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

Ladies and gentlemen, good day, and welcome to the Container Corporation of India Limited Q4 and FY '22 Earnings Conference Call hosted by DAM Capital Advisors Limited. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Bhoomika Nair from DAM Capital. Thank you, and over to you, Bhoomika.

Yes. Thank you, Tanvi. Good morning, everyone, and a warm welcome to the Container Corporation of India Q4 FY '22 Earnings Call. We have with us today the management being represented by Mr. V. Kalyana Rama, Chairman and Managing Director. I now hand over the call to him for his opening remarks, post which we'll open up the floor for Q&A. Over to you, sir.

Thank you, Bhoomika, and good morning to all my friends analysts, investors. I am having with me here, all my management team, Director, Domestic P.K. Agarwal; Director, International Marketing and Operations; Sanjay Swarup; and Director of Finance, Manoj Dubey with me. And let me, first of all, share with you that we are happy to come out with good numbers. And we are back from the effects of the pandemic. And the last year, we could see the volumes, the revenue grow very healthy. Almost all quarters, all months, we had record. We were having the best ever turnovers in all the months, in all the 4 quarters. The trend continued. And overall, in the year, we achieved a very good operational income that all of you might have seen from the results that we had net operating income of almost INR 7,600 crores. And also PAT, as I've given the forecast, the guidance during the last year's call, we've grown by 100%. This year, the PAT has come to INR 1,062 crores. And EBITDA almost, we touched INR 1,000 crores, a little less INR 2,000 crores this EBITDA. And the CONCOR team has really worked hard. As last year, we discussed the company was never closed for even a single day during the first wave of COVID. And during the second, third wave, what happened during this financial year also we never had any occasion to close down. All our terminals are working. Of course, there are some infrastructural constraints as a country we are facing. So our company is also having -- facing some infrastructure constraints. We are working on various out-of-box methods to overcome these constraints, particularly for the rolling stock and the containers. We have -- we added 24 new rigs last year. And now today, we are having 27 high-capacity rolling stock, which can carry 80 tonnes carrying capacity. As I was discussing with you, people that this 80-tonne carrying capacity wagons increase our changes of double stacking. And that happened. These double-stacking figures, we will be sharing during the conference. Definitely, people will be asking me questions about the number of double stack version. But overall, the double stack increased by 50%, 45% over the last year. We started operating double hub operations. So there is one hub with the Kathuwas, now the second hub at Swarupganj will become operational and we are doing double hub operations. Now JNPT is fully on the double stack map. In addition, even domestic containers also, we are now trying to bring in and do double stacking from Swarupganj to Kathuwas. So these are the new out-of-the-box ideas what we are bringing in. These things will improve our margins. So this year, the margin -- overall margin increased, of course, there is a slight dip in the rail freight margin because the repricing models, we changed a little bit during the year. We gave a lot of discount on the empty box movement from port to Hinterland that has given us very good volumes. In fact, the volumes increased by 3x. Because of that [indiscernible] more what we have announced. So we are continuing that scheme for this whole year. But overall, this has brought in more profits to us. So that particular one idea, if I talk about, the net effect of that idea is around INR 80 crores plus in my bottom line. Even after giving 50% discount on the movement of box into [indiscernible]. So we started some more VDS schemes this year to encourage more imports into our terminals. So the pricing changes what we did, which has brought down a little bit RFM but increased the overall operating margin is that we are making the earnings from terminals more pronounced compared to the rail freight. So that is a little -- a slight change in our pricing strategies. So the overall operating margin for the year, if I look at is gone up to 31.1% compared to 27% last year. So FY 2021, it was 27%. FY '21, '22, it is 31.1% overall operating margin. Whereas the rail freight margin has come down from 30% to 28%. So the earnings we shifted into the terminal earnings. And this is the hedge we changed. So that is making terminals more attractive, bringing in more value additional services, more other services, giving a complete basket of logistic service to our customers. We handled 4-plus million TEUs in this year. As I shared with you and this year, we are having ambitious value of touching 5 million TEUs. And one highlight here is Kathuwas, the hub what we were operating, we did 6.8-lakh TEUs in the financial FY '22. And this year, we are keeping a target to make it a 1 million TEU ICD. See this will be the first time, I think, in India, definitely, but maybe I have to check the records anywhere, 1 million TEU ICD is becoming operational. So this Kathuwas, this year, our target is to make it a 1 million TEU ICD. Rest all, I think during the questions, we will answer. And this year guidance, definitely, we will be adding at least 12% to 20% into the pack and in top line, again 12% to 20%, that is what we are aiming at. Because in domestic segment, we are seeing a good growth. The asset utilization has really gone during the Q4. And this year, we expect a similar type of growth in domestic and EXIM of course, it is dependent on export/import volumes out of India and the box availability. But overall, we could see the market is recovering very fast, and there is a lot of demand for exports. And so in tandem with that, we expect 10% to 12% growth in EXIM and maybe around 25% growth in domestic this year. That is what we are aiming at, having ambitious targets. And we are sure the company is now onto the growth path and next 3 years, we are expecting very good growth for our company year after year. And after 3 years, this company will be definitely on the next pedestal -- standing on the next pedestal to get into the complete logistics thing. Thank you. I think let me add one more thing before we open for the questions. The bulk cement, what I was talking of, now we started moving commercial -- we started commercial operations in that, be more commercially one or two trains. And this is going to give a very good volume. So let me give you a guidance on this. So people were asking me what is that volumes you can expect. In the next 3 years horizon, if I talk, as on date, we handled around 12 million TEUs -- 12 million tonnes, as tonnage terms in domestic. In bulk cement alone in the next 3 years, I expect the company to handle around 12 million tonnes. That is the potential available in bulk cement market. So it's a very good product we launched, and there is a good demand for it, and a very good product we come out with combining that bulk cement moment with cement movement, so it's going to be a revolutionary growth there in this segment. So that's what where we expect a robust growth in domestic volumes. Thank you. Now we can open up for questions.

