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

Ladies and gentlemen, good day and welcome to Container Corporation of India Limited Q2 FY '22 Earnings Conference Call hosted by DAM Capital Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair from DAM Capital Advisors. Thank you, and over to you, ma'am.

Thank you, Nirav. Good morning, everyone. On behalf of DAM Capital, I welcome you to the Container Corporation of India 2Q FY '22 Earnings Call. We have the management team being represented by Mr. V. Kalyana Rama, the Chairman and Managing Director. Without any further delay, I'd like to hand over the call to him for his initial remarks. Post which, we can open up the floor for Q&A. Over to you, sir.

Thank you, Bhoomika. Thank you for all of you. I'm sorry we got delayed a little bit because of some prior engagement, and I'm happy to share with all of you that we had a very good quarter 2. So in quarter 2 alone, if I look at Q2, this is a high -- this is the best-ever quarter 2 for the company. In the history of the company, highest operating income and highest PAT, both we got it in this quarter. The operating income in Q2 is INR 1,834 crores. And the PAT is 200...

64...

INR 264 crores. So these 2 numbers are the highest ever in the history of the company. And we come back Q1 with Q2 and look at H1. Again, H1 is the best-ever H1 for the company in the history again. So this is a very encouraging thing for all of us. For your company, the things are really falling in place. All the measures what we are taking over the years to pick up the market share are -- increase our efficiency in operations, service to the customers, all are giving results. So the -- if I look at the volumes, what we handled in the H1 compared to the last year, last year was [ slow ]. So definitely, the trend is very encouraging, and the handling -- and overall handling, we got a growth of around 21% in the handling figures and exhibited 18%. And in domestic, it is a robust growth with 48%. That is very encouraging trend. And if you remember, I was mentioning about this domestic segment, how we want to take it forward with the new things we are trying to bring in like bulk transportation, particularly the movement of goods in bulk in containers using flexi bags, such as cement, [indiscernible], we already did. They're on 4 lakh tonnes last financial year. So in cement, we are almost there, finding a solution because the solutions are available, but making it the cost-effective economical solutions is the challenge here. With these things, the -- our idea, which I shared with you earlier conference calls that the domestic EXIM segment share used to be 80-20 in this company, 80% of the revenue is given by the EXIM and 20% by domestic. We want to make this ratio to 60-40. That is the 5-year target we have set, and I think we are definitely going towards that because this are in [indiscernible]. If I look at domestic and EXIM share for the revenue, it is 70-30.

28%, 29%.

29% is domestic. That's what the -- my [ team ] have given me the figure. So it's almost 70-30. So as we said, that 60-40, so the dependents are normally the EXIM because an EXIM dependence, as we see now in the first 6 months, the shortage of containers because of the global operations by the liners is affecting us. There is no containers for export. Even though we picked up good numbers, this could have been much better if the container availability was good and there was no shortage. Even after giving excellent schemes to liners, encouraging them to bring in more and more containers to the inter-land, such as 50% rebate on the empty movement of containers from port to inter-land. And from September onwards, we have added that if some -- any one entity can offer us 10,000 TEUs in a month, we'll give [ 70% ] rebate. If they make it 15,000 TEUs, we give 100% rebate full transit. Even then, there is shortage because of overall shortage of containers. So our strategy of making domestic also a robust engine of growth and the contributor to the revenues will help in the future of this company. So the target of 60% of EXIM revenue is 40% of domestic revenues in the next 5 years. We are there in the midway, with 30-70 now. Going forward, for the next 6 months, if I look at the encouraging trend what we got in the H1 and Q1, Q2. At the beginning of the year, I have given a guidance of 12% growth in the volume and as well as revenue and 100% growth NPAT. I think now we can definitely look forward to getting around 15% growth in the handling and revenue. NPAT, it will be better than 100%. That's what I feel today. So there is a slight upward revision of our guidance now for this year. It's 15% volume figures and 15% in revenue and with 110%-plus NPAT. Regarding the CapEx. We are progressing well, but not as encouraging because the sector just started because the COVID now, I hope the COVID is almost gone. And fingers crossed, definitely, the India will be out of any third wave forecast because INR 100 crore [ vaccination mark ] also we crossed yesterday. With this encouraging trend, I think in the next 6 months, we will be able to definitely meet our CapEx target. Mostly, the things were not moving because of the COVID and the restrictions of COVID. Now things started looking up. And land license fee, as I made it very clear in the last conference call as well, that it is now fixed. There is no ambiguity in that. The total land licensing for the year is INR 450 crores. And in the first H1, quarter 1 and quarter 2, we have taken proportionate liability on that. And we have also paid the same amount to railways. So in H1, we paid INR 225 crores of land license. Thank you.

