TCI Express Limited ($TCIEXP)

Ladies and gentlemen, good day, and welcome to the TCI Express Limited Q4 FY '26 Earnings 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 date of this call. These statements are not the guarantees of future performance and involves risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this call is being recorded. . I now hand the conference over to Mr. Vikram Suryavanshi from Pellet Capital India Private Limited. Thank you, and over to you, sir.

Thank you, good afternoon, and very warm welcome to everyone. Thank you for being on the call of Trace Limited. We are happy to have the management to be us here today for question-and-answer session with the investment community. The management is represented by Mr. Chander Agarwal, uniting Director; Mr. Mukti Lal, Executive Director and Chief Financial Officer; and Mr. Pavitra Panda, Chief Business Officer. . 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. Kinder Agarwal for opening comments. Over to you, sir.

Good afternoon, everyone, and welcome to the Q4 Financial 2026 Earnings Conference Call of TCI Express Limited. I would like to thank all of you for joining us today. I hope you and your families are doing well. Our earnings presentation for the quarter has already been shared in the company's website and with the stock exchanges, and I trust you have had the opportunity to review it. . To begin with, I will provide an overview of the business performance, operational developments and key strategic initiatives during quarter 4 of financial year. Following this, our Executive Director and CFO, Mr. Mukti Lal, will take you through the financial performance in greater detail. Q4 financial year '26 marked another quarter of positive business momentum for the company delivering sequential improvement and maintaining its growth trajectory for the second consecutive quarter. During the quarter, the company strengthened its multimodal logistics capabilities, customer engagement initiatives and operational execution across business verticals. Demand trends remained encouraging across pharmaceuticals, automotive, engineering renewable energy, consumer goods and SME-led shipments. The operating environment during the quarter remained challenging due to the geopolitical tensions and the economy in West Asia, which resulted in elevated airline fuel prices and increased logistics costs across the industry. Additionally, higher labor costs and temporary business disruptions arising from the water-related SIR activities impacted operating conditions across select markets. While these external factors created near-term pressures on business operations, the company remain focused on service liability, network efficiency and customer-centric execution while maintaining a cautious approach towards the evolving market conditions. The Surface Express business remained the largest contributor to the company's operations during Q4 supported by customer additions, improved traction across industrial and SME led shipments and higher contribution from key sectors, including automotive, defense, solar, EV and pharma. During the quarter, the company expanded its last motility network through new brand additions and strengthen operation in each core regions. The upgraded nonconsenting center also commenced operations with enhanced handling capacity and improve processing efficiency to support higher cargo volumes and faster turn on times. Other business verticals also delivered healthy momentum during the year, supported by focused operational execution and network optimization initiatives. Railexpress recorded strong growth driven by a rising adoption of rail-based cargo movement, consistent service reliability and expansion of dedicated rail operations on key long-haul corridors. Domestic and Express delivered strong operational performance supported by good airport activity, shipment consolidation initiatives, optimized cargo planning and increase structure from pharmaceuticals and temperature-sensitive cargo segments. The international Express business strengthens growing network reach through customer additions, international partnerships, cargo consolidations were also taken during the year. CSS segment maintained healthy growth through the higher extra stocking movement, conversion of existing customer opportunities and traction from industrial sectors and for automotive and manufacturing in general. Meanwhile, the e-commerce Express segment continued to witness strong momentum supported by growing volumes from DTC brands, marketplace sellers and expansion of last mile delivery operations across key metro markets. Across these segments, the company continued strengthening technology integration, operations facility and AI execution capabilities to further improve customer experience and overall delivery network. During the Q4 '26, TCI Express reported year-on total income growth of 6% along with sequential improvement over the previous quarter. The company also maintained healthy capacity utilization levels during the quarter, while continuing to focus on operational discipline, cost optimization and network productivity. Financial '26 was a year of significant achievements for the company as we crossed the INR 1,000 crore balance sheet milestone. I surpassed 1 million tons of cargo handled during the year. The company continued to maintain a debt-free balance sheet with sustained focus on cost discipline, operational efficiency and liquidity management, reflecting its strong financial position and commitment to our shareholder value creation, the company also declared a higher dividend during the year. Furthermore, during our company continued to strengthen its focus on leadership development, employee engagement and social responsibility initiatives. TCI Express was also recognized as a great place to work for the sixth consecutive year, reflecting the company's strong people-centriculture and workplace practices. Further more during the year through the TCI Express Foundation, the company also continued to undertake community focused initiatives across preventive health care, Olympics sports training, rural development, environmental sustainability and vocational skill development under programs such as Cavage, Soria, Samanta and Saksham positively impacting beneficiaries across multiple regions and reporting the company's commitment towards inclusive and sustainable community development. Looking ahead, PC Express remains focused on strengthening as multimodal logistics capabilities expanding technical based AI operations and improving customer engagement across the service verticals. The company continues to focus on infrastructure expansion, operational automation, rail corridor in specialized cargo movement and B2C network development to support long-term growth opportunities across the express uses, et cetera. While geopolitical uncertainties and elevated fuel prices, may continue to create near-term challenges for the logistics industrial, the company remains focused on operational efficiency, service liability and customer-centric execution. With this, I would now like to hand over the call to me to take you through the financial performance for Q4 financial year '26. Thank you.

