Patel Integrated Logistics Limited (526381) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Patel Integrated Logistics Q4 and FY '25 Earnings Conference Call hosted by PhillipCapital India Private Limited. [Operator Instructions]. Please note that this conference is being recorded. This conference may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Harshil Shah from PhillipCapital. Thank you, and over to you, sir.

Thank you, Shruti. Good afternoon, and a very warm welcome to everyone. Thank you for being on the call of Patel Integrated Logistics. We are happy to have the management here with us today for a Q&A session with the investment community. Management is represented by Mr. Mahesh Fogla, the Executive Director; and Mr. Avinash Paul Raj, the Company Secretary. Before we get -- started with the Q&A session, we'll have some opening remarks from the management. Now I'll hand over the call to Mr. Mahesh Fogla for the opening comments. Over to you, sir.

Pleasure to welcome you all to the earnings conference of Patel Integrated Logistics Limited for the fourth quarter and as well as the financial year-ended 31st March 2025. Let me first thank you from my bottom of my heart to our host, PhillipCapital for arranging this con call. Thank you, PhillipCapital. Now let me take you through the operational highlights for the period under review. After that, I will give you the financial highlights. Let me first explain you the operational highlight. As we all know that we have a challenging macroeconomic environment, mainly due to geopolitical tension, ongoing tariff war, capacity constraint on both passenger and freighter aircraft during peak period, limited airport. In spite of all this, we have deliver -- delivered performance and --we're able to deliver a good performance. I need to say thank to all of my team members and to all the stakeholders in the company and maintained operational momentum across our core business segment. We are able to maintain the momentum -- and we are thankful for that to all the stakeholders, whether it is the airlines, whether the employees, shareholders, management, I thank all of them for that. We remain optimistic about the future of the logistic sector. In fact, we are highly optimistic about the future of the logistics sector. This is also because the government not supportive policy, whether it is by way of national logistic policy or the creation of infrastructure development by way of increase in the number of airport. Airlines are also given all the support to increase the number of passenger aircraft. So there, as you know also, there are a big number of orders have been placed by both IndiGo and Air India as well as Akasa Airlines. So will have in the near future significant increase in the number of aircraft, which I will explain how it benefits us. Further government has outlined a capital outlay of INR 30,000 crore by the -- through the Airport Authority of India for the development of the airport in India. And there are 1,000 new Uran route are getting developed, which will help in opening up new regional market and enhance nationwide logistic connectivity and we are being a pan-India company, we are very hopeful that as the connectivity improves, as the pan-India air connectivity improved, we will also get benefited as other companies being a first mover, definitely we will have advantage of that. This forward-looking infrastructure push supported by our own strategic initiatives has contributed to the consistent year-on-year growth and position us well to capitalize on the emerging opportunities in the sector -- in the air cargo sector. As part of our ongoing expansion and infrastructure development initiatives, we are very pleased to share with you that our Board has approved the acquisition of a 1-acre plot at Sanaswadi, very high growing area, Sanaswadi, Pune for the construction of a new warehouse. This is part of our expansion plan. Now let me share you some of the highlights of our performance for the period under review. For the full year-ended March 31, 2025, our total load volume each 57,001 tonne, reflecting a stable operational performance despite cargo capacity constraints and as I was explaining to you in the above, external economic challenges, macroeconomic challenges, macroeconomic -- not only economic, macro geopolitical challenges, tariff war also. In spite of all this, we able to get a good volume of 57,001 tonne. This also reflect our strength of our Indian economy. And one of the major market there, we are the major player in this area operation. But definitely, if our load remains stable, this prove that Indian economy is in a very good growth phase. Further, out of the 57,001 tonne, the domestic cargo contributed 48,878 tonne and international volume contributed 8,123 tonnes. Total domestic was 48,878 tonne and international 8,123 tonne. Total was worth, 57,001 tonne. And increase in the international volume definitely signify our growing presence in global freight forwarding. Further just to tell you, in spite of all the challenges, our overall volume remained broadly in line with the last year. However, our performance was significantly [ improved ] -- significantly improved by an 18% increase in average sales realization per kg. Our average sales realization per kg increased from INR 49.50 per kg in FY '24 last -- that