AVG Logistics Limited (AVG) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 and 9 month FY '26 Results Conference Call of AVG Logistics Limited, hosted by Kirin Advisors Private Limited. [Operator Instructions] Please note that this conference is being recorded. Before we proceed, a quick disclaimer, please note, this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Harshil Ghanshyani of Kirin Advisors Private Limited. Thank you, and over to you, sir.

Yes. Thank you, everyone. On behalf of Kirin Advisors, I welcome you all on the conference call of AVG Logistics Limited for Q3 and 9 months FY '26. From the management team, we have Mr. Sanjay Gupta, Managing Director and CEO. We have Mr. Rajesh Rohilla, Chief Financial Officer. Now I hand over the call to Mr. Sanjay Gupta. Over to you, sir.

Thank you, sir. Good morning, esteemed investors, and warm welcome to AVG Logistics Limited Q3 and 9 Months '26 Earnings Call. We sincerely appreciate your continued trust and confidence in AVG Logistics. Your support has been significant in shaping our journey from a single client start-up in 2010 to a leading multimodal logistics solution provider with a strong pan-India presence and international connectivity. Our journey so far has been defined by continuous innovation. We have entered into new verticals, adopted sustainable transportation models such as rail, lead movement, alternative fuel fleet, expanding our warehousing capabilities, strengthen digital integration and deepen relationship with marquee clients across FMCG, consumer durable, heavy commodities such as steel, cement, chemical, pharmaceutical, QSR, automotive and other key industries. During Q3 '26, we continue to strengthen our operational and financial foundation. A key milestone this quarter was the introduction of an expansion of our LNG-powered fleet, reinforcing our commitment towards green and cost-efficient logistics. Further in this year, become the first in India to commercially deploy 25-tonne electric motor -- Tata Motors and Tata Steel premises for intra-plant and short-haul deliveries with electric vehicle, advancing our green logistics strategy and supporting Tata Steel carbon reduction goals. We also secured a 6-year lease contract from Indian Railways for running a train from Agartala, Guwahati to Delhi and Ludhiana. We entered into a long contract with renowned FMCG companies for supply chain management services within their plant and warehouse for supply chain management without any CapEx and decent margin. I would say this financial year is consolidation for the company and logistics industry, which our industry affected by several factors. We believe in continually and long-term goals. The company continued to expand its business made INR 65 crores CapEx till date in this year. We believe next financial will be very good for the company as well as start getting benefit of the CapEx done in this year by the company for the next financial year. Also, the Indian logistic industry continues to undergo structural transformation driven by sustained policy support, infrastructure expansion and increasing formulation and supply chains. In the union budget of '26-'27, the government of India has proposed a record capital expenditure outlay approximately INR 12.2 lakh crores, reaffirming its infrastructure-led growth strategy. The continued interest on the multimodal connectivity, freight efficiency and infrastructure development, it is expected to improve transit time, enhance asset utilization, better utilization of the asset and reduce overall logistic costs across the country. So we very much hope that in coming years, we will grow as much as we have grown in the last 10 years. And I would now like to invite our CFO to take through the detailed financial performance of the quarter. Thank you.

Thank you, Sanjay sir, and good morning, investors. Now coming to the financial performance. We are pleased to report a stable performance for the third quarter and 9-month period ended 31st December '25 for financial year '26. During Q3 financial '26, we reported revenue from operations of INR 134.08 crores with EBITDA margin of INR 27.20 crores and EBITDA margin of 20.29%. PAT stood at INR 5.40 crores with PAT margin of 4.03%. For the 9-month period, we achieved revenue from operations of INR 402.13 crores, EBITDA of INR 77.73 crores with a healthy margin of 19.33% and PAT of INR 15.46 crores with PAT margin 3.84% overall. These numbers reflect the resilience of our integrated machine modern logistics and our continued focus on execution excellence across transportation, warehousing, rail and cold field segment. Going forward, our focus remains on calibrated growth through network expansion, technology integration, fleet modernization, strategic partnerships, prudent capital allocation. We are confident that our asset-light approach, integrated service offering and sustainable initiatives will enable us to create long-term value for all stakeholders. Thank you once again for your continued support. Over to Sanjay.

Sanjay, sir?

Yes.

Can we open the floor for questions?

Yes.

[Operator Instructions] We have the first question from the line of [ Abhishek Sharma ] from Sharma Investment.

Sir, like which segment is like currently the most profitable for us, from the liquid logistics or cold chain logistics. So which is like the most profitable?

