. Ravi Jakhar, Chief Strategy Officer for Allcargo Group; Mr. Vaishnav Shetty, Chief Digital Officer for the Allcargo Group; Mr. Deepal Shah, Deputy Group CFO, Allcargo Group; and Mr. Pirojshaw Sarkari, popularly known as Mr. Phil, CEO of Gati. I would now request Mr. Parthasarathy to take the presentation ahead with his opening remarks. Sir, over to you.

Thank you, everyone. Let me first add my personal thanks, and welcome to all of you for this investor meet. For some years, it was meetings like this, the [indiscernible] no replay. So after a long time, we are able to meet face-to-face. I'm delighted, therefore, to address you. Ankit, you must do something slightly differently next time because whenever you read the safe harbor [indiscernible], immediately, the speed should go up, right? Because that's how we see in all the advertisement. So I was hearing normal voice and I was saying why is it not speeding up at all. But thanks for putting out the harbor statement as we call it and say what are the things we need to do. Thank you very much. I want to first now, therefore, think about saying what are we looking at? So this is still work in progress. So okay, there it is. So that's the slide which said. This is what is called a transformational growth and path ahead, but somebody, as I came in, remarked that is transformational growth and Partha ahead. I said, no. I'm behind this company for it to see the path to be ahead of it. So just kind of giving you some guidance. First is we always say, to look at the future, look at the past. And therefore, I'm very delighted and pleased to be standing, okay? So the last time I stood was many years back where I said let us forge on a path of 434. In 4 years, make the revenue 3x and make the profit 4x. Okay? I'm not sure in that company whether I achieved it or not. But I'm delighted to share now I can really see that being achieved. So in the last 4 years, I mean, this is FY '18 to '22. So actually, it is 5 years figure, but I'm assuming the CAGR is of 4 years. And that if the consolidated revenue grew by 35% CAGR at 3.3x. So it has actually went up 3x of what that is 1. And if you look at our consolidated EBITDA, it grew by a phenomenal 42% and was a 4x kind of a growth versus the lap in the previous 4 years. So it is here a company which has a decent base and from that decent break grew year-on-year -- by all means last year was a phenomenal nobody should take anything away from that. You could see in that graph. And if you look at that corner up, it was a tip. But if you look at what has happened from the start, it has been a growth all through. And that's what happened in this. And if you look at our EBITDA last year, and this will be shared by people in much more greater detail close to about INR 1,500 crores in EBITDA. But if you look at the last trailing 12 months EBITDA at INR 1,732 crores and cash profit of close to INR 1,500 crores and then RoCE which is at 20% -- 27% for the trailing 12 months. So in whichever way you look at from a performance in the past point of -- past 4 years, it's been growth upward onward and it's been a robust growth in all these 4 years. So that's the key message I want you to take away. Think of the last 4 years, as 4x growth that we have achieved, 4x growth in profit, and that has led us to today's place where we are. So if that was the past, you will say, okay, past is one thing, what about future okay? So I think sometimes it is better. So one of the key things that comes to it, when you look at the future for that, that how are we performing with respect to market indices, or what the market is seeing. So if you look at the first chart on the left-hand side, on my left-hand side, which is a significant data over market growth Y-o-Y. So if you see the global trade volume growth and Allcargo, ISC annual growth rates are the -- in a world GDP and global trade growth are there, which are the one in kind of indices, which are given. And if you see that, and I don't know whether you can see my cursor, but maybe it's not reading out well. So the black ones. But if you see the red, which is Allcargo, the red graph shows a huge performance growth and a higher trajectory. It follows the market trends and it is, it will. Because we are not away from the market. But we are above the market in terms of growth rate always and that's the kind of chart that it looks. If you look at the second one, one of the key questions that you'll ask is, okay, currently, the freight rates are very high. Currently, things are there, what happens when it corrects. And that, again, is another one. There we have limited impact of the freight rates than it came. So if you look at the graph, the graph kind of tells that is the first one is the World Container Index, which is probably what you use many times when you predict. And you see that from the height, it has come down. okay? You can't make out how much it is, but I asked Ankit to give me the exact figure. I think we had dropped -- World Trade Index has dropped about 12% from the height. And during the same time, I asked what this Allcargo rates. So it's gone up slightly, Ankit, correct, 2%, it's gone up. So while the World Index went down by 12%, we marginally improved by 2%. I would say if nothing else we can say we were slightly flat or positive. That's the message I want you to take. And therefore, we have the ability to withstand this pressure of what called as the freight rate index, which the World Container Index, which it puts up, and we are away from that kind of strength. So 2 messages I want you to take from this slide. We are consistently outperforming the market. Second, is that we are able to withstand the pressures are top [indiscernible] in the market, and therefore, to have more predictable results, okay? And part of this will come up later. But if you look at Q1 also, which is not what we are trying to talk about here, we did better than previous year, and our 12 months average has become better than what it was earlier. So the next question that I thought you will all ask, okay, can you give us some glimpse into the future? So what I asked is the management to put out an estimate and say, "hey, what is your aspiration, tell me?" And as any management would, they said, I want to be conservative. And I said that's okay, but give me what do you think should be our aspiration. And this is what they put up at which that here you see international supply chain -- domestic supply chain, you can say, and other businesses. And then if you look at all the 3 put together, you see that what we are planning out will be a 25,000 to 30,000 kind of revenue and a INR 2,400 crores straight INR 2,700 crores, okay? Then if you relate to what we are currently, which is the last trailing months of INR 1,700 crores. You will see this is not a very dramatically high growth, but it is CAGR of -- double-digit CAGR into the next 3 years as we can look into it. So that's what they give us this one. Those of you who are taking notes is very good, but it's not something which will not be available. I'm sure Ankit will put it on the website and it will be available to everybody to that because I'm not going into depth of every line and column. I'm calling out the broad figures that this is what they said. And then we said, "Oh, look at the headline I've given, 4x growth in value. How is that you are talking about 4x growth in value if it grows from INR 1,700 crores to INR 2,700 crores." And what we are talking about here is growth in value, okay? Currently, we have grown very high 4x growth in EBITDA but the share price growth doesn't necessarily follow that because people are saying, is it onetime? Is it -- the cycles will turn, then what will happen to Allcargo. These are questions which are fair questions in everyone's mind. And therefore, what -- when this happens, they will say "it is not one swallow doesn't make a summer", there will be many swallows. So it will make a summer. And it will make some kind of song and dance. And I hope that at a INR 2,500 crores, INR 2,700 crores, whatever you think of as multiples. I saw some multiples of my [ Australian ] company, Mahindra Logistics at 105, even if you don't give me that. Yes. Even if you don't give me what is other people who are at 50 multiple of EBITDA. I say, okay, give you something, whichever way you give it will be a 4x kind of a growth. But I don't think I should be judging it. I think you should be judging it. And that's why the greater than 4x I put, I hope it is much more than 4x, but it made a good kind of thing. In the last 4 years, I've grown profit by 4 years. In the next 4 years, I want to grow market cap by 4x, and that will be achieved if we achieve these figures and leave the decision to you and the shareholders to give us the right kind of value. So what I'm going to talk about now is to talk about what we are going to talk about. As a group, what we will talk about is what are the drivers of this growth? So we will tell you why LCL and FCL business can continue to grow with the kind of headroom that is available to us. And the kind of -- even in terms of what we own in that space, we can own much more. And therefore, you will see what is the kind of -- how we can grow that further. The second part is Phil is sitting here and he's twitching, but what we said is Gati is a listed company, is already sharing a lot of figures, but what we will tell is how that turnaround will give us the next high because you need to have drivers of growth always. So while ISC, our International Supply Chain will give you a lot of growth today and tomorrow, there is a new star on the blocks, which has come from turned around and now can take off in the next few years. And that will give us value as we go forward. The third one is that whatever we have done in the past, how will that give more value today and tomorrow, which is how M&As would value us. And as we talk about all this, one question which will be in your mind is, "oh my god", but you know what, you can do everything, you're a physical company, which is doing a great job in the physical world. But what happens when the digital world comes to you. What happens when the [ frigital ] -- when you become [ frigital ] and then digital. So we wanted to tell you what we are doing. Our little story, Vaishnav Shetty will talk about that more when he comes in and talks about how we are changing our view to the customer as we go digital, and there will be more that will be talked about in that. And how we are creating value. Then Deepal Shah, the CFO, will come and tell and all us the CFOs happen to be. And my years truly has also been a CFO, so I shouldn't take anything else, but the CFO will tell you that this is what I have achieved, and he will be very conservative in the way he tells it. But what he will tell is what kind of a robust balance sheet, P&L, et cetera, that we have. And then last but not least, how we are betting on the one most precious commodity in the world. Is that, call it commodity, maybe underselling it, what's the greatest possibility on Earth? And that's people. And therefore, we will come and talk about how people will help us continue in this journey as going forward. So that broadly is what I wanted to share. But I've been talking English as somebody -- some people put it to put more color to that English. Let me call on my colleague, and friend and the guide to this company Adarsh Hegde.

