AVG Logistics Limited (AVG) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to AVG Logistics Limited Q2 FY '25 Results Conference Call hosted by Kirin Advisors. [Operator Instructions] Please note that this conference has been recorded. I now hand the conference over to Ms. Vaishnavi Ambokar from Kirin Advisors. Thank you, and over to you, ma'am.

Thank you, and good afternoon, everyone. On behalf of Kirin Advisors, I'm pleased to extend a warm welcome to all the participating joining Q2 FY '25 conference call of AVG Logistics Limited. Please note that this discussion may include forward-looking statements based on the company's beliefs, opinions and expectations as of today. These statements are not guarantee of future performance and are subject to risks and uncertainties that may be challenging to predict. Additionally, this call does not constitute of any forward-looking statement or projection related to revenue, EBITDA and PAT. Joining us today from the management team are Mr. Sanjay Gupta, Managing Director and CEO; Mr. Himanshu Sharma, Chief Financial Officer. And with that, I will hand over the call to Mr. Sanjay Gupta, Managing Director and CEO. Over to you, sir.

Thank you, Vaishnavi. Good afternoon, valued stakeholders. A warm welcome to AVG Logistics Q2 and H1 result of '25 conference call. We will begin by discussing recent industry development, our operational and financial performance. The logistic industry plays a vital role in the dynamic economic landscape of India by enabling the efficient movement of goods and service throughout the country's large territory. As India strives to realize its ambitious economic goals, including achieving a GDP of USD 5.5 trillion by 2027. Logistics sector has been undergoing a remarkable transformation. Contributing a substantial 13%, 14% of India's GDP and employing over 22 million people, the sector is poised to continued growth with another 10 million jobs expected by 2027. The market is projected by -- expand from INR 317 billion. [Audio Gap] Robust growth of e-commerce, cold chain and logistics. And significant infrastructure development with initiatives like the National Logistics Policy and Gati Shakti driving efficiency, integration of model technology, and reducing costs, the landscape is primed for innovation and expansion. As one of the leaders in the logistics sector, we remain committed to redefining excellence through a robust, diverse business portfolio that caters to multimodal, cold chain, warehousing, and value-added logistics solution. Our services are designed to empower business across industries, providing end-to-end supply chain supported by enhanced efficiency and customer succession, we are leveraging advanced technology, including IoT-enabled tracking system, automated business process, and cutting edge analytics to drive operational excellence. Sustainability remains central of our operation as demonstrated by investment in rail, electric and LNG-powered fleet. These efforts have significantly reduced emissions, provided cost advantage, and given us a competitive edge. We are committed to leading with green technologies, incorporating innovations like IoT for real-time tracking and optimization. Our growth strategy is focusing on expanding multimodal capabilities, enhancing profitability by serving fast-growing sectors, and leveraging cutting-edge technologies to improve reliability. Additionally, we continue to attract marquee clients from diverse industries, further cementing our position in the market. At the heart of our strategy is a focus on driver safety and wellbeing. Strong demand in FMCG, retail sectors played a key role in the performance. We continue to strengthen our infrastructure to navigate India's [ diversened ] logistics terrain. Looking at our performance in quarter 2, for year '25. Several key milestone highlights our continued growth and strategic expansion. We are appointed as the authorized partner of Parcel Express Service by the UP State Road Transport Corporation, securing space in 9,000 buses for parcel delivery services in the entire UP. The partnership is expected to generate INR 60 crores revenue over the next 5 years. In line with our sustainability goal, we launched a 20-feet electric advanced green logistics collaboration with one of our esteemed clients. Continuing our expansion journey, we added 121 fleets in first half year of '25 to strengthen our operational capability to meet the growing demand and expand our market footprint. Looking ahead, the National Logistic Policy targeting to reduce the logistics cost to 8% to 10% of GDP by 2020 (sic) [ 2030 ] presents significant opportunities for integrated logistics provider like us. None of this progress would be possible without the incredible team to drive our success from the drivers who navigate our roads, to the innovators behind our cutting-edge solution. Every indusial plays a vital role in our achievements. We are pleased to report steady growth and improved operational efficiency across key financial metrics, supporting our strategic growth. Despite inflationary pressure our challenging business environment, our investment in multi-model infrastructure availability has helped us to minimize the impact. Now I shall hand over to Mr. CFO, Mr. Himanshu Sharma for detailed analysis of our financial performance, and key metrics of the quarter. Over to you, Himanshuji.

