Container Corporation of India Limited (CONCOR) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Container Corporation of India Limited Q3 FY '20 Conference Call hosted by IDFC Securities Limited [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair from IDFC Securities. Thank you, and over to you, ma'am.

Thanks, [Naisha]. On behalf of IDFC Securities, I would like to welcome you to the Q3 FY '20 earnings call of Container Corporation of India. The management is being represented by Mr. Kalyana Rama, our Managing Director. I now hand over the floor to Mr. Rama for his initial remarks, post which we'll open up the floor for Q&A. Over to you, sir.

Thank you, Bhoomika. So this quarter, maybe the -- one of the bad quarters of CONCOR after a long time because of the economic situation, both imports, exports down, the economy has not picked up. But the positive thing is that our margins, we could able to maintain. Our operating margin has -- is in -- in fact, we improved upon our operating margin. So as I mentioned last time, we are not participating in some of the price wars, and we are not going for any negative margin business. So that's a conscious decision, and that's giving us result as far as bottom line is concerned. But overall volumes are down. So the top line has come down, the profit in absolute numbers has come down compared to last quarter. So we are also keeping our fingers crossed that when the economy will start looking up. Many external factors are also affecting us, as the virus in China and so that, again, reduced volumes. So things are really not very good at this moment. But otherwise, the lead increased and the volumes-wise overall in 9 months, if I look at -- we're just minus by some 1.5% on the handling side and somewhere around 3.8% on the originating side. And 9 months, when we look at cumulatively, we are positive on operating income and positive on profit side. So hopefully, we will be able to maintain, as we were discussing, that -- the same levels as for the last financial year. Otherwise, our new businesses -- what we are now looking at, they are taking some traction. The movement of bulk commodities in bulking containers. We already did some commercial runs in the food grains and the customers are happy with the results. And also that, along with the container warehouse concept is picking up and in the next financial year, that will be definitely a positive outlook for us. So this quarter also, we are expecting to do some volumes in this segment. Now cement, also this quarter, we are trying to start moving in bulk, so that will be an additional stream in the domestic sector, which we are trying to pick up in this particular third -- fourth quarter. So these are the -- some positive things we are working on. The rest of the things will depend on the general economic scenario of India. Thank you.

[Operator Instructions] The first question is from the line of Akshay Bhor from Premji Invest.

My first question is on DFC. And what kind of traction are you seeing in terms of customers wanting to move to the post DFC? Are there any conversations that have already started that customers are showing an inclination that they want to move to railway in 3, 6 months down the line?

Please repeat that customers showing inclination?

Are customers showing inclination to move to rail? And are they already having a conversation with you with respect to moving to rail maybe 6 months down the line?

Yes. See once the DFC starts operating, definitely, the customers are interested to come and move on rail because of the traffic guarantee which will be available post-DFC operations. So there we can now talk of ceratin expected traffics in the beginning, maybe overall events in a matured thing it will be a guaranteed transit thing on the DFC. So that will be a change in the overall the rail transport mode post DFC.

Got it. But would you want to highlight any sectors that have already shown any inclination or are they in conversation with you to see what the post DFC scenario could be?

See, last time, we did around 2 years back, we did some timetable trains running between Delhi and Mundra on the India Railways Network and we could see a lot of traction coming in, particularly the retail segment exports. The American retail chain stores, they were very much interested in using rail services. They normally use 100% by rail -- road, they don't move much of their cargo on rail because of the transit guarantees which they will be looking at. But when we ran this timetable train, a lot of them have switched onto rail. But again because of these same problems, which maintaining these schedules in Indian Railways Network is a problem because of the conditions. We could not adhere to schedule, so they again gone back to road. So these people are ready to switch to rail mode as soon as the DFC comes and there's a lot of -- a minimum guarantees are given to them. So there is interest.

Got it, sir. Got it. Just second question in terms of your domestic margins for the quarter. Is there a reason why 3Q margins should be lower than 2Q? Or is there any -- because if I go back and see your FY '18 and '17 3Q as well, the margins tend to be significantly lower than 1Q and 2Q. So any reason why 3Q margins are lower? Or how should we read into these numbers?