Good evening, everybody. Partha put some numbers around, and I think you guys would be actually more interested in those numbers itself, right? But those numbers to achieve, there has to be some logic behind it, right, to get to that number as we move forward. So I'm just going to give you a little of a glimpse or recap. I'm sure most of you guys know about it. But to get to those numbers, like he said, there are a lot of -- a lot of slots that he filled it for you, that how are we going to achieve that? It is also not going to be, as rightly said, it's not a forward-looking statement, but at the same time, I want to say that it's an aspirational number. And we have always said when we have actually shared it with you all some aspiration numbers, either we have achieved or have come closer to it. And we're going to achieve through certain mode. So let's a little recap on how this is going to work. You must be aware that we are a global #1 in the international supply chain. When I say international supply chain in the LCL consolidation business, we actually have a market share of almost 14%. We cater to about 40,000 plus port payers across the globe. And when you talk about these 14% global LCL market share, we have still a lot of room to capture here. There are certain trades where if you look at it, if you break it down, you will see that in some of the trades, we still are lower in terms of less than probably 8% and 7%. So there's a lot of scope to catch up on that aspect. There are certain trades where we still are growing, and we're growing really fast. So in that perspective, if you look at it today, when you put this in the global perspective, it looks like it's 14%, but 14% is not good enough. I think we have a good scope to go up to at least about 18% to 19% of the market share that we could get on board. With the infrastructure that we have built -- and that's where our growth is going to come from. One of the biggest growth that's going to come from. Look at our Indian supply chain. I did not tell you all post the acquisition of Gati, we cater to almost 99% of the pin codes that almost we cover, I guess, about 80%, 85% of India? 97% of land of the districts, 97%. So thank you, 150-plus warehouse and distribution centers, 5,000-plus partners, network, vendors that operate trucks for us and 10 million square feet of distribution and warehousing space. Who else has got this. Just look at it. While you compare this with anybody else and look at the numbers that we talk about, we are by far the biggest Indian logistics company here. with a revenue of about 20,000 plus. While in each segment where they have given leading ICD players, leading B2C express players, leading Air Express leading in CL contract logistics leading in FTL player. These are the numbers who are the top ones there around that. We probably are not the #1 here. That doesn't mean that we are #1, but we have huge room to grow and catch up on those numbers. With the infrastructure that's been built over the period of years now, and the acquisition that we have done with Gati, that entails us to get to what we want to be in each of these segments as well. These are multi-levers where we would probably be able to get closer to the numbers in each of these segments. Like I said, in the LCL, we have in certain trades, we have enough of room to grow. So in many of these segments also, if you look at it, we have enough of room to grow. I'm sure this is something that we've been looking at -- as I said, we are the fastest growing in the LCL market and we'll continue to grow. We've had a growth of almost 16%, 17% last year on the LCL segment, yes, almost 16%, 17% growth that we did. We have enough of room to build on in many of the segments that when you talk about. Container freight rates, which is our biggest talk of the town right now, and I'm sure you will have a lot of questions around that. But with this container freight rates dropping as well, we've been able to hold on very well, right? We continue to hold on well because of the growth that we have achieved. Partha did show you some graphs that did show how the global rates, where and what rates Allcargo were able to achieve as well. We've not been able to get to those numbers. because of various reasons. But the reasons have been that solidifies our position in the market that we have still been able to hold on and grow the business while our yields have been also much better. We are promoting a lot of e-platform promoting B2C trade and demand is shifting actually. I'm sure you would have heard e-commerce business has picked up a lot of momentum, especially with COVID coming in, there has been a tailwind on that, and that has also helped. Most of the guys who were not probably buying on technology, not using technology to buy today. It has been forced upon us to go on technology and start buying. And that has actually created an opportunity for us also to grow because there are a lot of traders that who want to ship in small packages and parcels. And there, we get an opportunity to convert that, and that's got converted into LCL. Of course, the FCL business, also in some form, when the freight rates were high, did move towards the LCL part of it. But that percentage was not very high because when you talk about FCL, it's sort of a bulk model that works on. But the e-commerce business is going to be the big one that you would see as we move forward, and it's taking a huge traction. And that's an opportunity for us also other than the trades that I spoke about earlier. I did not tell you about FCL. If you look at it in terms of percentage, we probably are less than 1%, the global percentage in the FCL market. Do we have an opportunity? Huge opportunity. While we also want to be a neutral player, we continue to be neutral. If you look at the segment that we have approached is we work with small forwarders. And what does that mean for small forwards. Small forwarders get to piggy ride on our buying power. And what's that buying power? The buying power has come in with the base volumes of LCL that we have and with a bit of FCL that we have added, we are in a position to go and buy. Our procurement is very, very strong. Are we in a position to compare it with any global forwarders -- probably not because the numbers will be very, very high. There probably some of the people who would be doing -- would have a market share of about 3%, 4% or 5%. But with our procurement, the small forwarders do get to piggy ride on our pricing, and that's where we have actually encashed as well. And that's where we have come forward and supported the global forwarders like what we do in the LCL. In that perspective, we still continue to be neutral. We do have some shippers, which also work very closely with us. And that's something that we would further encash, we have more room to grow. We have more room to grow with some small forwarding companies as well. The aspirations, of course, from 2019, you would see the numbers that where we want to grow as well. This is a huge number whereas our share is already given, and we have -- we have a potential to grow in this segment as well. But it doesn't stop here. If you look at it, we've been -- till date, we've been only doing door to door. And what does that mean? We've only done 30% of our existing business we've been doing door to door. Huge potential on that 70% of our customer base that we still have where we don't do door-to-door. The FCL business that we have been driving, we have a huge opportunity to grow in that segment as well. Probably in that, probably we should be not doing more than about 5% to 7% or 8%. We have huge potential to take this to a next level. While we offer, as you all know, that there are 52 countries globally, resulting in convenience for customers, higher margins for ECU, 30%, as I said, we do door-to-door. While at the same time, we're also building an ecosystem. I wouldn't say that we are building, we have already built, but we are enhancing and moving forward on ECU360, which is going to be a big one that as we move forward. Everything is moving digitally, and we also need to be digitally there. Like what Partha said, this is going to be a big one that's going to come in the next few couple of years. I'm proud to also express that when I meet customers, when I meet shippers, when I meet a lot of our partner partners, competitors, they do express that we are much ahead on this digital foray. And that gives us this confidence that will give you the confidence that we are way ahead in terms against our competitors. Obviously, network. We already have a huge network, and we will continue to keep looking at opportunities. Technology-driven platforms, specialized offerings that will come in, in terms of door-to-door. Transformation-led Express and contract logistics. Operational excellence, upgrading our infrastructure or automating it. While we say this, it's not that we are not technologically driven, we are, but we are still -- I mean, technology keeps changing. And we need to be in pace with the changing scenario. We have been there. We continue to be there. We continue to upgrade our technology aspects of it. Sales acceleration. This is something that has been of -- has really helped in our growth. If you look at it, we have created a lot of white spaces. We've encashed on those white spaces where we had lost opportunities with these transformation project on sales acceleration, a huge impact that has come in on our balance sheet. On our P&L, if you look at it on our sales numbers that you talk about. While the sales acceleration has moved on from professionals who handled it to our in-house people who continue to now drive. For the last 6 months, we see that impact continues to be great. Digitalization, you'll hear more as Mr. Shetty, Vaishnav Shetty, who will come and speak about it. And new verticals in the contract logistics providing end-to-end is where we offer integrated offerings with the integration of the contract logistics. And while we have Gati, which we have acquired, we'll be able to offer customers a door-to-door. You pick up from anywhere in the U.K. and probably deliver it to the 99%, what he said, the 95% of the pin codes that we deliver in India. With this, I'm sure there is also a lot of other aspects that would add on, which will top up to our aspirational growth that we are presenting it to you. The value accretive M&A that would be shared by my colleague, Ravi Jakhar here. Thank you.

Thanks, Adarsh, and hello, everyone. Yes. So if you look back at the history of the company, acquisitions have been a part of our DNA. And when I say that acquisitions have been part of our DNA, it means that we need to be proactive and these M&As need to be strategy-led. The most interesting part is that these acquisitions are not restricted to any geography. We have acquired companies and businesses across diverse geographies in Americas, parts of Europe, within India and several parts of Asia. We've acquired them with diverse cultural backgrounds. And the biggest achievement has been our ability to integrate them and make them successful, a near 100% track record in successful acquisitions and that too when we are speaking about a number well over a dozen, speaks highly about our acquisition strategy. If I may just go back all the way to 2006, the time when Allcargo acquired its principal ECU Worldwide then known as ECU Line. It was a company 5x the size of Allcargo. And that was the beginning of a journey or the new part of the journey in many ways, stating the bold ambitions, the courage and the conviction business team had about growing this business from strength to strength. Since then on, we have acquired many companies, be it the recently acquired Nordicon. Speedy multi-modes in CFS business. A couple of years ago, we acquired Gati. And several companies like FCL Marine in Rotterdam, Econocaribe in U.S. and then a lot of other companies. What's common to all these acquisitions is that they do not come in through some kind of a filtering funnel mechanism, which most of us are familiar with. So I'm happy to share a glimpse of our secret handbook to some extent on what drives these acquisitions and how do we make them immensely successful. So there are 4 kinds of acquisitions that we do and on these 4 principles, which are core drivers for our acquisition. The first and the foremost, consolidation of network, be it acquiring the principal ECU line back then or be it acquiring Econocaribe, which was our agent in U.S. or several other agents who are part of our network. As we acquire these companies, we are able to have much better control over the end-to-end network. It allows us to have a more robust end-to-end pricing, which is not possible if you're operating with an Asian partner. It allows us to enable digitization at a faster speed. It allows us to operate with 1 single global operating system, which is a huge advantage as you set out to automate operations or provide a single interface to customers. And not only that, when you have one way of working, one way of standard processes, you make your own life easy and you're able to serve the customers in a much better way. And this has been the foremost driver of our acquisition when we have set out and acquired majority, significant majority or the entire stake in one go or over phases over the years. There have also been acquisitions to get into new segments. While we had some business in FCL in India, the other part of the world was only focused on LCL. We wanted to make a furry into FCL trade in Europe, and we acquired this company, FCL Marine in Europe. And my colleague, Adarsh, just spoke about how on the back of this acquisition with far more incremental effort, we not only entered this segment, but transformed our presence there, growing at a CAGR of almost 27%, which is an incredible success on the back of an acquisition, which was done to add a new product to the portfolio. And there are opportunities to follow on this principal as well. The third one is what -- when we want to enter new markets where we do not have our own presence not even a strong agent partner. On the back of our transformational growth, we have not only been able to upset talent and customers but even competing network partners. And we have been exploring opportunities to expand into new markets where we do not have formidable agents by acquiring companies, which are equally willing to be part of the formidable ECU Worldwide network. One such example is the Nordicon acquisition that we did last year. It made us market leaders in Scandinavia across all 4 countries, the 40% market share. That's something which is not possible to achieve by any other means. The other part is, it's not just about acquiring the company. It's also about how do you go into the final nuances. There are conflicts because even if there's a smaller agent in none of the 4 countries, there is a conflict in there. How do we integrate this new company, which has been operating as a part of another competing global network. How do we ensure that not even 1 single cubic meter is standard anywhere as there's a network switch on a particular day. All of this was very seamlessly planned through an extremely efficient integration and execution strategy. And that's the kind of work which goes behind every acquisition. But as the integration work itself started 6 months before the acquisition was completed and conversations for acquisition itself perhaps started 2 years ago. That's the kind of effort which goes into a strategy-led acquisition and what that leads to. Since our acquisition, the business has seen more than 2x growth on its profits. And that's just about 1 year we're talking about. We're talking about 1 year, which was also, to some extent, impacted by the Russia-Ukraine crisis, where in some amount of rail business was hit, despite all those adversities, we're talking about a 2x growth in an acquired business 1 year from the date of acquisition. And the fourth and an important part of M&A strategy is entering into new business segments. We recognize that there's greater opportunity closer home within the Indian supply chain, and we went on to set up the joint venture, ACCI and Contract Logistics back in 2016. And a hallmark example of this strategy is Gati acquisition, which we did 2 years ago. It allowed us to enter into fast-growing express logistics market in the country. But yes, perhaps not with a business which is already thriving. And this is another example of acquisition is not just about riding on successful ventures, but being able to step into situations, which are filled with chaos and problems at times and the group's ability to turn around. And I'm sure that most of you are familiar with what we have done with Gati, be it about bringing down the debt, manpower being brought down while the volumes and revenue grow, which speak about efficiency, digitization, volumes on any parameter that you look at, Gati stands truly turn around and on the path of transformation growth. So these are various pillars on which our M&A strategy drives. And I'm happy to share that we continue to look at growth, which can be enabled by such opportunities and every single time an acquisition that we undertake is always a proactive strategy-led acquisition. And on that note, I would request my colleague, Vaishnav to come and talk about what digital means for us? thank you.

