Glottis Limited (GLOTTIS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the Glottis Limited Q1 FY '27 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to the management for their opening comments.

Good afternoon, everyone. Thank you for joining us for the Earnings Call to discuss our performance for the quarter ended 30th June 2026. We appreciate your participation and interest in Glottis as we begin the new financial year. The operating environment during the quarter remained mixed across global logistics and freight market. India's merchandise exports recorded growth during the quarter with engineering goods, chemical and electronic goods among the category contributing to the increase. At the same time, freight activities across the individual trade lanes remain uneven. In this environment, our focus remain on customer engagement, expanding our services capabilities and maintaining operational [ discipline ]. We delivered good growth in revenue during this quarter. Revenue from operations was INR 2,345 million, an increase of 39.5% year-on-year. EBITDA was INR 163 million with margin of 6.9% while profit after tax was INR 107 million with margin of 4.6%. The growth in revenue was supported by better realization and favorable business mix. Ocean freight continued to account for the majority of our revenue while the contribution from export and air freight activity increased during the quarter. This helped us grow revenue even though container throughput was lower. From volume perspective, our ocean freight container throughput was 21,841 TEUs during the quarter. The lower throughput was partially offset by better realizations and higher contribution of business mix, higher revenue per shipment. Looking at the business mix, sea import remained our largest vertical and contributed about 70% of our revenue during the quarter. Sea export increased its contribution to around 20% compared to about 15% in Q1 FY '26. The revenue from sea export grew at 83.5% year-on-year. Air freight also recorded growth during the quarter with air import and air export contributing around 2.8% and 2.1% of revenue respectively. Transport contributed around 4.6% of revenue, while the newly added warehouse business contributed around 0.04%. The improvement in exports and air freight contribution is part of our broader effort to build a more balanced business mix. We have seen opportunity to increase our share of customer retainment beyond traditional sea imports and provide a wider range of logistic services. From profitability perspective, the company reported EBITDA margin of 6.9%, the quarter saw [ a higher ] operating cost in line with increase in business activity while the overall pricing [indiscernible] remained competitive. We remained focused on improving the quality of revenue and maintain disciplined cost management as we scale the business. Moving to our industrial mix, renewable energy remained our largest industrial vertical and contributing around 13% of revenue during the quarter. At the same time, the contribution from other industries increased meaningfully. Consumer durables contributed around 10% of revenue compared to 7% in Q1 FY '26, while chemical increased to 7% from 2% in Q1 FY '26. This reflects the wider customer base we are building across different industrial and cargo categories. We are also seeing opportunities across apparels, autos, chemical, defense, engineering, pharma verticals and other industrial segments. Our objective is to increase the share of business overtime so that the growth is not dependent on any one industry. This diversification also allows us to participate in different trade and shipment cycles across the year. On the geographic side, Asia remains our largest region and contributed around 84% of revenue during the quarter. The region remains important for our business in terms of sourcing and manufacturing across -- activity across markets. Where our customers operate, we are also working on increasing our presence across other continents such as Africa, US and Europe trade corridors as we expand our customer relationship. Customer acquisition remains an important area of focus during the quarter. We added 260 new customers and our repeat customers were approximately 75% during the quarter. At the same time, the contribution from the top 5 customers was around 29% of the revenue. Lower concentration reflects the gradual diversification of our customer base and our efforts to build relationships across a wider set of accounts. Alongside customer expansion, we continue to invest in our operating capability during the quarter. We added 38 owned vehicles, taking a total owned fleets to 80 vehicles. The larger fleet gave us major control over first mile and last mile movements and help us provide more consistent service to customer. We will continue to add capacity selectively based on customer requirements and locations where we see sustainable demand. As we move ahead, our focus will remain on increasing customer coverage, improving our mix across sea, air, transport and warehousing and expanding our presence across industries. We will also remain focused on improving realizations and maintaining cost discipline as business scales. Our approach will remain measured with investments made in areas where we can improve service capability and support long-term growth. I would like to thank our customers for their continued trust, our employees for their efforts and our shareholders for their support. With that, I now hand over the call to our CFO to take you through the financial performance in greater detail. Thank you.