Yes. Actually, in our -- we are doing business in 3, 4 segments. One is our old legacy business of the freight transportation by road. And now we are entering into the liquid logistics and cold chain. Definitely, the profit margin and less competition in the liquid logistics and cold chain. So now we are trying to -- we have brought 2 trains from importered -- import of tankers, which we carry our liquid logistics. And cold chain business is also increasing, which will give us more -- increase our profitability.

Okay. And like how are we planning to scale them further probably?

Yes. Because now in India, cold chain is a huge demand because earlier, a lot of material is moving in the dry vehicles. And because of the growing country, a lot of like fruit, vegetables, chocolates and many, many things are QSR items, which we are doing ice cream. These are things who have better milk product, dahi, et cetera. These are packing material moving from here and there, and there is a huge demand. And as of now, we have total around 920 vehicles. So out of that, around 450 vehicles, we are in the cold chain. So because this business can be done only with our own CapEx only. So gradually, we are increasing. And this year, next year, we are trying to add around 200 vehicles. And after that, we will get more milk dairy product, fruit vegetables and chocolate business in the supply chain. And liquid logistics also 2 bigger plant, jumbo plant is coming by Reliance and Adani Group. And there is a huge demand and only 3, 4 service provider is there in India as of now. So we are one of them. And we are planning to make 5, 6 trains next year for this liquid logistics. So this is a good business in logistics industry and better margins.

And sir, on a warehousing front, what is your current capacity utilization there?

It is 100% only. So we are in warehousing, we are using 2 type of model. One is our own warehouse and one is our lease model. So on warehouse, we have around 2.25 lakh square feet that is situated in Goa, Medud, [ Arakal ] and another warehouses, we are in Gazhiabad, [ Manipal ]. These are the lease model. So we are taking on lease and giving to the customer on lease along with the value-added services. So all the services at both the warehouses -- 4, 5 warehouses, we are providing our own. And now we have -- last year, we have been allotted a land in Odisha and now we are talking to the Guwahati and Patna also. So as of now, we are managing around 9 lakh square feet. And our target for next year is around 15 lakh square feet. 5 lakh square feet is coming up in Guwahati and Patna. So these are under discussion with the government that 2, 3 lands we are taking from the Industries Department of the concerned state, and these are developing as per the customer requirement.

And how are margins in this warehousing segment?

Its margin is better compared to the truck business, but 9 lakh square feet we already have. So because it's a onetime CapEx investment, later on, there is no expenses from our side. So we are getting margin on each and every services we are providing. We are providing manpower, we are providing security. We are providing rack placement in the warehouse and warehouse management, supply chain management also inventory management. So all these sectors, we are getting the profit margin over and above the investment. So onetime investment and more or less, our investment, which we did will get back in 10 years and -- 9 years actually. And margin is around 25% to 30%.

Okay. 25% to 30%. Sir, one last...

Yes, yes. So this is planning to be added 5 lakh square feet in '27 in next 1 year or so.

Okay. Okay, sir. Sir, one last question. As the global equity markets are quite volatile right now. So there's a clear direction in the stock price across industry. So logical exception to that. So how should shareholders think about company's stock performance over the say, next 3, 4 years? Like for a long term, how should we think about it?

Yes. The company was established in 2010 with a business of around INR 5 crores. And now we are touching around INR 550 crores, INR 560 crores. And we are upgrading ourselves according to the market requirement. So as and when now the market is asking for the alternative fuel, train movement, liquid logistics, supply chain management and trucking business is also there. So at AVG, I'm having experience of more than around 35 years. So we know the customer, and that is our strength, what is the customer requirement. So if we do business according to the customer requirement, so we'll sustain and grow according to the customer. Because as of now, all the customers are FMCG and marquee customers, which they are growing around 7% to 8% year-on-year basis. And because of the many changes in the GST, et cetera, last year was little [indiscernible] market is stable now. And the international market and the U.S. deals, et cetera, overall market is down. But I feel that over a period of time, it will come back and company is growing and country is growing. So huge demand is there and logistics business, government has given the budget of INR 12 lakh crores. So a lot of the road conditions are better and highways are constructed by the government and we are trying to reduce the cost of our operation. And we are also working on using our asset -- better utilization of our asset, sweating of asset so that -- because there are 2 type of cost in logistics. One is the fixed cost, another is the variable cost. Variable cost will be always increase, but we can manage our fixed cost. For example, if our vehicle is running 7,000 kilometer and our cost is INR 70,000, so INR 10 per kilometer. And whereas if we be able to run my vehicle at 9,000 kilometer, then my cost will reduce to INR 8 per kilometer. So that is the strategy we are following to run -- more running in the vehicle so that it will benefit to increase the profit.

We will take the next question from the line of [ Priya Jain ] from Green Capital.

I have 2 questions. One is on CapEx. So what is our budget for FY '27 for CapEx? And what returns do you project on incremental assets?