Good evening, everyone. Very nice to be here and present to all of you. So first, let me say why digital. I'm sure you all hear about it and are very familiar with all the jargons, I think what we really want to express is that we have taken a very outcome-based approach towards digital and our idea with these projects is really to drive business growth, organizational efficiency and customer satisfaction. So how do we do this, right? When we first began our digital projects, we started with 1 project. It was a big one. There was our customer application called ECU360. And at the time, we were working with a top 4 consultant, and they said that if you managed to achieve all of these things, then you will truly be a world-class platform. Today, I'm happy to say that ECU360 is the world's largest LCL platform. We have 20,000 enterprise accounts every month, booking with us, 52 countries door-to-door and a key enabler of the door-to-door strategy because in the logistics or in the shipping industry in order for you to get a door-to-door quote, it takes, on average, 72 to 96 hours, we're able to provide that instantly. And this is a big factor in order to drive customer stickiness, especially in this post-pandemic world where the world moves very fast, right? So as we got into this first project, we also then started to think what else is out there in digital. And what we realized is there is... [Presentation]

Okay. So maybe I can quickly share to Adarsh's point. what ECU360 helps us do is, again, drive strong customer satisfaction, good retention rates and allowed us to create an overall ecosystem, a digital ecosystem where we are able to onboard partners and have very strong network coordination and automation across our value chain. And this has been very critical towards also our productivity over the pandemic where we are able to manage a lot more transactions and workload. So as we started to dive into the whole tech scene what we realized is that there is too much that a logistics company can do, right? And I'm sure you have all heard of things like blockchain, IoT, and we had to be very, very focused in terms of what we want to do. Because it's very easy to spray and pray and then you end up with nothing but nice PR and marketing articles, right? So what we came to see is that there is usually 3 phases of digital transformation, digital strategy. It starts with just enabling or adopting good practices, automating as much as the low-hanging fruits as possible and then looking to accelerate in terms of your revenue, in terms of your value proposition, competitive advantage and things like that. So in funneling that down, what we did was we thought to ourselves that we will base our digital strategy on 4 key tenants. And those tenants are the customer applications like ECU360 and we also have at Gati and at the CFS, our automation, AI and ML and start-up collaboration. So with the customer applications, like I said, to boost customer delight, enhance wallet share on automation for us is an asset-light network business rather than looking at costs, what we saw was automation is a key enabler of customer satisfaction and service quality. So automate as much transactional processes as possible and allow our people to do what they do best, which is exception management, AI and ML to create a lot more visibility for the management to drive much better decision-making and start-up collaboration. We're the only company in India with such a robust wide-scale network, our ability to work with start-ups across the country is very, very strong to do reverse mentorship, teach them and learn from them and onboard them into our operations to create a lot more efficiency. And that is something that we are also very excited by and have done successfully over the last couple of years. So the one very interesting aspect of being in a digital role is that you get to work with all levels of the organization. You have to learn from them, talk to them, sell to them, drive them. And I think the one common theme that everybody agrees upon is ECU Worldwide's global network is the most powerful asset that we have in order to drive business at the most micro and macro levels, right? And what we are trying to do is combine that almost irreplicable network with a strong entrepreneurial culture and digital capabilities and proprietary technology to optimize our efficiency as an organization and drivers towards growth and also, like Adarsh has said, keep up with market demands because things are moving very fast these days. So I spoke at high level, maybe I can share with you some trade secrets. This is how -- we run our digital projects today. This is the core focus areas of our digital projects. And I wanted to show this to you because -- all of these projects are currently live in several countries. For us, the idea is how do we bring all of these together and create a very, very unique operating rhythm, operating model. And I think we are in a good position to do that. If we are able to do this, I think we will be able to have growth and margins, unlike any other competitor in the LCL industry. And the work that we have done already, I'm happy with, but there is a very, very long way to go. And Mr. Parthasarathy has set us some very, very high ambitions to make a bottom line impact. So just to share with you some numbers. What has happened over the last 2 years with regards to ECU Worldwide. And we have more than 60% of our bookings coming online. To some, it may not see much, but it's very, very high. We are higher than most shipping lines, shipping lines, as you know, our top of the food chain, right? And in order for us to do this, it has been very difficult. But I think it also speaks to the robustness of the platform we have created. We have 1 global operating system, which is extremely important to our customer centricity, digital and data strategy and to where we want to take the company going forward. We have door-to-door instant serviceability for 52 countries, automation, integration with trucking providers across the world. Like I said, we have 20,000 plus forwarders using 360 every month, and it's growing at a good pace. And these are customers from more than 80 countries, we have a customer satisfaction of more than 95%. That's similar to WhatsApp, by the way. We have a retention go of 92%, which is more than WhatsApp. We have CFS to CFS visibility, 90% in the pandemic, that visibility piece became extremely, extremely critical for cargo movement. And as some of you may know, we faced a hiccup last year with our security. Now we are at the highest standard of security in the world and constantly looking to improve that as well. Quickly to speak about the Express Logistics company -- business, what we are looking to do is also drive significant efficiencies from digital in that segment. We are using some AI and ML to make the network as efficient, robust as possible in terms of not only cost reduction, but also turnaround time improvements. And we're doing things like hub automation and ERP of the future to make our warehouse operations far more efficient what this does is, of course, increase turnaround times, ensure strong OTIFs, but also it will help us create a far better cash flow. And on the front end, as all of you have seen in this industry, that the start-ups have done a phenomenal job in growing very quickly. We have the supply. They have the demand, right? Supply is extremely difficult to create what we are now trying to do with the front end is really drive demand acceleration and growth. So that is all from my side. Thank you very much.

