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

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

Yes. Thanks, [ Dennis. ] Good morning, everyone. I would like to welcome you to the Container Corporation's 4Q FY '21 Earnings Call. We have the management today being represented by Mr. V. Kalyana Rama, Chairman and Managing Director. I'll now hand over the call to him for his initial remarks, post which we'll open up the floor for Q&A. Over to you, sir.

Thank you, Bhoomika. Good morning to everyone. So I'm here with my full team, all the directors are with me to attend to your questions and to clarify things to all of you. So let me give the brief regarding the operations for this financial year. So I request everyone to listen carefully because we can avoid a lot of questions repeatedly on the same issue. Our operations, I can rate them very well. One of the excellent operations for the financial year. Despite all the pandemic and the lockdown, your company has never closed down for even a single day. Operations continued for all the 365 days. And at the end of the year, we ended up flat compared to last year. Originally, we took the guidance that we may be losing around 20%. But on the revenue front, we are almost there, only around INR 80 crores less. And the volumes -- in originating volumes, in fact, we are ended up a tad higher compared to last year. We picked up 2, 3 percentage points in domestic and EXIM also we picked up around 0.5 percentage point. And our market share, we mentioned, in fact we picked up on to the positive side compared to last year, a little bit on to year-end around 66%, plus we are having market share, both EXIM and domestic combined. And in an apple-to-apple comparison, in fact, we did much better than last year. Our operating margin has increased to 36% in this quarter. And overall, for the year also, we ended up 1 percentage higher compared to last year. But for the one-off payments and the change in land license fee, it would have been more -- bottom line would have been better than last year. It would have increased by maybe around 60, 64. So there will be a lot of one-off time payments, onetime payments I will count on one, first is the land license. They principally has changed from per-TEU basis to 6% of the market value. The 6% of the market value, also there were some difference in calculations. We -- the bank done a calculation where we calculate it, it would be around INR 450 crores for Ministry of Railways and other calculation. So ultimately, in the month of March, we could settle on a principal that we have to pay 6% of the current market value. So that has come to around INR 580 crores of land license fee for the whole year. And that additional difference amount is booked in this quarter. And also, we cleared off some old dues, which we are under discussion. But preparing for the divestment, we cleared off the dues. So in total, we paid around INR 680 crores of land license fee. So that is an addition of almost INR 640 crores over the last year. So in this quarter, it is on land license fee basis itself we paid around INR 200 crores extra. And another onetime payment we did is for the forced retirement medical scheme of the employees. This, as per the requirement, we were contributing into that fund. If we would have continued our PSU, that would have been continued. But looking at the strategic divestment scenario, we cleared our entire liability to be given to that fund. That's around INR 70 crores we contributed in this quarter. And another onetime provisioning what we did is for the assets we have to leave in the 16 terminals we surrendered to Railways. They are nonrecoverable assets. The value -- book value of INR 77 crores, we gave a provision because these we will not be able to recover. So that is onetime provision. See, these 3 onetime provisions have, in fact, reduced the profit in this quarter very much. Otherwise, this quarter, let me share with you, friends, it's the best ever quarter for CONCOR with quarterly revenue of INR 1,950 crores. And in fact, our H2, second half of the financial year was best ever H2 in the history of the company. And in month of March, we did extremely well. That's the first time for a monthly income off we carried more than INR 700 crores. So things are moving on the positive side. Now there is a clear clarity on land license fee. It is 6% of the market value. So we know what is our land license fee liability for this current financial year because we know what are the market value of the land which we are holding as of 1st of April 2021. So this time, it is calculated, and I can share that figure with you, this will be INR 450 crores. In addition to that, maybe all of you must have seen that we notified that we are going for a short-term loan, exploring the possibility of taking a loan. This is for signing a long-term agreement with the Railways or the railway ICDs where we are operating on railway land. Today, we are operating 26 terminals on railway land. And we intend to sign a long-term lease agreement for 24 terminals. That is for 35 years. So that will also put complete clarity on the land license fee. It is now 6% of the market value, but then there may be a revision maybe after 5 years, maybe 10 years. But once we sign this long-term lease agreement, paying the market value to the Railways, that is we have to pay 99%, then there is a complete clarity on the land license fee or the expense what we have to bear in because that will be the -- we will be taking a short-term loan and with cash availability, we will be signing this. And that will give us clarity on the land license fee front, and everything is now -- it will become like, we own the entire land. For next 35 years, there will be no uncertainty. And for the current year, let me give you the guidance also in the beginning, we expect this year to be good year. So the initial guidance what we are giving here is the top line, we may grow by around 12%. And coming to bottom line, it will be 100% growth. This year, we ended up somewhere around INR 500 crores of that. Next year, we expect on that to reach the level INR 1,000 crores. Thank you.