is last year to INR 58.64 per kg in current year – in last financial year -- in last financial year under review – I beg pardon – in financial year under review that is FY '25. We have increase in the sales realization from INR 49.60 to INR 58.64. This improvement in under [ 4 hour ] shifts towards higher value cargo supported by focused customer targeting and disciplined yield management, enabling us to protect our turnover even in a competitive landscape. We are able to improve our turnover significantly due to that -- this which you can -- which you will able to understand further as I'm explaining you to our financial performance. Key highlights of our financial performance for the fourth quarter and the financial year-ended 2025 as under. For the fourth quarter under review that is the fourth quarter of the last financial year FY '25, our operational revenue grew by around 1% year-on-year to INR 87 crore and EBITDA margin reported at 2.42%. Net profit -- worth reported at INR 2 crore, which represents a growth of around 12% year-on-year and PAT margin stood at -- profit after tax stood at 2.19%. For the full year-ended March 31, 2025, we achieved operational revenue of -- for the full year-ended March 31, 2025. We achieved operational revenue of INR 343 crore, marking an 18% growth over FY '24. We have a increase in the full year turnover of 18%. EBITDA for the full year is INR 9 crore, reflecting a marginal 3% decline year-on-year. EBITDA margins were reported at 2.57% while our net profit due to control in the interest cost and other expenses increased by 38% year-on-year to INR 8 crore -- around INR 8 crore with a profit margin of 2.22%, with a PAT margin of 2.22%. So, as you can see, our net profit has been improved very significantly. Now since this is a full financial year under review also, so I am -- I will share with you some balance sheet number also, which will give you that clear picture of our financial position as on 31st March 2025. As of March 31, 2025, the company has a -- maintained a strong and disciplined financial foundation, which can be seen from our figure as under. Our total assets is -- our total asset are INR 168 crores. Net worth increased to INR 122 crore, reflecting healthy internal accruals and regular profitability. We have made significant strides in deleveraging long-term borrowing which dropped sharply to just INR 50 lakh -- INR 0.5 crore down from INR 9 crore last year. From INR 9 crore we are able to reduce our long time borrowing to INR 50 lakh or INR 0.5 crore. As well as short-term borrowing also we're able to reduce to INR 13 crore from the INR 16 crore last year. As a result, our debt-to-equity ratio is near now 0.11 compared to 0.20 in FY '24. This deleveraging marks a significant milestone in our financial journey and position us well for our future expansion, give us all the flexibility and the resilience in any downturn if in the economy or any -- if anything happen. So company has been made with read-free. We are all the time making effort to how to make the company read proof. On the liquidity front, we closed the year with cash and cash equivalent of INR 29 crore, reflecting ample headroom to fund operations and the growth initiative. We have last year trade receivables of, as you may recall, some of them who attended our regular earnings call that we have a trade receivables of INR 90 crore in the last year, which had been now reduced substantially to INR 68 crore, although there is an increase in the turnover by 18%, reflecting our continued focus on technology, credit control and collection. We had -- as I was explaining in my earlier con calls, we have developed a mobile app in the name of FreightPILL, so everything has been made the paperless, which also help us in controlling the things. Our investment property and long-term lease warehousing assets including the 99-year Bangalore facility continue to provide a -- us the required age by supporting its scalability without requiring heavy CapEx. We -- as you know, we also have a Bangalore facility of 2.2 acre. Further, in line with our strong financial performance as mentioned above and continued commitment to reward the shareholders who are very loyal shareholders, as I must tell, who have supported us all the time. We are very pleased to announce that the Board has recommended a final dividend of INR 0.30 per equity share for the financial year 2024, 2025. Again the earlier payout of only INR 0.10 per share almost aggregate 300% increase in the dividend payout. Overall, as a final conclusion, I can talk about we have a strong balance sheet, minimal debt, healthy cash reserve, rising net worth, above all, very committed all the stakeholders, the employees, suppliers, shareholders, dedicated team, management, strong management, very committed management. Patel Integrated Logistics Limited is well positioned to seize new opportunities, particularly in high-growth segment of air freight logistics, e-commerce logistics and multimodal distribution. Just to further tell you being a pan-India company, there is also just to -- we all know that we recently take the Indo Pakistan war, but being our performance got least affected being spread all over India and as well as international movement of the freight. With this, now I open the floor for the question-and-answer session. Over to Harshil.