Thanks, Vaishnav. So generally, when it comes through finance, the question is, what are the numbers? And how did we get them? Now I think what, you already know, because these are already published. And how, my colleagues have already alluded to. So I think not much left for me, but I'll attempt to give you some color around the financials. So we are basing our fundamentals, which are very strong. The growth -- strong fundamentals, leading to a much stronger growth is the theme. We're giving you a 5-year snapshot of the numbers and we grew from around INR 6,000 crores to INR 22,000 crores. For -- the -- your -- this is TTM, which is trailing 12 months. So what we've done is for FY '22, we have the numbers, which are published and we did a 12-month backward working from Q1, June to give you a sense of how the business is growing. So many times, people were looking at '22 to be an aberration, but it continues to show that along the side, even for the first quarter, in spite of the freight rates being slightly subdued. Our growth continues to be resilient. Same way on the EBITDA numbers. So there are 3 things here, which are growing, one is the revenue. Second is the EBITDA number from INR 375 crores from FY '18, reaching to almost INR 1,700 crores for the TTM that we're talking about. Also, if you look at the EBITDA margins, which are slightly above on the graph, we're also growing relatively consistently on the EBITDA margin. So this is a clear story of resilience and growth that we are debuting in our numbers. So this growth is leading to a very strong cash flow. And how are we actually allocating our cash flow. So capital allocation strategy is very, very important in any organization. And as many of my colleagues mentioned, especially Ravi, that a lot of growth has happened primarily because of the capital allocation strategy because of value accretive M&As that we have been able to build over a period of time. So we depicted a little bit of chart to explain you where the cash has gone over the last 5 years. So primarily, we could kind of source around INR 4,000 crores of cash, and we have close to spend of INR 3,300 crores. Primarily 2 large spends are the value-accretive M&A, which is INR 800 crores almost INR 900 crores and a CapEx of almost INR 1,000 crores. So these are both are growth drivers for us in the long run, and that's where the cash has been used. Rest is treasury and taxes and, of course, dividend to our shareholders that we've been giving. As you can see, the most important bit of this is the cash that we're actually holding at the end of quarter 1, which is almost INR 700 crores. That's a strong availability of cash that we have to kind of look forth and look forward to more opportunities for growing our organization to invest into opportunities as and when we kind of look for them. Coming to the CapEx, typically, almost INR 900 crores, we spoke about INR 984 crores of CapEx that we've spent primarily as you're aware that much of the CapEx, there are 2 parts of CapEx, one is the transformation exercise, some of them and IT equipment and majority for the warehouses, which we have been built. From cash coming to the returns on capital. The return on the console capital employed is close to 27%. And as you can see, over FY '19 has been growing consistently to years where we invested actually the 2 years FY '20 and FY '21 are the years we actually invested where the returns were subdued because of the investments, and these investments have started to create value as we go along. And you can see the rise in the chart and the FY '22, we are already at 23% and TTM at 27%. Breaking that down further to international supply chain, which is our main business, which is -- accounts for almost 85% to 90% of our business. We had one of the best possible returns. Now we had 50% plus returns, which is one of the best in class, it's gold standard in all respects, it's 58% return. And we have CFS, which consistently gives you around close to 27%, 28% throughout. The -- with 58% and 28% of RoCE in the 2 large businesses, the question would come up is why the console RoCE is at 23% and 27% -- these are primarily due to 2 segments. One is the Express Logistics, which is a new baby we've acquired it recently, and we are expecting it to -- it started to turn around, and we expect the value to get unlocked over a period of time. And we believe that once the value starts getting added, you'll see a significant jump in the consolidated EBITDA -- that is one part of the segment, which is subdued at the moment. The other one is the logistics park. As you're aware that we have agreed to divest majority of our portion of our Logistics Park business, which will bring in cash and that cash can be used to -- for various purposes, and that will also improve our current RoCE. So that is where -- how we see our RoCE going forward. Leverage, it's very important to understand how we are leveraging our company funds, capital employed. So basically, we currently had a gross debt of from close to INR 1,700 crores. As you are aware holding almost INR 850 crores of cash, leading us to approximately INR 850 -- INR 860 crores of net debt. That's the number. We have a fairly well-placed structure as far as the debt is concerned, we have -- for the Blackstone agreement, we have something once upon execution, it will go away. The INR 112 crores. We -- the LRDs, which are almost average 10-year maturity, these are long-term debt available to us. It's fairly well structured, against lease rentals. And then we have largely working capital in the short term, which are rollovers possible. And then you have an average maturity of 4 to 7 years, which are midterm investments that believe we'll pay off. There's more than enough cash to meet all these obligations, as you can see. It's very easy to pay this off as well, as you can see, but the right leverage is very important to enhance shareholder returns over a longer period of time. So we'll continue to invest to borrow or invest and to leverage ourselves to increase optimal returns to all the stakeholders. That is our long-term objective. There has always been a question what will happen if the Blackstone deal goes through, which is around the corner. It will shrink our debt to close to around INR 300 crores from where it is now. So that's the number that one should be eyeing. It's around the corner, we should be able to get there in a couple of months. As you all are aware that we have started the demerger process, so it's a classical demerger. We are splitting Allcargo into 2 more companies. We'll end up with 3 companies Allcargo, the existing company will hold the asset-light model, which will be Gati or ECU and contract logistics business. The asset here we will move to Transindia Reality. And there'll be CFS, which is the terminals business, it will be housed under all cargo terminals. The filing with NCLT has already been done. The process is underway. And as far as our understanding is concerned, we believe that -- we are optimistic that by March, we should be able to complete this process. What we have done over here is we've attempted to give you a little breakdown into our understanding of how the assets, liabilities and the capital employed debt, et cetera, will split around three. A disclaimer that these are very high-level numbers, and these will change as we go along depending upon how the debts are repaid, how the profits happen over the next few quarters before the actual demerger approval comes in play. So we typically have a INR 5,300-odd crores of capital employed at the console level. And we have a borrowing of INR 1,700 crores or INR 1,800 crores. And that's some of the numbers -- how the capital employed, majority of INR 3,500 crores will sit with the current company. Typically, like I mentioned, ECU, Gati and Contract Logistics business. All cargo terminals will have a smaller capital [indiscernible], [ 390 ] and the asset heavy, INR 1,400-odd crores will sit with Transindia. Once the Blackstone deal happens, we expect almost INR 1,000 crores to be shared off from that INR 1,400 crores as we go along. On the borrowing, primarily Allcargo terminal doesn't have any -- it's a self-funded business. It's a cash cow. It doesn't have any borrowings, so not much of borrowings will go there. The Transindia Realty will have all the LRDs and all cargo logistics will hold back working capital and some long-term debt used for investment purposes. And that's the split of the EBITDA. Business EBITDA, INR 1,500 crores is what will split majority is sitting with the existing company and respective businesses, as you can see. I've explained the numbers I'm just flashing them through. Thank you so much. I'll invite Mr. Parthasarathy to -- for the next Board and management team. Thank you.

Thank you, Deepal. I thought you will explain that with a lot of constraint, but you explained it with a lot of flourish. One of the key things that I'll do is talk about our team and people, that's the most important thing. But before I went there, I just wanted, I thought I'll take a moment to summarize what we have seen so far. What we have seen that the past growth of the past 4 years have been spectacular. And we think we have done a very good job to take care of the opportunity and build on it both on the organic way and the inorganic way. So the past is no prediction of the future. So what we said is what are we predicting the future and what efforts are we doing? And what we, therefore, told you is how we are doing and creating headroom in both the LCL and FCL business. How we are well poised to take care of all opportunity and life will throw curved ball at us, how are we ready to hit the curve, even the curved ball, out of the park. So we are prepared from that perspective to look at it. We also said we have a budding start and what is called -- what fills very fondly calls us making Gati great again. So that will give us the real differentiating kind of growth prospect in that. And if that is not enough, we have 2 more [Foreign Language] -- 2 more -- many more bows in our shaft. And that is about the 2 listed companies, one of which could be asset-heavy and could attract the right kind of investors to take us a far and the other one, which is in terms of CFS business, which is a very different thing in the progress of India, and we can be part of it. So we got cash businesses, star businesses, which can go places and -- we've got new businesses, which is from our perspective, which can grow far deeper, higher and fly ahead with great amount of our [indiscernible]. So we have all this available for us to do. And therefore, we are very excited, and I hope you are very excited too, to see these kind of things. But as I said, all these things, rest on one possibility. I went to [indiscernible] Foundation seminar and spoke about execution excellence of Allcargo because they thought that this company is an example, which others could learn from. And I was delighted to share it, but they had one beautiful thing, so I came with that learning, that human resource -- is not -- is the wrong way to call. Human is not a resource, it's possibilities. So let me present the possibilities that we have. And that's the Board of Directors. So let me present the possibilities that we have, and that's the Board of Directors. I don't need to speak about them. You would have seen all of them in various form, in the balance sheet, et cetera. I'm equally delighted to talk about the top management, some of whom presented here, but many of whom are presenting us in the marketplace with Plum and without any ceremony, very hard working and delivering results. And if you look at the worldwide team, you will see the 180 countries we represent, being represented by Star Wells, who not just understand the geography of it, but also the history of what it is to and the future that they will go towards. So -- and this is our, as I said, Phil leads -- and Adarsh as the MD, and Phil leads the Gati team, which is the newly minted management team that we are welcome to our family. And that brings to the circle and the logo, which encompasses all the new people who have joined us in the very recent part. And I'm delighted to see some of them sitting with us here, whether it's Harmindar who PR; or Kapil, who is the Head of IT, and now he has called himself Chief Information and Technology Officer, correct Kapil; and Urmi, who's come as new and knows more about supply chain than I do. That's for certain. And who else am I missed. So there is -- who else? Our Chief Risk Officer is also here. So some where -- she is hidden somewhere. There she is Rani who's Chief Risk Officer who has joined us. And to -- and not to say the most, and I will let Adarsh introduce her once he comes in, okay? So these are possibilities. These are our pride. These are the people who make things happen in Allcargo. And I think that's always the right note to end on, and then invite Ankit to kind of talk about what we should do going forward, even as we organize the table so that all the people can come and sit on the dais to face you and answer your questions. I'm sure you have a lot of them, so please do start thinking about them. Over to you, Ankit.

[Foreign Language] Yes thank you, management, for addressing the crowd. We'll just set up the table in 5 minutes, and then we'll open the floor for Q&A. Yes.

Introduction to do. A lady from the family has joined us. Let's put it that way. So Kajarte, if you can just get up and show and wave at everyone. [shobdha] is Mr. Shetty's daughter, who has joined us on 1st of September. She finished her majors in economics from Northwestern, and she minored in math. She's just joined on board. You could expect a lot from her as well as we move forward. Likewise -- like probably 4 years back when we had this young guy sitting next to us. And today, when he comes on stage and has done a reformation of this logistics company, where he's moving this company into digital. So I think we would see something more coming from this lady as well. So all the best, and congratulations. Welcome on board.