[Operator Instructions] The first question is from the line of Atul Tiwari from Citigroup.

Sir, it's quite good to know that finally, this LLF issue has been resolved. So just one clarification. Some of the numbers that you spoke were slightly unclear. So in FY '21, CONCOR has paid INR 680 crore for LLF. Is that number right? And compared to your earlier guidance of INR 4.6 billion, why is there so much deviation? So what explains that division? And why this INR 680 crore should go down to INR 450 crore in FY '20, again -- FY '22, again?

Yes. As I told you, Atul, we were calculating the market value based on formula of calculation. And we were discussing with Ministry of Railway. With that formula, the market value is to be calculated based on the base year of '99 and 2005. But the principal, ultimately what is adopted, and it is good for the company, also in a case of it is divested also, then the principal will be the remaining the same. So there will be no further increases. So it is 6% of the current market value. So the current market value on that year will be taken and 6% is calculated. So in that, against INR 450 crores, we paid around INR 520 crores. That -- we paid -- as I said, we have given some more dues which we were discussing for the last 3 years. So these discussions would have continued, but because in the scenario of divestment, again Ministry of Railways decided this -- now this is to be paid, and we also cleared those dues. So it's more of cleaning of the balance sheet for the divestment. And there were some service tax liability, which was not accounted for in the earlier years. Suddenly, Railway realized, and so that is a liability. So we have to provide for that. So that is also provided for. All this put together, let me correct the figure, it is -- how much, INR 6.46 billion?

Yes, sir. INR 646 crores we paid total. Out of that, INR 517 crores is the actual payment.

So it is total INR 646 crores...

Sir, sorry to interrupt, but your audio is not clearly audible, sir?

So total payment done is INR 646 crores against -- so against last year, we paid INR 38 crores. There were again some adjustments in that INR 38 crores.

Okay. And out of the INR 646 crores, INR 520 crores is LLF and the balance amount relates to this service tax and other dues which dues owes to Railways...

Some old one-time clean-off items, we cleared off everything. And now the second thing you asked is how it will be INR 450 crores this year because we gave away 16 terminals, the 16 numbers were given during the course of the year. So there were some part period LLF payments for that. And also, we are giving away some more land in the 24 terminals, which we thought we can rationalize. So this rightsizing, now the current market value we calculated. And based on the current market value, our estimate is this year it will be INR 450 crores. That principal is now settled. There is no further surprises in this.

Okay. Great, sir. Great. Quite good to know. And sir, just one follow-up on that. So that new that we have been hearing that cabinet needs to take a decision finally. So now, obviously, that -- none of that is needed. So the dispute between you and Railways is settled and no higher authority needs to decide on it, and we should not expect any kind of further decision by government or the cabinet on this issue of LLF.

Yes, on LLF, there will be no further decision is required. But as I mentioned in the opening remarks, again, I'm repeating for the benefit of everyone that we are working on finding a long-term lease agreement with the Railways. But -- see out of 26 terminals, we received 24 and 2 will be given -- further surrendered during the course of this year or next year because we are building our own terminals at those locations. So looking at the 24 terminals, what we are working on to sign the long-term lease. There is a further certainty and the issue of land license fee because yes, today, as I said, principal is 6% of the market value. Now market value is notified by the revenue authorities. Revenue authorities sometimes they decrease, they increase. Like in Delhi, it was decreased. It is now less than last year rate. But with the payment of the current market value, there is a complete certainty to the issue. So this liability, whatever we take now that once we clear off, it is like our own land for next 35 years.

But sir, why is the loan needed to sign the long-term lease agreement? You are kind of buying off this land from Railways or the...

Either we have to pay every year land license fee of 6% of the market value or for 35 years, you pay the 99% market value. So in any financial calculation paying 35 -- 99% for 35 years is much better than paying 6% and which will be varying depending on the revenue authorities, notification of the market values.

Okay. Okay. So you will like front-load that payment completely. And in future, you will not have to pay INR 4.5 billion or 6% of market value...

Once we pay, it is long-term full lease, that 99% market value, we will not make any payment to the -- for the land license fee.