Shall we open the floor for questions?

Yes, please.

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

Sir, a few days ago, we saw the segment of, I think, finance secretary saying that there is still some issue pending with LLF because of its -- the divestment has been postponed to the next year.

Atul, let me clarify. The statement is there is still something to be decided about the land policy, not land license fee.

Okay. Okay. So nothing is pending from our side, I guess?

LLF is, as I said, very clearly, there is no ambiguity in payment of LLF. It is about land policy for long leads. So that, there is some discussions still going on in the government. And that, as I said, that is not our concern, it is not land license fee. So that is what finance secretary was mentioning we're addressing them soonest.

Okay. And sir -- very clear. And sir, in terms of originating volumes, if you could share, EXIM and domestic. That's my last question.

Yes. [indiscernible] about our business.

The originating are -- volume for the Q2 was EXIM 518,986 TEU; domestic 90,280 TEU. Total is 609,266 TEU.

6092?

266.

66.

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

Two questions from my side. Number one, sir, if you can just comment a little bit on any market share movement in handling volumes in this particular quarter, especially because one of the smaller competitors in North India has reported stronger volume growth and even scope of market share gains in the Delhi NCR market. So that's question one. And secondly, if you could just provide an update on the launch of assured transit time services on DFC, because I know you have launched one with [ Merck ], which have assured 60 hours time of transit time, whereas another company that has launched a train service, which assures 27 -- which gives about [ 27-odd percent ]. Can you just explain?

[indiscernible] CONCOR issues. The CONCOR market share in the market is around 65%. So there is no point in comparing with small, small players, what they are doing and all. These are all marketing gimmicks, okay? Let's come to the core question.

Okay. Okay, sir. So there is no -- there isn't any big change in the market share. That I get. Secondly, the transit time -- assured transit time services, how do you plan to launch more services and...

We launched a lot of services. Transit assurance services are moving from North India to Mumbai, people doing very well and we have seen good volumes coming into that. [ The other ] exports have picked up, the reason is that [ up ] there from the transit assured the goods normally move to Europe and U.S. [ Moradabad ] also picked up well because the handicrafts are moving from [ Moradabad ]. There is good growth in that. You see -- so I'll give you the number of double stack trains what we did from Kathuwas. It is 1,597 trains. This is the highest seller. What we did the total Kathuwas domestic handling we did earlier last year is 1,000. So there is 50%...

This was in the quarter, sir? 1,597 in just this quarter or 1H?

6 months. H1. H1. On quarter, we did 790.

[Operator Instructions] The next question is from the line of Abhishek Ghosh from DSP Mutual Fund.

Sir, this overall target, which you've given for domestic to EXIM of 40 to 60, if you look at the profitability or EBIT, it is a lot different because of the lower profitability in the domestic part of the business. So will that also see a marked improvement with operating leverage and volumes coming back? How should one look at that mix?

See if I tell you, PBT margin based on originating in EXIM is INR 5,400 in this H1. And in domestic, it is INR 5,800.

Okay.

I hope that answers that.

Okay. So profitability will be maintained even with domestic improving? Okay. And sir, in terms of effective October, have you all taken any price hikes or rationalized prices? Any sense around that?

Yes. We have given the price hike of 1,000 [indiscernible] on every container handled in the terminal for both import and export from October 1 onwards.