[Operator Instructions] The first question is from the line of Ashish Shah from Centrum Broking.

So my first question is that in response to the withdrawal of discounts by the Indian railways, what would be the pricing action that we would have taken or proposed to undertake?

I think we already announced Ashish and there is the pricing. We passed on the increase in the fare to the customer.

Okay. So what would be the quantum, sir, roughly that we have passed on?

So whatever that 25%, what the railways people are on, the same thing we passed.

Okay. So it should have no impact on our margins?

Absolutely not.

Sure. Sir, second is, if you can just share the originating volumes for the quarter?

Yes, Mr. Swarup will give you.

Rating for Q4, for EXIM, it is 534,438 TEUs and domestic, it is 113,253 TEUs, total 646,691.

Sure. And just last one, sir. This quarter, if you see the employee expenses and the LLF, they seem to be a little bit on the higher side when I compare with the third quarter. So if there is any clarity if you can provide on the same?

Yes, yes. So just for your clarity, for apple-to-apple comparison, we have just deducted INR 72 crores that we provided for last year. So if I deduct that from last year, it comes to INR 352 crores. And whatever provisions we made this year because of good performance, the company, the PRP provisions goes up as well the medical provision and other actuarial provisions. So if I do apple to apple comparison, INR 352 crores has grown to INR 364 crores, which is 3.5% only. So that's the clarification for everybody to note. And this 3.4% normally, it is 10% growth every year in the salary, 3.4% is only because of the fact that attrition level is a little higher nowadays for [indiscernible] company. And we are not adding any further employees, although the productivity is going up. So that's the clarification.

Sure. And sir, secondly, on the LLF, that also seems to have gone up when I compare with the third quarter levels?

No, LLF has not gone up. LLF, we gave a guidance of INR 450 crores, and we did it INR 465 crores. This INR 465 crores has got some provision, okay. So there was a little -- and that the LLF, now the final papers are with government and something is going on. I can't now reveal what it is, but definitely it will be beneficial to the company. Once that is decided, these provisions will be adjusted in the current year.

Okay. So for next year, we should take INR 465 crores as a base and then grow it by 7%. Is that?

You should give chance to other people, you're asking.

The next question is from the line of Akhil Milani from VT Capital.

Sir, my question was relating to the container shortages that we've been hearing about for the past 1, 1.5 years. How does that exactly affect our operations, sir? That would be my first question. And my second question would be, I remember 2 calls ago, we had discussed, on the automotive side, we were planning some new sort of containers, and we were planning to put into that. So what has been the progress there, sir?