[ In fact, you get 7% increase will also be there... ]

So everything will go away. There will be no further -- any increase, decrease. So it is once-for-all sale for 35 years.

Okay. And how much that amount would be any idea at this point?

It's [indiscernible] the figures now, but we are working on that. So that is why we notified the exchange that we will be...

Okay, sir. And sir, my last one -- my last question is on originating volume. So can you share EXIM and domestic originating volumes for fourth quarter? That's the last one.

Yes. Sanjay?

What exactly do you want?

Originating volume for fourth quarter, EXIM and domestic.

Fourth quarter, okay. Originating volume is, for EXIM, it is 555,106 TEUs. And for domestic, it is 96,586 TEU. Total is 651,692.

The next question is from the line of Ankur from Axis Capital.

Yes. So just continuing with the land license fee, first, the payout that we will be doing, will that -- the cumulative payout, will that be factoring in the 6% or 7% escalation? Or it will be the annual number, which will be paid, let's say, FY '22 number into 35 years is what payment will be made?

No, no, this Director sir answered. So if we pay one time, it has to be paid one-time at the current market value of this year only without any escalation. So if we are going for all the land parcel for long-term lease, what we'll do, we'll take the land rate on 1st April of '21. On that rate, fixed payment will be paid. That way, 99% of the land value will be paid forever. So that will take care over the next 35 years, and no further payment will be paid. If that does not materialize, what CMD mentioned, even if that doesn't materialize for the year '21, '22, our liability at the rate of 6% of the current market value will be around INR 450 crores only, I think I'm clear.

That's yes. That's right. Okay. Fair enough. Sir, second thing on the overall trade volumes. Now as you mentioned the numbers on the originating side, pretty, pretty impressive performance here. If you could highlight how is the mismatch between the export and import cargo and the empty running cost there for the quarter?

Yes. Export/import have shown a very good growth from Q4, and they are keeping in trend with the economy that is moving in that direction. For empty also, there has been some reduction. And for the financial year in EXIM, it was reduced by minus 7.8%, and it was INR 98.37 crores for the entire year. For the first time, it was below INR 100 crores. For domestic, it was INR 133.81 crores. Total empty running was INR 232.19 crores for the financial year.

Sure. Sure, sir. Sir, just a clarification, domestic, you said was INR 133.81 crores?

Yes. Yes.

Okay. Okay. That's helpful, sir. And sir, just one thing on the realization of the EXIM front for this quarter, now we see the numbers are largely flattish on a Q-on-Q basis. So the TKD price hike that we had taken has been completely passed through? Or it is still a work in progress and probably will get implemented from April?

No, that price rise actually is from -- that we have introduced from 1st of April. For TKD, actually it is there. So that because license fee is there, so it takes care of most of that...

Okay. So it's from 1st of April, and it has been fully pass-through? It has been fully implemented?

It has not...

We did not pass-through anything. In fact, what do you mean by pass-through?

No, not pass-through. Pass-through is a wrong word, my bad. But has been implemented. So all the revised contracts that we are having are on the revised rate.

See, maybe if you have followed CONCOR, we gave a press notification also. We gave a new scheme that we are giving now 50% discount on the empty movement from Railways ports to the entire land ICDs. So this has given 20 -- 266% additional movement of empties in this first 45 days compared to last year. So this, in fact, is a very good thing. And we expect that the gains will be much more compared to the discount what we are offering.

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

Sir, first question is on employee costs. So you mentioned, there are certain one-off related to medical expense for retiring employees. So is that -- I mean, ex of total one-offs, what is the employee cost for the quarter? Like how much do we have to exclude from -- because there's some mention of actuarial impact also in the notes to account, so is INR 90 crore a sustainable number for next quarter quarterly, first half first?

PRMS, it is a onetime payment of INR 970 crores, we paid to that. Otherwise, yearly liability is only around, how much, 1% of the pack.

That is what it has happened.

No, but we are paying less. We are paying every year...

We thought we made only INR 5 crores contribution to PRMS before that and requirement -- now we see paid INR 70 crores and the next 25 years, the calculation is, total, there will be further addition of another INR 55 crores into this one. That is around INR 2 crores per year.

No, I mean, the reported employee cost is INR 128 crores for the quarter. If you remove INR 70 crores, it comes at INR 50 crores, INR 60 crores. That took like an...

