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

Ladies and gentlemen, good day, and welcome to the Patel Integrated Logistics Limited 2Q FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. This conference may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectation of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Harshil Shah. Thank you, and over to you, sir.

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

Thank you, and good morning, everyone. It is a pleasure to welcome you all to the earnings conference call for the second quarter and the first half of the financial year 2026. Let me first thank our host PhillipCapital for graciously hosting the con call. Now let me take you through the operational highlights for the period under review followed by the financial performance figures. The overall business involvement remains somewhat mixed during the quarter with global uncertainties and fluctuations in air freight demand in certain sectors. However, we continue to stay focused on our core strategy of operational excellence, maximum optimization, and the [indiscernible] efficiency. This disciplined approach help us deliver another quarter of competence and healthy supplement. We are also encouraged by the ongoing infrastructure development within India's logistic report system like upcoming Navi Mumbai International Airport, expected to commence operation soon. We include a dedicated cargo permission with an [indiscernible] around 0.5 million tonnes that [indiscernible] to about 3.25 million tonnes in later stages. These are the three [indiscernible] operational, which significantly enhanced Digital India cargo facility and given our strong presence in [indiscernible] nearby Gujarat, it will naturally compliment out network and with the help of several [indiscernible] address. As you know, the other airport is Jewar Airport in Noida also coming soon. We feel have initial capacity of 0.25 million metric tonnes. [indiscernible] this landmark airport Navi Mumbai and Jewar Airport in Noida will have definitely help us in enhancing our capacity as well and increasing our volume. During the quarter ended [indiscernible] demand remains stable across our key customer segment, particularly from e-commerce, pharmaceuticals and manufacturing, which continue to drive a steady cargo movement across our network. In Q2 FY '26, we handle a total cargo volume of 15,393 tonnes comprising 13,195 tonnes of domestic cargo and 2,198 tonnes of international cargo. On a quarter-on-quarter basis -- Q-on-Q basis domestic volume grew by 13%, while international volume increased by 31%. For the first half of FY '26, a total cargo handled was 28,711 tonnes including 24,831 tonnes in domestic and 3,880 tonnes in international segment. As a result of blended realization [indiscernible] for the quarter reached INR 59.24 against the first -- and part of first half as INR 58.22, reflecting disciplined rising and continuous focus on value-driven customer from this. These are the operational – actually [indiscernible] and we will be happy to share with you. Now let me provide some key highlights of our financial performance. During Q2 FY '26, the company reported an operational income of INR 94 crore, marking a 12% year-on-year increase. Our EBITDA for the quarter stood at INR 3 crore growing 14% year-on-year with margin as 2.66%, while profit after tax that it has reached INR 2 crore, an increase of 15% year-on-year, leading to an improvement in tax margin to 2.44%. Now let me give you the half-yearly figure. For a half year, our total operational income reached INR 170 crore, an increase of 4% year-on-year. EBITDA for the half year is INR 5 crore, up 2.3% year-on-year with margin of 2.61%, while PAT is INR 4 crore, higher by 8%, reflecting an improvement in PAT margin to 2.27%. Since, we are at half year end, and let me share some balance sheet number as well. However, currently the property, plants and equipments are INR 33 crore. Our capital work-in-progress is INR 5 lakhs, investment property is INR 13 crore, our intangible assets are INR 30 crore, our non-current investments is INR 2.35 lakhs. Let me correct myself, intangible asset is INR 30 lakhs, not INR 30 crore, sorry, I am really sorry for that. Now let me continue to the [indiscernible] non-current investments of INR 2.45 lakhs, loans are INR 1.15 lakhs, other financial assets are 2.58 lakhs [indiscernible] a total non-current assets of INR 2.55 lakhs. Further the current financial assets are current investment of INR 2.14 lakhs, trade receivables are INR 71.74 lakhs, cash and cast equivalents in the company is INR 21.75 lakhs. Other than above, we have in the bank also bank balance, other than the cash and cash equivalents of INR 5.44 lakhs. We have other financial assets of INR 1.45 lakhs, another current assets of INR 15.28 lakhs in rounding off to INR 15.29 lakhs leaving us a total asset of INR 171.36 lakhs. Again [indiscernible] the equity and other liabilities are equity share capital of INR 59.58 lakhs, other equity of INR 52.54 lakhs [indiscernible]. And further the small borrowings which we have of finance [indiscernible] of INR 49 lakhs, other financial liability of INR 3.74 lakhs, deferred tax liability net INR 1.92 lakhs, current liabilities are borrowings of INR 12.58 lakhs, trade payables are INR 15.75 lakhs [indiscernible] visible to me but will be INR 15 crore as against this time, okay. And other financial liabilities are INR 15 lakhs, other current liabilities INR 18.48 lakhs, total current liabilities are INR 42.98 lakhs that is our total equity and liabilities are INR 175 [indiscernible] INR 171.36 lakhs. And since we are against the cash flow [indiscernible] of cash flow, I would like share with audience. We have a cash flow for our mobility activity of INR 3.92 lakhs and giving us operating profit before working capital changes of INR 5.21 lakhs, after the working capital adjustment cash generated from operations for half year is INR 3.26 lakhs [indiscernible] net cash is coming of INR 1.47 lakhs. [indiscernible] as of it just now got also the refund after the quarter end, this was one is of INR 2.26 lakhs, which will reflect [indiscernible] beneficial, will be reflected in the coming quarters INR 2.26 lakhs refund [indiscernible] after the end of the quarter is now cash flow from investing activities are purchase of fixed asset of INR 74 lakhs, sale of fixed asset of INR 11 lakhs, purchase of -- purchase or sale of [indiscernible] investment of INR 80 lakhs, movement in fee deposits of INR 82 lakhs [indiscernible] received of INR 13 lakhs [indiscernible] received of INR 1 lakh giving us an [indiscernible] activity negative INR 1.48 lakhs. Cash flow from financing activity each [indiscernible] from long-term borrowing negative INR 37 lakhs [indiscernible] only INR 21 lakhs. Dividends paid to the shareholders of INR 2.08 lakhs -- INR 2 crore in fact rounding off to INR 2.9 lakhs [indiscernible] the cash and cash equivalent of minus INR 2.32 lakhs. Opening balance of cash and equivalent of INR 14.13 lakhs, closing balance of cash and cash equivalent after netting of the borrowings and [indiscernible] INR 11.82 lakhs, so we are a net-debt-free company now. These are the financial numbers. Now let me switch over to technology front. We are a company with a system-driven company always try to add more value to the system. So as a result our [indiscernible] continues to enhance operational stability and customer experience. Now nearly all bookings and deliveries are now processed digitally improving standalone time and including transparently [indiscernible] of the supply chain. Just to add up in this we have developed [indiscernible] software also, which controls the [indiscernible] to the system apart from the human intervention, human monitoring as well, so -- and which is in our industry very well recognized and IT dealers are the first in our industry to develop a [indiscernible] controlled software. We are also doing the international outbound [indiscernible], where British Airways is one of the major foreign airlines for them. First in our industry, we have directly connected with the British Airways operation with Canada government and as a result we got appreciation also from British Airways that system is working very fine. What I mean by the system is, we are directly connected with the operating system of the British Airways. And still it was more about a regulatory requirement from the Canadian government. We are expecting very soon other government and other airlines will also start the same. It will also give us a first mover advantage in this airline. We also just [indiscernible]. We are now in the process of -- we are in the air cargo very well. We are in the process of doing the road transport also to some air subsidiaries, which is in the process of -- which is in the process only right now. [indiscernible] development as well. [indiscernible] as we connected [indiscernible] it is the blessings of all [indiscernible] and the team hard work, we have [indiscernible] started. We also [indiscernible]. We remain confident about maintaining this throughout momentum in the second half of FY '26 [indiscernible] combined with several e-commerce and manufacturing demands to get [indiscernible] or strong cargo [indiscernible]. With our focus on operational discipline [indiscernible] customers and [indiscernible] with further [indiscernible]. Thank you all of you for having [indiscernible] hearing from me. With this now I open the floor for question-and-answer session. Thank you once again for [indiscernible] with me.