[Operator Instructions] The first question is from the line of Sanjeev Damani from SKB Consulting.

Sir, really congratulations for a very fine set of numbers despite a lot of turbulence in the economy within India and abroad as well. Now sir, I had attended one of the con call before about 2 years, where you had mentioned that company has got certain land assets which are being cleared for monetization. So what is the progress there? Can I know?

Sure. This is Mahesh. Thank you for asking this question. I could -- [indiscernible] actually raise this point. Yes, we have a property in Bombay in major places of Bombay. Just as we are talking about, we have one complete building in the Khar area only. We are in active discussion with the developers also and multiple. But till the final agreement gets signed, we cannot put anything on the report. But as I can rest assured, we are in the process to do something for that. And as you were talking about the 2 years -- yes, 2 years back, we talk about that thing. Then because these things are like a life-changing or the game-changing opportunity. So we want to negotiate best. As a result, we don't want to make a hurry and desperate thing. And as we are talking about there are -- yes, there is some discussion going on behind the scene meetings are going on, but I could not talk anything because nothing is signed on the dotted line. But yes, discussions are going on definitely.

Okay, sir. And this is the only one property or you were talking…

No, sir.

Yes, one property with discussion going on. But as we are talking about, we have in the pan-India properties are there. As I'm sitting in the Bandra office right now, here also the first floor is a public listed company, entire 5,000 square feet floor in the public listed company. There we have -- Thane property there. There is a -- some in the Andheri also, some redevelopment of one area is going on. So we have multiple properties which we disclosed also in the balance sheet. As we can talk about when we evaluated our property we have in Bangalore also. So there -- if I talk about the market value of the property, definitely, as we are disclosing in the balance sheet last year also, it is a triple-digit figure, yes.

Sir, can I know -- I mean, what was declared value which was declared in the balance sheet? Or if you can express today the approximate value of the sum total of all the properties that we hold, whether really -- can we really monetize all of them? Or are we using it also for our current businesses, because the property that we are using today for our business will not be monetized? But if you have identified certain properties, like one in the Khar, for monetization, can you elaborate the approximate market value of all such properties? That is one question, sir. And secondly, are we also taking properties on rent for warehousing and all? So can you elaborate that how many places we have taken properties on rent for our warehousing purposes, which is required for running our current businesses?

What I was talking about was the triple-digit figure of crore in you, that is basically not a historical figure. That is the figure done as per the accounting standard, also because we have to disclose in our books of account also market value of the property. So the historical figure, definitely the book value of the figure will be depreciated, and all this will be lower only figure which I was telling you all over India is the market value only. And second thing...

Sorry, what I was only asking, you said a 3-digit figure, so it is certain INR 100 crores, something like you want to indicate …

Yes, that's only I was talking about...

Yes, sir. And you have the intention of monetizing all of such properties, which you have mentioned to be in 3 digits.

Yes. Sir, just to clarify you correctly, I got your question. In our operation, are very asset like operation, near [indiscernible] operations, we don't require a big [ godown ], okay? So this thing that I'm talking to all of them can be monetized. It will not affect our business anyway. It will very minimally used for [indiscernible] can be monetized externally, and they are not like us -- for that, any business getting affected.

Okay. Got it, sir. And now what are the prospects, what are the tie-ups that we have made for the current year, which will enhance our businesses over last year?