That calculation why you want to discuss that in the conference call. I'm telling you one-off payment is INR 70 crores in the employee costs.

Okay. So just a question on buying off plant, which you talked about. So a simplistic calculation like INR 450 crores -- I mean, simplistic value of land, which you mentioned like 6% of market value. So this should come at the tune of like INR 7,000 crores to INR 8,000 crores, I think which was also discussed a couple of years back, I think, so that would bring depreciation and interest on our balance sheet?

Yes. There will be a depreciation. There will be amortization. Tax benefits will be there. So depreciation will come into the balance sheet automatically, and there will be interest expenses for some time. It will be clear of the debt. So the total value of the land will be -- we are working on it. It may be less than what you are mentioning, it may be less than that.

Okay. And just final question on your port-wise market share...

JNPT, 34.46%; Mundra Port 33.86%, Pipava 11.33%, Vizag 6.65%, Chennai 6.62%, Kolkata port 2% and Vallarpadam 2%.

And also, I think your market share at port?

Our market share, we calculate for -- individual ports, also we don't calculate. But from only 3 main container handling at port we have calculated. So JNPT, it is 64%; Mundra, it is 44%; and Pipava, it is 50%.

The next question is from the line of Deepika Mundra from JPMorgan.

Just 2 questions from my side. Sir firstly, when you are planning to pay this advance to Railways for the land. So basically, it will be based off this INR 450 crore number or basically that INR 450 crore is subject to change when once you sign the 35-year lease?

See, once we sign 35 years lease agreement, we'll be paying 99% of the market value as on date. So that is onetime payment. So we will be taking -- we will be paying that capital amount. And then that will be cleared off from our own reserves, our this thing and our earnings. So then there will be no land license fee payable any further for [ 35 years. ]

Right. Sir, what I'm trying to understand is that basically, once you do that, it is based on current value, but you're saying that the current value is decided with Railways at INR 450 crores, right?

INR 450 crores is 6% of the market value. INR 450 crores is not the market value. It is 6% of the market value.

Okay. Got it. Got it. And sir, secondly, can you give us an update on DFC and your volume outlook after that?

DFC, as of now, I think, expected to somewhere [indiscernible] October. That's what we are hearing. Am I right Sanjay?

Yes, sir. Part of it.

Part of it connecting to Mundra and Pipava. So that -- once it comes, we are expecting volumes to increase but yearly forecast, I have given you that we will see an increase of 12% for top line. So we are expecting 10% to 12% growth in our volumes also.

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

The first question I have is with respect to our volumes of the total originating volume, how much would be the northwest region? And number two, would it be possible for you to give us some sense in terms of what is the market share in NCR and Punjab region, sir?

We don't calculate that.

And in terms of volume on the northwest corridor where the DFC will have...

We don't do those analysis. For these conference calls, and we don't share those analysis. A rough estimate is 40% is on northwest.

40% of our originating or handling, sir? Just a clarification on that.

Here, it is originating and handling there will not be much variation, which is a percentage here or there. It will be 40% of both the thing.

Understood. Understood. And in terms of the rebates, would it be possible to give us some sense what was it for FY '21 rebates [indiscernible] discount? What was the amount for EXIM and domestic?

[Foreign Language]. Rebate for FY '20, '21?

Total rebate, for the quarter, it is around 97.23 for financial year.

97.23 for financial year is the total rebate given.

The quarter ending, it's INR 30.45 crores.

The next question is from the line of Vikram Suryavanshi from Phillip Capital.

Yes, sir. Sir, can you share, what is the current...

Mr. Suryavanshi, sorry to interrupt. But may I request to speak a bit louder, please increase handset mode while speaking.

Okay. Is it audible now?

Yes, tell Vikram.

Okay. Sir, can you share what is current cash balance on the balance sheet? And how is the CapEx program planned given that there is a possibility that we may have to pay upfront money to land license, so will have impact on the CapEx...

Cash balance is roughly around INR 2,500 crores, okay? And the CapEx for this year is around INR 500 crores we are planning. So we will be taking a short-term loan for payment of the -- the upfront payment to Railways for 35 years lease.

Okay. Got it. And sir, can you comment on how is the profitability on domestic side of the business? Because for this quarter, particularly because of a lot of one-off, it is difficult to understand the profitability impact on the domestic business. So how is that given...

Apple-to-apple comparison, profitability on domestic has slightly increased. So the profitability, the margins are in the range of around -- how much INR 3,800 crores?

