Premier Roadlines Limited (PRLIND-SM.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the H1 FY '26 Conference Call hosted by Premier Roadlines Limited. Please note that this conference is being recorded. I now hand the conference over to Mr. Akhilesh Gandhi from Stellar Investor Relations. Thank you, and over to you, Mr. Gandhi.

Thank you. Good afternoon, everyone. I'm Akhilesh Gandhi, on behalf of Stellar Investor Relations, welcome you all to the Premier Roadlines' H1 FY '26 Earnings Conference Call. We shall be sharing the key operating and financial highlights for the first half of the year ended on September 30, 2025. We have with us today the management of Premier Roadlines Limited, Mr. Virenderji Gupta. He is the Chairman and the Managing Director. And with him, we also have Mr. Samin Gupta. He is the Whole-Time Director and Chief Financial Officer. Before we begin, I would like to state that this call may contain some of the forward-looking statements, which are completely based upon company's beliefs, opinions and expectations as of today. The statements made in today's call are not a guarantee of future performance, also involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statements to reflect development that occur after the statement is made. Documents related to the company's financial performance, including investor presentation, have already been uploaded on the stock exchange. I now invite Mr. Virenderji Gupta to state his opening remarks on the company's performance for the first half of the year ended on September 30, 2025. And after that, we'll open the floor for the question and answers. Thank you, and over to you, sir.

Thank you, Gandhi, and good afternoon, everyone. Thank you for joining us on today's earnings call. I'm Virender Gupta. And on behalf of entire Premier Roadlines team, I would like to extend a warm welcome to you -- all of you. We hope you had an opportunity to go through our investor presentation that is available on the stock exchanges. Today, I will take you through the key financial and operational highlights for the 6-month period and the [full] (sic) [half] year ended September 30, 2025. The first half of the year is generally a bit softer for us because of the monsoon season and slower project approvals. However, this year, we witnessed good demand in the over dimensional cargo segment, led by higher activity in the power, cable industries, particularly in the transformer movements. To support the growth in our operations, we have expanded our owned fleet during the period. We have added 2 new pullers, 32 axles, taking our total fleet strength to 9 pullers and 106 axles. This expansion was funded through a careful mix of internal accruals and bank finance. In line with our asset-light approach, every investment is made after a thorough assessment of long-term values and returns, ensuring that our capital is deployed efficiently and responsibly. Looking ahead of FY 2026, we expect growth momentum to remain strong, supported by increased project approvals, faster infrastructure development and a positive economic outlook. We are expanding our project logistics and over-dimensional capabilities to manage larger movements across sectors such as transformers, renewable energy, cement, hydrocarbon. With our specialized fleet, strong execution, trusted client relationships, Premier Roadlines is well positioned to capture new opportunities and play a meaningful role in India's infrastructure growth. Our focus remains on operational efficiency, disciplined growth and delivering long-term values for all stakeholders. Thank you for your time and continued support. Now I hand over to Samin Gupta, who will walk you through our detailed financial and operational performance.