Thank you, Candace, and good afternoon, everyone. And I will now take through the financial performance of TCI Limited for the quarter and financial year end. And as our monitor has already highlighted the business environment and operational development and service initiatives were taken across key verticals in the company. I will primarily focus on financial and operational highlights for the quarter and full year. So for quarter 4, I think I hope everyone has been going through our website on for this investor presentation. So we are achieving a revenue growth of INR 327 crores as compared to INR 308 crores in Q4 of last year. Sewaren a growth of 6% plus. And on a sequential basis, we have around 4% and total income stood is INR 331 crores in this quarter. EBITDA is also -- EBITDA for Q4 stood at INR 37 crores as compared to INR 34 crores in Q4 of last year. So it is reflecting a growth of 11% year-on-year basis. And EBITDA margin for the quarter is 11.3%. So profit after tax stood at INR 21 crores, which is also like similar of last year and with a margin of 6.3%. For the full year, we also increased our income after 2 years. So our income is INR 1,236 crores against INR 1,208 crores in last year, reflecting a growth of 2% plus. And EBITDA for this year is INR 146 crores with a margin of 11.7% and profit after tax is INR 90 crores with a PAT margin of 7.2% for the whole year. For overall for me during the year reflects stable operating execution, disciplined cost management and continued focus on operational efficiency across the network despite the challenging, as you're all aware, operating environment during this quarter. And from a return and efficiency perspective, return on capital employed for FY '26 is around 20%, reflecting efficient capital utilization despite continued investment towards structure and network expansion. Current ratio has also remained healthy at 3x, highlighting strong liquidity position, continue and balance sheet flexibility. Working armament remained stable during the year with the continued focus on receivable management, which has been maintained even reduced by 1 day, which is from 59 to 58 days. Operational efficiency and disciplined customer monitoring. The company continued to maintain healthy working capital metrics supported by its satellite business model and a strong liquidity profile. The company continued to maintain a debt-free balance sheet during FY '26 also, and we will take the intention to keep the same in future as well. So net cash position remained healthy at appealing to INR 136 crores as of March 2026. Providing stocks a strong financial flexibility to support future growth in the sentiment operational requirements. Cash flow from operation is also very robust at INR 112 crores during the year. This is a company incurred capital expenditure of INR 67 crores, primarily towards branch expansion, construction of sorting center and technology enhancement initiative across business verticals. So I just would like to clarify that earlier, we have a CapEx plan of INR 500 crores from FY '23 to '27 and which we've been revised from INR 500 crores to INR 400 crores. And in this year, we have planned to be like execution of around INR 130 crores. As INR 270 crores, we already spent in last 4 years. After that, we will be put in another plan for the next 5 years. So to summarize, the company deliverable, stable financial provision supported by disciplined execution has the liquidity position and continued focus on operational efficiency. Going ahead, we will remain cautious about ongoing industry challenges, including geopolitical uncertainties, volatility in air fuel prices specifically, increase in labor and operating costs and regulatory disruptions such as I, which may continue to impact logistic demand and cost of circa the sector. Our priorities remain centered on managing financial discipline, strengthening cash flows and supporting long-term scalable growth through focused investment across multi-model logistics capabilities and technology structure. With this, I conclude my remarks. We can now open the floor for the question and answer. Thank you, everyone.

[Operator Instructions] We have the first question from the line of Ravi Naredi from Naredi Investment.

Thank you to give me first opportunity. Sundaram shareholders since so many years -- and I always try to ask questions in the con call. I remember when we made some concert, 4 years back and what was our target for company which is now going down and down and down. But the market is there, you can't do anything. Sir, my point, Page 18 of investor presentation, you see our total income from 2023 to 2026 in 4 years are same, profit margin reduced from 11.2% to 7.2%. That is net profit margin in spite of our modernization of sorting center, and we do not have any [indiscernible] So what is going on in business? Can we start vesting over .