Thank you, Sanjay, sir. Good afternoon, everyone. I'm pleased to share our consolidated key financial highlights for H1 financial year '25 and Q2 financial year '25. H1 financial year '25, our total income stood at INR 263.25 crores, reflecting a year-on-year growth of 20.35%. EBITDA for the half year is INR 48.04 crores, marking a year-on-year growth of 19%. PAT for the H1 stood at INR 10.59 crore compared to INR 4.25 crores of H1 financial year '24. And year-on-year increased by 149.42% resulting in an increased PAT of 4.05% compared to 1.95% of H1 financial year '24. This is showing a growth of 210 basis points into the PAT. Our earnings per share for H1 is INR 7.75, which is up by 114.68% compared to same period last year. Quarterly performance in the quarter 2 financial year '25, we recorded a total income of INR 139.57 crores, a year-on-year growth of 18.3%. The EBITDA for quarter 2 is INR 24.42 crores, showing a 14.19% year-on-year increase. PAT for the quarter stood at INR 5.38 crore compared to INR 1.72 crore of the quarter 2 financial year '24. This represents a year-on-year growth of 213.1%, resulting a PAT improving to 3.89% and presenting a growth of 242 basis points. The EPS for Q2 was INR 3.94, reflecting a robust 169.36% year-on-year growth. On the balance sheet ratios, our debt equity ratio is maintained at 0.44 in September 2024 compared to 1.23 in March 2023 and 1.42 of March 2022. This is showcasing a stronger equity position and reduced leverage. Similarly, the current ratio is also maintained at 1.72 in September 2022 -- '24 compared to 1.15 in March '23 and 1.35 in March '22, reaffirming our strong financial position. Our journey is well aligned with the future of logistics in India, as we look ahead, we are poised to drive further growth by investing in multimodal infrastructure, emerging technologies, expanding our fleet with EV and LNG-powered trucks. The opportunities before us are immense, and we are confident in our ability to sieze them, guided by a vision that balances profitability with sustainability. With that, I will now open the floor for questions and provide any clarification you may require.

[Operator Instructions] The first question is from the line of Rishi Kothari from Pi Square Investments.

Congratulations on a good set of numbers. I had a specific question as to, why was there some reason for a dip in margins in terms of EBITDA level? We know there was an increase in other expense and other benefits. What exactly do we include in other expenses.

Yes. Thank you so much for your question. So EBITDA is a bit reduced due to some of the vehicle, we have done a transaction of sale and leaseback. That is number 1. And number 2, we have further explored a leasing opportunity. And we took a few vehicles into the leasing as well. So if we purchase those vehicles directly, it goes into depreciation and interest, of course, while we capitalize that. But whereas if we take it on lease, so lease terms are normally available for a lesser tenure, and then it hit into the top line. So -- but this is helping our -- the growth of the company, and we are focusing on improving the net profit and EBITDA is marginally reduced.

Okay. So for now, it will hit because we had a lease -- say, a lease thing on our vehicles, but eventually it will improve?

What exactly the PAT, right?

Yes, that's right.

So this is the model of -- the light asset model. And in this scenario, the PAT is improving, whereas EBITDA is a little bit minorly -- there may be some reductions. But overall, PAT is improving, and we are working towards light asset model business that leasing is availability in the market.

So you generally categorize lease expense as other expenses, right?

No. It goes into operating expenses.

Okay. Interesting. Okay. And also in terms of my other question was around the guidance that you gave of INR 700-around crores of top line for FY '25. Do Still hold that? Because if we see H1 compared to H2 you more or less have to more than double the revenue in H2 compared to H1 to achieve that guidance? Or do we still hold that?

