Patel Integrated Logistics Limited (PATINTLOG.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Patel Integrated Logistics Q1 FY '26 Conference Call, hosted by PhillipCapital (India) Private Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involves risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vikram Suryavanshi. Thank you, and over to you, sir.

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

Thank you, Vikram. A very good afternoon to everyone. It is a pleasure to welcome you all to the earnings conference call for the first quarter of financial year 2026 of Patel Integrated Logistics Limited. Let me first thank you, Vikram and his team from PhillipCapital for graciously agreeing to hosting the con call, and we are really thankful to them. Now, let me take you through the operational highlights for the period under review. After that, we'll take you through also the financial highlights. So let me take you through the operational highlights first of all. As we all know, there is a challenging global environment, marked by ongoing geopolitical tension, uncertainty, tariff. However, we don't want to distract by all of them, and we remain focused on executing our initiatives which we have taken up, and we are very much focused to achieve our goals. Operationally, we are well positioned to benefit from upcoming infrastructure development, as we know that, including the much-anticipated inauguration of the Navi Mumbai International Airport, which is expected to be operational by October 2025 as per the media report. And also, we are expecting in the UP also, one big airport going to be opened. These are all -- as we know, these are all part of overall government initiative to increase number of airports from around 140 to 220 airports. As we know, as the number of airports are increasing and airports have a cargo facility, it will definitely give us a boost to our business. And the development is expected to significantly increase regional air cargo volume, unlocking meaningful growth opportunities. We believe this will play a pivotal role in extending our network capabilities. And as we know, we are a pan-India company. So more and more airports are increasing, and so, our network also will increase further and enhancing -- and we will be able to enhance our service offering to the customer also. Customer will have more choice, and more -- cargo movement will also be faster, which in turn, supports our long-term growth and profitability. And very recently, we have also signed a new rate contract with one of the leading airlines in the Middle East, which will also help us to offer more competitive pricing to our customers and give our -- enable us more goods to move from India to the Middle East. This move is expected to drive our definitely international sales volume and further reinforce our strong market position. Now, let me go by the numbers, which are under the quarter under review, that is the June quarter -- quarter ended on June 25. To provide a clear picture to all of you, we classify -- as we know, some people who already attended our previous earnings call, we classify our business into 2 segments, domestic and international. Domestic segment includes goods movement within India through the air, while the international segment relates to export and cross-border shipment, means goods movement out of India. In that, our domestic sales volume for the quarter is 13,318 tonnes, slightly lower than 13,366 tonnes in the previous quarter and 14,535 tonnes in the same quarter of the previous year. Let me clarify in the outright, it is also a seasonal business. So quarter-to-quarter comparison may not be appropriate, although we are a growing company. So if I talk about the June quarter of the last -- same June quarter of the last year, it is more comparable than the immediate past quarter. However, since there is a requirement to give the quarter -- immediate past quarter figure also, so we are giving that figure also to all of you. Further, let me -- also happy to inform you that our sales realization improved to INR 57.04 per kg. That is a 3.5% year-on-year increase -- when I'm talking about year-on-year, that means I'm talking about the June quarter of the last year -- reflecting our disciplined pricing and value-driven customer service. This was the overall sales volume for the quarter, which I was talking to you, including the international and the domestic of 13,318 tonnes. If I do the breakup of that tonnage into domestic and international, then the domestic segment contributed 11,636 tonnes, showing sequentially growth from 11,266 tonnes in the quarter 4 in the -- showing sequential growth from -- yeah, no sorry, I beg pardon. Domestic segment contributed 11,636 tonnes, against -- last year, we had 12,600 tonnes in the -- 11,266 in the Q4 FY '25. I beg pardon. I will repeat the number. Within the domestic segment, contributed 11,636 tonnes in the current quarter against the [ 12,676 ] tonnes -- 12,617 tonnes Q1 FY '25 in last year. The international segment contributed 1,682 tonnes, lower than 2,099 tonnes in Q4 FY '25 and 1,918 tonnes in Q1 FY '25. This decline, as I was explaining, was primarily due to geopolitical uncertainty, tariff impact, [ and don't ] know what to do and what not to do. However, we are very confident that things are getting settled down as we are talking about and which we are -- in the last quarter, okay, it impacted. But in the coming quarter, we are hopeful to recover all this whatever the decrease happened in the earlier quarter of June quarter. Further, let me give now the -- apart from the [indiscernible] figure, let me give the financial figures for the quarter under review. During the first quarter of FY '26, operational income declined by 5% to INR 78 crores year-on-year. That is net of GST. The decrease was primarily attributed to seasonal softness and a marginal drop in overall cargo volumes. EBITDA for the quarter was -- as sales had come down marginally, so consequently, EBITDA also came down from -- EBITDA for the quarter was INR 1.9 crores, down 9% year-on-year with EBITDA margin standing at 2.44%. However, we are able to keep our profit after tax, increased by 6.7% year-on-year to INR 1.6 crores, supported by a substantial reduction in the finance cost, which we are hopeful to continue to get the benefit. Further, our PAT margin improved to 2.05%. These are some of the operational and financial highlights from my end. We are -- as I was explaining to you, we are very hopeful about the things which are going to happen in the future, in spite of all these noises which we are hearing from all over the world. And as a general -- as a macro picture also, we are not an export-dominated country like China. We are more dependent on our in-house demand, domestic demand. So we don't expect much effect on the -- all this noises to our -- not only to our company but as general also. And since we are in logistics business and if the economy is doing well, as you can see today also, our Honorable Governor also kept the growth rate same and he also hopeful, so we are also hopeful for the entire thing. And by this, I am -- over to Vikram. Thank you, Vikram.