Thank you, and good afternoon, everyone. I'm Samin Gupta, Director and CFO of Premier Reliance Limited. So I'll guide you through the financial and operational performance for the first half of financial year 2026. So our total revenue stood at INR 141 crores, which was an increase year-on-year basis of 25%. In terms of the segment mix, contracted Integrated logistics contributed 35%, ODC contributed 32%, project logistics contributed 18% and general logistics contributed 15%. Our EBITDA, which came in at INR 13 crores, was up by 54% year-on-year with an EBITDA margin of 9.3% when compared to 7.5% in the same period last year. Our profit after tax also stood at INR 8 crores approximately, which was up 38% year-on-year. And our PAT margin has improved from 5.4% -- to 5.4% from the last year 4.9%. The improvement in profitability was mainly driven by a higher share of ODC logistics, which continue to be more margin accretive. On the balance sheet front, we remain in strong financial position. Our ROE stood at 16% and ROCE at 20% on an annualized basis. The debt-to-equity ratio improved to 0.19x, reflecting our prudent capital management and continued balance sheet strength. Operationally, our total number of orders increased from 15,735 to 17,000 this particular year, while the number of customers served came down from 594 to 467. The reduction of customers has already been previously explained. It is a strategic decision to focus on high-quality, long-term partners with an entry barrier. Although the overall customer count declined, the rise in total orders reflect stronger engagement and repeat business from existing clients. The average revenue per order also improved from INR 71,599 to INR 82,870. This is supported by high-value ODC cargo movements. Looking ahead to financial year 2026, the H2, we expect strong momentum to continue in the project logistics and ODC, supported by increased infrastructure activities, which is a favorable macroeconomic outlook and the rising capital expenditure across key industries where we are working for. We are seeing especially promising opportunities in sectors such as transformers, cement, oil and gas, renewable energy, each of these areas require sophisticated logistic solutions that align closely with our core strengths. And is it a complete -- is a complete mix of -- complete fit of our logistic services. We've also secured major projects from many names in this particular first half and the next set of names will be updated soon. At the same time, we continue to deepen our relationships with leading clients such as Siemens, GE, Hitachi, CG Power, Atlanta and Transformers and Rectifier and many more in the transformer industry. Our consistent focus on building long-term partnerships has established with Premier Roadlines Limited as a preferred logistic service provider for critical movements, especially in the transformer logistics. The Transformer and the Power Equipment segment continue to gain traction. India's grid upgrades and the growing focus on renewable energy are driving strong demand for large transformer movements across the country, where our expertise in heavy haulage provides a clear advantage. In the oil and gas sector, upgrades in the refinery capacity, pipeline, storage facilities are creating a steady flow of demand of over-dimensional cargo and project logistics where dependable execution and timing delivery are critical. Each of these sectors represent not only a significant opportunity but also a natural extension of our work of we do. As these industries expand, we are confident that PRL will continue to be a trusted partner for supporting their growth. For the full year financial year 2026, our focus remains on operational excellence, disciplined capital deployment and deepening our customer relationships. And our strategy remains clear as we continue to strengthen our asset right model, expand into logistic intensitive industries and also build on our reputation for a strong execution of future orders. With that, we now open the floor for questions.

[Operator Instructions] Our first question comes from the line of Jatin Agarwal from Manisha J. Mundada and Associates.

Am I audible?

You are audible. Sir, you may proceed.

So you had a previously promised guided 30%, 35% CAGR for next 3 years that was supposing in May '25 and this year your [indiscernible] INR 144 crores for the first half. So are we still on track for 30% to 35% CAGR?

Jatin, as of now, we do look on track with the guided guidance. As our business is typically H1 heavy and you've seen in the past trends that H2 comprises mainly 65%, 70%, sometimes or that's an approximate number of total revenue, so we do look at EBITDA guidance as given before.

So if I'm correct, then around -- somewhere around INR 380 crores to INR 390 crores is what we could expect by the end of FY'26?

I would not comment on any number. I won't comment yes or no on any number, but as guided before, we will not change any guidances and it will remain as it is.

Okay. Okay. Okay. That would help. Also, my second question is, sir, you previously you had said that you were targeting 75% ODC plus project.

Yes, on a full year basis, yes.

Currently, by H1, I guess it is about 60%, ODC plus project. So can we expect by this financial year end 75% of revenue share from these two categories and also the margin improvement we can expect, is it going to -- EBITDA -- can we expect a double-digit EBITDA?

See, we -- like I mentioned, it was our clear goal and clearly -- it was an objective that we had that we want to be more of a project. We want to keep the revenue mix of project logistics and ODC more than contracted and general logistics. So our efforts will be as high as it can go to make sure that we are staying up to the commitment and we are getting 75% revenue share of ODC and project logistics on a full year basis. And of course once that commitment and when that objective is fulfilled, the margins will follow.

Okay. Okay, sir. Also, how is the feedback regarding the defense sector? You had recently entered the defense sector, defense logistics? And are you happy with what's happening over there? Because you had mentioned that they are not valuing your services.