Sir, can you repeat the question, please?

Again. Sir, we've done business in last year. Now, are we adding more clients this year, whereby we increase our business, some sort of tie-ups where they'll give -- the customer will give that assignment always to us. Do we have that type of fixed assignment also, or we have to deal every inquiry and get business?

We are also continuously -- because we are a company, we don't want to depend on a -- on some of the customer or very few customer. And as you can see from the INR 90 crore debt, we have reduced it to INR 68 crore debt. So one of the objective is that we don't want to depend on a very few customers. We continuously increase our customer base. As we are speaking about you -- to you, we have a number of customers also increased in the last March month also. We increased the number of customers as well as risk mitigation, we want to spread our customer base. And your question about that how we get the customer and all this, we are a company which is -- can I take a 1 minute of you. We do business through the airline, and we take the load from all the e-commerce, pharma companies, whoever moves the goods through the air. We have -- as you know also, we have definitely a double-digit market share in that, correct? So we are continuously talking about adding the customers. And in the meantime, yes, there sometimes it happens also because it's a continuous process, 1 or 2 customers also will leave also maybe because of the credit issue or because of the margin issue, and all this. But net-net, we are increasing our customer base that I can assure you.

The next question is from the line of Ayush from [ sole practice ].

I just wanted to know in the airline, what is the capacity for cargo that we have? And how much of it can we use?

Sorry, I couldn't get your question. Cargo capacity you're asking for?

Yes, yes. And how much of it can we use?

Yes. Look, cargo capacity, like what we do, like you and me travel by the passenger aircraft of that passenger aircraft belly capacity we only use, okay? So, on that belly capacity, when we use like I'm talking about that we have last year done a total volume of -- in the domestic, if I talk about 48,878, okay? So that means roughly it is 50,000 tonne, you can safely multiply that one with a 10x -- and around 10x. So you can talk about that we have a capacity in the -- all over India around 5 lakh to around 5 lakh tonne. And capacity also varies because first priority is given to passenger load. If there is a passenger load or not, this is an add-on revenue for the airlines also. And then this cargo is getting loaded. So, as we are talking about that, there is a number of big orders are placed by IndiGo for 400 airline -- aircraft, like Air India also places a big order. Akasa talking about every month, every week, or every month, they are taking new aircraft. So, as the number of aircraft are getting increased, the cargo load capacity will also increase.

Yes, sir. Makes sense. Sir, also one more question. Can you help me with the EBITDA margins for International segment and the domestic segment?

Right now, I will not have, but we have a consolidated EBITDA of this figures are there, which I told about to you, just I will again repeat. EBITDA for the year stood at INR 9 crore for us in a turnover of the INR 343 crore. So you can talk about around the 4% margin.

[Operator Instructions] The next question is from the line of Sampath Nayak from Avira AMC.

So on your website, I can see, sir, you have ventured into a new vertical. So you have tied up with UFC Gym. Can you talk more about it?

Yes, good actually. But just to tell you, as we were talking in our earlier question and answer that we have multiple properties are there, like we have one property in Bandra, okay? That property was -- was remaining back end. So what we have done basically, we have tie up with the UFC and we have started a gym there. And just to tell you, basically, it is a rental, and we're getting a money, regular money from them. And it is operated by somebody else. So it is only because we had a listed company, we have to disclose all the things. But you can safely say we have no interest in running the gym business. It's basically a rental model for us. We are getting a rental from the gym business.

The next question is from the line of Harshil Shah from PhillipCapital.

What is the breakup of domestic and international volume for the Q4 and FY '25?

Q4 and FY '25.

For the quarter and also for the year.

For the year, let me speak you first of all for the year, domestic is 48,000 tonne for the full year, domestic cargo is 48,878 tonne, okay? And international is 8,123 tonne. And for the quarter it 11,266 tonne is domestic one --11,267 tonne, you can say precise and international is 2,099 tonne –--,099 tonne -- all figure are in tonnage.