Good evening members of the management. I've been fortunate enough, I've been looking at Allcargo for, I want to say 15, 16 years. My name is Anil Sarin, and I represent Centrum. And one has seen over the past decade plus, I mean, such strong execution and clearly, a lot of milestones have been crossed. A few years ago, at this very venue, the Chairman had mentioned another company, which was very famous for its digital promise. And it's quite -- I mean it's so good to see that you've been able to cover the distance, and I would not name unnecessarily, but in the venture field in the private markets that company has a very good valuation. So one wishes that similar things transpire over here given the capabilities that have been built up. That being said, I had a question regarding the LCL part, the growth. There is no doubt that this is a very valuable business, exemplified by the consistent cash flow profile over a turbulent decade where many, many container carriers went under. There was so much of consolidation, there is so much of upheaval, and here is this Indian company, which has delivered consistently. I mean it is -- it's highly, highly commendable. However, as I drill deeper, I find that -- but for fiscal '22, prior to that, 4, 5 years in the LCL domain, speaking of volumes on LCL, there has been a kind of a stagnation. There has been -- sometimes there have been modest growth, sometimes there is a little bit of modest degrowth. But I speak for the for the market as a whole, where there is a widespread perception that this is a temporary phenomenon caused by seasonal boost or whatever onetime boost in freight. So then the question comes to LCL, that what is the volume growth? Now we have seen volume growth happen in the most recent year gone by. So while you have shared some thoughts on why LCL growth in volume terms would happen as the years go ahead, it would be nice if you throw some more light because for us from the stock market, that business is the linchpin.

Thank you. You're right. If you look back a few years back, even when you look back into our numbers as well, you would have seen some sort of flat or probably a small growth. You're absolutely right. I will also not take away the tailwinds that we had, for sure. As I said in my presentation, too, that we did have a little of a conversion of FCL to LCL, a bit, but not to that great extent. Now what helped us, let's come to that, right? What did we do especially that our growth has happened, right? There has been a tailwind, no doubt. There has been a tailwind because of FCL. There has been a big number that has moved on e-commerce now because that has pushed the industry completely different way, right, which was probably would have taken another 5, 7 years more. But with pandemic coming, like today, we use digital like no one's -- no other day, right? Everything is done digitally. Probably in the U.S., if you had to look at it, people used digital, everything was through digital. But when you come down to the countries like ours, pandemic pushed it really, really in a big way. So there was a big push from the e-comm as well. Now what did we do? I would say that, fortunately, we picked this up very early, even before pandemic. The Chairman then picked up this innovative thinking and said that why don't we look at sales acceleration. And this came because that we were not growing at that speed as well, right? And this -- what is this all about sales acceleration. The sales acceleration was a sort that where we looked at white spaces within our organization. We had customers who worked with us for very long and they moved out, but we had no visibility that they moved out, right? When I say no visibility, we did have visibility that they have moved out, but did we really pursue and go back to them and get -- garner them back? That's what has happened now. If you look at in each of the countries, our new customer base has moved up. And what are these new customers? These new customers are not that have come through because of pandemic or because they have moved from FCL to LCL. But these customers who had moved away, and when I say moved away, for about a year, so they are new customers for us who never operated with us, probably they went out for various reasons. Now there was a focus drive that started happening. This, of course, the consulting firm that we had appointed did help us in driving this. And today, I'm happy to tell you that 60 -- almost -- it's almost like 4 or 5 months since, our own team is driving it, and you've seen the results. It continues to be there. Now if it was only for tailwinds, then the tailwind should have stopped long back, right? So we have got back our old customers, one; Secondly, we have new customers; third, from our existing customers, if you look at it, we had certain market share. We identified that. And what is that market share that I'm talking about? If you are a customer to me and probably you were only giving 10% or 12% of your business to me, today, we have gone back to those customers and have increased our market share from that 10% and 12% to say about 20%, 18% or 19%. So we increased the market share from our existing customers. These were the 2 big impacts that we brought in. The other big impact that also was created within the organization was that our reach became larger and that reach was through acquisitions as well. Like Ravi in his presentation did say that in some of the countries, some of the regions, we were not in at all, and that, through acquisition, those numbers came into our forte as well. Tailwind was there. But is that -- it's always going to be questionable that is that tailwind going to be sustainable, right? And we're already seeing it. But today, when I look at it and I very clearly, am very, very strongly feeling that we will still grow. When I say still grow, even with this tailwind going off a little. I'll be not telling you truth that if the tailwind is not going to diminish for us. Of course, it's going to diminish. But where is the growth? The growth is going to come from the sales acceleration that drive that we are doing our focus on each of those customers whom we lost, we had huge thousands of lease. I can give you a small example that in U.S., we have got back almost like 728 customers. And each customer probably would add to a certain CBM, right? And I'm talking about LCL. So that's my -- this thing on selling. Did I miss something else here?

I don't think. And if I may just add a couple of points picking on your earlier thoughts. You asked about the LCL growth, and there are 2 parts to it: one is the market growth, and second is within the market, how do we grow our share. So the market growth for the last few years, the whole e-commerce in the small and medium businesses participating increasingly in the global trade has led to an increased expansion of LCL trade. And the estimates that you saw on the industry growth rate coming from one of the leading global consultants. And there has been a little bit of subdued numbers over the last 2, 3 years from the industrial -- the overall industry growth. That's primarily because of the constraint, the supply chain constraints where they are the port congestion, the shipping capacities and all of those things, right? Otherwise, you could have seen even higher growth rate in volumes. So that is there, which is sustained, which would continue to grow. And within that, as I think Adarsh pointed out in his presentation as well, what transformation has done for us is we were perhaps like a federal structure. We own several companies, but they were not truly integrated. As we became one global entity with one global operating system, which you set up and the whole transformation path has now resulted in the flywheel of success, which Adarsh alluded to. The higher operating volumes give us the scale to get better efficiencies and then allows us to service the customers better and that in turn allows us to get more volume. So it's almost like the flywheel of success, which becomes the driving force for our market share expansion, and the market itself is likely to grow very fast, like you spoke about the e-commerce and all the small and medium businesses. So we are quite confident that from a volume perspective, both the market as well our share should continue to grow well.

Just one more, just to give you a little of confidence. I'll just tell you the case study, special for India, okay? This has happened across the globe. In India, we used to have about 19,000 CBM of cargo, in India only per month, we used to do. And today, we do 60,000 CBM. The tailwind couldn't have brought in so much because you still have competition.

19,000 to 60,000?

Exactly. So this is where we really focus do very, very differently. And even with the volume increase, what happened, we started offering customers new direct rates. Earlier, LCL, you know it's like you could do a transhipment right? You might do it through Singapore, you might do it through Busan or Penang or whatever, right? Now when you have enough of cargo, right, that opens up avenues for direct services. And when you open up direct services, your transit reg uses, pricing model becomes very different, right? You become efficient your pricing becomes more attractive as well because you're doing a direct box as well. All this has actually added to the impetus of growth that has happened is what I just want to leave it.

This is Kashyap from Theleme India Master Fund. A couple of questions. First and foremost, on the container rates. Do you think that the container rate normalization is gathering pace? I think recently, the Shanghai Exchange or if you look at the World Jury they've been kind of reporting a couple of weeks of a decline of 5% to 10%. So just trying to understand whether there is some amount of demand softening? And also on -- broadly on the demand side, do you see that there are some negative or, say, headwinds on demand given that the world growth could kind of soften? So do you see that there are some downside risks to demand?

So I think on the ocean freight rate side, we have seen a certain amount of normalization over the quarter 1 and the trend continues in this quarter as well. But like you would have seen the World Container Index that becomes the headline statement is more of a spot rate market that doesn't truly determine the long-term contractual numbers that we operate with, both on the customer side as well as on the supplier side. And as you saw from the presentation, the impact is quite minimal. But to answer, yes, the downward trend has kind of sustained, but there's also an expectation and these are all based on wider industry views rather than our own. I don't think we are in a position to truly predict the freight rates. But the faster demand through the later half of the year, which is the remaining 3, 4 months, you usually could see certain bounce back in the freight rates as well. That's the view on the volume side. There are certain pressures on the demand, and we keep looking at the inventory levels dropping down, particularly in some countries in Western Europe, which have been facing pressures from the energy bills and also in the United States to some extent. But these are still more cautionary headwinds, which may impact in creating certain sluggishness in the next few months. But overall, if you look at even for the month of July, the U.S. imports actually were higher than the previous year. So there is some amount of caution skepticism and a little bit of sluggishness, but not something very significant. But Adarsh if you'd like to add from our business perspective too.

No, absolutely. I think Ravi covered it well. The -- is there going to be -- is there a softening? Yes, we are seeing it, right? And it's an open part of it that it is softening, but it's not softening across the globe. Let's answer it that way. In some trades, it's softening, and there are reasons for softening as well. Inventories being built up because you know that the freight rates went shot up, there was no inventories available. When I say inventories, the container was not available, right? And those inventories were not available, so people thought cargo needs to move at whatever it takes because LCs were expiring, so they really pumped in, brought in whatever and pushed it. So many of the places, if you look at it, the inventories are lying more than what the demand was, and that's now yet to be. So like what Ravi said, probably in the next 2, 3 months, you will suddenly see that it's going to bounce back a little. While on the freight rates, it's not going to be the freight rate what we saw during Pandemic, right? These freight rates are obviously going to be -- will come to normal. He rightly said that these numbers are like one-offs one, right? When I say one-off, thousands of containers are moving. And out of the 10 containers moves at $18,000 and the rest of the containers move as actually $10,000. But for the index, it shows as $18,000 because they pick up the highest numbers, right? $10,000 is the one which is probably the number that we should be comparing. And that's one of the reasons if we look at in our presentations also, our numbers did not show up to that number. Will that number be at $10,000 or will it be pre-pandemic? No, it will not be pre-pandemic, for sure. Presently, for a short term, it is all sounding people are showing up some trends. but will be a new normal that will come in for sure. And that new normal could be maybe a mid part of what we would have seen the high numbers. And when I -- is not say about $18,000, maybe $10,000 and probably the pre-pandemic, pre-COVID numbers. So in between somewhere, you'll see the numbers becoming normal.