Yes, yes, we are hardworking towards that line. And actually, the one of the big government contract is under consideration. And unfortunately, that finalization of that contract is taking some time because of the value of the contract. Hence, it may be expected in next 1 month or so. We are working and adding the organic growth, which we are taking around 20% as taken from our recent customer and we are adding a new customer on a monthly basis, and you must have seen the improvement of 20%. But the growth of [Foreign Language] we are trying to get some big contract and definitely finalize in next month or so by end of this month or next month, let's see.

Okay. Interesting. So any other new tender updates apart from the government contract that you are eyeing right now?

Yes. So this time, we have uploaded our presentation and Page #30, we have given the list of the new clients which we have added in our FMCG sector and other sectors. Like we have added Indian Herbs, Haldiram, Anmol Biscuits, Devyani Foods and electronics and other items. We have Dalmia Cement, Everest Industries, Shyam Steel, Supreme, EPAC. And so we have added around 15 customers. So in our industry, the growth is coming in the 2, 3 segments. One is our existing business, that is around -- organic growth of around 10% to 12% and 10% to 12% growth, we can take by addition of the new client or new business line. And we are also in touch with 2, 3 companies, which is under finalization phase, this merger and acquisition. So 2, 3 good companies we have already identified, so we are acquiring those companies in our business, which are presently doing the business as of our line. So this will help us to grow the business and profitability.

Okay. So in terms of merger and acquisition, which exactly segment are you targeting with M&A. Of course, we are more in a way a diversified company in general. But any specific segments are we targeting in M&A?

Yes, we are talking about -- majorly, we are in the multimodal. So nowadays because of the truck pricing, toll tax costs, and other operations costs are increasing day by day. So the customers are shifting towards the multimodal, which we have already run in the 7, 8 trains on long-term contract with Indian Railways. So we are talking to FMCG companies and cement and steel is also coming up with a new sector in our business. So this will help us to grow very fast in the same industries.

Okay. So the companies are more focused towards this multimodal logistics which we are targeting for M&A?

Yes.

The next question is from the line of Subhash V. from Value Investments.

Congratulations on a great set of numbers. Even I had a question on your guidance of INR 700 crores. I went to Bharat Connect Conference Rising Stars that happened in September 2024. And -- when I went through the post-conference notes, I could note that you were in discussions to acquire 2 companies one with INR 50 crore revenue and other one is around INR 170 crores revenue. So are both these companies in the logistics sector? Or are you acquiring companies from any other sectors?

No, no, no. We are -- our core business is logistic-only. We never go with the other businesses. So we keep only warehousing and logistics company, which are our core business. So these companies are under the same business only. We are not dealing with any other businesses.

Okay. And also when I see the revenue that you have achieved until H1, it is INR 263 crores. So the remaining will be around INR 437 crores to achieve the INR 700 crores guidance. That will be around 62% of your total INR 700 crores. So if I look at the last 2 years' financials, right, so when I look at the second half of the year, you AVG Logistics was able to achieve 51% and 55% in FY '23 and FY '24, respectively, in the second half of the year. Now in this year, in FY '25 you need to achieve 62%. So is this gap of another 10% will be filled by these acquisitions that you're talking about? Or do you have any other strategies to meet the INR 700 crores guidance?

The last -- the same was done by the last person. So there is one government contract of around big amount. So it was under finalization and supposed to finalize by the September. But because of some technical reason, it is taking some time to finalize. Hence, it is getting delay. And most probably, we are in touch with the concerned department and hopefully, it is finalized by 15th of December. So we hope that this tender will finalize and it will be implemented very soon. And the good growth will come from that particular tender.

Okay. So even though you're going to serve only Q3, Q4 for this ongoing tender, you think that you will be -- sorry?

Yes, we are working very hard and trying to complete the -- our business growth so that we can be honor growth.

Okay. So you still stand at INR 700 crore revenue growth, right, INR 700 crore guidance. INR 700 crore revenue, right?

So yes, we have been in touch with the concerned department to finalize the tender as soon as possible.