Okay. So sir, this is on account of cost inflation that you're seeing or export/import imbalance, what is that -- or this will improve the overall margin?

I think we are the [ conference caller ]. See what we do is we have our own calculations.

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

My first question is, sir, how is the transit time on export leg and import leg improved like post now impacting operation from of DFC from [indiscernible]?

Transit time, how it is now. I think there's no [indiscernible]?

Sir, transit time, yes. Transit time from Dadri to Mundra, if it goes directly, is almost 40 hours. And if it goes well, Kathuwas, it is around 60 hours. So the trains have got very good speed now.

The assured transit time, what we have given to the market is 60 hours from Dadri to Mundra. And mostly, 99% containers are reaching within 60 hours.

And can it further come down with further efficiencies in DFC? Or this is the best we should be looking at?

Better than...

60 hours is a very good figure. Okay? So I don't know what is the basis of your question.

No. I mean it used to be 72 hours earlier or is this too much?

It used to be, it was 72 hours. It used be [ 75 to 72 hours ] but it used to be 80 hours, 90 hours. Now it's 60 hours, and the exporters are very happy with the [ 60 hours ].

Okay. And sir, can you just highlight on CONCOR's share at all the ports now.

Now we at JNPT, it is 61.44% for the half year; Mundra, it is 44.2%; and Pipavav, it is 53%.

[Operator Instructions] The next question is from the line of Achal Lohade from JM Financial Service.

Can you hear me? Hello?

Yes. Yes. Go ahead.

My first question is the concession given by the Indian railways with respect to rebates. Is it possible to quantify what is the total impact on a per TEU broadly at the company level?

Well I think there is no relevance for this. This rebate is continuing from last year. So that has now, almost a year, accounted for in the balance sheet. It is 25% rebate on the empty movement.

Right. And 5% on the railway containers, right, sir?

5% on railway containers.

Yes, 5% on railway. Yes, yes. It's continually -- as already [indiscernible] has told already...

Continuing from last year.

Yes, yes. What I'm trying to also understand is that of the total benefit, is anything passed on to the customer? Or the company is able to retain the [ sale ]?

Achal, I think you are not following the CONCOR and asking questions. I'm sorry, man. We announced the rebate scheme at the start of this financial year on April 1st to move empty containers from port to inter-land. Normally, empty movement happens from port to inter-land because of container shortage, which is what we see is going on. We announced a 15% rebate. We've got only 25% [ from earlier ]. So we are giving 20% extra. Year after that, the growth in the numbers show the robustness of this scheme and the marketing effect of that particular scheme on your company. [indiscernible] and this we now extended from September 1 onwards, that of somebody here 10,000 TEUs in a month, we will give 70% rebate. And if they are for 15,000 TEUs in a month, it is 100% free. But there are riders who [indiscernible]. Those containers which come to our place must be exported back from our depot only and on our trail zone. They take away empty container out to some other players, then the entire concession, what we have given on the container will be collected. But in addition to that, there are some additional charges of almost INR 3,000, which we charge them. So this scheme is as well covered scheme. It's giving good dividends. So we are passing on more than what we are receiving from [ revenues ], but that is giving good dividends to the company as well.

Okay. Got it. And can you help us with the rebate for 2Q FY '22? And also for the same quarter last year?

You want rebate number?

Yes. Yes, rupees crores, sir. And the empty handling, empty cost.

Rebate how much rebate we pass on to the customer.

Rebate. [ INR 21.67 crores ].

Q2 we passed INR 21.67 crores and Q1 we have passed INR 26.51 crores.

Right. And the empty handling cost. If you can?

empty running?

Empty running.

Empty running.

Empty running for this quarter is total is INR 69.42 crores. And the breakup: EXIM INR 23.59 crores; and domestic INR 45.83 crores.

[Operator Instructions] The next question is from the line Bhoomika.