Our director, domestic will answer your question.

See, there is an impact of the economy where that traffic offering is less. So we have to pick up the traffic to retain the existing traffic also we have to reduce certain margins on certain segments, one thing is that. And second thing is that overall our margin has some impact of -- because our coastal movement. Again there is a pressure on the costal side. But we are not able to realize the full cost. And there is some that has impacted the margin.

The next question is from the line of Atul Tiwari from Citigroup.

Sir, my first question is more of a housekeeping question. So could you share EXIM domestic and total originating volumes and lead distances?

Yes. Sanjay?

Originating for EXIM for this Q3, is 484816 TEUs and domestic is 70562 TEUs and total is 555378 TEUs. And what else do you want?

Sir, the lead distances.

The lead figures I have for the 9 months, for EXIM it is 721 kilometers; for domestic, it is 1,352 kilometers; and total is 785 kilometers.

Okay, sir. And sir, my second question is, could you share some light on how many of your current terminals are on the land leased from Indian Railways? And what is the agreement exactly between the Indian Railways as of now? And how is it likely to change given the government's divestment move? And how long it will take to change those agreements?

See, we got 41 terminals on railway land. Okay?

Okay, sir.

And the agreement is that we pay a land license fee based on the containers handled in our terminals. Divestment is not the -- for this conference call it is beyond the scope of this conference. So let's not -- there is absolutely no clarity. Whatever clarity you got, you got -- it's already there in the media. So beyond that, we can't discuss any further on divestments.

Okay. But sir, this per TEU base pricing is likely to continue for FY '21 also or is it likely to change?

As of now it stands per TEU basis, so if there is any change, we will definitely let you now.

The next question is from the line of Deepika Mundra from JP Morgan.

4 Sir, firstly, I just wanted to understand on the market share. You mentioned about the short lead distance getting fairly competitive. What is the situation on the slightly longer lead distance segments? And also, could we look at this now as a sustainable market share for the company?

See, our longer lead distance share is more or less intact. We are not loss there. So there is some increase in the shorter lead movement on rail. There, we are not participating even though we got our own share there, but our share is very less. So we are not participating with our negative margin side. So now at this moment, our market share is around 68%, which used to be around 73% last year. So we lost around 5% to 6% market share because of these happenings. But in the last 3 quarters, we are maintaining the same market share around 67% to 68%. We are continuing that.

Okay. And sir, regarding your diversification efforts. Could you guide us as to cement and other types of cargo that you have been mentioning. When does that become a sizable portion that it starts reflecting in numbers?

We are now -- we made a beginning in our moment of food grain by bulk. So we did already some commercial runs last quarter. And going forward, there is interest from the customers to do that. So this requires a lot of changes in the -- not only in our efforts, but also the infrastructure available with the customers at both ends. So this is all a slow evaluation process. It can't be overnight, it will not be changed. In Cement, also this quarter, we will be starting this moment. It will take, as next year, we could see some movement happening and some revenues coming out of it. I don't want to make a guess when it will be a significant figure, but next 5 years, it will be definitely an interesting journey in this particular thing. And from 5 years henceforth from now onwards this can be one of the very important market segments for CONCOR.

The next question is from the line of Achal Lohade from JM Financial.

My first question was on -- if I look at the operating expenses number, in the second quarter FY '20, it was about INR 225 crore, which has declined to INR 160 crores. Is there any one-off item here you have written back or anything of that sort, sir?

See, there is some adjustment in LLF because we paid something extra in the second quarter. So we adjusted that in the third quarter.

Will you be able to quantify, sir, how much would that be?

Around INR 45 crores.

Okay. Okay. Understood. And the second question was with respect to the new business what you talked about, cement, food grains. I was under the impression that this was kind of on a restricted list by Indian Railways. So is there any change or is it being moved in the form of containers, so there is no issue for us?

There is -- I think your information is wrong. These things are not on the restricted list of Indian Railways movement by containers. Okay?