Just to add different commentary from here. I don't want to, but I just do want to say softening, yes. But for us, the softening doesn't mean that rates go down, we are able to manage. Second is volume is not what is softening, softening is the rates, yes. The volumes are still holding up and growing. I just wanted Deepal, but Deepal Q1 in terms of volume growth, which is the last 3 months, what's the kind of volume growth that we saw in LCL? Can pick up that and quickly just -- no, no. I said. Yes. Okay. Yes.

No. So the volumes have been very stable and growing as well. So there are 2 reasons for the volume growth. One which I mentioned earlier, that we are also increasing slowly our market share. Our reach to our customers like we spoke earlier that we are increasing our market share. We are going deeper to our customers. That is one. Secondly, we are also going to new markets and quarter 1 volume growth has been close to 4%, 4% to 5% has been growth in the volumes that we had over the previous quarters. So it's consistently growing, and we expect that growth to continue as we go along for the year.

Thanks, Deepal. So volume, I just wanted, generally, we look to our CFO so that you get authentic figures, right? So...

No, no, absolutely. I think maybe softening means the price softening, and the price will soften for us something differently, right? We knew that demand and supply changes. But as rightly said, for us, there is a huge room to grow in many of the trades where some of the trades, if you look at it, we would be about 7%, 8% totally, okay? In the overall perspective, you're probably looking at 14%, right? As I said, in India, if you look at it -- I remember telling my colleagues and I said, hey, we become #1. Then I said, can you slice it and dice it and tell me in Ahmedabad, where are you? In Kolkata, where are we? And we certainly see there is very huge room to grow. So we're talking about the globe here. And this has come out of the sales acceleration, the process that we have put in place, right? And I think we have a huge room to grow and a huge opportunity to grow. Even if even if you think if the markets are going to be a little slower, but we have a huge room to grow for sure.

So if you look at India, that's the other perspective on it to throw that look at auto sector, for example, and we will do I can't find enough think today it is supply constrained. It's not demand constrained. So there's more demand than it is there. Now everybody is waiting for 4 months to 12 months for cars, right? And chips are in shortage. So there is a huge amount of pent-up demand waiting to happen, yes. That's 1 product line. Again, pharma, you already know and how it is going. And while there will be a certain amount of sluggishness because what happened in terms of somebody saying there is a recession coming, right? So therefore, you'll be worried. Is the demand going to go? I'm saying what about China, which is normalizing. What about when the Ukraine, this war is there. So that is the press. What about when it gets left out? There are others like the U.S. joining this entire cycle of this. So as many as there are downside risks that is also green shoots, which we are seeing around device, both on a product category basis and on a geography basis, and that's all.

And this growth also if you look at it, ours, what you see is with lockdowns in China, mind you. 2, 2.5, 3 months of lockdown in China. If that had not to be there, then you would have seen a different shoot altogether, right? So just disappointed.

Q1 is only muted.

Yes, exactly.

Yes. So did we answer your question? I just want to make sure that -- Someone in the back, yes. For a minute, if you stand up, then we'll see you after that, you can sit and ask the question, please.

Yes, sure. Am I audible?

Yes.

This is Abhijit from ICICI Securities. I have 3 questions. First of all, in the first slide, you have mentioned INR, 20,000 crores to INR 25,000 crores of ISC revenues by FY '26. Can you share some of the building blocks that has gone into that assumption or forecast? Second is you are generating tremendous cash flows, as you saw in the slide, almost INR 1,500 crores of cash. Assuming that you are going to maintain these numbers even if the freight rates fall, the assumption would be majority of the cash generation would be in the MTO business or the ISC business. What are the plans for deploying this cash? Because if each year, you're generating INR 1,500 crores, what are the broad plans for deploying this cash, whether you have enough avenues to sort of get this cash utilized? And third is, if you can give us some thought as to the structuring they were thinking around Gati, there is some discussions that you are doing with KWE. I think you're all waiting as to the final structure that's going to emerge, whether that's going to lead to deployment of the capital that you are generating from MTO. Is that even possible to get the money from outside and get it into India and invest in to Gati? So some clarifications on this? That's all from my side.

There are 3 questions. It's okay by you if I reverse the order of the answer, right? Yes, that's fine. So Phil, why don't you start by talking about the building blocks of Gati and where are we and then I will add on and then we come to the other questions.

Yes. Thank you. As far as Gati is concerned, I think we have gone out to the press and said that we have been now in dialogue with KW for a buyout. So we are in discussions. And as things unfold, we'll be talking to you in the near future on that. Coming to your first question, yes, Gati will play a role in building blocks towards that INR 25,000 crore mark. We have been very clear in giving you our vision and direction of how Gati will progress. Gati has turned around. You have seen the first quarter results of Gati, and this is only the base we are going to accelerate from here and make at great again. And I'll hand it over, Partha, to you.

Just if I get your first question of this, you said what is the building blocks for the ISC that I put up. And you understand, of course, the Gati portion and the new businesses portion, but you're more talking about ISC, how are we building up, right, the building blocks of ISC. So basically, first is that before going there, we need to understand what would be our ISC revenue for today. He's talking about INR 20,000 crores that you projected 4 years from now? Yes. So today itself, we are about INR 16,000 crores. So first question -- answer to your question is that there is a healthy base. Now how are you going to build on that base, right? So LCL yes, FCL, door-to-door and added services. These are 4 things Adarsh you are going to kind of rephrase that once again on those elements that you have checked.

No. So the building blocks, obviously -- the international business, as we said, that we still have room to grow, not just the services that we offer today, we want to add value to it. And where will that come from? One, Obviously, there's a lot of traction that's come out coming through the digital platform as well, right? ECU 360, what Vaishnav shared with us. There's a huge uptake on that. That's one part of it. The second is that we -- as we said, we have only 30%, we are today able to give value-added services to our customer. And we still have room for that 70% balance, which is our existing customers. So the out shouldn't be a challenge. What was it that you might even ask a question saying that, why haven't you already offered it? Because there was something -- a lot of things that need to be put in is the infrastructure that we had to create. We had to partner with a few people to do that door-to-door that we want to do. And that's now all getting into place. Are we going to deliver everybody all the 70%? No, I don't think so, but probably another 30%, 44%, for sure, we will be. We're already upscaling the digital part of it where the visibility like what Vaishnav said in his presentation. We continuously will keep enhancing that part of it. The biggest one that's going to come from LCL will continue to grow. As I said, we have white spaces. We still have a lot more to cover up. Just don't look at the 14% of what market share we have got. We have enough of room in many of the traits that we are operating, right? China, probably, you have a huge room to grow for us, to be honest with you. we will be among the top 3 today. Globally, we are ranked #1. India, we are already #1. But in many of the Southeast Asian countries, we are among #2, #3. We want to get to the #1. So we have enough of room to grow there. FCL. FCL Is one, we are, as I said, we are not even 1%. Today, probably we are ranked 18 or 19? 19, 18th in the world in the lease. We have a huge room. Our aspiration to be in the top 10. Even with the regrowing, even if we let assume that we are, there is a market that's de-growing, has a huge room to grow because our market share is below 1%, right? So this is the other one that we are aggressively working on. We have aspirations to grow that. And we have proved even in the last few years, if you look at the FCL how the growth has happened, right? And it's only going to be better because today, our procurement power has gone up. While we went to a carrier at 80,000 TEUs and today, we go with about 500 -- 0.5 million TEUs, you can imagine our power of buying goes up, right? So that's the other block that we're talking about. We also want to add custom clearance in many of the places because this is now getting digitalized all across, right? So that's an opportunity that we still have to -- we are still opening that with digital coming in place. Did I miss anything else? I think I -- yes.

Yes. Because Vaishnav has got -- not been speaking at all, I want to bring in. Is digital going to bring some new revenues on to the table,Vaishnav? To add to the ISC, to the band wagon? And what kind of value you think you can create?

Yes. I think -- everyone can you hear me fine?

Yes.

I think our ability to drive new customer acquisition growth is something that we have proven internally already. We have also managed to upsell customers to quite a significant amount by growing the value-added service uptake by 12% over the last year. And that is only primarily on door, we're also able to infer a lot more. And not only new customer acquisition, we are also able to reduce customer leakage, churn and wallet share by diving deep into customer behavior analytics and providing some predictability to our sales and essentially doing some sales beat planning. So I would say these 3 are levers that digital is able to drive further volumes.

I think the other thing is going to be the EQ trucking as well, right, which is going to be then all across.

Right, absolutely. So what we have -- in addition to the value-added services, we have strong trucking partnerships where we are also offering domestic trucking as a stand-alone product to some of our customers, where we are doing then revenue share with our partners. So these are partnerships that we are creating with digital models. So these are new business models also through which we are able to drive new revenues.

Thank you. Ravi, any other -- yes, cash I'll come to. No, I want to finish the others. You've kind of got. Okay. So Ravi is our -- and he knows everything he is an encyclopedia. So if we miss anything, we'll look at him to add to that gaps, yes? So -- but I hope on the revenue side, you've got the building like LCL is related to growth come whatever means the situation because of e-commerce and other tailwinds that exist in the overall global economy. And we can grow faster than that because we are well placed. So that's one of your big legs. FCL, we have bps. And we only have -- our -- this one go is to grow in a way that we keep our current customers very happy and not come in any way in that path of progress. But at the same time, there are many people waiting to help take help on that. So that's the FCL that we can grow many fast, and that's what he explained in terms of. Then we come to that digital, okay? So -- and Vaishnav has a little bit -- he doesn't want to come in to a figure as yet because he first wants to show it before he talks about it. But what broadly we think is that 2 years back what the EBITDA of the whole company of EQS, can you, in 2 years from now get that kind of EBITDA only from digital, okay? This is the simple kind of target. And therefore, it can create a huge amount of value. So there are many things that we can do. And by the way, there is some countries which has potential. So one of the times that I know and I'm new, Adarsh was taking me around. And he said -- I asked him how much can U.S. grow? And he has given a target to the U.S. CEO to say, can we grow 4x in 3 years? So this is kind of -- and this is a very mature market. But our potential is that kind of potential. And this is just one example, okay? So I'll stop here on that front. That leaves the third question to be answered, which is cash, right, that we didn't answer. So [Foreign Language] This is a good problem to have. Deepal?