Yes, sir. Sir, just wanted to understand. We've really seen a very sharp improvement in the double-stack movement in the last couple of quarters. And we -- in the first half, you've done quite well. Now that the DFC is fully commissioned in September, is there possibility to further increase? And how much more can we see an increase in terms of double stack?

Yes. DFC actually has been very helpful for running our trains between Kathuwas and Palanpur. Now that 600 kilometers we are able to cover in 10 to 11 hours only. And definitely, we will see a good growth. And with a short transit scheme in -- fully streamlined now on the surface. So we expect that there will be good growth in H2 also.

Okay. And in terms of, as you said, the transit time itself has reduced from over 70-odd hours to now 60 hours and lower, now how much more improvement can there be? And are we seeing the shift from road to rail?

Yes. Of course, the 60 hours is a very good figure because by road it takes 70 hours. So we are 10 hours less than road, and we are very competitive because of double stack. So already, there's a lot of cargo has shifted from road to rail. And even the malls is running a retail express train every Wednesday from Dadri, which is all the light cargo for Target stores and Walmart for [indiscernible] U.S., and it's running to full capacity. In fact, we have demand for more such trains from Dadri. So definitely, the cargo has shifted from road to rail, and this trend is likely to continue also.

Is there -- if you can just talk about how the rail coefficient that all the 3 ports have moved, and where can this possibly improve to at, say, JNPT, Pipavav and Mundra?

The JNPT is still not on DFC. So when JNPT comes on DFC, definitely it will see a very good jump in rail completion. Otherwise, in Mundra and Pipavav, there is a good growth in rail coefficient at Mundra, from 25% it has gone to 27% in the first half; and Pipavav, from 61% it has gone to 68% in the first half. So already, these 2 ports have seen a good growth in rail coefficient.

And sir this Mundra rail coefficient would be at right now?

27%.

Bhoomika, I think now everybody is saying -- I was telling one of the, somebody has been asking me, some operator announced very creative services where somebody is talking about doing something with [indiscernible]. These are all marketing gimmicks. That's what I said then. So these figures now which everybody listen, that port share, it actually increased for [indiscernible]. So there are certain gimmicks out there. And then in the accounting of numbers then, somebody tries to show more market share because they do some 100-kilometer transits, 550-kilometer transit, which gives no revenue -- neither revenue nor profit. And mostly, it is -- give some cash profit, but overall, it is a net loss. So those things we don't adapt to. That is why somebody increase show something -- because we ran the statistics, it is really a numbers game. But in original, the revenue earning and the margin earning figures, we are picking up the share where it matters.

Fair point, sir. Fair point, sir. Sir, just one thing on domestic. We've clearly seen a very sharp improvement in revenues, volumes handled and also in terms of the margin profile. Now obviously, there's still some gap between EXIM and domestic. How much scope do we have to kind of scale up the domestic margins? Or is it [ actively ] going ahead?

Someone followed up before asking this question. I have given domestic margin for H1 as 5,000...

65.

And 65. And EXIM margin for H1 is INR 5,322.

Yes, sir. So is this driven...

[indiscernible] margin now. We have taken certain measures in domestic which already -- we -- in fact, there is good margins this year in domestic. Particularly, what we did is we converted all our rates into [indiscernible] rates that is a technical term. Basically, it is 68 tonnes carrying capacity. So all domestic rates are now 68 and carrying capacity rates. And all containers, we are now -- we procured [ 24,000 ] new containers in the last 3 years, which can carry [ 51 ] tonne of payload. So these things are in domestic, they are picking up good margins and we pushed our margin. Now further what can be increased through that? As of now, I think we almost held up our margins to a very nice figures. Per container 5,960 [ capacity ]. So now the aim of the company is to wait in these margins in domestic.

Okay, sir.

Don't forget the competition is road, not to the other rail operators.

Okay, sir. Just my last question is on lead average lead distance for both EXIM and domestic.

What you personalize this conference call?

No, sir. Last question, sir.

What is the question?

Average lead distance for EXIM and domestic?

Average lead for EXIM for first half is 704 kilometers; domestic, it is 1,400 kilometers. Total [ 793 ] kilometers.