Okay. Sure, sure. And if you could help us with the market share at the ports -- different ports, sir?

Yes. Our lead director will answer this.

JNPT 32.64%; Mundra, 31.26%; Pipavav 15.16%; Chennai, 5.71%; Visakhapatnam 6.86%; Kolkata, 2.19%, so this makes approximately 94%. The rest all are small, small ports.

And the market share at the 4 key ports, sir?

Market share, at JNPT the rail share is 17.32%, out of that, we are having 67% share. At Mundra port, the rail share is 26.2%, we are having 45% of that share. And Pipavav, the rail coefficient is 68.73%, out of that, we are having almost 51%.

And this is for third quarter or 9 months, sir? Just a clarification.

This is for 9 months.

9 months. Got it.

The next question is from the line of Prateek Kumar from Antique Stockbroking.

Yes. Just wanted details on empty running charges during the quarter?

You want that empty running charges and -- just 1 minute.

For both EXIM and domestic segment?

For 9 months, for EXIM, it was INR 83.28 crores; for domestic, INR 69.35 crores; total is INR 152.63 crores.

And on a quarter-on-quarter basis, there is a sharp decline in realizations on a reported basis. So anything to read there? So have you taken, I mean in domestic, as you mentioned...

There's no sharp decline, my dear friend, there is no sharp, there is a decline, but sharp decline [indiscernible]

Net of NPA there is only 2.54% decline. He is talking about realizations.

You are talking about the SEIS?

No, I'm talking excluding SEIS, quarter-to-quarter decline not year-on-year. So quarter-to-quarter?

There is no sharp decline. There is a 2.5% decline quarter-on-quarter compared to last quarter. Because of less volume, so there is a little increase in empty running will be there. And the loaded volumes have come down, empty volumes have gone, the margin will slightly hit.

Right. And sir, regarding the terminals. What is -- I mean, how are we progressing for current year and next year?

Commissioning around 7 to 9 new terminals this year. So -- in fact may be -- we are thinking closing down some terminals. We'll come with whatever will be there thing we are now working on. So we'll let you know once we finalize the things. But there will be new terminals -- 7 to 9 new terminals will come in this financial year.

And you will be clocking to like close to 90 terminals then for..

Yes. Yes. We will be touching 90, maybe but then we will -- we are thinking of closing down some more terminals and start new business. See the target hundred is there, but it will be reoriented now a little bit. We're working on that in some changed scenarios and then further improvement on our business.

Right. Just last question on CapEx. For the full year, we maintained INR 1,000 crore CapEx guidance?

Yes, yes, yes. We completed CapEx of INR 260 crores till now, but we will complete INR 1,000 crores by the end of the year. The things are already in our pipeline.

We have completed INR 260 crores till now?

Yes.

The next question is from the line of Deepak Krishnan from Goldman Sachs.

Sir, this is Pulkit from Goldman. So 2 questions. Firstly, sir, if you look at the Union budget, what the government has budgeted for freight container revenue from EXIM is a 19% decline year-on-year. Can you please explain if this is any reflection of what their expectations from CONCOR is? Because that number seem to be a pretty big decline. And it has been tough for us to comprehend why that was the case. Would you be able to throw some light on that number, please?

Yes. These analysis we are not done. So it's better you do the analysis and maybe send me an e-mail.

No sir, I need to understand it to do the analysis. Anyway. Sir, my second question is...

That decline is not there 19% is now that -- I already mentioned in the 9 months over 9 months, our handling volumes have come down by around 1.5%.

No, sir. This is for year FY '21. The government has budgeted INR 47 billion as freight container revenue. Okay, anyways, I'll go to this next question. Sir, somebody asked this question on cement transportation. And you mentioned that there was no restriction. Any reason why we've not been transporting cement because it's a pretty huge volume, because we were also under the impression that there was some restriction of cement being moved in containers. So...