Your first question, this container shortage is in the EXIM segment, and that is liner containers we operate. So the liners, they were doing a lot of repositioning into India because Indian exports have gone up and imports how little come down. As a country, we were -- normally, we will import surplus. But suddenly, we became export -- import deficient and export surplus. So that has put us in the situation where there is a container shortage. That is why CONCOR, we gave that scheme of 50% freight rebate to encourage shipping lines to bring in more containers in the interline from ports. And there is on a very good result, as I mentioned in the opening remarks, the volumes have gone up by 3x. Looking at this, we expect shipping lines to bring in more containers in the India, and they are doing it. We could see in this year that trend is continuing, the repositioning is going on. So that the shipping lines have to bring in. Sometimes, these operational problems and the China ports are affecting India. Once that -- we hope that COVID effect will go away. Now recent news is that Shanghai has also become almost COVID free. Once these ports open up and China come back to normal, then again, the continued shortage not the problem in India. Regarding your second question, I don't think we never plan for any automotive containers. I don't know where from you had. I never mentioned this in my con calls.

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

Congrats on a good year. Sir, just 2 from my side. Firstly, on the volume growth, you mentioned 5 million tonnes as an outlook, that's about 20% growth. Could you split that into EXIM and domestic in terms of guidance? And secondly, on the rail haulage cost, in general, with energy prices going up, any risk to increase in rail haulage costs?

Deepika, I already mentioned about the rail haulage. Whatever the railways has announced withdrawal of the rebate of 25% on empty running and 5% on loaded running. We just passed down the actual increase in the haulage to the customers, okay? So there is no effect of that increase on our margins. And having done this railway, now let us see what railways is also very aggressive in their pricing nowadays. So I can't speculate on what railways is going to do. But we will not be taking any hit on the price increase by any real increase, that definitely we are working on that you could see from the present increase what we passed on the customers. Coming back to volume, the present year, we did 3.27 million in EXIM and around 8 million in domestic. So overall volumes, we did is 4.07 million. So in domestic, we are expecting 25% growth. So that will take us to roughly 1 million TEU in domestic and maybe around another we'll add 0.5 million to 0.8 million in EXIM. So overall target, we kept 5 million. So 1 million to 1.2 million in domestic and 4.8 million to maybe 4.6 million, something like that into the EXIM.

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

Can you help us with the market share at ports, at the key ports please, for FY '22 and FY '21, if possible?

That is real cofficient. At the JNPT is 20.8%, out of which CONCOR, if we deduct the short distance movement, our market share is 76.4%. At Mundra, it is 46%, and Pipavav, it is 52%.

And would you be able to help us with FY '21 as well, sir, in the similar fashion?

'21 in JNPT, it was same, 76.4%. Mundra, it was 43.5%. So it has increased. Pipavav, it was 49.8%.

The second question I had, if you could help us with the empties cost for EXIM and domestic for FY '22 and '21, sir?

Empty cost is for EXIM, it is INR 86.92 crores and domestic INR 207.13 crores.

Okay. And just one more question. Sir, you have highlighted that the scheme what you rolled out for the shipping lines to get the containers into the interline drove the volumes 3x. Can you help us in terms of the mix of these empty containers in our total volumes for EXIM, would that be?

Right now, I can't give you. Those numbers, we don't have. Because all the EXIM containers whichever come into our system will go as export loaded.

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

You briefly mentioned about double stacking to JNPT. So could you elaborate more on it? Has it started? And like what is the status of final connection of DFC to JNPT as of now?

I'm not talking of JNPT connection. I'm talking about JNPT bringing on to the double-stack map. That is what we are doing through Swarupganj hub. Swarupganj is near Palanpur and DFC. So we are bringing JNPT containers into Swarupganj and we are doing hubbing at Swarupganj and double stacking up to Kathuwas.

Okay. Okay. And sir, any color on when is this final connection likely, what are the current time lines? Do you have any color on that?

I can't guess it, and I hope you have to do a concall with the DFC CI.

Okay. And sir, I mean just the last one from my side. Any update on strategic divestment, anything that you have to share?