Mr. Raviji. Thank you for your question. I also said this many times, like in the last con call also that it was a cycle that we cannot really avoid, when we had the COVID, there was 0 business. And that -- you can see the drop in below the line. And when we -- when COVID was over, we shot up to like 30% growth. So that was a knee-jerk reaction. And then slowly, it came down to 18% and then 13% and then 5% and so forth. So this is something which we are again playing the cycle, the demand and supply cycle, which took -- has taken 5 years, please settle down in at least the logistics industry. There is nothing that we have done to not mitigate that. We have still paid out dividends, unlike other companies. religiously for the past 5 years and substantial amount of dividend. So I don't think that we should discount the cyclical -- the cycles of the business cycles that 1 has to occur to especially after something like COVID. So going forward, of course, the 5 years it takes to kind of like even out the graph and then start going up again. So I think it's only a matter of time, you will start seeing the same level of growth that we were used to earlier.

I understand, sir. Can you bifurcate our total volume in rail road Air on track? .

Yes, Raviji. So basically, you see like total, we have this multi-model revenues is around 18.5% for the full year in FY '26, which is growing. And so over the period, we also felt to depend on the 1 business is also like sometimes risky. And to mitigate that as we put in a focus to offer other services also had added 1 by one. like rail and C2C and then refocusing now on e-commerce. So this is our strategy now to making this around is 18% and 18.5%, which will we want to become around 22% to 25% in next 2, 3 years, and we continue be making effort to derisk the like existing model. So though, again, surface is in a road segment and where we have the highest stake and that internally also, as we understand your concern of the growth, and that's why if you see and you might be like appreciate for that in the last 2 quarters, we start to grow in the range of single-digit and surely for this quarter also, we will start to grow further on that. So soon, you will see like a rebound on that. And you also please understand, in spite of that like a reduction of our margin, we are still in above the levels in PAT level. So this is also our target to have all the time to healthy growth, not the growth to just compromise on the margin and all, so in spite... And this open railroad is 18.5%.

[indiscernible]

No, no. spacially, rail, C2C air all put together in e-commerce whether not alone .

Okay. And 1 last year, sir, due to spike in fuel prices, any fare we have increased in current quarter?

Yes. So holidays is a budget and everyone is like concerned about that. And Ravi, there is a sequential change happening in fuel prices. So though it is a natural passing on process is there. But we wait for some time because we see -- ultimately, diesel has to be increased by at least INR 10. So which we've already seen is INR 8 has been increased. So we have taken some time lag to passing on to customers because that sequential happen in a 10 to 15 days. But now we're already passing on to our older customers. barring, I think, 10% to 15% we negotiate with them. Otherwise, it directly natural process to be passing on that. So we do that. .

We will take the next question from the line of Alok Deora from Motilal Oswal Financial Services.

Sir, just had a couple of questions. One is if you can indicate what was the volume in the fourth quarter and the volume growth for the quarter, yes?

Yes. So whole volume all of is INR 267,000 precisely. And in the whole year, it is -- we cross again INR 1 million and in prices INR 1,400 basically. And volume growth in this Q4 is 4% over last year.

So sir, I just wanted to understand, I mean, the growth has been pretty restricted. I mean it's been in the mid-single digit and slightly or slightly lower than that in the last even if you look at 7, 8 quarters. So if you can just highlight what's happening there because the market does not seem to be reviving at least for us and also the margins, which used to be pretty high number at 15%, 16%. And even if we take a normalized margin of 12%, 13%, we are now at around 10% to 11%, which seems to be now the stable state margin, so just wanted to get your sense on where the volumes are headed. I mean if you were to take FY '27 volume guidance from you, just if you can highlight on that because the volume guidance, which we have been giving due to different reasons, the numbers have been a little lower than that and which has also, I believe, expect impacted the margins. So just some thoughts on that would be helpful?