Good afternoon, everyone on the call. I will now take you through the financial and operational performance for the quarter ended 30th June 2026. Starting with financial performance, the revenue from operations for Q1 FY '27 was INR 2,345 million. This represents growth of 39.5% year-on-year and 19.7% quarter-on-quarter. Including the other income, the total income was INR 2,366 million compared to INR 1,682 million in Q1 FY '26. Coming to the operational profitability, EBITDA for the quarter was INR 163 million compared to INR 169 million in FY '26 and INR 105 million in Q4 FY '26. EBITDA margin was 6.9%. On a sequential basis, EBITDA increased by 54.8% while the margin improved by 150 basis points. PAT was INR 107 million with a margin of 4.6%. Coming to the operational metrics, TEU's handled during Q1 FY '27 were 21,841 compared to 26,278 in Q1 FY '26 and 31,402 in Q4 FY '26. Looking at the segment performance in more detail, sea import generated the revenue of INR 1,647 million and contributed 70% of our total revenue. Revenue from this segment increased 24.1% year-on-year. Sea exports generated the revenue around INR 467 million with growth of 83.5% year-on-year with contribution increasing to 19.9% from 15.1% in Q1 FY '26. The air freight business recorded significant growth. Air import revenue was around INR 66 million increasing 97.1% year-on-year. Air export revenue was around INR 50 million, increased 240.4% year-on-year. Together, the air freight business has contributed around 4.9% of this revenue during the quarter as compared to 2.9% in Q1 FY '26. Road transport revenue was around INR 107 million contributing 4.6% of revenue. Revenue from this segment increased 107.8% year-on-year. Additionally, the company also generated around INR 9 million from warehousing during the quarter. From the geographical perspective, Asia remained the largest contributor accounting for around 84% of revenue. North America contributed around 10% followed by Europe at around 3%. Africa and South America contributed around 2% and 1% respectively with the balance coming from Australia and other markets. Looking at the industry mix, renewable energy contributed around 38% of the revenue during the quarter. Engineering products accounted for around 8% while consumer durable contributed around 10% and chemicals around 7%. Our trade receivable days stood at 77 days at the quarter end compared to 87 days at the end of FY '26. So this reflects the beginning of the normalization we had flagged in our last call as our newer customer accounts move into the steady billing cycle. On our backward integration program, our own fleet strength in Q1 FY '27 stands at 80 vehicles up from 42 at the end of Q4 FY '26 and 17 at the end of Q3 FY '26. Container deployment will start from Q3 and we remain on track to substantially completing this CapEx program during FY '27 as guided in our previous call. We are happy to update that the reputed monitoring agency CRISIL has released a report stating that IPO proceeds were used as planned and there are no deviations. Overall, the quarter saw a meaningful increase in revenue and sequential improvement in EBITDA. The key operating trends during the quarter were better realizations, higher contributions from sea exports, growth in air freight businesses. At the same time, the increase in cost base impacted profitability. We remain focused on improving the operating leverage, managing costs and maintaining working capital discipline as the business scales up. As far as revenue is concerned, we expect it to exceed FY '25 numbers. With that, I conclude my remarks and request the operator to open the floor for questions. Thank you.

[Operator Instructions] Our first question comes from the line of [ Disha ] with Sapphire Capital.

Am I audible?

Yes. Madam audible.

Couple of questions. Firstly, on the international trade side, given again the geopolitical situation, what sort of impact are we seeing there and what sort of steps are we taking to mitigate that?

If you look at the geopolitical situation, the war in Iran, the U.S. and the Iran [indiscernible], there is a serious implication, especially in the supply side. So if you look at it geographically, [ blockage ] is from the Asian side right now. If you look at the overall volume that we process around, it goes to 84% of our major contribution comes from Asia. So there is an impact, but it's not like a major as we see with the other trades in the market. I would say there is a minor impact in terms of price, in terms of supply availability and all those things. But it is mitigated in the right way, ma'am.

So no major impact we see in terms of these freight trades and the vessel availability?

We see, but it is not impacting as much as we expected it to be. As a player, we are an Asian-dominated player. So major contribution comes from Asia, it contributes from imports, and the majority is happening from the Far East into India.

What sort of growth then can we look at for this year?

Sorry, ma'am.

What sort of growth are we targeting for this year?

Growth -- actually it's yearly targeted so we will be surpassing FY '25 numbers.

Sorry, sir. It is not audible.

Madam actually we expect that it will exceed our FY '25 numbers.

And in terms of our margins, what will be our outlook for this quarter? I think you were at around 7%? What is the...

So definitely, it will be -- we are targeting more.

Madam, can you hear us well?

Yes, now I can hear you well.

So margins, we are targeting a little more compared with the current quarter.

And what sort of CapEx are we doing for this year?