Strategic divestment is on the cards. And things are moving on. And let's wait for the government decision. The decision is of the government. The decision is out that the company will be divested, I think there is no change in that decision. When and what time lines we will be, I think, hearing very soon. Let's wait for that.

Yes. So obviously, last week, we saw that government has kind of decided not to go ahead with BPCL. So does it change the situation for CONCOR also?

I think I already told in clear terms, now why do I ask me. You're doing journalist or analyst.

Because it is quite vital for the company and the stock. So we need to get some updates.

You are analysts and I already said that the divestment is on the cards.

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

A couple of questions from my side. The first on the cement demand, which you are forecasting over the next 3 years. See given that the average lead distance of the end market is roughly about 600, 700 kilometers for the cement sector. And overall, right now, the domestic leads are at close to about 1,200 plus kilometers. So one can expect that the need will come off and in turn, the realization would come off. Is that a fair assumption sort of going ahead?

That's not a correct assumption. It all depends on the margins that we calculate. The asset utilization also has to be. And my lead is domestic lead is around 400 kilometers if I'm operating. So my asset will take more time to have a turnaround. So I will be doing 1 cycle maybe in 30 days, but whereas the lead will come down to 600 kilometers. I'll be doing rice maybe in 10, 12 days. By ultimately per container per year, what margin I will be earning that will be in tandem with what we are doing right now. So that is how we price and we work on. That is how operational optimization we bring in, in the system.

Right. And then given that the extent of rolling stock required to meet this incremental demand will be fairly substantial, so what is the quantum of reconnection you're expecting over the next 3 years to meet this demand?

Look, there are certain infrastructural constraints. So last year, we added 24%. And as of now, the approved program which I shared, I think, maybe a year back or I think maybe my '19/'20 call that we made a program to add 270 rigs in 4 years, out of that 24 got added. So still there are 246 rigs, which we plan and the procurement action is on at various stages. So that is regarding the rates. And containers we are working on. And company is planning to add anywhere between 50,000, they are large containers in the next 3, 4 years. We are working on various methods on that.

Got it. And so if -- regarding the terminals also, if you can highlight on any terminal additions you're likely to add more?

Last year, I think we added 2 terminals, and last FY added 2 terminals is because a lot of work slowed down because of pandemic and COVID effects. And this year, we are expecting to add around 5 to 6 terminals, and we are planning in another 4, 5 new terminals.

And sir, last from my side, if I may. The volume mix from respective ports, sir, JNPT, Mundra and also the lead distance and...

Third question, not very important. I will put you back to the queue.

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

I had 2 questions from my side. The first question was on the land license fee. So you had indicated that CONCOR has planned for going forward, long-term arrangement giving onetime payment to railways, is that plan still on? Or does it depend on the land license fee and the revised amount of it?

Sir, it is very much on. See, now we are waiting for -- see there are certain decisions to come from the government. And as I mentioned in the beginning, there are very positive moves going on. And very soon, we will hear. So once it comes out, then there's long-term lease, we will be doing it. It all depends on -- see that now the land license fee, what percentage we have to pay on year and long term. So we will be doing calculation. I think long term is any day, it is better. So we will be -- that is still on the cards. We are waiting for the final decision on the land license. But let me here to avoid further questions from all the people, I hope everyone is listening to this. There is a clear clarity on land license. As we mentioned last year, I gave a guidance of INR 450 crores. We made payment less than that, but we provided some amount and met INR 465 crores in this balance sheet. That is as a part of good governance, not to give any uncertainty into the balance sheet in future in case of any divestment or any other thing, anything. There are no speculation on the balance sheet. So otherwise, so there is a clear clarity. And there will be definitely something we are going to hear from the government that may be beneficial to the company.

The second part -- second question is related to DFC. What I wanted to ask you was, what steps need to happen on the ground so that the benefits of DFC start becoming more meaningful for you and probably some time line for the same?

Already DFC benefits we are seeing. See, the number of double-stack trains have gone up by 45% in the FY '21, '22 compared to FY '20, '21. So this is -- and more and more traffic is coming on to rail. There is a shift happening from road to rail. And also I mentioned about the high-capacity wagons, which we introduced, 27 rigs are running, which can be 80 tonnes. So that is giving more opportunity of double stack. So further DFC advantage will come once Dadri gets connected, and JNPT gets connected. Once Dadri gets connected, the advantage will increase. And once JNPT connected, it will further go up.