Yes. So we are not pretty much focusing more on defense now because it's a very -- they do not value the provider, but they value the cost and there's intensive competition there. There's no entry barrier. In some places, of course, it took us a very long time to get on the vendor list, but they are just comparing us with the normal unlisted players. So we believe it's a time waste for our organization, and we are not focusing more on defense. We do still cater to defense logistics, but that's a very negligible amount of the total revenue. So we are not keeping it as one of the key sectors like we are for others.

Okay. Okay. And just my final question. The new fleet that you had mentioned, so could you just tell me what new additions have been made by H1 of FY '26? And what more can we expect going forward?

We have added Goldhofer axles and Volvo pullers in the previous financial year -- in the previous half of the financial year. And going forward, on a need basis, we shall be adding more. But I don't think that we will be adding any more axles for this particular financial year of heavy duty. But if required, we shall be adding some lower capacity axles of Indian-made manufacturers such as VMT or [Supergreen]. So that is the plan as of now, and it's still on a very initial stage. But if something comes up in the business update, we will absolutely inform the investors.

And just the follow-up for this is, how are you planning to finance any of the further CapEx?

It's a mix. It's a mix of bank -- internal accruals and bank financing.

Our next question comes from the line of Rajiv Kankaria from Faith Industries Limited.

Hello.

Rajiv, you are audible. You may proceed with your question.

Just two questions from my end. Could you throw a light on the TAM for the ODC and project logistics overall market size? And since our revenue is somewhere around INR 200 crores, INR 300 crores for this segment, how big is the entire industry and who are the competitors? And how big are they?

I got your questions. So I mean, like always, I've been stating that we don't have an exact number, but I can give you that sort of assurances is that from where we are, we can easily grow 5x to cater to the entire segment of ODC and project logistics. So that may answer your question. And in that particular process also, we will be having a portion of the total addressable market. So that probably gives you an idea that how big the market could be.

But 5x from this size would still be a small segment, according to me, do you think the TAM is that small?

See, it is just about our capacity I'm talking about. Of course, we will also have some limitations in terms of catering to that particular demand. And I can only comment about me. So I am comfortable -- we are comfortable, Premier Roadlines is comfortable to grow 5x with this particular market condition.

With the current resources you have?

Yes, exactly. With the current resources I have.

So over time say, in 5 years, you grow say 5x and within that period of time, if you also add a few more resources to your entire fleet, so gradually, you will also grow and the market size would also grow. But what is the current -- maybe if you could just throw a light on who is your competitor?

Yes, I will not comment on any competitor because there's nobody on the listed front. On the unlisted front, there are many people who are competing with us. But just to give you an idea, like I mentioned, my previous question does not satisfy your question -- my answer does not satisfy your question. So just to give you an idea right now. So for many number of just -- I mean, there's so many number of renewable energy parts are in currently processed or solar are being sent there, all -- wind energy -- wind blades and everything are setting up. So for that, you need transformers. For that, you need wind blades to be moved. For that, you need solar panels to be moved. So with the renewable energy right now kicking in and how aggressively it is expanding, so the demand and the total addressable market is huge. And there is no number that we can put to it, because there's no available data online, like what is the transportation spend on these particular projects that may come through. Right now with renewable energy, cement and oil and gas, in, say, next 2, 3 years, you never know which industry might be in more favorable conditions. And the good part about Premier Roadlines Limited is that we are very much diversified with all the segments and all the sectors. We are working right now for close to 12 sectors, and we are all -- we are working for all the big names in those 12 sectors. So the total market and the total opportunity is always there and it's a huge opportunity. So -- and I'll definitely try to get a number, if I can, and I'll get back to you on mail or something if possible.

Sure, sure. So a follow-up on that would be in say, general logistics, we all know the entire market is crowded. So what's the competitor intensity in ODC and projects logistics? Like is this market as crowded as well because there's a lot of business you're currently doing as well, right, as of now. So is that market crowded as well in terms of offering?