Okay. And also your guidance was 4% to 5% PAT margin, right? Is it going to be 5% because I say that in H1, you have around 4.05%. So will it increase to 5% in H2? Or is it going to stay between 4% to 5%?

It will be between 4% to 5%. Because earlier, it was 2.5% type. So we have reduced some costs and some -- when the business is increasing, so we get the leverage. So that's why we're able to increase the profitability. Expenses are not encouraging in the same ratio.

Got it. I just have one last question. This is, when I went through the post-conference notes of the Bharat Connect Content Rising Stars, I also read a note stating the company is aiming for INR 1,000 crore revenue from the cement sector alone in the next 3 to 5 years.

Yes, yes.

So you mean in the next -- after 3 to 5 years, only from the cement sector, you will have INR 1,000 crores revenue per annum?

This is just cement and steel.

Cement and steel, okay, got it.

Because this is a very big industry. And because cement is paying more than INR 1 lakh crore, INR 50,000 crores evaluation [Foreign Language] transport business. And since India is -- the development is happening in the last 3, 4, 5 years. So a lot of cement and steel is used in the infrastructure. So a lot of transportation business is available for those things.

Okay. Sorry, this is the last question. So you said that you're acquiring 2 to 3...

[indiscernible] waiting for their turn sir. [Operator Instructions] The next question comes from the line of Sauresh Pal from Peace Wealth Capital Limited.

Sir my question is, so you stated that the [ 14% ] guidance, a large part of it is dependent on a large contract that you are receiving from the government. So if you can -- if you can please tell us more about that government tenders, that will be great, sir.

[Foreign Language]

[Foreign Language] a large part of it is dependent on a contract from government, which we'll be getting in next month. So if you can tell more about that government tender, that will be geat sir.

Yes. Actually, we cannot disclose the name of the company. And -- but it is a government tender and value is very high of the contract. So that's why it is taking some time for some finalization in the tender. And because of the guidelines from the NSE and SEBI, we cannot disclose the name. But we are seriously working on that tender. And hopefully, we will get it next 2 to 3 weeks maximum.

[Foreign Language]

Immediately, immediately. As and when we get the LOI and we sign the contract with the customer, then we can announce the change.

[Foreign Language]

Yes, yes. We are working on that. You'll see that result. So I think presently, we are working for plus percentage. Last year, we cover that growth is more than 100%.

[Foreign Language]

[Foreign Language]

[Operator Instructions] The next question is from the line of Arya Mehta from Maximal Capital. Sir may I request you to use your headset sir. Your audio is not very clear, sir.

Is it now better?

Yes, yes.

[Foreign Language]

Yes, yes. This is the light asset model, that's it.

[Foreign Language]

[Foreign Language] So it is going to be hitting the operating expenses. If the lease is a finance lease then what you are suggesting IND AS accounting...

No, that was according to earlier accounting standard, but IND AS every lease is financial, unless there are a few exceptions of say, it is short term or [Foreign Language]

[Foreign Language] If the lease is suggesting operating lease means the asset is not coming to you and still it is going to be accounted as a operating expenses.

Understood. Understood. Okay. And sir, [Foreign Language] 3% to 4% of turnover is there transportation cost, whereas for steel and cement industries, it is much higher.

Yes, sir. Yes. [Foreign Language]

Correct. 18% to 20%. [indiscernible] steel or cement clients, big steel clients. So we will get probably a plant from which they are operating. [Foreign Language] we may get?

Yes, yes.

[Foreign Language]

Yes, sir.

[Foreign Language]

[Foreign Language] will give us a revenue of around INR 50 crores to INR 60 crores.

INR 50 crores to INR 60 crores, if we do 20% of a normal plant work.

Yes, yes. [Foreign Language] it is moving around maximum 500-kilometer areas. The cement is a low price item, and it cannot be transported more than...

It is not viable, it is not viable [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Correct. Understood. [Foreign Language] It will be on the same margin profile or we will have to incur additional CapEx to serve these clients properly?