Yes. So in this quarter, we have given a guidance of around obviously a high single-digit growth, which is around 9%, 10%, and we're achieving a 6.5%. So I think had some job done on that. But we somehow could achieve like, again, 9% or 10% also. But after March, we slightly disturbed on, I think, not major, but 1.5% kind of growth we disturbed due to this geopolitical situation and major disruption on air side, where our international business is also like getting affected after this Gulf war started on a like for very end. So -- and domestic business also because there is a disruption in the prices because the ATF has increased in 50%. And obviously, international prices sought up like is like 2x or 3x. So people have hold up their material and all. So that's why we somehow couldn't achieve like 1%, 1.5% more growth in this. Second thing, margin level type -- we mentioned in the last time also, 1 reason was to consolidation of airlines, which is again beyond our control, and we are now trying to be like, I mean, this quarter is again a disrupted quarter for that rate prices and all you are aware about that. And again, it is not in our hands. And also is the impact on the other side where once prices increase in air people shift to other mode of transportation like might be in obviously, in surface or rail or whatever it is. So this is also happening because price is higher. But still, I think we will be -- you will see the number -- a very good number in quarter 1 for the air business also. So we're putting effort for that to how to mitigate whatever cost has increased in last year, which we'll need to passing on to customers. So I think that sense this time is very good because in our industry, fortunately, unfortunately, people or customers are ready to take the effect of fuel increases, but not other cost increases or you can say in general time increase, like consolidation of airline happened and supposing the air cost has increased by 10%. So nobody is ready to give any high. They're saying it's your problem, and there's no general hike happen, no digital hike happened, so we will not be give to that. But now it is like it, so everybody is like ready to give these price hikes and that we are also taking. Another thing is obviously privatization of the airport funds. So it is also beyond our control. So these are 2 things, even my cost has been disturbed by 1.5 basis points. And second, obviously, lower volume has dropped by utilization level of truck, which is really, we can't take the risk to reduce the capabilities for the temporary period and then you added on that. Whenever you reduce the capacity, then you add on a slight higher cost. Third thing, labor costs everybody is talking about an industry where labor cost is unproportionately increased for every logistic player, which is also having -- on my overall cost is almost increased by 100 basis points, though this cost is like less than 10% to overall cost. But you can see there is an increase of like 15%, 20% on their cost because -- Otherwise, you can't retain the labor. -- continuous elections was their SIR process has also happened across India. So that was the you can see like disruption in cost side also continuously going on. And Alojas you appreciate, it's still in the industry, if you see at Express industry, we are the in margin level of PAT level will be 7.5%. And obviously, we have to be willing to bring back to the double-digit margin on a PAT level because, again, we don't have any cost and notation and interest on that part. So we are very willing and we increase our capabilities in multimodel all the services, which you see in the traction and margin will be soon increased on that part. So FY '27 Again, we have an intention to be increased at least 100 basis points to 150 basis points on that with a revenue growth of double digit plus. Yes.

So volume growth, what is the guidance for?

It is, again, 10% plus?

Okay. Okay. And in April and May, we already have kind of lost some growth in the first 2 months because of the reasons you mentioned. So you think this 10% is achievable even after that?

Yes. So I think for us, even April was not that bad, what we thought up. And Mais also, I think, is going good. So we will be -- I think quarter 1 will be given with again kind of like high single digit growth. And subsequently, in a quarter-on-quarter basis, we will be improved because now I think you must be going through with our presentation where in multi-mill all the services, we've grown almost 20% plus. So that capability will help us to be growing this year and supposing we will be grow these all products like 25% and then surface is also like around double-digit growth. So ultimately, we will be achieved this 10% for the shop.

We will take the next question from the line of Jinesh Joshi from PL Capital.

Sir, I have 1 bookkeeping question. If I look at our depreciation expense, it is up by about 50% to about roles INR 9 crores and even the interest expense has increased to about INR 1 crore odd. So is there any change in the depreciation policy? And what kind of quarterly trends should we expect from here on?

So there is -- yes, this is a good question. So basically, what happened, we have taken 2 big sorting center on leads on a longer term. It is this 1 on in coal at -- so because -- so that's why it has been added in the ROU asset basic write-off used assets has been increased and that's why it's common precision portion. So this will be -- I think will be like next year onwards, this will be in the same range. So that's the only reason. Depreciation policy. Depreciation is almost like per quarter is around INR 6 crores or INR 625 kind of depletion will be there in each quarter.

Right. So you mentioned that we have taken a lease for 2 sorting centers. So I think part count remains intact at 28%. So if you can clarify on that business?

Yes. So basically, earlier, we have a policy to take the like all the assets on the less than 1-year contract basically and get however it is applicable. So that's why that has not come into it right, use assets Ind AS. Now as we have taken because nowadays, it's a good to having longer tenure for the lease because in Mumbai, so we have taken for the 5-year lease because we freeze the like rate rent hike and all. And same way, we've also taken on Kolkata also. So we -- in Mumbai, we wake existing one, which we have taken on a 1 year and a new 1 taken for the 5-year lease and on the bigger space. Same way in Kolkata, we have baked like earlier on and go into a new 1 with again 5-year lease. So that's why this has been increased for this one. Number is the same. So we replace with the existing to new one.