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

Congratulations, sir, Mr. Kalyana Rama on good set of number. Have only one question, I joined little later. If you have replied, then I'll go through our con-call traffic, See, what is our strategy over the domestic logistics business, which we had planned, we are seeing some good trick. So how do we see in near 3-year term perspective domestic business? If you can give some color on strategic thing as well as the growth opportunity?

Bharat ji, I see domestic, as I said, the volume growth is -- we are expecting very good growth because of the bulk cement what we started. As we mentioned, we are expecting 12 million tonnes of traffic in that alone. This year, we added 12 million tonnes entire domestic. So there is the organic growth in the existing market plus a new product of domestic bulk cement is going to add. So there after 3 years, where I'm seeing domestic volume is plus 25 million tonnes. That's a good number, okay? See this year, we did total 48 million tonne out of which 12 million tonne is domestic. I'm seeing after the years would be 1 million tonnes. That is one thing. So in domestic, again, in domestic and EXIM, we added FM and that first mile, last mile and there is a good growth in that activity. So connecting the end-to-end solution. So we are expecting that also will further increase. Our aim is to cater to 50% of the market through our FMLM. I think we are working towards that. We are trying to bring in some new things into the FMLM segment. We are working with some OEM equipment people, thing like LNG transportation. So these are new ideas we are working on and CONCOR is definitely is at a place -- is at a stage where we can bring in new things into the market. which will be beneficial for the company as well as to the customer. The other thing, which maybe you are trying to understand is the distribution logistics business. So there was some effect on that is because of the COVID. Recently, I think we floated a tender for 2 locations, and there was some response to that. So we are working on that. So I think it will also will come through because that -- now the COVID effect has gone out, and the market is now picking up. I think there's a good interest for the warehousing and the supply chain management business, [indiscernible] logistics in the market.

Sir, I mean, on cement side, can you give some geographies, which are the geography and how this DFC will play out for us in domestic also?

Domestic [Foreign Language] DFC, cement business [Foreign Language] DFC may not play much role. But what we are trying to do is the traffic which is moving from west to east, we are trying to bring it on to DFC to do some double stacking between the hubs. As Swarupganj and Kathuwas, even domestic containers, we can do double stacking because they are the double of operation and we got that higher capacity wagons of 80 tonnes. That will give us the chance to do bring in domestic containers into double stacking, that we are working on. So that is only the effect of DFC on the domestic business. There are cement is now cement market, the well driven market is available all or India. It is not any specific regional wise, there are cement factories in West, South, East, I think North there, not much, not we will be bringing in cement from other places.

And how do we see the profitability with volume going up?

As I said, no, the margins will be in tandem with what we are getting now in domestic as well as EXIM. We don't go for a kill in the margins. We want to steadily grow the market and increase the volume, market share and that will funding our profits.

So is it fair understanding that in next 3 years, domestic will grow at a faster pace than the EXIM?

That is what I'm telling, Bharat ji.

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

Sir, would it be possible to share rail coefficient numbers for Mundra? And in your assessment, sir, what this number on that?

We already given an earlier question.

I think that was CONCOR market share in Mundra, I think, sir.

No, Mundra -- rail coefficient was told at that time. And rail coefficient is, what, how much is rail coefficient, 27.47% is Mundra coefficient this year compared to 24.85% last year. And Pipavav is 68% compared to 63% last year.

Yes. And sir, more importantly, sir, in your assessment, sir, if we go into 4 to 5 years in future, what this number could be for Mundra particularly? Is there a substantial scope for the number of rail coefficient can go to closer to 45% level numbers based on the cargo?

In Mundra, the DFC, if it gets connected up to Dadri, this may go up to the 35%.

And sir, last one from my end, sir. There's this Gati Shakti scheme of Indian Railways where they plan to develop 500 multimodal terminal. Is there opportunity here for CONCOR or it's more of a non-containerized cargo that Indian Railway does for themselves?

CONCOR has got its own terminal all over India, and we are self-efficient and we are showing the growth. So if there are opportunities available in Gati Shakti, we will definitely try to utilize them also.