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

Just wanted to ask the price hike which we've taken INR 1,000. Is this over and above the congestion surcharge that we had implemented at TKD?

Yes. This is INR 1,000 from 1st October.

I think TKD is [indiscernible].

That is -- yes, concession was only at TKD, but this is on pan-India.

Okay. So TKD, we had taken a surcharge of INR 5,000 on import containers, if I remember. Is that correct?

Yes, that was a long time back.

Okay. So that continues?

Yes, that is still continuing, only [ INR 40 ] .

Okay. And sir, when do you expect the electric locos to start running on the Palanpur route -- I mean from Rewari to Palanpur because I believe you're running on diesel locos now because of the substation not being fully functional.

Do you see any advantage on running electric?

So I think, to my limited understanding, sir, you can carry more wagons because the weight-carrying capacity goes up and also the speed increases.

I'm telling you there is no difference as far as we are concerned. If we are not railway technical man. There is no difference between diesel running and electrical.

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

Just one question, sir. In the last 1Q conference call, you had mentioned that with the [ surrender ] of terminals, et cetera, maybe the LLF can also reduce to INR 375 crores. But right now, you mentioned INR 450 crores and 1H provision has also been...

I never said [indiscernible] we are maintaining right from our first call after the last financial year during the financial results. We said this year this is INR 450 crores. [indiscernible] you might have seen 80 now. Today we are carrying INR 375 crores from the round figures. [indiscernible] then INR 450 crores at [indiscernible] which has been calculated right in the beginning of this financial year. And accordingly, we are making the payment.

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

Sir, how significant is our Nepal-Indian-Nepal per volume for us? There was some article, so thought to get clarification from you. And how is the competitive situation there?

Yes. See, the volume and the revenue from Nepal movement used to be very -- put it in percentage terms, maybe it is around, I think what, 1%?

Less than 1%.

Less than 1%. And profit also less than 1%.

[indiscernible].

So yes, there is competition now the sector opened up. So we also -- we announced the company to raise there. So we got our long-term strategy of doing something within the Nepal moment. It is very [ insignificant ] within the [ industry ] and on the balance sheet.

Got it. And can we get what was the empty running cost for this quarter in terms of rupees crore for EXIM and domestic?

So it is -- for this quarter, INR 23.59 crores is for EXIM and INR 45.83 crores for domestic, and total is INR 69.42 crores, and this is lesser than Q1 of this current financial year.

And sir, last question to repeat. Sorry for repeating, but I missed the originating volume. So can you just say it?

Yes. For Q2, it is EXIM 518,986. Domestic, it is 90,280. Total 609,266.

The next question is from the line of [indiscernible] from [indiscernible] [ Life Insurance ].

Sir, based on the DFC, how much more growth prospects we see? And how much we are yet to see the growth prospects when the DFC becomes fully operational? And in next 2, 3 years, what kind of a growth traction we'll see in DFC?

See, DFC transit assurance and as well as less transit time. So [ trains ] started slowly picking up. As we have given the guidance, the DFC become operational. Now it is operational but to port Mundra and Pipavav. So with this, the growth, what we are expecting will be around 10% on overall volumes. Now DFC becoming fully operational is connecting the Dadri as well as JNPT. So that may be any time so what the official targets given is, I think, next year, July. But we don't -- I don't want to comment on that. But whenever that happens, there will be further growth of 10% to 15% on overall volumes. Now I'm talking about overall volumes. That is different than what growth we get in this sectoral volumes of not -- wealth sector. On an overall volume scenario for CONCOR, it will be 10% more now and when the entire DFC is completed, there will be further growth of 10% to 15%.

Sure. And sir, just started with this new services, the container service. Do we see incremental growth because of that? Or it will only address whatever the market share we might have lost in the Ro-Ro?

I did not get your question. You are talking about Ro-Ro?

Yes. [ I'm talking about ] train services, which we [indiscernible]...