Some additional CapEx is required. So what we are doing, we are looking after some leasing vehicles instead of buying. And we have already started. And in earlier call, I have explained about the vehicle to be brought by our drivers [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Understood, sir. [Foreign Language]

[Foreign Language] Like customers are paying in 75, 80, 90 days. And in this industry, the payment terms are very competitive, 1 week or 15 days. So our margin on investments are almost same.

Understood. Understood. [Foreign Language].

Yes, yes, yes. So we can rotate our money much better.

The next question is from the line of Babu George, who is an investor.

Sir, my question is, can you share your detail about the strategy for Express Parcel Services business? And how would we leverage the similar kind of partnerships going ahead?

Yes. As of now, our Express Parcel business is around INR 2 crores per month. And your question is right. And in our industry, the margins in express business are better than our other business. So now we are targeting for at least make it double, so for the e-commerce industries and like small, small industries are there who are using the express service. So we are trying to make it double this year of, say, around INR 4 crore per month. This will benefit in improving our profitability and also the payment recovery is very fast in express Business. So we have made a strategy to increase our business double by this year.

Sir, my next question, what expansion efforts we are increasing in Nepal, Bangladesh and Bhutan?

Yes, we are doing for 2, 3 customers like Nestle and HUL, we are doing for this Nepal and Bangladesh. And we are talking to some other customers also because these are the countries where the plants are not available. So for example, that even we understand that Colgate and P&G and these companies are also a lot of moving a lot of material from India to Bangladesh and Nepal. So we are in touch with a few FMCG companies where they are moving the material from there. And it is also a good opportunity to increase the business for Nepal and Bangladesh.

The next question is from the line of Hemant, who's an Investor.

Just wanted to ask one thing like we are targeting INR 700 crores by FY '25. So what will be the growth trajectory post FY '25?

Total growth.

What would be the growth trajectory post FY '25?

So we have given the guidance for current year, financial year '25, INR 700 crores. And then as Sanjay sir has explained earlier also, that 10% to 12% growth is coming from our current customer. And we always try that another 10% we bring from new customers. So after this significant growth, we want to maintain a 20% year-on-year growth in the coming year.

Yes.

A 20% year-on-year growth and the 2 acquisitions, which we just talked about. So it includes the numbers from both the acquisition post FY '25. And when will it be integrated to our books?

Certainly, sir, we are working. So one, we might close in the coming quarter. Like in the coming days, and we will announce to the stock exchanges. And one is still in the discussion stage. So we will further -- so that will take time, but one we are closing soon.

So out of 2 deals, 1 is in a maturity level, and it will definitely complete in this quarter, current quarter, third quarter. And the fourth -- the second deal will be happening in the fourth quarter.

Fourth quarter. Okay. So basically, INR 700 crores kind of revenue and 20% year-on-year growth, post FY '25, right. Sir, so I mean -- so H2 shall be pretty much heavy as compared to H1, if INR 700 crores revenue is intact.

Yes. It will be a bit heavy, and we are working. So normally, in logistics, the second half is better than the first half. And in the similar line, we are also expecting that we'll try to reach the target.

So we can expect a sequential growth from here on...

[Foreign Language]

Yes. Yes, sir, can you come again?

Yes. So INR 700 crore is depending on the government contract, right? But we are maintaining 20% of our organic plus new customer growth. So that we are maintaining. And once we get this government contract, certainly, the volumes are huge there, so we'll achieve that. yes.

So sir, as per your earlier communication, it is supposed to close the 15 of December, right?

Yes, yes. It is under final discussion and expected by the third week of -- second week of December.

Okay. Sir, if it gets closed by 15 of December, then INR 700 crores revenue is intact, right?

Yes, yes.

Okay.

It is big amount of tenders.

Our next question comes from the line of Rishi Kothari from Pi Square Investments.

I just wanted to have an update on the warrant front on the pref shares, what exactly the situation? Are everything being converted or?

Sorry, can you repeat the question?

So I was going to ask you on the preferential allotment that we did some time back. So what exactly is this status there?

Status of preferential offering.

How we treated that?

Yes. Not in terms of treatment, I think it's revenues done in terms of that.

It is already converted. You must have seen the announcement in the last 1 week or so. And only through 2 things are pending, which will be completed on the due dates -- before due dates.