This operating margin is INR 334 crores. For-TEU margin, of course, it will be -- operating margin per-TEU is [ INR 1,660 crores. ]

It will be around INR 3,800 crores, INR 4,000 crores operating margin for the domestic if we don't take the one-off.

Operating margin...

One-off [Foreign Language].

One-off, that also the operating margin for [indiscernible] INR 11,460 crores. It is INR 11,460 crores.

Vikram, that -- see the domestic margins are slightly increased because we are moving higher loads.

Understood, sir. And sir, last question about how is the progress on distribution logistics or bulk solution given the kind of investment we are doing in container acquisition and opportunities we are getting in domestic?

Bulk, we started moving. Bulk food grains are moving now. Bulk cement also now in containers, we are doing experiments, but in tank containers, this may start maybe this end of this financial year or by the next financial year we may. For distribution logistics, as of now, I can say a little bit because of the divestment scenario, we are working on that. We will let you know once we get clarity on the divestment, and then we will work on that.

Got it. And any plan to restart coastal side as well?

Coastal, yes, we'll restart at the right opportune time.

The next question is from the line of Aditya Makharia from HDFC.

Yes, sir, congratulations on resolving the LLF settlement. It gives a lot of comfort to the markets. Just a couple of questions here, sir. Initially, the 6% land value was being spoken at about INR 1,100 crores to INR 1,200 crores. So I was just wondering, now that it has been settled at INR 450 crores, how many terminals do we have of Railways and how many are we giving up?

I already told this [Foreign Language], you are not listening to my initial comments. We have given away 16 terminals. Today, we got 26 and we will be keeping 24, 2 more terminals we will be giving away during the course of this financial year or maybe the next financial year because we are building our alternate to our own terminals there. So final count will be 24 terminals will be on railway land, for which we are working on a long-term lease agreement with the Railways.

And sir, the total terminals which we have as of today, including ours and Railways, will it be about 75 to 80?

No, it is 64. We are now commissioning some new terminals. I think around 8 terminals are in the -- 8 more terminals we are working on. So that will be 72 terminals.

Okay. And sir, will we be giving up any land at TKD by any chance because you said we'll also be surrendering some excess land within the terminals?

Yes. TKD also, we are giving away some piece of land. We are rightsizing TKD also.

Okay. Got it. And sir, just last question, this INR 83 crores exceptional expense you mentioned is because of the write-off on the ICD equipment, right?

Yes. Structures left out at the 16 terminals which are nonrecoverable, the permanent structure, the book value of the structures [indiscernible]. Basically, we provisioned this year that the write-off will be a procedure. So it is a provision we've had in the balance sheet.

The next question is from the line of Devraj, individual investor. [Operator Instructions]

Sir, I just want to know that in sir, DFC, sir, from Palanpur, that rail line is going to Viramgam or it will come to Sabarmati Junction?

It will go to Mundra and Pipavav Ports.

No, but Palanpur to Sabarmati or Palanpur to Viramgam?

I don't know [Foreign Language], why you require Viramgam or Sabarmati, I have no ports there. My interest is from Palanpur, it will be get connected to Mundra port and will connect to Pipavav Port.

Okay. But sir, right now, existing network is from Palanpur to Sabarmati, right?

See, I don't know that question, I am not going to answer Mister. Palanpur, it will be connected to the port, whether it's connected to Sabarmati or it's connected to Viramgam, why it is interest. You ask those companies where you want interest your question, no. It's not the question for CONCOR conference call.

Does that answer your question, sir?

No, no, it is answered.

The next question is from the line of Ajinkya Bhat from Macquarie.

Sir, 2 questions. First is, I believe you mentioned the exceptional loss is on account of structures left on the surrender terminals. Apart from that, the cash flow statement also shows an increase in noncurrent provisions of about, I think, INR 89 crores. If you could just clarify what it is? That's question one. And second question is on the bulk food grain opportunity, you said it has started. So now has it moved from pilot projects to actual commercial service to food corporation and which states are you servicing in the first phase or initially at the moment, if you could clarify on that?

No, as CMD already mentioned, there is onetime provision of INR 77 crores of [ some costs ] for the capital expenditure that were made on the railway ICDs, the lands we have already surrendered, right? So INR 77 crore is worth that. And INR 5 crores of which we have taken towards some third-party impairment tests that we did for FHEL. So last year, this amount was INR 20 crore. This year, company FHEL that fully owned subsidiary, they have done better despite this corona thing and pandemic thing and Kisan Andolan. So only INR 5 crore is supposed to be impaired. So we have taken that hit also. That totals to around INR 82 crores.