No. Now let me first explain this. See, I'm talking of cement movement in bulk in containers now, okay? Cement movement in bulk in containers is allowed. Cement movement in bags is also allowed, but that is at a higher rate, where it will not be a viable proposition for cement companies to move it by containers compared to BC and wagons. But in a bulk it can move in BC and wagons. It is a very good solution to move it by containers. Cement is not restricted commodity for movement by containers. I request all the friends to note this. It is not a restricted commodity. It is in a container class rate commodity, which is not viable if we do it in bad condition. But in bulk cement, it is a different rating and it is a viable proposition.

The next question is from the line of Ankita Shah from Elara Capital.

Sir, my question was on the CapEx. I mean, given that there is a Y-o-Y decline in volumes and overall, the cargo growth is very muted, looks muted. So is there a need for INR 1,000 crore of CapEx to be done? And what is...

CapEx is not for quarter-on-quarter, CapEx is for the future. And the future, we are working on certain things which are definitely looking bright. As just now mentioned, the transportation of commodity in bulk using containers as warehouse, which will eliminate 2 transports and 5 handlings. So these things are going to get traction next year and in the next 5 years. So the CapEx what we are putting on is for the future. And the DFC also will be needing some high-capacity wagons. So they are getting rolled now. So these are the elements which actually this INR 1,000 crores is comprised of in this particular year. And going forward, in the future, CapEx will be based on these ideas.

Okay. And yes, so we are confident we will complete INR 1,000 crores by end of this year, by March?

Yes, yes.

Okay. And sir, any advance freight payments are we making to railways this time again for the next year?

No, no. As of now, no. If anything happens then we'll let you know.

The next question is from the line of Vikram Suryavanshi from PhillipCapital.

Yes. Sir, can you share the number of double stacking train in this quarter?

Yes. DMO sir will do.

Yes. So in this quarter, we have around 602 double stacking trains.

And what was the rail freight margin during this quarter and 9 months, if you can share?

Yes. Rail freight margin in this quarter it was 27.46%. And for 9 months, it has been 28.19%.

And sir, last question, about this coastal shipping. How is the experience? Because looking at the domestic number, we see some pressure on the profitability. So how is the outlook and so looking to expand it on East Coast. So how is that plan going on?

There is intense competition, because we are entrants, we are also now working on that. Yes, we are facing competition there, but we are participating in the competition trying to get our market share, because our model is to come back to the hinderland, so we are working on those things. And East Coast, yes, we'll be starting very soon on East Coast also.

The next question is from the line of Shrinidhi Karlekar from HSBC.

Sir, I just wanted to know on the pricing side. So if you remember last year, we had come up with the constant trade policy for entire FY '20. Just wanted to know is that pricing policy likely to continue? And are there any freight rate increases that you have already communicated to the market for entire FY '21?

See, we are still continuing in FY '19/'20. This is only the third quarter we are doing now, isn't it? So our policy still continues till March 31. Before end of the financial year, we will be definitely coming out with our strategy for the next FY.

The next question is from the line of Aman Madrecha from Concept Investment (sic) [ Investwell ]

Question was, can you give me the numbers of EXIM domestic originating volumes, the total volume? And I want to understand like how is the double stacking?

You have not noted?

Sir, you told about the handling volume.

What is the next question?

Sir, my next question was, I will repeat again the question. I wanted to understand how double stacking helps in reducing the empty running charges, because I am not able to understand that?

Yes. I think, in many times I explained this when we do a double stack. So we can address the imbalance on any, but one side. See, there will be a imbalanced traffic on one side. Like in import/export, India imports are more and exports are less. So while exporting we do single stack, while importing will bring double stack that will reduce empty running.

The next question is from the line of Bharat Sheth from Quest Investments.

Sir, on this -- again, I'm sorry, but this food and cement. Now this will come, we are evaluating and food we have already started. So we are moving these in container and that need a special kind of a container. Is that correct understanding?

No, no, no. It is -- see, the bulk movement what we are planning in containers is in regular general purpose containers. That is USP. We are not putting any special type of containers. Where ever we go for special type of stocks, there will be empty running involved in it, inherent empty running. So we will be -- we are doing in GP containers. So that is our USP, so we can use these in our normal circuits.