So we are adding the fleet and CapEx according to the customer requirement because as our customers are increasing their business by 10% or 7%, so we are adding 7% to 8% business we will get from our existing client. And around 7%, 8% or 10% will come with the additional client.

Now so -- what is current fleet utilization? And how do you plan to improve?

Yes. My fleet utilization is around 97% to 98% because a few vehicles are always breakdown, out of 900 vehicles we have. So around 20, 30 vehicles is maintenance and some accident cases. So more or less around 70 -- 98% vehicles are on road only on a daily basis.

That's good to hear, sir. Also one last thing, like logistics is booming and there's a lot of merger going around logistics industries. And we are sitting at a market cap of around INR 200 crores. So how do you see this valuation going up in next 3 to 5 years?

Yes. We are doing hard working and trying my best to increase the business and different segment and like cold chain, supply chain management, rail business. So overall, we are definitely 15% to 20% growth we are expecting year-on-year basis. So when the -- actually, overall market is -- we have discussed earlier that overall market is down so -- because of some international policies, et cetera. So over a period of time, it will get corrected.

We have the next question from the line of [ Mahesh Sheth ] from [ BY Capital ].

Can you hear me?

Yes, you're audible.

Yes. So I wanted to know like as we have seen the company filings, company has expanded its fleet size and services, like revenue growth, but the revenue growth has been modest. So what specific client wins or contracts will drive 15% plus growth in FY '27 as suggested by the management from very beginning.

Yes. Actually, in the business, so we are doing the business of 2 type of business. One business is our own fleet and another business we are doing with the market fleet. So market fleet margins are less and own fleet is under control. And if the market is vital, then our profitability will become less than questionable. So to avoid that, we are now talking to the customer with the own fleet and this is increasing our CapEx, but we are getting the long-term contract of 5 to 8 years. So whichever vehicles we are providing to the customer with a long-term contract of 5 to 8 years and the profitability and the business commitment is good from the customer. So market vehicles, we are using less now. So maintain our business growth and profitability both.

Okay. Fine. And can you also suggest a revenue target of the company for FY '26?

FY '26? FY '26 is more or less actually stable only, say, we have touched INR 400 crores now and INR 170 crores, INR 160 crores maybe another merchant. So say, it will be last year it was INR 550 crores, so maybe INR 560 crores, INR 570 crores. Because what is happening that because of the GST changes and et cetera, there were market was a little bit up and down, but now it is stable, and we are working hard towards increasing the top line and maintaining the bottom line also.

We have the next question from the line of [ Vidhi Jain ] from Phoenix Capital.

Actually, could you please share the current capacity utilization across your rail routes? And specifically, what percentage of your net capacity is currently deployed versus available?

So ma'am, the rail capacity, which we are using, like we are having one route from Delhi to Bangalore and Bangalore to Delhi. So Delhi, Bangalore is around 105%. And 105% means we are sending the material from one place to another place and from another place to final destination also, we are sending. Hence, it is becoming 105%. But sometimes in the return load, there are less loads and our rates are decided according to the load availability, like Delhi-Guwahati load is there and Guwahati-Delhi load is very less. So we see the revenue of the train, which we are paying to railways and what we are getting. So if it is see Delhi-Bangalore route, it is 95%, 5% less. And in case of Delhi-Guwahati, it is going -- it is 110%; while coming, it is only 20%. So -- but we are taking the freight from the customer on the Delhi-Guwahati route more than 100%, 200% so that our revenue will complete and we should not have any loss in the transaction. Do you understand, ma'am?

Okay. Yes, actually. So like how many -- like do you have any additional routes or which can be added without significant infrastructure bottlenecks?

Yes, yes. We are talking to railways for the new routes like Delhi, Kolkata, we have just recently launched, and we have not taken the entire train. We have taken the small quantity of the 100 tonnes per train. And like Ahmedabad, Kolkata, because what is happening is the Northeast and East India, there is productions are less. So production in Maharashtra, Gujarat and North India is very high. So all the consumable items are moving from North and West to East and Northeast. So there is huge material is going overall in these states. Hence, our return load is empty. So we are talking around another 2, 3 routes, which is like Ahmedabad to Guwahati and Delhi to Guwahati, Delhi to Kolkata. So gradually, now railway is launching because railway is also very aggressive for the developing their business. So now a few trains are expected in the next 6 months, which may use on a 30%, 40% basis. We will not take the 100% train in our base this time because it's a huge infrastructure is required for this.

Okay. So my last question would be like how does this mix of owned versus partnered vehicles improve flexibility during demand cycles? And this is for the freight?