And that will be converted by the promoters, is that right?

Promoters already invested in, 530,000shares already converted by the promoters.

Okay. And that would be converted by when?

By December 15th for 20th. The last day is 31 December. So 25% has been already paid. So balance will need to pay by third week or maximum third week, we will complete this. Because the funds are required now to increase the business, et cetera. So we are focusing to convert it as early as possible.

Okay. Got it. And -- this will be converted by someone [indiscernible] warrants.

Yes.

The next question comes from Nitin Varma, who's an investor.

Am I audible?

Yes.

Yes. Sir, my question is, like if -- what are the certainty of this government contract getting finalized? I mean, is there any chance that this government contract is not finalized that you are talking about?

[Foreign Language] But we are confident that we will -- we'll get this.

Yes. That's what I'm asking. I mean is there any chance that [Foreign Language]

[Foreign Language] otherwise we it would have finalized in September itself.

[Foreign Language] What will be the revenue for this year? I suppose if this doesn't get finalized then?

[Foreign Language] So the tender value is INR 500 crores. So we are expecting INR 100 crores revenue in this year of this tender. [Foreign Language] INR 600 crores definitely will complete, but that is more than 20% growth. And if you see the growth compared to last year, the 20% we have already achieved maintaining the achievement of 20%.

Yes, yes. That I can see but market is more excited about INR 700 crore projection.

Yes, yes. We are working very hard, sir. We are working very hard and fully trying to convert this tender as early as possible so that it will be great for our company and our investors.

Okay. So I'm just taking the negative case if the government and has not finalized, then this acquisition which you are doing, which is completed in this quarter...

One acquisition is already almost completed. And today is 19th. So we are trying to announce by 30th November or maximum second of December. And because some due diligence that et cetera, has already done. Now it is under finalization of the thing. So it will be announced within 2 weeks maximum.

Okay. How much revenue can we expect this year from this acquisition?

That we will report all those numbers into the market once it comes. Yes. And -- but we are promising that this 20%, 25% growth, what we are doing, we will be achieving that in the Q3 and Q4, as well.

Okay. And you -- on the last con calls, you said that PAT margins will be 5%. But today, you are reiterating that it will be between 4% to 5%. So what is the -- what is going to be seen? Is going to be approximately 5% or it could be early 4% also like 4.05%, something like that.

Yes, yes. Sir, so we always say that we will try to achieve between 4% and 5% in the next -- in the year '25, which is a significant increase from last year. So last year, we closed somewhere around 2.8% PAT without one-offs. So there was a one-off of INR 18 crores. So INR 14 crores roughly was a PAT. And this year, we are trying to achieve 4-plus percent growth. So it will be between 4% to 5%.

4% to 5%, we are targeting our PAT.

Best of luck for future quarters.

[Operator Instructions] The next question is from the line of Subhankar Ojha from SKS Capital and Research Private Limited.

Am I audible now?

Yes sir, please go ahead.

So a couple of them. So one, what will be the total share outstanding after conversion of the warrants and preferential -- preference, which you said will happen by December.

Sorry, sir? Total?

The total number of shares outstanding would be how much?

Sir, so roughly 195,000 plus 140,000, 335,000. So these 335,000 shares are outstanding after -- as on today. So remaining are already converted.

Okay. And sir, post the conversion of these, what will be your total net debt -- net borrowing? As of now, your balance sheet basically September-end is showing INR 214 crores of borrowing. And what would be your net debt number post the conversion of preference?

So net debt is INR 86 crores as on 30th September compared to INR 80 crores of the March '24 and INR 110 crores of the March '23. You, I think, including the lease liability also which is...

Lease liability, so excluding that...

That's a operating lease?

Right. And post the conversion of the promoter. So how much would the total borrowing be, the net figure? Will further come down?

Not really because we are working for these all the growth, we need to plan -- we are working on a few debt also. So in the coming quarters, actually, debt will increase for the growth of the company. [indiscernible]

Okay. Secondly, so I missed the level now...

Our target is to make it a debt free company, but because of the growth, now some assets we need to buy so that's the...