Okay. But earlier, there was a thought process that it may -- we will require a special kind of a container handling?

We are -- we -- that was the normal idea. So we have never worked on that. So we were always working on this idea, and now we are successful. Even cement also, we completed our trials. Only thing is we have to start now commercial runs in that. Commercial trial runs, let me say that. So once we start, we are sure that we will be successful even in grey cement movement also in bulk in containers, but in GP containers.

Okay. Okay. That's fine, sir. And sir, second thing, how that will improve our domestic conduit that we wanted to build? And with additional, I mean, freight coming from in domestic market, I mean, with cement and food grain. So how that will really, I mean, empty running and in domestic side will reduce?

No. This will be an additional business in domestic. And also here, it will reduce the train. For the commodity it will reduce to intermediate warehousing and 5 handlings. So there will be saving for the customer. So it's a win-win situation for the customer as well as for containers, and the container as a warehouse we are offering.

Okay. And sir, my last question on this MMLP that we were looking to start with the value-added service as well as last-mile connectivity and develop the -- we have developed. So what is the status on that? And where do we see -- I mean...

The distribution logistic has not yet gotten traction, still, things are under that execution stage, let me say, planning and execution stage. Last-mile thing, we are working on that maybe, but we will be trying to do -- our app is already implemented, and we are working on that. So these things will take time some time. Distribution logistics also, maybe next year only we could see some traction in that. Rest of the MMLP, our MMLPs, we are continuing with our commissioning, and this year, we'll be commissioning maybe around new 7, 8 -- 7 to 9 MMLPs.

Okay. And sir, on DFC side that we were expecting that one I mean up to Palanpur one phase to start, I mean, so what is the status? Do we expect any -- really that happens, how it will qualitatively improve our business?

Yes. Actually, this DFC for Mundra, Pipavav, is likely to be ready by June of this year. So we are hoping to have a full commissioning of DFC line up to Mundra, Pipavav ports. And for Nhava Sheva it will be taking some more time.

Okay. So once, I mean, that Pipavav and Mundra will start, so how that will change? I mean, now this -- are we -- the way we were saying, I mean, scheduling the right time scheduling, so that we can...

That's what we expect Bharatji then let us see. See once it starts, it is a prime corridor, so there will be no differential space on that. So there is every possibility of transit time assurances which we can offer because railways will be offering us that. That will change the way the rail logistics are looked at.

Okay. And any thought process on haulage rate side from the railway that...

Already, that has been clarified. It is same. There will be no change in the haulage policy between IR and DFCCIL.

The next question is from the line of Bhavin Gandhi from B&K Securities.

Sir, firstly, on this double-stacking trains, I think from a peak number that we had reported sometime last year of 800 trains, they had come off quite significantly to 600. So could you explain what is happening out here?

The imports are coming down, the volumes are coming down.

So it's just volume led thing, there is nothing else that has changed?

All double stack is volume led, see, because when there is imbalance, then we can pick up. Now the exports decline is around 2%, imports decline is around 9%. So when the imbalance is less, so obviously double stack will come down.

Sure. Got it, sir. Sir, also could you share the tonnage number separately for EXIM and domestic, the tonnes handled?

For domestic in the financial year, so this is for 9 months, 5.61 million tonnes. And for EXIM, it is 25.27 million tonnes. Total is 30.88 million tonnes.

The next question is from the line of Aditya Mongia from Kotak Securities.

Sir, my questions have been answered.

[Operator Instructions] The next question is from the line of Prateek Kumar from Antique Stockbroking.

Firstly, on -- is there any update from DGFT on SEIS income?

Yes. One moment.

Yes. So this INR 182 crores that was allowed by them out of our total claim of nearly INR 1,000 crores. That money will be coming within 15 days, as has been indicated by them. And once they officially refuse our claims for rail traffic, then we will be going for arbitration with them. First we will make an appeal, and this appeal goes up to Honorable Minister. If it is -- then we will see how it comes out. So that is around INR 863 crores that we have kept as disputed liability. So INR 182 crores, we are going to get very soon.