Ah, Ro-Ro. That's called Ro-Ro. See, Ro-Ro is a different market. Ro-Ro has nothing to do with the container transport market. So there is no correlation between that and rail.

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

Just one thing. I remember in the last call, you had mentioned that there is -- there could be a possibility of taking a loan, a short-term loan of INR 2,500 crores for making onetime payment of LLF, for the railway for the 24 terminals that we have. Is there any update on that?

See, that is what somebody asked me the finance secretary made some comment about the land. But to tell you this, the land policy is still under finalization with the government. Unless the land policy is finalized. So this issue will be work in progress. Once that is completed, then the long leasing of these 24 terminals or 35 terminals with upfront payment will be discussed. And I estimate, what I've given you is if that happens, this will be [ a different ] figure. So let first the government decision come.

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

Sir, can you share us a rail freight margin for this quarter?

Yes. The rail freight margin for this quarter is 28.33%.

28.33%. Is it?

Yes. Yes.

And sir, a bit of hypothetical question. Apologies in advance for that. Sir, you alluded that unavailability of containers did impact your volumes. You could have done much better volumes. Sir, is it possible to quantify a bit? Like how much higher volume would have been possible if situation would not have been bad? And sir, at the margin, is the situation improving for you?

Is the situation improving now on our margin?

Yes, yes. So in Q2 compared to what you faced during -- Q3 compared to Q2?

[indiscernible] since now imports started coming to India. So we expect that because the India still before -- pre-COVID, it was import-heavy country. We used to get more containers in imports than what we used to export. So there used to be empty repositioning out of India. Now we are getting less imports, and we are doing more exports. So we are having shortage of containers. Now if you ask me of the tough remarks on what would have been additional numbers, maybe 10% will last in export volumes. So that's a -- another 10% on export volumes; 10% of handling also because either empty containers would have moved in quarter or more. So the situation of not having any container shortage, we would have got over 10% extra volumes in EXIM and so a growth of 18% to 28%. Now Q3, Q4, let me not make any guess. I hope things should be better because now the economy is picking up.

The next question is from the line of Lokesh Garg from Credit Suisse.

Basically, referring to earlier question, wherein you shared pickup that could happen on back of DFCC. What you shared is that basically, there is 10% type extra growth, extra to sector that has happened on back of the DFCC portion which is already operational. And perhaps there is additional 10% to 15% that could happen once the remaining portion of the DFC gets connected, which I sort of just rephrase it that basically Mundra will position...

[indiscernible] to my answer, yes. Don't try to put my answer in your own words. I said the growth is expected because of the DFC connectivities in Mundra, Pipavav is 10% on the overall volumes. That is a work in progress. I never said that already growth has come. Now the growth started picking up. The effect of this will be 10% growth in the volume. So that we will see. We are seeing the growth in volumes. And once we complete DFC's mix, there will be impact -- that other than 10%, 15% growth will come. So this will not be -- today, we have not achieved it. It is coming, picking up. [indiscernible] speaking.

[indiscernible] to earlier data shared by, in the call, wherein you said that Mundra rail coefficient has moved from 25% to 27%; and Pipavav from 61% to 60%. I was linking the 2 together, seeing that some part of it has been achieved already.

I agree with you. That's why I'm telling, it is a work in progress. If you say that 10% we achieve now, no, it's not achieved. It will be achieved. That is the potential of the DFC connectivity in Mundra.

Thank you. The next question is from the line of Rohit Ohri from Progressive Share Brokers.

One question, which is related to the speech, which was in the AGM. You touched up on saying that you are moving towards implementing artificial intelligence. So sir, can you take us through what are these emerging technologies? And how will it benefit us?

The artificial intelligence is giving the customer data completely as well as the online and realtime about their operations in our terminal. So there, when we do this, we use artificial intelligence in understanding customer preferences and the customer needs. So there are 2 steps in this, this program. One is providing the customer time visual data to look at the operations being carried out on their cargo. So there will be no [ revenue ] nor leakage of cargo anywhere. The company will never be blamed about wrong handling or anything because the customer can visualize whatever operations we are doing with their cargo. And when we process the cargo, which is there are a lot of operations that happens in the terminal, we'll put them into one warehouse, take it out, stuff it, we unload and some space is occupied. So our operations, we now optimize based on the analysis of all these things through AI. So AI used to optimize the things -- optimize the operations within the terminal..