[Operator Instructions] The first question is from the line of [Jimmy Jill], an individual investor.

Firstly, congratulations on a good set of numbers. I have a couple of questions that on the Navi Mumbai Airport and other airports that we will be present in. So our offices will be present in the airport itself, right?

Because we are a company where [indiscernible] airports are there having cargo facility, but before we have to be there. So okay what we normally -- near the airport, we develop our office and hub also. Okay, that does [indiscernible] we are right now also in the airport of India. Similarly, we will have in Navi Mumbai also our presence and in the Jewar Airport.

And sir, out of the total offices, how many are owned and how many are franchise offices?

Look, it sometimes changes the figure and all this one, but definitely we are -- all in the major metro cities, we are owned and wherever the [indiscernible] are there, to face the overhead cost we are in the franchise.

And one question on the financials. So for Q1, we saw a flattish quarter and now we have recovered well in Q2. But if we keep the same annual growth rate of around 15% top line, so that comes around INR 400 crores for FY '26 end. So will we be able to achieve it in the next 2 quarters?

Look, we are in the process of growth of the turnover [indiscernible] definitely. [indiscernible] first quarter remain our [indiscernible] because from the second quarter of the financial year momentum picked up and it continued because now again it is not coming [indiscernible] calendar year coming and the March again the [indiscernible] and all the growth momentum. Indian economy, we are also growing because we are one of the major player in our segment. And just to tell you about the landmark figure of what you are talking about, that will be definitely achieved and we are in the process of achieving. But I cannot give you a definite answer that this number will be achieved or that number, but we are in the process of achieving the -- growing the turnover definitely.