Right. And sir, any specific reason for the cut in dividend versus previous year's? Last year, we didn't give an interim dividend. But this year -- generally the interim dividend is slightly higher than the...

No. Interim dividend last year, we gave one time, but otherwise, practice is we give one interim dividend. So this time also, we again declared interim dividend. In fact, 1 year back, there was interim dividend declared always.

But the run rate is expected -- was expected to be similar like the way, INR 0.75? Or it would have been...

No guess questions, Prateek Kumar. See, the profit has been dipped because of SEIS. We accounted for SEIS. So that's why the dividend is less this quarter, the interim dividend, whatever you have. Let's see once we complete our fourth quarter, then we will come out with that also.

Right. And just one question on locomotive ordering. So we had large CapEx related to new orders. Sir, when is that...

[indiscernible] Locomotives?

Sorry. Not locomotives, trains,rakes, I mean.

Rakes. Yes. We are ordering. We -- the roaring here is going up. This quarter, we added one new rake. So now our rakes are 311 of BLC and the high speed rakes are 311.

The ones which are suited for DFC, the advanced ones, so are they expected to hit before June when the DFC starts?

Yes. Yes. Definitely, I think they'll be coming out in this month.

And that's part of the INR 1,000 crore CapEx which you are doing this year and the pending CapEx which you have to do?

Yes. It is a part of the INR 1,000 crore CapEx.

The next question is from the line of Achal Lohade from JM Financial.

I just wanted to check with respect to DFC. In terms of the benefit, would you be able to give some idea as to or would we see a substantial improvement in terms of profitability or cost reductions? And if possible, if you could quantify?

I don't want to do that work right now. But DFC will bring in the transit assurance business into rail logistics. So that will be a game changer as far as the transportation by railways is concerned. So it will be a big boost for this sector. So the remaining things will be a consequential thing, so let's first this then we will give you -- once we -- in the follow up process we will let you know what will be the financial side of it.

Sure. And just a clarification. Last time, you had mentioned about 45% -- 40%, 45% of volume actually originates or is actually for this particular route corridor. Is that right, sir?

Yes. Yes.

Okay. And just if you could indicate with respect to the Western Coast what has been the growth at the aggregate level for the industry for the container train operators?

I don't have those figures right now with me.

The next question is from the line of Priyankar Biswas from Nomura.

So my question is regarding news reports that we had recently read as well as on CONCOR Twitter handle regarding the development of an Integrated Logistics Manufacturing Zone in Machilipatnam Port in AP. So can you shed some color on that? Like what can be the capital commitments and some timelines on that?

This MOU we signed with AP government. And recently again, we had some meeting with AP government and this has been reiterated. So we are waiting for the Machilipatnam Port to be developed. Without the port, the ILMZ will not be a real beneficial thing there. So it will be concurrent development along with Machilipatnam Port. So Machilipatnam Port is supposed to go for development, I think, last year, but there was something happened and it did not start. So we are waiting for that. ILMZ concept is an industrial park with 3 dimensions.

So essentially, anything on our side will only start once the port comes under development? So nothing before that?

Absolutely. Absolutely. It will be concurrent development with the port.

And sir, one more question on the domestic volumes. Is like -- as you had mentioned, that, of course, there you were not able to recover the full cost from the coastal. But other than that, was there any -- maybe some big incentives or rebates of past quarters that would have been accounted in this quarter because of which the margin has come down?

No. Otherwise margin, we maintained our margin. Actually, coastal has slightly dipped our margins because coastal, intense price war is going on as of now because the going is tough. The people are trying to give a lot of discounts. So in one center where we are competing with the market and trying to establish our presence there is coastal, because recently, we started a year back. We want to establish ourselves. We are now there. We have been going for some discounts. And then in the rail business, we are very clear about our -- the market, what we will choose and the sectors where we want to operate.

Okay. So excluding the coastal, maybe the profitability would be in the same range...