Yes. I hear you said, you are planning for to inorganic basically opportunity over the next couple of quarters. So that may...

So we are working with a leasing model and some purchasing model also. If we buy it, then that will increase, but asset will also increase accordingly.

All right. Sir, secondly, you said you have 2 contracts actually from Dalmia and UltraTech which is worth INR 60 crores over the next 5 years?

No, no, no that is UPSRTC.

No, sorry. So from Dalmia and UltraTech, what's the value of the contract? And for how many years?

With the contract they are making for the 3 to 5 years. And it is -- they are having the good volume of business. It is on us how much we can service them. So our target is to complete the business of around INR 100 crores per annum from these 2 companies.

Have you already started?

Yes, already started with both, already started. As of now, we are in around, I think, INR 1.5 crores or INR 2 crores per month as of now. So we have to increase the business from INR 2 crores to INR 8 crores from these 2 companies.

Correct. Yes. And obviously, I'm wishing you best of luck for this last contract you have just mentioned. So I mean what is -- I mean, obviously, we'll get it probably, if not by December then next quarter, maybe the delay in finalizing those. But typically, if you look at our H1 versus H2 performance. So we have done H1 -- so H2 is obviously better for us, but you have never done like doubling of our revenue in H2 versus H1? Like historically, we have done a 20%, 30% growth H1 versus H2. So like in H1, we have done INR 250 crores, if I assume a 20% -- 30% growth. So H2, it's probably INR 325 crores and another is INR 100 crores is for '25, which you are exiting from that new contract. So if you do not give there or this a delay in that, probably will end up doing somewhere about INR 600 crores or so.

[Foreign Language] INR 600 crore we are achieving, which is around 20%, 22% growth.

Yes. Yes. Got that. And finally, so you mentioned a few other new clients like some Shyam Metalics which is steel, any other clients in the cement space other than Dalmia and Ultra?

Yes, yes. There are another 5, 6 clients are there, that is hopefully, like JK Cement, [Foreign Language] So we are talking to those companies. And we may get the business from them because [Foreign Language]

Yes. No, no, great. I mean the working with Ultra and Dalmia, you will get the credibility. And so basically...

[Foreign Language]

Yes. And so basically, your Express Parcel, you're saying INR 4 crore per month is your target. Is that so?

Yes, as of now, it is around INR 2 crores, but business is available in the market.

Double that number there, and you're going to do 2 or 4x in the cement business. I mean, basically, which can probably materialize next year, maybe FY '26. So basically, these 2 are going to be your big growth driver for the next year, probably Express Parcel revenue from cement business.

Yes, yes.

The next question is from the line of Subhash V. from Value Investments.

So you said there will be 2 acquisitions, right, 1 with INR 170 crores revenue and other one is around INR 40 crores, INR 50 crores revenue. So the one which is almost closed, which one -- is it possible to tell like which company is it? Is it the with INR 170 crores revenue?

No, no. It's first, we have closed INR 45 crore company.

Okay, got it. And post acquisition will the acquired companies' revenue will be shown in AVG Logistics revenue in Q4?

Yes. Yes.

Okay. And also the PAT margins also will be almost around same as AVG Logistics or will it take time for those companies to improve the margins, same as AVG Logistics?

No. PAT margin is [Foreign Language] they're having a 3%, 3.5%. But what will happen that if we merge both the companies, we are losing their cost like, there all offices will closed, and we will merge their offices in our offices. So we had made a plan to how to reduce the -- their office expenses. And we are not increasing our office expenses. We are giving -- accommodating them in our present office.

Thank you. As there are no further questions from the participants, I now hand the conference over to Ms. Vaishnavi Ambokar from Kirin Advisors for closing comments.

Thank you, Dipku. Thank you all for joining the conference call of AVG Logistics Limited. We appreciate your participation and throughout questions raised during this session. We trust the management team had addressed your queries comprehensively. Should you need any further assistance or you want to reach out, you can write us at [email protected]. Thank you once again, the management and Dipku.

Thank you.

Thank you, everyone.

On behalf of Kirin Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.