Thank you. Yes. So the spend on the cash that we'll generate will follow our long-term capital allocation strategy. So typically, there are 4 options that we look at. And of course, we'll keep exploring. One is value accretive mergers and acquisitions, which after me, maybe Ravi can add some more color to it. But also in a subpart would include even increasing stake in some of the well-performing JVs or where we have a lot of full stake. They can probably add more stake in some of those JVs. Second could be the amount of spend on digitization and on the transformation of the entire organization or the group rather, so there's a lot of effort going on in how we transform ourselves to the future. That's where we'll spend some money. Of course, we'll continue to look very closely view our leverage if there is possibility to look at reducing the leverage, we will probably repay some of the debts. And lastly, of course, dividend as we want to consistently maintain some dividend to be given to our shareholders. Those are some of the large options that we kind of look forward to spending our cash on I'll invite Ravi to share some more color on the M&A.

Yes. So I think, Deepal, like you rightly said, there are enough opportunities for us to continue to look at growth through acquisitions as well. And I earlier spoke about key drivers and buckets of our acquisition. If you split them in a different way, there are opportunities for us to acquire residual stake. So we have not acquired 100% in many of the joint ventures. One example being our discussions with KWE itself for the Gati partnership. There are other joint ventures. Even in Nordicon we could potentially look at something. There are other joint ventures in India, outside India, where we do not own 100%, and we may look at increasing our stake Beyond that, there continue to be new possibilities. There are markets where we are not present where there are opportunities for strategic acquisitions. We may not enter into new business segments, but if you look at our coverage, we are already present across all the key segments of logistics, and there are continued opportunities to explore synergistic strategy-led acquisitions. So there should be significant opportunities for putting the capital to right use and continue to drive growth. And if you recall the example we shared on the kind of value that we create post acquisition, that basically drives the enhanced return on capital employed because everybody is looking at a certain value and we set out to acquire a company, we create incremental value only when we are able to acquire at an ex bottom line and transform that to 2x or 3x in a quick period of time. And that's something which we will endeavor to do. And like I said earlier, that's the DNA of the company. So as long as we have strong cash flows, we'll always have good use to put them to.

Thanks, So cash, he is great that I have enough opportunity, both from taking it up the scale as well as taking new business, but I've put 1 spin on this. okay? What I've said is that ISE has now got a world class 50% ROC. I want to maintain that ROE, then you tell me how capital utilization will be. So any acquisitions or anything that we are doing with the cash? -- has surpassed the ROE test as well, okay? So we are putting -- as a group, we are putting a huge amount of thought on that so that we can give value accretive. The second one is in terms of saying how do we spend for digital, which can give what do you call it, number of multiples of that would be much higher than what that thing would be. And we are not very ours to returning what we don't need because we know we can go back and borrow from the market. So I will reduce my debt right now, keep myself dry powder ammunition, dry ammunition whenever an acquisition comes up because it will be always be strategic. But acquisition is only when the other party is available, right? We will have to wait for the right chance, so we'll keep it powder dry and be ready to take on when that happens, okay? So I hope I've answered all the 3 questions of yours. Yes, okay? I see the node as yes. Okay. Yes, there is a question at -- please go ahead, like...

My name is Sailesh Raja from B&K Securities. Sir, my question is this 30 percentage of our existing business comes from D2D services. So you said, there is a huge scope to improve the 30% mix further. So what are the steps we are taking to improve this mix? How the improvement in mix in D2D services will help in improving the overall EBIT per TEU of the company?

Yes. So if I can just add and then, Adarsh,, you could perhaps elaborate much better. The 30% that we spoke about is the door-to-door component in the international supply chain business. what you are saying was conventionally we were a port-to-port operator. Over the last few years, we started offering door capabilities, and that's something which you spoke about, whether it's EQ trucking or other last-mile, first-mile services, right? Today, 30% of our bookings have some door component. It may not necessarily we don't do it could be door-to-door or do to port or port to door. So the opportunity is to grow within the 30% and also on the additional 70% where we can further grow from port to port, which is the current mode to a comprehensive door-to-door services. And perhaps Adarsh, if you want to talk about what the kind of services are the things that we're doing to make that possible.

Yes. So just to add what Ravi said, on the 70% when we went -- on the 30%, what we meant was that we were adding some value to that customer, correct? And within that value-added services could be many other aspects of it. One is the last mile part of it, the first mile part of it, the custom clearance. As you rightly said, today, we are predominantly, not today, I would say, for the last few years, we've been predominantly known as a port-to-port operator on the international business that we're talking about, right? I also said that we -- why have we not really gone berserk on that and gone and sold that services to them, we needed to create that infrastructure, and that infrastructure is being created. As I said, digital is one way because people want visibility, right? That's one. Second, to do it in actual -- in terms of, in reality, you need some partners to be onboarded as well who would actually execute it for you. because we are still -- we continue to be an asset-light provider, right, in that aspect. The rest of the 70% are untouched as of today. And we have a huge opportunity to go and tell them. And to pick that 70%, we have already started building infrastructure around the world. What are those infrastructures is to have partners who can actually collaborate with us and they provide the services on our behalf. This is what is -- and did he have some -- 1 more question on it?

No, on the drivers for door-to-door. And perhaps Vaishnav you also alluded to your -- how digital has been a big enabler, and that's why it's 1 of the driving reasons as well. If you want to throw more light on that.

Sure. I think on the digital side, one of the very important levers, like I mentioned in my presentation, is the ability to give instant quotes, right? Most companies like us take 70 to 96 hours to respond to a door-to-door quotation, we're able to do it instantly. And that is probably the #1 reason why we are able to scale this up so fast. And as a result of doing so, it has grown our volumes we're able to have a lot better partnerships and tie-ups like Adarsh has said. We were able to tighten our procurement a lot better. So our costs have come down quite significantly. And we also have a team of specialists who are looking to sell go-to door across the world. So it is one central team under the transformation office. They work with countries across the world, and they look to upsell customers in that way. So it's a very structured approach, I would say.

Yes, there's a focused approach on that. We have a focus team which is driving this.

And I just want to kind of repeat the numbers, which Vaishnav said because they're really impactful numbers, and they actually truly demonstrate what digital has achieved for us. So talking about an industry landscape, a competitive scenario wherein the usual accepted norm for a quotation because these are not like your B2C complex B2B quotations, the accepted norm as of today in the industry coming from competitors is like 72 to 96 hours right? Vaishnav that's what you said. And what ECU360 does is about 7 seconds or 10 seconds once the information is fill-in, less than that. So talking about 7 seconds versus 72 hours, just to let the magnitude of the impact sink in.

If I can also add with value-added services, customers want it, but the time that it takes is just not feasible for them. So generally, if we're able to offer them instantly because we have far better procurement or the only 1 to work with 1 service provider, they would much rather do that. So this is, again, a good...

We'll be able to give what is the percentage of growth in the portfolio?

12%.

12%, yes.

12% over the last year.

Increase?

Increase, yes.

From last year?

From last year to now, yes.

Thank you, Vaishnav, and thank you, Ravi. It gives the impact on the B2B that we have developed, so we can say that our question is never to be or not to be. It is only to be with be, yes. So that's our future. That's where it lies. I hope I have answered your question fully again. Yes, if you can just...

How this will improve the overall EBIT per TEU, sir?

How will -- that same gentlemen? How will it improve the EBIT and how will it improve the profitability, yes?

Yes, yes, correct. Yes, sir.

So I think we've -- as we offer more door services naturally means they're on the same box or the same cubic meter, we are offering additional services and therefore, incremental margins, but I don't think it would be possible for us to give specific guidance on the impact. But there would be an incremental impact on the bottom line as well on a per cubic meter or a per TEU basis because of moving from port to door.

Yes. Also on the stickiness of the customer mind you. The customer stickiness becomes stronger there, right? You are providing him under one roof one. And obviously, some revenue, some number will come to your bottom, right? You're not going to do it for free. That's what I would put it here.

Also, the cost effectiveness, our cost of operating will go down. it's digital, the cost of acquisition of a customer to the cost of operating, all that goes down. So -- of course, it's not possible to give you an exact number, but we believe that there will be a fair amount of addition to the EBITDA per TEU as you go along.

Simply put, all the overheads are already accounted for when we do port-to-port. This is incremental revenue and there is some incremental costs, of course, associated with it. but all the other fixed costs are already there. So we are able to leverage on our expenses. This builds on what we already have. So it will be incremental to the top line, but more incremental to the bottom line consumption, yes? That's so we can leave it at that without specific guidance. Does that answer your question, sir, now fully?

Yes, sir.

Any other further questions? Any other questions that you can ask. So sir, if you don't mind, there's a gentleman at the back, I'll let him ask that, and that last -- you can have the last word.

This is Nishant Sharma from Edelweiss. One keeping question and one clarification. So if it is possible to give a breakup of revenue for 3 businesses, which we are demerging, I mean, 2 ones? And second, on the Blackstone transaction, which business will be getting a benefit of that money, which will be coming from Blackstone?

So the first one is that when you go through the -- we present it, but when you go through this slide, -- we have answered your question specifically. He will give you some quick answer, but we have answered it specifically. There are 2 demerged listed costs let to come out, right? Once the demerger is complete, Allcargo Limited will exist with the balance of Allcargo business and with Gati and EQ investment. So that's the residual company. Now there will be 2 new companies, CFS listed co, and Realty listed co. The figures of that for last year on an estimate basis he has given you in terms of capital employed, revenue and EBITDA, okay? So -- and if a closer to the time when this becomes a reality, we will give you a on that and much more granular detail, yes. But it is another 9 months away in terms of demerger to happen, okay?