And one on the receivable side, sir. So receivables for this H1 has increased even though we have streamlined our process through the online [indiscernible]

This actually look like closing numbers because the turnover increased [indiscernible] turnover increased, so that closing number sometimes get skewed and you can see in the quarter end some numbers have to increase, okay. But [indiscernible] increased or something like that. So we are very -- at the same time, we are a company, as you know also, earlier also with that [indiscernible] company, we are a conservative company, and we definitely don't do -- at the risk of turnover, we are ready to forgo turnover, but we don't want to reduce the quality of the [indiscernible]. So that's the way we do. So we are very much -- the debtors are very much in control, nothing to worry as per our understanding.

And sir, on the Pune that 1 acre land we had bought. So are we in the process of building a warehouse there? Or what is the plan for future?

Correct. Just to update you, we were in the process of acquiring the land, I agree with you, but we have not still acquired the land till now because still some -- we are in the process of discussing and all this one because we want to be an ROI-driven company as well. So unless until the ROI comes up as per our things and all this, we don't want to move ahead as well. We have just passed the resolution, I agree with you. We were in the process, but still we have not -- our cash remain in our company only till then.

The next question is from the line of Dhiraj Kaswan from RRR Investments.

My question is that can you provide some commentary about the warehouse that we are going to be building at the Pune land? Is there any update on that?

I was explaining your previous [indiscernible] question as well [indiscernible] we are thinking of but we are not [indiscernible]. Look there is always a possibility to make a alternative [indiscernible] and there we have more ROI investment. So we always look for that, we were in the mental mind making up certain things. But we are at the same time looking for alternative [indiscernible] we can have more ROIs. Okay, so we have not closed that chapter till now.

The next question is from the line of Pawan Singh, an individual investor.

Congratulations on good results. So my question was that, so what led to the growth in the volumes? Like is it -- was it from Middle East, India or from any rest of the world?

Growth is also due to the overall [indiscernible] economy [indiscernible] as well as -- we also -- we are also trying talking about the turnover and all this one. So yes, team has done a wonderful job. They are investing all the time to acquire the customer and increase the volume, that is there. But I can assure you definitely it is also the economy-driven turnover. At the same time, as we can see there [indiscernible] there, as a result the domestic volume has increased because people are also now more focusing on the inwards and outwards.

And sir, one more question. So how much increase in the cargo capacity in passenger is the company expecting given the increase in airports and the aircrafts.

Look, passenger aircraft, as we all know from the [indiscernible] there are two major airlines, Air India and IndiGo. And also there are three major domestic airlines, okay. Right now they have uplift the capacity of the passenger aircraft -- number of passenger aircrafts around 700 to 800, that we are expecting to double it to 1700 and if that increases, a number of airports of 140 to 220 airports increase. Definitely that is road map for [indiscernible] and since that are increasing, and definitely we are aware that passenger aircraft [indiscernible] are there or the cargo -- airport is the cargo – first airport is cargo facility [indiscernible] and then the passenger aircraft has to be there. And if both are there, definitely as we discussed the numbers are like almost double. We are also with the hope [indiscernible] file of that number.

[Operator Instructions] The next question is from the line of [indiscernible] Agarwal, an individual investor.

My question is not with respect to company, but with respect to the overall logistics environment and national logistics policy which was intended to reduce the overall cost of the logistics for our company. Has the development happened on ground level towards the reduction because margins are not improving so much for almost all the company?

Look, yes, government is not trying very hard, but -- since we are a very large company, we have a [indiscernible] volume. Before we [indiscernible] but as the roads are developing and we can see [indiscernible] also, there roads have developed. Cargo is moving from one to other channel also because [indiscernible] cargo can be moved [indiscernible] this will be the costliest [indiscernible], so that type of things are happening. And what will happen -- what my understanding is that the margin is one thing but overall the volume increase and overall the economy improves, then what will happen, margin will not be the criteria, criteria will be the how much you can [indiscernible] and all this one. Yes, there will be reasonable margin -- for everything will be there. But at the same time, nobody can expect -- and another thing, margin can improve. What I can tell you apart from the national logistics policy, which always I speak about, still in the logistics industry, 30%, 35% cost is the oil, ATF, oil, petroleum, whatever that we can talk about. If that are not coming under GST, then definitely that GST portion remains a significant cost for any logistics player, whether it is aviation player or is a road player because that's the first thing government has to bring the aviation fuel petroleum under GST, then one of the things can -- what we are expecting can be achieved.

So my second question is with respect to -- especially to Patel Integrated Logistics. If I need to invest for long term as a retail investor, I need to see the needle moving towards minimum INR 100 crores per quarter volume sales kind of thing. So when do we see this will start happening?

[indiscernible] from the previous speaker also. As I can tell you, including GST already we are in that bracket as you can see. So is that we are not in that bracket only including the GST. My -- I don't want to do any forecast, but my reading is it's a matter of time only. I don't think it's much challenge for that only. We are a company [indiscernible] who want to be [indiscernible] don’t want -- for sake of turnover, don’t want to achieve the turnover. But anyway is a matter of -- as you can see including the GST, the turnover is already there. So we are almost there.