The next question is from the line of Ashish Shah from Centrum Broking.

Sir, just one question. What would be the CapEx plans for FY '23? And if you also can give some medium-term perspective, less over the next 3 to 5 years, what is the kind of CapEx that we should expect?

This year CapEx, we have given a target of INR 620 crores, but our CapEx infusion requirements are very high. So there are certain constraints because of government policies like China water policy and all. So we are working on various models. Once they come through our CapEx infusions will be very high. So next 3 years, if I look at CapEx infusion, the CapEx influsion in the next 3 to 4 years will be around INR 8,000 crores. INR 8,000 crores to INR 10,000 crores.

Okay. Sir, could you broadly highlight if you could split this INR 8,000 crores into 2, 3 main buckets where we will be spending?

We will be spending on infrastructure, rolling stock, containers and equipment.

The next question is from the line of Sumit Kishore from Axis Capital.

Sir, in your opening remarks, you mentioned that in the next 3 years, you will see the company would be standing on the next pedestal. We also mentioned that you'll have a more well-rounded offering in logistic. So could you please elaborate and maybe chart out the 3-year strategy plan for us?

I already mentioned a lot many things what we are going to do in the next 3 years. So 3 years, I talked about domestic business, achieving volume of 25 million tonne in rate-wise. And the volumes handling this year itself, we are targeting 5 million TEUs. So that will further go up. We are trying to make Kathuwas a 1 million TEU ICD, which is first anywhere not in India, maybe in Asia, I have to check up the statistics elsewhere. And DFC getting completed and getting connected to Dadri and getting connected to JNPT. And we are inducting more rolling stock of higher capacity. Getting into a logistics business, we're already doing FMLM, connecting, and we are now also giving business solutions which is a complete solution to a customer, right, from picking the cargo at the doorstep and putting container on to the ship are delivering the cargo at the other end in India. So these things have already started. We are working on -- we are doing them, but they are on now low scale. They will definitely, see we will be scaling up these things. And we are getting into 3PL business, the domestic, distribution, logistics. We floated the tender for 2 locations and our idea of making 20 hubs is still on, and there's a lot of interest in the market. So all these things are going to happen in the next 3 years, 3 to 4 years. So I kept the target of 3 years for the company. So after 3 years, and we had all of this and this definitely is keeping the company in the next pedestal.

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

The question, sir, that I wanted to ask you was related to the haulage rate. Now Indian Railways may be considering taking a hike given the way and these prices have moved up. So in the past, such hikes have been arbitrary and quite high. Is there any confidence that you're getting from the railways that things would be different this time around?

Already Indian railways announced the hike now, which is effective from May 1, it was affected. So they already announced 25% empty running, we have drawn -- and 5% domestic discount they have withdrawn. So that is already [Technical Difficulty] more than that, I can't speculate on what railways is going to do.

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

Just wanted to confirm one thing. You mentioned that the CapEx over the next 3, 4 years would be about INR 8,000 crores to INR 10,000 crores?

Yes. That is what the capital inclusion required in this company.

So this is excluding the long-term lease to be paid towards the Indian release facility. So we would take an additional debt for this CapEx. Is that the thought process?

For the CapEx requirement for the next 3, 4 years, if I spend INR 8,000 crores to INR 10,000 crores, I think mostly is from internal generation.

So this includes the Indian railways LLF, lease advances can be likely paid for the longer term?

No. This is other than lease. This CapEx I'm talking of is not of a lease. Lease is something that is a lease long-term lease, then there will be no LLF payment for next 35 years.

Understood. Okay. And second question from my side on the bookkeeping question with respect to the volume mix of CONCOR from respective ports and the distances double stacking?

You asked everything in one go, you ask specific what do you want.

Okay. So then I would request for volume mix from port.

JNPT 32.3%, Mundra 40%, Pipavav 10%, Vizag 6%, Chennai 5.7% and Calcutta 1.3%.

The next question is from the line of Jonas Bhutta from Aditya Birla Mutual Fund.

Just circling back to the CapEx numbers because the last 5-year average run rates have been more in the INR 800 to crores INR 1,000 crore band there. Now it seems that that's sort of getting bumped up, given that we have a cash balance of roughly INR 3,000 crores, and we generate about INR 1,400 crores, INR 1,500 crores each year and provided that if you pay this onetime LLF payment, then wouldn't that warrant a debt take on for the CapEx? And also when you elaborated.