Yes. Thank you, sir. I think we can move to the question-and-answer session.

[Operator Instructions] The first question is from the line of Vikram Suryavanshi.

Yes, sir. Sir, we have seen a volume decline on a Y-o-Y basis for this quarter. But on full year basis, as well as the long term, if you take, what kind of growth in volume we are targeting as a company?

Yes. As I was explaining, Vikram, yes, in the 1 quarter -- normally, this quarter remains seasonally weak for us, traditionally also. As we can see, the things are coming up here for July, already ended up also, and it looks good only. So we are expecting at least -- I will not give a specific number, but definitely, we are expecting more than the last year overall.

Okay. And how is the gross margin, as well as the EBITDA margin, in international business compared to domestic business? If you can give some sense?

Yes. Definitely, in the international business, the margins are lower because the recovery of money is also faster in the international business, okay? And in the domestic business, there, as a traditional practice, receivables are there for 3 months around, so margins are a little higher. So in the -- if I give you a ballpark figure of that, in the domestic business, ballpark figure is around 12%, around -- between 12% to 13%, in the range. And in the international business, the range is between 1.5% to 2.5%.

This is for gross margin?

Gross margin. I'm talking about the pure gross margin.

Okay. Understood. And what would be our receivables and payable scenario currently in terms of days or absolute number, whatever is available?

Yes. Look, we have also -- very recently, we have introduced one system also, system-driven, because we want to be a system-driven company. And after setting up the mobile app, FreightPILL mobile app in the last year, thereby everything moved through the mobile only or the system. Nothing is done -- no booking is done in a manual way. And recently, in December also, we have introduced the receivable control also through the system only, and which -- right now, we have receivables as usual around INR 65 crores, around the figure [indiscernible] -- INR 65 crores to INR 68 crores figure. But as we have improved the system as essentially in December only and which is getting digested in the entire -- our ecosystem, and we are hopeful to improve our receivables also in the coming quarter, which will definitely help us in more movement of the goods and more sales volume. So overall, it looks like receivables also are in control.

Understood. And 2 more questions. One regarding -- we are hearing like a lot of other express players or logistics players are also aggressive in, now, air express or air cargo movement, when you look at Gati, or even other -- TCI Express, everyone has now started and putting -- started giving air volume numbers. So are they competing with us? Or we also do consolidation for them and it is complementary for us? So how is the competitive scenario? If you can explain that, I think, it will be helpful.

Yes, [ good actually ]. What is happening in -- look, like when you're talking about a specific name of one party, they are our customer also. You know that they are not our customer also. And we actually -- the market is huge now and market is growing because the way -- then, people are talking about the electronics, all the -- movement of the goods in a faster way. And as the way the number of airports are increasing -- and as you can see, we use normally the passenger aircraft, and the number of passengers are also increasing leaps and bounds. So a point to that is, whoever is good for us only. And as we can see, earlier also, people are coming also and -- but we, as a company -- which are definitely not scalable. We talk in our language. We have a strong brand [ recall ] of the POBC, we call internally. And Patel Airfreight Kangaroo brand, people have a lot of faith on that brand of -- Kangaroo brand. And we are open to -- competition is always welcome. Competition leads towards more efficiency, more innovation, and we are -- to be unduly not bothered about any competition. And in fact, we will feel that more competition will give us more -- market will be more wider and we will have more players only, overall.

Okay. And how is the progress on monetization of noncore assets?

As we are talking, my team -- one of the teams is talking to one of the developers only, to be honest with you, as we are talking right now also. But as we know, this type of thing takes time, but it is progressing, as I'm talking to -- just now, the other team is talking to [ them ]. And other buildings, we're talking to the developer only.

The next question is from the line of Vishal an individual investor.

I wanted to know that -- more about the recent contract that is signed with the Middle Eastern airlines. Specifically, like, will we be receiving some fixed allocated cargo space on the flights? Or will we be getting some incentives on the volume of load that we are providing to them?

No, it's like that -- look, there are a number of airlines are -- foreign airlines are there. When we are able to sign the contract with them, then we have the option to move goods through that airline and to that specific area also, okay? And definitely, once we -- as I was talking to -- mentioned that we have signed a contract with one airline. I cannot talk the name right now, but this will open further door, and it will definitely help us in increasing our sales volume. And without -- now, look, if I don't have a contract with that airline I have -- I cannot move the goods through that airline, okay? So now, I have signed the contract with that airline. It's an open contract. Normally, it remains open contract, okay? And [ depending ] on the situation, the rates go up and down. And we will have not like an incentive like that. It is like just we will have a more increase in the sales volume that will help us in that.

Okay. And sir, like how much time will it take for us to, like, recognize the revenue for the same? Like, can we expect...

Just to tell you that -- as I was talking just now, yesterday only, we started that one, also putting the goods to that airline also. So it will -- we are a company with daily weighted [ loads that go ] into the airlines, okay? In our language, we call ourselves [indiscernible], okay? So we are a regular one. So we already started yesterday loading the goods to that airline, and we will start booking the revenue also.

[Operator Instructions] The next question is from the line of [ Kamal Jaswani from U First Capital ].