Okay, sir. So we are looking at reducing the human errors is what you're saying?

Yes. Human error, increase in efficiency, increase in transparency, increase in customer satisfaction. These are all not directly -- you will not quantify them, but there are always the factors for increasing revenue share and attracting more customers. That is the catalyst for the [indiscernible].

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

Just one, what would be the volume mix at the ports during the quarter for CONCOR?

Yes. it is JNPT 32%; Mundra port, 39%; Pipavav, 10%; Vizag, 7%; Chennai, 6%; and others are very small volume.

Okay. And sir, on CapEx, we maintain the INR 500 crore CapEx guidance for the year?

Yes, please.

[Operator Instructions] The next question is from the line of Aditya from Kotak Securities.

I had one question on the transit time. From Dadri to JNPT, once the JNPT is fully on DFC, what will be the kind of improvement in transit times that you are envisaging?

Right now, it is around 35 to 40 hours. But after the JNPT comes on DFC, it will be in the range of 24 hours.

Okay. And the second question -- and is this the reason why the market would start growing for you? And the 10%, 15% growth comment, is it more on the basis of a better transit time?

Yes, this is one of the major reasons.

Understood. And again, I want to kind of clarify. When you say the 10% growth will happen because of DFC, because of Mundra and Pipavav becoming online, and then 15% add-on, are you suggesting that there would be a 25% growth impact in all from DFC? [indiscernible].

See, that growth will be DFC doing the better transit, shifting the -- cargo shifting from road to rail, and the natural growth which will come in India because of various government programs announced. And we expect them to give good results as [ make ] in India and some manufacturing apps shifting from other countries into India. And all these things, if put together, we expect this growth. So if you look at the model Share in India today, it is 20% by rail and 80% by road. And the government always wants the modern share to shift at least 40% to rail. So that's a huge shift which government is also working on. So all these things will lead to growth. I think [ moderator ], I think if there are no further questions, we can call for the conference to [indiscernible].

Sir, We have one last question. The next question is from the line of Achal Lohade from JM Financial.

Just wanted to ask in terms of the MMLPs. A, how much of the work is still pending? And B, how do we see the contribution? When can we see the contribution starting from MMLPs? I'm talking ex Kathuwas, because Kathuwas is already kind of reflected from what I understand. That's for the all other MMLPs, sir.

Your question is about MMLPs? [ Do you have ] MMLPs?

Yes. In terms of the MMLPs. Are we -- where are we in terms of the construction and commissioning? And B, the revenue contribution of profit contribution, if any?

Yes. I think this is answered many times in my conference call which is we do is what we do is we [indiscernible] develop, we do a commercial phase where commercial use of those developments. We don't wait for the MMLP to be completed. So there is -- and our work in progress is very less. Normally, we don't keep this -- we are doing a INR 500 crores CapEx every year. Our work in progress will not be more than INR 200 crores. So that means we do capitalize and we do commercial [ exploration ] up to partially [indiscernible] products also. So I can't give you this figure what will be the growth in that figure and all. What is this natural growth, whatever is coming, and all that, there is many factors helping into it. So as of now, we are trying to develop around a 6 to 8 new facilities. There were some issues because of the COVID. Stock is inversed because of COVID restrictions. Now they are picking up. So very soon, we will be coming up 1 or 2 in [indiscernible] and one in [indiscernible] they are going to start. So they will give again further growth to the company.

I now hand the conference over to Ms. Bhoomika Nair for closing comments.

Yes. Sir, I would thank you for your time and to management, for giving us an opportunity to host the call. Thank you very much also for answering all the questions very patiently. And to all the participants, for being there on the call. Thank you very much.

Thank you very much. On behalf of DAM Capital Advisors, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.