I think I answered this question. If I look at my CapEx infusion of INR 8,000 crores over the next 4 years, 3 to 4 years, I may not require any debt. So if LLF things comes out, yes, there will be debt requirement. Let it come out. So why we should do a lot of speculations. See, that is your job, isn't it? As analysts, you do your permutation, combinations and do a lot of iterations. I don't do that iterations. My thing is CapEx infusion, I need around INR 8,000 crores to INR 10,000 crores, which I am planning. Maybe that doesn't require me any debt. I can do it through internal resource generation. So in addition, if land license will come out and I decide that I have to pay 4 years long-term beneficial rather than paying every year after the government decision. That definitely I will maybe go for that because that will avoid me paying LLF for the next 3 years for this company. So that, again, sales money from LLF which I'm paying today, this year I paid INR 465 crores. So there are various calculations, the iterations isn't it. I answered -- the question was for the CapEx of the infrastructure rolling start, containers and equipment is around INR 8,000 crores, to INR 10,000 crores.

And out of this rolling stock and containers put together would be how much, roughly? If you said is that 245, you need to 245 more rigs and about sorry, 50,000 to 1 lakh kind of containers, how much would that be sort of 50% of that down?

Numbers, you do the calculations, why you want everything to be done by CMD of the company. Each rig costs around INR 14 crores, INR 15 crores, each container is costing roughly around INR 3.5 lakhs to INR 4 lakhs.

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

Just one question, sir. I mean in one of the earlier questions, you said that it's -- it looks like almost a certainty very soon we'll be hearing about divestment. On the other side, we are increasing our CapEx so significantly. I mean there is clearly a mismatch because why would the existing owner want to incur so much CapEx when the new owner will take the direction of this company wherever they feel rightly so. So if you could just help us reconcile, one, the owner is changing and second, such a significant CapEx is right now being planned. How does that work?

Pulkit, this is your perception, okay. Now I'll look -- I'll listen to my perception. So whoever may be the owner of the logistics business, logistics is a particular way of doing businesses. Logistics can't be done in a different way. There are something completely 180-degree opposite method of doing logistics. Whoever is going to buy CONCOR or CONCOR will be PSU. I do not know at this moment. So CONCOR will be doing the operations in the same method because these are the best proven methods, and we are able to produce the balance sheet quarter after quarter, year after year for last almost maybe 10 years now. So CONCOR is always profitable. So do you think there is other exactly 180 degrees opposite method of doing logistics business, definitely no. So whatever may be the decision, these plans will be holding good, and everybody will be looking at these plans.

No, sir. Sir, my question was that a new owner may already have certain assets, may already have presence at certain locations.

Let us not get to the speculation. This is too much of speculation you are trying to.

I'm not -- I'm just trying to understand from a thought process perspective.

That's what I'm telling you, by anybody is going to do logistics of CONCOR, if it is a PSU, it will be run by me for some time, after me some other will become as CMD of this, will run. So when we are talking of the future of this company, this company will be definitely taking these steps to increase and get on to the next pedestal and becoming a complete logistics solution provider.

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

Can you help us with the lead distance for the fourth quarter and FY '22?

Quarter wise we are not having lead business right now. For the yearly distance. In EXIM, it is a lead distance is 692 kilometers, domestic is 390 kilometers and combined is 785 kilometers.

And how would that be so for FY '21, if you could also give a comparable?

FY '21, EXIM, it is almost same, 697, domestic, it was 1,378 and total 778.

Understood. And the double stack number, sir, please?

Double stack, there's a growth of 45%. And I will give you the yearly number, this FY -- in '21, '22, we did 3,757 double-stack trains compared to 2,574 last year.

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

Sir, my question has been answered.

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

I think they must have completed their question. Now that we are getting repeat of the same people.

We have a question from Girish Achhipalia from Morgan Stanley.

I just had one question on the long term. You've given a CapEx outlook for 4 years. Is it possible to provide some direction on the revenue asset turns in the fourth or the fifth or the sixth year and some divisional split in terms of city operations and MLPs that you look at and other logistics initiatives that you're looking at, some revenue split at that level and some asset turn guidance?