So sir, that is the exceptional item, right? Apart from that, is there any additional provision booked in the other expense which is not exceptional because there is -- because if I look at the cash flow statement, there is a decrease in current provision...

Don't waste time for others, [Foreign Language]. I have given you one-time what we have done in my initial remarks itself. There is nothing more than that. And if you got still some doubts, then e-mail to our finance department.

Okay, sir. And on the food grain opportunity, on the second question.

Food grain opportunity, now it is a commercial run. These are not rail. We are doing for FCI. So it started -- movement started, and this will slowly pick up during this financial year. And as I mentioned in cement, in the containers, what like food grains, what we are doing, that is still -- our trials are going on. We are doing some testing. But in tank containers, we will be starting that movement, maybe by the end of this financial year or by next financial year. So there will be bulk cement movement also will start very soon with the company.

The next question is from the line of Nidhi Chawla from SBI Mutual Fund.

So I had 2 questions on LLF. When you say that the land license fee has been finalized with the Railways, are you implying that the land value has been finalized with the Railways? And is my understanding correct that when they were trying to give a demand of INR 1,300 crores for that 6%, the land value implied would have been somewhere INR 17,000 crores, INR 18,000 crores. And then you today are talking about that INR 450 crores amount. Even if I give up certain land parcels, would be somewhere around INR 8,000 crores. So has the Railways agreed to this fall in the land value? Or I mean, is that still under discussions?

No, I think -- you heard my opening remarks?

Yes, sir, yes, sir.

So, am I not clear?

Sir, I'm just trying to clarify in terms of the...

When I am telling that, it is now finalized. And for this financial year, it will be INR 450 crores. When I'm making a statement, either you take the statement or then otherwise you keep on having doubts in your mind.

No, no, no, sir. My basic question was when you were taking INR 450 crores, the land value imply...

See, 6% of the market value of the land is a land made from fee. So it's finished, there's the clarity on that.

Got it, sir. And second question is, sir, when you will decide about this, giving the land upfront fee or the land license...

It's very work in progress, on a very fast pace. And working with government, I can't give you 100% guarantee on what will be the outcome on these things. But from our side and from discussions between CONCOR and Ministry of Railways, this is on a very fast pace because this is one of the steps towards divestment.

Sir, but is it fair to assume that -- then which means that the policy is not even thinking of reducing 6% because you are willing to upfront the entire cost for 35 years?

No comments on that 35 years. We'll be paying 99% of the market value, okay? Whether reducing license fee by the cabinet or not, I have no comments on that.

So sir, we -- it impacts us negatively, right, because we would be paying an upfront payment on the base of the 6%. And incrementally, if it actually reduces to 3%, then we would have actually benefited out of it. So clearly, the policy is -- I mean, there will be...

So you did what -- you are a financial background or what?

Financial background only, yes.

So you calculate, it will be then this.

Okay. And is there any last -- I'm sorry to broaden this, but is there any return ratio that you will look when you will look to buy the land versus the percentage that you are implying today in terms of...

I'm saying the current market value of 99% of the current market -- I'll give you a macro small payment, then you do your detail calculation. So the inflation, even at today's rate in India, the value -- money is getting doubled in 7.5 years. You invest somewhere, you get in 8 years double, maybe in 8.5 years double people are costing us. For 35 years require 4x the doubling. So when I start paying at the percentage of the market value, when you look at inflation, it's going to be 2 to the power of 4, that means 16x it will increase over the lifetime of 35 years. Now you calculate, when I say 99% right now, and I will not be having any increase or anything and this liability I will cover off from my own cash reserves, what is the benefit? You calculate it and then send me a mail, okay?

Sure, sir. That's helpful. I'll get back in the queue.

Right. I've given you homework, you do that.

No, no, I'll send you the mail. For sure, I'll send to the finance team, yes.

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

I mean, I want to have this on distribution, logistics, you said that still -- I mean, so exactly which stage we are and when we really see that start...

We started and some people shown interest, but because of the pandemic, things got halted that did not progress well. And meanwhile, the diversement came. So we put a little hold on that because we have to get a clarity on the divestment first.

Okay. And sir, second question, I understand that there is a railroad containers or one train has started about 1.5 years back from Chennai to Delhi. So we are -- that railroad, I mean container where container can be straight away connect to the truck and moved on the road, which can save, I mean, a lot of time.