I'll give you an example right now. So we are moving almost 30 feet high cargo from the ground level, when I say 30 feet, it's almost a 3-story building that we are moving on the road. It's coming from Chakan, which is in Pune. It is going to Barmer Pachpadra Refinery, which is of HPCL, Hindustan Petroleum. And it is oil and gas equipment, which is moving. It is a 3-story building that is on the road. So just to give you an idea how many people are competing for that. There are not more than 10 people who are eligible to bid for that particular project and to compete for that particular project and have that sort of capability and execution excellence and operational excellence to ensure that particular cargo reaches on time. So that itself gives you an idea and the confidence that general logistics, I agree it's a crowded place. But when you go up the value chain, say, over dimensional cargo or project logistics, you are competing with only a few, handful. I can name those competitors and I can visualize those competitors when I'm thinking about that particular project or ODC logistics cargo. So that goes to show that the market is -- the customers are only trusting a few people, and it's not at all crowded. It's a very selective few that are always given a preference.

Got it. Got it. Now second question would be, since our customer base is now reducing as per strategy, what would be the mix of, say, top 5 customers or top 10 customers? How much do they account for in terms of revenue size?

Not more than 10% of revenue.

Equally distributed.

So -- we are -- yes. Since day one, we have been telling and I want to repeat it again. We are very selective with the customers we work for. And on paper, the customer base is declining, but the quality of customers we are adding is uncomparable. And it is beyond reach of any logistic service provider, be it listed or unlisted player to go and even have a cup of coffee in those particular offices. So the names that you see are the biggest assets that we have. We are on the vendor base of all the biggest names and to have -- to become a registered vendor and to be a trusted partner for them is the biggest asset. And by this, it's an endless, I would say, process. We really want to just work for close to 300, 350 customer on [indiscernible] move forward.

Perfect. Perfect. And what would be the average revenue per order only for ODC and project logistics if you remove the general logistics part?

I don't have a number, boss, but it should be in lakhs.

Okay. Okay. Could you give a guidance for the newly acquired supply chain company? Have you started...

No, we cannot give any guidance on that.

Have you started business in that?

No, no, we have not started any business in that, just normal some ocean crates and some normal ocean cargoes have been booked, but it's not a company which has been mature enough to give a guidance -- that we can give a guidance. So we just stick to guidance on a consolidated basis that we have given in the past.

Our next question is from the line of Natasha Singh from Arihant Capital Markets Limited.

So my first question is regarding maybe this Premier Worldwide Logistics. I just wanted to understand how you offer the services like ocean and air freight with the core domestic ODC project or logistics?

So ma'am, we started this wholly owned subsidiary a few months back and we do have a separate division and team of people who operate in this particular organization. And they have sufficient experience from their past organizations in handling ocean freight and project logistics from the sea. And they have been successful to do a few shipments here and there. But because our hands are full in the domestic front, so we are also not able to more concentrate on that. And to ensure that, that is also promoted. We are not able to put our time and efforts over there. So that's why it's a slow-moving vertical as of now. But in the future, maybe probably a year down the line or 1.5 years down the line, it might kick off as the company matures. But as of now, it's just -- it's just at a starting point.

Okay. So we can see some of the things by H2?

No, you cannot see anything by H2 also. You will probably see some sort of contribution from Premier Worldwide Logistics starting from the next financial year.

Okay. Got it.

I'll add more to it. The thing is that Premier Roadlines itself is growing so fast and rapidly and the orders are completely piled up. So there is no reason to even consider Premier Worldwide Logistics' balance sheet or the top line or the bottom line as a part of forecasting for Premier Roadlines as a whole, if you understand what I am trying to say.

Yes. Got it. Sir, secondly, regarding the margins, as a given almost 177 basis point improvement was there in the EBITDA margin, which was up -- which is stronger than usually the demand on the power and cable industry. So basically, what specific structural cost for power pricing improvement you have been focusing on that?