And what volume growth are we expecting in FY '26?

Volume growth will definitely improve as the economy grows, and we are a pan-India company. We are targeting ourselves definitely, I'm refrain from giving any guidance, but I can definitely expecting the volume -- momentum to maintain.

So sir, as you had mentioned in your opening remarks, that business was affected due to the India-Pakistan issue. So, can you quantify the amount or something?

That's only I was trying to clarify just now because I just know before the call also, I checked with my team also, okay, we were expecting that because maybe there is perception is there because of India-Pak war, our volume was affected and all this. Luckily, because the airports, which were there, they were small airport. And being a pan-India company, we were not at all very, very marginally get impacted, not significantly. I want to clarify that point. That's why I raised it. And luckily, we are safe. We are not affected.

[Operator Instructions]. The next question is from the line of Kamal from [ Nueva ] Capital.

Congratulations on good results. I just wanted to know that now with the tariffs started coming in from last month. So, how much of the exposure do we have in the cargo going to U.S.? Because I see maximum more than 60% volumes are for international cargo. So, how much of our exposure in the U.S.? And how has the traction been over the last 1, 1.5 months since the tariffs have been in place?

No. Luckily, I have one -- in the paper also I mentioned luckily, we are more towards the non-U.S.A. Our movement are more toward the non-U.S.A. So we are not getting affected. But having said so, overall environment, as I talk about, definitely, the rates are getting increased because all of people want to move the good faster because there is a lot of uncertainty there. People don't know which route we will – which play the rate will increase, which play a decrease. So there is definitely rough is there. Rough is there. But in our case, luckily, we are not in a -- doing the U.S.A. movement of goods. We are more towards the non-U.S.A. movement of goods. So we are not getting affected. I'm talking about general environment, definitely like pharma, pharma getting affected because they are -- people don't know when the pharma tariff will -- increase. I mean tariff will be put on that pharma goods or not. There is -- rough is there.

So that means industry like pharma, where they are probably rushing in and sending more goods before the tariffs come in place.

Yes, because they think before the tariffs come up, and we never know when the tariff would -- before that they want to move the goods as much as possible.

Okay. So that will be benefiting us.

I'm talking about general economy, general logistics information which is there.

Okay. But as we are not into U.S. too much, so it won't have any impact.

No, no, luckily we don't have. Yes, rates are getting harder, just to tell you, rates are getting harder.

So that is good for us.

Overall rates are also getting harder... Yes, yes.

So, margins should be going up probably this quarter.

Well, it depends actually margin. But look, actually, yes, sometimes if rates getting harder, you feel the margin is getting improved. But overall, too much of high or too much or low, both are bad for the -- every stakeholder. It is always better to be orderly movement of the things are there -- then in the long term is viable. But otherwise, ultimately, cost is a big element in logistics. If people are feeling the cost is very high, they will go for alternative things and all this one. So my request and everybody --everywhere the request will be there, let have an orderly movement of the thing.

And how much of our turnover will be from e-commerce roughly?

Look, we are a company which don't depend on any particular thing. We move anybody who want to move the goods through the air, like whether the private, whether the e-commerce good or pharma good, paper document. So we are not depending on any one sector, and we don't track also that's the reason.

As there are no further questions, I now hand the conference over to the management for closing comments. Thank you, and over to you, sir.

Thanks all of you who have asked the question or who have attended this conference just hearing my remark, our remark. I am very thankful to all of you for participating in this earning conference call. I hope -- we have been able to answer your question in whatever way we could do that one in the limited capacity. If you have any further question or clarification, or you would like to know more about the company, we have also our Investor Relations agency Valorem Advisor, you can definitely reach out to them also to understand more about everything. We will be happy further. They can also reach to us for any clarification. So again, repeating, we have an Investor Relation agency in the name of Valorem Advisors. Please call them for any clarification, any questions, any issue you want to know about the things. Thanks a lot again for attending this conference call.

Thank you. On behalf of PhillipCapital India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Thank you.