Forecasting is too much of dissection is not good, Girish. So definitely, the forecast when I give you this is we are looking at making these volumes to 5 million this year, we are targeting. So after 4 years, we will be targeting something like 6.5 million to 7 million. So you can understand what will be the revenues. The revenue -- the operational revenue, we are definitely looking at doubling it up in the next 3 to 4 years. That is what we are aiming at. The rest of the things will be as I said, margins will be in tandem with what we are doing now. I don't want -- I don't expect the margins to really go up because we are operating at a very high an EBITDA operating margin of 31.1% is a quite high margin in logistics.

Sir, any direction on the revenue for the new logistics initiatives that you would be looking at in terms of how much could that contribute in the percentage of revenue, would it be like 20%?

I'm not giving you those forecasts right now because these are the new initiatives we had to roll out and work on. So definitely, they will contribute, let's say, like this okay. So overall, there will be a good contribution basis. So I gave you where I can give you a definitive figure like bulk cement transportation, we will be looking at 12 million tonnes transport.

The next question is from the line of Koundinya N from JPMorgan.

Sir, a couple of questions on the domestic business. So firstly, on the margin front, I see that for the margins are little of I can understand there can be quarterly volatility. Just trying to understand if there is any one-off thing or what would be the run rate that we should look at from a domestic margin perspective?

See, P.K. Agrawal, Director, Domestic. See, we have been keeping off in Denton with this earlier margin. And if you'll see the percentage of of operating margin for the domestic, it's almost around 20% to 22%. So we'll continue that. quarter, quarterly, there will be some adjustment of certain investment which you can see there up and down, but we have to see the overall what is there in annual margin, which you can see that there is some [indiscernible] with that.

Understood, sir. And the second question, sir, on the domestic front, you did speak about cement. I was also trying to understand where we do we stand with respect to fertilizers and also food grains we are also trying to container this bulk cargo movement. So just trying to understand where we are currently on those?

Food grain, we are already into it, and we also have made already trial run of the bulk foot grain movement, and that is continuing. As far as fertilizer is concerned, there is no movement in the container because the most fertilizers are being run on the basis of that is -- I would say, concession or discount they get from Ministry of Fertilizer whereas for the containerized movement, there is no such concession available. That is why the fertilizer movement does not take as in the containerized movement.

Understood. Sir, lastly, if I may ask one more question. So on the CapEx front, you did speak about infrastructure. So just trying to understand container terminal expansion that we are planning. So we already have land, et cetera, on this front? Or should we also invest towards plan and for high CapEx here?

See, already is being mentioned by CMD that this year already we already learned which has been cure will be commissioning around 4 to 5 terminals and also another 4 to 5 terminals we are planning in this year, which led procurement will also will be going on in the current year. So that is the plan will go year-on-year basis, and we'll go for the land procurement for the new container terminals.

The next question is from the line of Rohit Ohri from Progressive Shares.

Two questions. The first one is related to the CONCOR acting as a custodian where you are trying to keep containers as warehouses. Can you take us through the rationale -- the risk and opportunity in this initiative?

See, as far as container as a warehouse, we have quoted the scheme toward the domestic container where basically, it is a part of the [indiscernible] logistics solution and people will not require to evacuate the cargo from the container and they will be a liberty to evacuate the cargo as per their requirement. And they can keep the cargo in the domestic container, that is already the scheme is on. And that in going future, that will be much more we'll be providing that service so that our overall logistic cost goes down and become more competitive.

Sir, can you share currently, how many terminals are capable of doing this service, at what price?

All the terminals are there and pricing is same. We will give you the inverter pricing across the terminal.

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

Okay. Thank you for giving us the opportunity to share our plans for the future, for the current year, how the company will be with all of you. I hope we will be able to come to the expectation of all my customers and investors and the customer value creation is always the motto of CONCOR. And with a lot of digitization initiatives what we have taken. And in fact, this year, we will be coming out with a visual based artificial intelligence model by giving more information on information to customer, real-time information about the activities of their cargo happening or terminals. So with all these initiatives, I'm very sure that CONCOR will be playing a very significant role, leading role in India logistics sector. Thank you.

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