No, no, this railroad thing is, see, that is not our thing, and we are not interested in that railroad containers. There we don't think that they're very useful because normal container lifting and putting on it on train is much beneficial compared to this railroad.

Okay. Sir, last point, I mean, we were evaluating of making some investment in other international geography. So any clarity or that has also been put on the hold?

Yes. Well, as of now, we paid one in the Africa, but that did not go well because that -- ultimately, that the country has decided not to go forward. So as of now, nothing moved forward in that. And our focus is mostly on domestic because India has got a lot of opportunities in logistics field.

The next question is from the line of Pulkit Patni from Goldman Sachs.

Sir, my first question is on your guidance of top line. I mean, if I look at the first half of '21, where we had almost 21% and about 9% decline in volumes, just the base is too favorable for us to look at just a 12% growth in FY '22. So are you just taking a very conservative view? Or is the trade volume worrying you? Just wanted to understand why only a 12% top line for FY '22.

See we did extremely well in H2. If you look at our H2 -- H1, you are looking at, H1 was bad H1. H2, if you look at, we did extremely well. In fact, every month, we made a new record. We had almost best ever performance ever seen by this company. Like in March, we got revenue of INR 700 crores plus in a month, which was never achieved. So with that scenario now, whether that growth path will continue or it will be an average growth, we are not understanding because the pandemic now second wave, again, we are going through some lockdown. And people are talking of third wave. So in this uncertainty, estimating beyond 12% at this stage is may not be correct. But that should not worry you because last year, we started with minus 20%, and we continuously upgraded our guidance. And then -- by the last quarter, I said that we will may end up flat and we ended up flat. So let's see how these things work out. So there will be no further guestimates, 12%. But as I said, bottom line, I gave you a very good guidance, we will be growing by 100%.

Sure, sir. Sir, my second question is, clearly, this transaction of LLF, where you'll be -- you could planning to sort of literally buy that land for 35 years. It's obviously going to be a sweetener for the buyer whosoever comes in to look at CONCOR. Now just wanted to understand that this particular transaction, if obviously, it goes through, from a CONCOR point of view, if we have to assume, what do you think could be the rate of interest that we can borrow this, whatever, INR 5,000 crore to INR 7,500 crore money for? I mean, what should we assume in our models?

See, we can -- I can tell you, we will get the best rate -- lending rate possible in the market because we are rated AAA plus. So I can't guess on the market rate, whatever market today going on...

Understanding the lowest repo going on in the market and most of the banks are ready to pay repo linked rate, obviously, all of us know that for a company having AAA rating and a government company having 0 debt, we are expecting the best rate available that you can guess.

Sure. Sure. Sir, if I could just squeeze in one more question. Any other change that might needed to be done to the business before this divestment happens? Because I think we've cleared a lot of things right now in terms of land license fees, et cetera. Anything else that could possibly be outstanding before the marketability of this business?

Let me tell you one thing. I haven't said so much on divestment. Actually, I'm working all these things for the benefit of CONCOR, whether it will be divested or it will remain as a PSU.

The next question is from the line of Abhishek Ghosh from DSP Mutual Fund.

Sir, if you can just help us understand that what are limited trial runs that one has had on the DFC whatever section has been opened, if some experiences around what has been the reduction in turnaround profitability because of double stacking? Any -- if you can share, it will be very helpful. And how does it -- how should one look at it?

The undrawn will reduce or there will be improvement in undrawn by 100%. That is minimum expected once DFC comes. For the section compare, so that, if you put on the total movement between the ICD 24, we can take a reduction of around 25% to 30% in the turnaround time. And as far as the profitability part is concerned, there will not be much gain in the margins because the rating what's going to be adopted on DFC is same as what now being followed on IR. And we are already doing a lot of double stacking. So the benefit is on the turnarounds. And because of the turnaround, there may be additional traffic diversion from road to rail, which today, we are not able to capture because of the constrained in the transit time. So that will -- we are expecting maybe that come to 10% to 25% anywhere between that we will gain in this particular corridor. These are the 2 gains we are expecting from the DFC.

Okay. And sir, is your marketing team already kind of seeing some customer inquiries, guys who are moving by the road kind of coming in? Any sense there?

Yes. Yes. We are already working on that. We are working on that, and we have a fair idea.