In coastal, we have maintained our margins, okay?

The next question is from the line of Krupashankar from Spark Capital.

My first question was on the first season of DFC. So given that the tender is expected from June '20, when can CONCOR provide its first scheduled rail services post the commissioning of phase 1? Or is it expected to be after the full completion of it?

Krupashankar, I think I mentioned this in my earlier conference also. We are ready even today. So if June 1 is the first train run, then the first train will be of CONCOR train. We're absolutely ready with all our systems to run our trains on DFC and as intended to run on DFC.

I understand that. Sir -- but on the scheduled timetable train services, because if assumed that -- I mean, something that -- few volumes would come in from Tughlakabad and Dadri, and it has to get transshipped at Rewari. And given that they will be congestion on these specific sectors, is there a timeline provided on, first, timetable service post...

Actually, this is timetable services in October 2017 to January 2018. So we've got our experience of running time table trains from Dadri and TKD into Khatuwas and from Khatuwas onwards to port. So what is your question?

So if DFC is going to be -- phase 1 is going to be commissioned on June '20. Do we already have a timetable service, let's say, Dadri to Mundra and Pipavav?

That doesn't require real preparation for establishing a time table train service. That's what I'm trying to impose on you. As we already did this, and we know what part we have to choose, it is readily available. We did this thing, and yes we will again restart those services, what we did in October 2017.

I understand. My second question was on the EXIM mix in the northern hinterland markets. So what would be the current portion of export-import ratio, especially in the northern hinterland side?

We don't have that with us at present. We'll get back to you.

Any broad numbers will also do, sir.

No. No, we don't have those figures right now. But imports are more than exports.

All right, sir. Okay. So any deterioration seen is what I was coming to or any, because imports have traditionally been higher than exports in the hinterland market. So over the last 1 or 2 quarters, have you seen a further widening of gap?

Overall, in the Indian market, imports have come down compared to exports. If you see the economic figures of India. Import is down by around 9% compared to the exports, down by 2% in the corresponding figures of the last financial year.

Got it, sir. So technically, the empty running cost should come down because of this, right?

Empty running cost have come down a little bit.

The next question is from the line of Ankit Panchmatia from B&K Securities.

Sir, I wanted to know your view on how big this business could be with related to warehousing. We have been seeing some green shoots from that business. I wanted to...

Oh, what not? Warehousing?

Sir, I wanted to know how big this business could be? Or what potentially it has coming FY '22 maybe. So what are your view on this business?

Which business? Which business?

Warehousing business?

Warehousing?

Yes, sir.

Yes, warehousing business. We -- okay, what -- we already said that we were looking at developing 20 distribution nodes with a warehousing capacity of 15 million square feet there. That program is on. And in addition to that, we are now trying to promote container warehouse for these commodities, which will be transported in bulk in containers. So these 2 things put together, there's a good potential in warehousing thing.

Okay. Okay. And sir, any update on the arbitration case [ Garri ]? How are we approaching that? Any timelines to that?

Where? Which one? Arbitration with the?

Garrisons. On Garrisons.

Yes. This is a one-off case. So this is beyond the conference call. So this -- once they -- anything comes, we will let you know.

[Operator Instructions] The next question is from the line of Vikram Suryavanshi from PhillipCapital.

I just want a clarification on this tax for this quarter. Provisioning seems to be much higher, particularly the deferred tax amount was also high. So any specific reason for this quarter tax rate for full year, what will be the effective tax rate?

Director finance here, you're with the right question. So yes, we reversed the CapEx benefit that we're getting under 35AD, right? So we have chosen to be in a new regime, where our effective tax rate comes out to be 25-point something compared to our 34-point something in the old regime. So since September, we had gone by our old system of taxation. So as you can see in this quarter, there is effectively INR 53 crores of -- more deferred tax liability, which has impacted my PAT also. But this is one-off. In the Q4, you will have a regular benefit of a low tax regime and things will be at a normal size. The 35AD and 80IA these two benefits that we were earlier getting, now we have decided to forego it and go to the new regime, which is going to be profitable for us.