So just -- revenue was missing.

Yes, so just -- revenue was missing.

Yes. So revenue was missing. But it's very simple. If you look at the segment results are already published. So what stays back is EQ, which is the MTO business, which is the segment that we have, MTO or ISC as we call it now, with -- together with Express distribution. That's what stays back. The logistics park segment goes to TRL that is Trans India Realty. And CF is already a separate segment, which is there, which is -- which becomes a revenue for the Allcargo terminals. That's the answer for the revenue, yes.

Yes. So you have -- but what I'm saying is his question is, why not give that? So we will put that out to you specifically, okay? So that there is not. But we didn't want to take our today eye of the growth segments and get into the demerger as a mechanics and forget the growth story that we are trying to build. So we subdued it, but we'll give you the figures that you talked about. You asked a second question, sir. I don't think we fully answered.

I think you asked Blackstone will be basically impacting which entity? So that's the logistics parks entity, which is the Trans India Reality.

You're not audible.

No, no. I think you're asking whether that number included Blackstone impact or not. So that number was as of today, the Blackstone impact would be subsequently. So post Blackstone, like I think Deepal mentioned, there have been impact and if you want to highlight.

Yes. So the debt will go down by INR 300 crores and capital employed in total, we expect it to go down by INR 900 crores to INR 1,000 crores in that entity.

So the India part is still open for you. I mean, as one evaluates the assets and the talent and the IT infrastructure that you have accumulated over the years, there are many Indian start-ups, some of them recently listed who sort of skillfully bring all of this together, and they have generated a lot of value. So why not all cargo do the same? I mean you have you have so much presence and you have linkage with the international side as well. So just as you are trying to go after the 70% door to door, which you aren't addressing as of now, Similarly, there seems to be a large Indian opportunity, specifically where Phil comes from those moving -- those autos around and so many other ancillary activities. So why not go after those?

So I'll come to Phil and ask him to answer some portion of this because thank you for asking that question because then it's less pivotal. But for a moment, I wanted to stay on how digital and physical have to come in and can we use the magic in India to create. So that was your question. And I think part of the answer was in the presentation, which was made, but just let me try and kind of articulate. There are many companies which talk about what they can do, and it's English. So like I said, Vaishnav is very wants first to show that it works and it creates value before we talk. So we were maybe a little subdued in the way we put it. We have made building blocks in terms of both all the elements that we can do through digital and bringing it together with physical in terms of what customers that we can do. And that should put a huge amount of focus on India. And that's why we are now bold enough to say, let's have 3 companies. And we can use these digital capabilities at the back end to be able to do well, whether it be the reality sector where the right investor can come in, very confident that we have the wherewithal to physically deliver and digitally enhance an agenda, okay? Similarly, the CFS kind of business. And similarly, the other business that we do in this. And I'm consciously not answering Gati to give that short term. So this is that. So your point is very valid and your advice is very gratefully accepted because that's what is our thrust area. And we can bring in both global best practices through what we are doing in EQ and other places as well as out of industry-based practices, meaning what financial world does tomorrow -- yesterday, we can do it today and be the first in the logistic industry to do it. So that's the practice. So Phil, if you can answer specifically.

So at Gati, it's a two-pronged approach. I think, first of all, We, ourselves, have embarked upon the digital journey. Our front-end digitization is now complete. We have already invested in salesforce.com. It's a world standard CRM tool. So 400-odd salespeople roaming around with mobiles with salesforce.com on it. So that basically the interaction with the customer improves. And our Nagpur call center also is on salesforce.com now. So seamless front end. And of course, the results will now be coming out of that. On the back-end side, we have again embarked upon our digitization journey. This is be divided into 6 to 7 pieces. It starts from pickup and ends with delivery and all the pieces in between. So yes, we have embarked upon it and results will come as each piece comes into place. But what we also leverage is what you said. The digital-first companies that are coming into India cannot perform logistics without us. So what they can do is they can acquire customers but they cannot fulfill their promise to their customer without using a Gati or any other company which has the network and in B2B network is extremely important. So we use them as a sales arm, right? So instead of saying, compete with them. We collaborate with them. They become our sales arm, and we give them the service. So it's a two-pronged approach that we are taking in Gati. The other program that we have gotten post Gati acquisition is you must understand that Gati is now a 35-year-old company. And even when I joined a year back, we had more than 3,000 customers in Gati. So we have put a cross-sell program for all cargo and Gati, where -- all these Gati customers would have something or the other to do with the all cargo side of the business, whether it is LCL, FCL, CFS or even warehousing, right? And therefore, this becomes a huge opportunity as a lead engine for the other side of the business. And vice versa, of course, all the all cargo customers, some of them would also have expressed distribution needs. And there is a focused cross-sell program that has been institutionalized in Gati for the last 12 months, and we have seen some good quick results, especially because of the number of customers that Gati brings to the table. As you all know, Gati is a household name in B2B, right? Every customer has used or continues to use Gati. And therefore, that opens up another kind of lead generation for the group. Yes.

If I can add to what Phil is saying Internationally, DHL, Kuehne+Nagel, FedEx, UPS, this is actually the core value proposition in the long term, right? They are able to really sell value-driven services to the customers rather than transactional services. And right now, Allcargo is the only one that can do that, right, at least in the near future also.

Today, we deal with every multinational shipping companies. Today, we are in end-to-end logistics, whether it's in Europe, U.S., South America, every part of Asia and India to as aspiration of India exports, government needs it because of trade deficit to go to $700 billion or $1 trillion. I don't know how many years it takes, but it will take how much of business shipping companies can add as a cross-sell because you are supporting them buying freight, they offer business because of Container Freight Station, be it Gati or Trucking in U.S. because the turnaround which you offer to the shipping lines, they can sail faster. That's one service, but multiple services brings how many more containers to you.

So basically, the cargo turnaround is not controlled by us. Let's see. It's not the shipping lines or anybody today. there the shipping lines -- I mean, during pandemic, they were keen to have the turnaround because they needed inventories while during nonpandamic, that was prepandamic. If you look at it, if the containers had to stay put, they would make money out of the detention charges. Now the other point that what you said, how can we add value, right? How can we add value or how can they add value to us. Today, if you look at it, they've already reached out to organizations like us where we have the infrastructure in place. They actually -- they also work with BCOs. A lot of big customers who are available in the country across the world. They are now trying to also offer a door-to-door, right? But while they want to offer a door-to-door, they cannot go to somebody a small operator who can do it. Like for example, in India, we have a huge infrastructure we ran a transport organization before. We understand the Nuances very well. We know the integrities in India. So we are in a position to we are in an asset-light model today. We are in a position to offer that services to them. We build relationship between them, where in some of the customers that we also offer them and they, in turn, offer some customers to us. So there is a bit of a cross-sell that happens. Is this going to be a long term? Don't know. It's -- there's always going to be a question mark because everybody wants to get into our shoes of somebody else, right? But it's not easy. They have tried this before. They have walked in and walked out as well. We see that happening now because they have a lot of cash flows in place, right? But it's a matter of how this moves. Markets are changing, markets are changing for good, bad, better, whatever you want to say. We, as an organization, will always offer anybody who comes forward to jointly work with them if there is something in offing for us as well. So that's what I would leave at it.

A lot of PLI schemes are being floated, be it in manufacturing, electronic goods, specialty chemicals, textile whatever auto ancillaries. What are we doing to map those be it for Gati or be it for Allcargo global business because Apples of the world will have to drive global business.

So I think if I can just highlight the point that Adarsh mentioned about, we cover 99% pin codes. So whenever those factories come up, if those components have to move in from China into India and some of those handsets have to move from whether a factory in Telangana or Himachal to any part of the world, be it Latin America or Africa or anywhere else, we already service and cover those trade lines, both internationally as well as in India. So therefore, we are very bullish, like all of us perhaps in this room on India's potential to continue to grow exports, increase exports would mean increased CFS business for us, increased domestic transport business for us and increased international business for us as well. And like Adarsh others highlighted, the market share that we have in India today on the international LCL business as well has gone tremendously high, which means that we will have a much larger share of the incremental pie which comes in based on the -- all the schemes that the government is running as they become more and more effective.

On the schemes, just to tell you that exports have grown okay. the deficit probably will take some time. But for sure, it is -- it was -- I mean, it is still growing with a brisk pace, I can tell you. Probably there is an impact of the Make in India, and that impact would actually come probably in the next few couple of years ahead.

So you're seeing early signs of positivity on...

Absolutely.

My last question, what is the digital expenditure on a global basis likely to be in the next 2, 3 years?

Yes, you can see. As long as you say, the impact also.

The tricky one now.Expenditure.

What is your budget, let's put it that way. What is the digital expenditure for the aspiration Allcargo has?

Like Mr. Parthasarathy said, we want to try and achieve where the company was EBIT-wise 3 years ago as the incremental that we had. So it's about 15% to 20% uplift of where it is today to EQ worldwide LCL business.

Yes. He talked about next 3 years being at about INR 900 crores, was the CapEx you talked about, totally last 4 years? Last 4 years spend. Going forward, if you spend the next 4 years, INR 900 crores, how much what percentage of it would be digital? So about 20%, 25% 20%?

Yes, we would expect that.

So that's the kind of thought process. One thing about I wanted to acknowledge, the PLI, if you think of a different way you made the point that share of wallet of a customer who does goes for PLIX how much of share of wallet can I get? So that's a thought you're left with me. Let me explore that thought, how do we -- how can we kind of share of all market share is one. Share of wallet is another way to look at. So let me think about that separately. So that's a point I've taken out of what you said.

Yes. Thank you.

Yes. Thank you all for your participation. We request you to join the management for the high-tea session planned around the evening. Thank you.