Okay. And sir, just the second question is, if you can just help us understand the competitive intensity because last time around when the crisis had hit the entire country, we have seen the outperformance of rail and the kind of rail had kind of gain market share. Are you seeing similar things around this time also and competitive intensity within the railway plays itself, if you can just help us understand on these 2 aspects?

I couldn't get you -- follow your question. What is that you are trying to understand.

I'm trying to understand...

No, listen, I just spoken you. Last year, with all that lockdown, pandemic and even our people suffered. Out of my workforce of 1,400, 460 people became positive, okay? Even with that, we never closed even a single depot on a single day, and we never sustained any of the operations anywhere in India. So that is the planning what we did. So with that experience of 1 year how to work in these pandemic situations, lockdowns and all, I don't think -- I don't foresee any problem in working in this coming financial year or further.

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

Just wanted few data points. In terms of market share, can you help us with the domestic and EXIM market share for FY '21, sir?

We got a domestic market share of almost 74% now with us. In EXIM, we got around 66% or 67%.

And would you have the similar for FY '20 as well, sir, like in terms of gain or loss of market share?

We gained little bit in EXIM. We most there maybe around 0.3%, 0.4% gain. In domestic, we gained around 5%.

Understood. And in terms of like-to-like margin, can you help us like-to-like margin for fourth quarter for domestic and EXIM? Sir, you kind of talked about domestic but it wasn't very clear, if you could...

We don't calculate those figures right now. But as I said, in apple-to-apple comparison, we actually improved our margin in domestic.

And in the EXIM, sir?

EXIM also, I think, a slight improvement, but maybe it is not much because we moved a lot of empty. There is empty movement increase because of import reduction and export increase, there was a little imbalance in the Indian trade. And obviously, our margins on imports are higher compared to exports.

Understood. And if you could help us with that double-stack number and the lead distance, sir?

[Foreign Language].

Double-stack, we have done 2,574 trains in this financial year.

And for the quarter, sir?

Quarter, it is 786.

786. Sure. And the lead distance, sir?

Lead is for EXIM, it is 697 kilometers; domestic, it is 1,378 kilometers.

And this is for the fourth quarter you're talking about, sir, I presume, right?

No, I'm talking about the financial year total.

These things we don't give for quarter.

For quarter, we don't have the number.

The next question is from the line of Deepika Mundra from JPMorgan.

Sir, just the 2 terminals that you are planning to give up, what is the volume impact of those? And you mentioned that you will be building 2 terminals instead. So what is the lead time for that?

6 months.

And in the interim, sir, what's the volume impact for the 2 terminals that you're giving up? Which are the 2 terminals?

There's no volume impact. In fact, we will gain some volumes if we start our own.

The next question is from the line of Aditya Makharia from HDFC.

Yes, sir, there was one article saying that major ports, such as JNPT will be allowed to bid for the privatization. So would that be a possibility because earlier, we thought it is only the private entity?

JNPT...

Sir, the major ports, basically JNPT and Chennai, so...

These media reports, I can't comment on that. I can't comment on media reports.

Okay. And sir, just the last question. The fourth quarter payout for LLF was how much. You said of the total INR 680 crores, how much will be pay out in the fourth quarter or we booked in the fourth quarter?

INR 292 crores for LLF in the fourth quarter.

INR 2-9-2 crores?

INR 2-9-2 crores, yes.

Sir, can we continue with the question?

Okay, last question. After this, please close the conference call.

Sure. We take the last question from the line of Prateek Kumar from Anti Stockbroking.

Yes. This is Prateek. So there's a press release, which has been uploaded on exchange on CONCOR. It says that we'll be raising INR 3,500 crores on short-term borrowing. So assuming INR 2,500 crores, which you said on your cash and balance sheet, INR 3,500 crores related to borrowing. So somewhere in the range, it's INR 6,000 crores, you are looking at the land in terms of acquisitions?

You're such as an intelligent fellow, why you want to ask me all this things.

Okay. And sir, just one bookkeeping question. What's the rail position at different ports which you generally give in the call...

We have given [Foreign Language]. We have given.

In one of the questions, we already answered.

We answered, Prateek.

Well, ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for their closing comments.

I think we have clarified each and everyone. And I think there's a lot of clarity and everybody, I think, got a sigh of relief for the land license fee clarity, I hope so. Thank you. Thank you for attending the conference call and for the interest shown in the company.

Thank you. On behalf of DAM Capital Advisors Limited, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.