Can you please repeat again? [Foreign Language]

Okay. So like how is the mix of owned versus partner vehicle like fleets, okay, I'm talking about fleets, like improved flexibility during the demand cycle.

Yes. So like, for example, as of now, we are around 40%, 45% with own fleet and 55% is the market fleet. So now for example, now the Holi festival is coming up. So there will be huge demand from the customer side in Holi and drivers maybe only or huge demand from the many, many other clients. So market will go up. And during that time, we are also asking the customer to increase our rate as a special case for 1 week time like 28th February to 7th of March. So in this scenario, what we are doing, we use trains and we will run our vehicle more and giving incentive to the drivers to provide services during the tough time. Like we are doing business in Kolkata. So Kolkata-Bihar driver will go away from Holi festival. So we ensure that all the drivers will stay and we put mix type of driver from other states also. And we are giving incentive to the driver to provide service during the festival season.

We have the next question from the line of [ Raj Shah ] from Shah Ventures.

Sir, my question is, how does the management see the company's revenue growth trajectory over the next 3 to 4 years?

Yes, we already discussed that. If you see organic growth, it is around 15% to 20% year-on-year basis. So sometimes if you see in '22, '23, there was COVID time, company is stable and there is no increase. So overall increase around 15% to 20% year-on-year. Because logistic service industry. So service industries we need to keep watch on our margins and other things also because otherwise, if we took some wrong decision, then immediately our profit will burn there and reduce that. To maintain the profitability and sustainability, we keep watch on our -- all the businesses. If some businesses is not giving profit, then we stop that business and adding new businesses during that time. Because our total logistics business is in demand and supply basis only. So somewhere demand has increased, then cost is increasing. If demand is less, then cost is decreasing. So like next 2 months is very, very crucial for us because there will be huge demand in view of our year-end and coming time.

Sir, also, I want to know about the business verticals, like which business vertical do you believe like will drive the next phase of growth for the company?

Actually, now the alternative fuel is the main business in the industry. The customers are looking after because they are under tremendous pressure from the government side. And business growth will come with the big customer only. So now we have changed the strategy. We are in touch with big clients who are spending more than INR 5,000 crores, INR 3,000 crores in logistics. And this growth will come from the sustainable logistics, which is green logistics, electric vehicle and LNG vehicle and CNG vehicles. So the next 5 years, there will be a huge change in the industry. Digital vehicle will vary less now and production also reduced digital vehicle. And a lot of demand from the customer side for this sustainable vehicle of LNG, hydrogen. Hydrogen [indiscernible], but electric and CNG has come up very well. And cost of operations are also a little less compared to the digital vehicle.

We have the next question from the line of [ Takshi Shinde ] from [ Shaha Consultancy Limited ].

I have a couple of questions. So my first question is what is the current overall capacity utilization across your multi-model operations?

It is around 95% to 97% -- 98%, ma'am.

Okay. And how much headroom exists within your existing infrastructure to support the near-term growth?

Can you repeat, please?

How much headroom exist within your existing infrastructure?

Yes. Within infrastructure, there the growth is around 7% to 8%, but we are adding our new business line and CapEx also. So overall growth, we are expecting around 15% to 20%.

Okay. And sir, at what utilization level do you start witnessing strong operational leverage benefits?

Leverage benefit will be like, for example, if our business will grow by 15%, so our expenses will not increase in the same percentage. So -- as and when the business will increase, so our overall PAT will improve once we increase the top line. Because by same team and same infra, we will increase the business and that will help us to improve the overall profitability.

Okay. And my last question is how do you plan to optimize the asset turns across the rail roads and warehousing?

Yes, we are talking to the customer for providing the 4PL, 5PL services, which is now warehousing, warehouse supply chain management, primary transportation and secondary transportation. So if we got all the 5 things on one table, then business comes to us and better asset utilization and thus the overall improvement in the business and profitability. So this will help us to increase the business and profit both.

We have the next question from the line of Subhankar Ojha from SKS Capital. Due to no response, we will take the next participant. We have the next question from the line of [ Dhergas Vharma ], an individual investor.

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[Foreign Language] Can we do with different company? Or can we do something [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] and this will help us a lot to improve our business in all the sectors in commodity. [Foreign Language]

[Foreign Language]

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Thank you. Ladies and gentlemen, we will take that as the last question. And with that concludes the question-and-answer session. I now hand the conference over to Mr. Harshil Ghanshyani for closing comments. Thank you, and over to you, sir.

Yes. Thank you, everyone, for joining the conference call of AVG Logistics Limited. If you have any queries, you can write us at [email protected]. Once again, thank you, everyone, for joining the conference call.

Thank you very much, members of the management.

Thank you. Thank you, ma'am.

Thank you, sir. On behalf of AVG Logistics Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.