Okay. So this will get to -- you'll be around like 25%, in that range?

Absolutely actually. Therefore, from Q4 onwards, there will not be any adjustment for deferred tax which we have enjoyed in the last quarter.

Okay. Got it. Yes, that was helpful. Just on this empty running cost for EXIM growth. Can you repeat if possible?

Empty running cost for 9 months for EXIM has been INR 83.28 crores.

INR 83.28 crores. And domestic was 59.3%?

69.35%.

The next question is from the line of [ Sarika Thorat ] from [ Union Mutual Fund ]

I wanted net cash position as of the 31st December 2019, please.

Net cash position?

Yes.

So, it is around INR 2,800 crores that we have.

[Operator Instructions] The next question is from the line of Ankur Periwal from Axis Capital.

I'm sorry I joined the call a bit late, so pardon me if I'm repeating any of the questions. Sir, first question, you had mentioned that the lead distances overall have been stable on a quarter-on-quarter basis. But if I look at the realization, there has been a dip while probably we should not compare quarter-on-quarter, but there has been a significant decline Q-on-Q. So if you can put some light on that.

You are comparing Q3 to Q2?

I'm comparing -- exactly, Q3 of this year versus Q2 of this year. So 16,400-odd, declining to 15,300 roughly because you did not take the...

You must be seeing that the volume has also come down. That is the basic reason, not the lead. Because volume, you must be seeing, is coming down from Q2 to Q3. That is the basic reason of less realization.

Sir, but my sense was that even while volume is coming down, and your lead distance would have determined the realization, higher lead...

Lead distance has also come down from overall lead was 795 kilometers in Q2. In Q3, It's 784 kilometers.

For lead distance it has come down from 735 to 750.

Yes. And so they...

See when volume is coming down, there will be little more empty container running we'll pick up. It will not -- it will not reflect in your empty running figures. But whatever we mentioned as empty running is empty flat running. But there will be some -- empty container running will be going up. So the empty container running is definitely not of the same margins as load running.

Sure, sure. Due to which the realization as well as the margins, although we are still on a -- the margin are pretty healthy...

Margin we maintain because of various things. But overall, realization per container will keep coming down because of empty running, empty container running.

Sure. That's helpful. And the -- so adjusted for this because of the higher proportion of empty running, there is no change in the absolute realization that we have been charging, and this number is expected to continue the same maybe for the next year as well. Is that right?

We are not changing any of our rates. We already declared price stability, and we are maintaining that. Still we are in the same financial year, and our policy is still continuing. So we are not changing any of our prices, neither we are reducing nor we are increasing.

Fair enough, sir. And any port-specific divergence or volume traction you are seeing, maybe Gujarat Port performing better or JNPT losing some bit of market share there? Or the decline in volumes is a fair bit sort of similar across all the ports?

Yes. Port volumes have picked up a little bit compared to the last year because of maybe some transshipment handling, they're doing some other things. But in rail share, our margin -- our share in the long-lead transport is same, more or less. But in short leads, we are not participating in price wars. There's some short-lead traffic moving on rail where there are no margins, negative margin, we are not doing.

Sure. And sir, lastly if you can help with our tonnage volumes for the 9 months versus Y-o-Y numbers?

Tonnage, EXIM tonnage for 9 months is 25.27 million tonnes; domestic 5.61 million tonnes; total is 30.88 million tonnes.

Sure. And sir, if you can help with the Y-on-Y comparable number as well?

EXIM last year was 26.77 million; domestic, 5.76 million; total, 32.53 million.

Sir, we don't have anyone in the queue.

Okay. Then we'll close the conference call.

As there are no further questions, I would now like to hand the conference over to Ms. Bhoomika Nair for closing comments.

Yes. On behalf of IDFC Securities, I would like to thank all the participants for being on the call and for the management for giving us an opportunity to host the call. Thank you very much, sir, for answering all the queries.

Thank you. Thank you, Bhoomika.

Thank you. On behalf of IDFC Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.