Understood. And sir, in this quarter, you highlighted that our volumes were at about 267,000 tonnes, which is a 4%, 5% growth on a Y-o-Y basis. Can you highlight what is the growth in the surface volumes. That is one. And secondly, even on the margin side, if you can just clarify one thing. So if I look at our multimodal business, I think domestic Air Express has grown by about 18%, even the growth in the rail Express business is about 35%. So to an extent, I think the growth that we are seeing in volumes could be driven by the multimodal segment, but our margins have come off and you highlighted certain inflationary pressure. And I do understand about these reasons hitting our margins. But is the new segment, the multimodal segment margin dilutive in nature? And how to think about margins from here on, given surface will continue to dominate the overall mix?

Yes. So this is good Kristen. So sir, basically, what happened, there's a disruption in cost in air, air domestic and Air international. So this is a temporary effect where margin has been down. Otherwise, it almost like same to surges or slightly higher on that. Rail margin are very stable. C2C margin is also very stable. So disruption in margin only in Air domestic and international in this quarter, but going forward, that will be, again, more than surface for the shaft. At surface margin also, we will be improved with this one because now as the diesel price has increased, -- so also, we've seen in '21 or '22 where our margin has been jumped almost 300 basis points on a single year due to that arbitrage benefit we have taken after digital prices has been very sharply on that year. So in this year is also like sharply increased, and we're talking about the each customer, and we like we're passing on to our customers on like our selling price, and we pass giving effect of price hikes to my vendor on my cost price. So arbitrage of vision is very good, like kind of 30%. So hopefully, we're trying to maintain that. And surely, it will be helped to improve my margin and everything will be synced with that. But sometimes is flexibilities like time lag is very important because the atypical were supposing tomorrow, again, government increased 5% of disel prices. Then again, like you establish the process, you discuss the customer, you increase the prices with the customer and everything done. That's why suddenly you also get like of INR 5. Then you again go and convince them and then somehow you need some time for that. So that might be like hard supporting again, increases happened, which is -- we don't see really because INR 8 is, I think, fine. INR 1 or INR 2 might be increased. But supporting tomorrow, they will be increased further INR 7 then again, becoming slight challenge to be, again, go to customer and convince them and then increase the prices. Otherwise, supposing is stable. That's why we are giving a cautious statement also because this time is highly, highly unpredictable environment is going on. Though we are a highly profitable company, and we are also changing all the time, stable margin, stable cash flow position and all. So depending upon slightly on the geopolitical situation, which we, right now, not seeing anything deroting, but right, we're seeing now is a stable one. So hopefully, we'll increase the margin for the store for 100 to 150 basis points for sure.

Sir, 1 last question from my side. What was the key picks to upgrade the Natt center? And what kind of reduction in sorting time have we seen because of this automation. That is one. And secondly, what are the time lines for automation in Calcataand Indaba, if you can just clarify and also the key picks that we need to incur for these automations?

Yes. So very good. So basically, on ARPU, we were on a lease basis. So now we built up our own one. And to -- for clarification for everyone, this is not fully automated one. This is a semi-automated 1 because this is not a big facility. It is around 70,000 to 75,000 square feet facility only. And that's why I don't see any changes on cut off any time in like for this 1 router and all. This would be, I think, almost same or like hardly 5% to 7% changes on that. So because it's not fully automated. But it is no sense to be having automation there for this purpose. And for this year, we make a total CapEx of INR 67 crore, which we spend on ongoing projects also, which is going on, 1 in La now, another 1 in Amdabad and Polat. So these 3 locations is also going. In future, we also like up in next 1 being Canaan Bangalore, we will be trying for that.

The automation time lines...

Yes, Kolkata and Amdal will be automated. And I think AmdaatKastaka, Andaba and Kolkata construction will be finished in this year. And automation will be ramped up by next half year, like in FY '28 we'll be there.

We will take the next question from the line of Chirag on. .

Sir, my first question is that as you have changed your recognition method for your -- for the warehouses. Just wanted to understand on the like-to-like basis, what were our EBITDA profits?

Sorry, can you come again? I couldn't get your question. .

So as you said that we are now leasing our warehouses phase. So the recognition matter related to the intact change in the 116, which is pouring down through depreciation and finance costs. So on a premium day basis, we would have looked at what would have been our EBITDA profit for the quarter?

So it is like -- this is actually excess items usually we're getting on an annual basis only. So there would not be any big change. This is hardly like whatever EBITDA increase. So you are seen on a PB tailor, we also same way.

So if I understand that INR 4 crores worth of interest and depreciation expense have increased on a Y-o-Y basis, our EBITDA profit would have been INR 28 crores rather than INR 32 crores?

Not really because some depreciation is usual depression is also increased, which is assets increase like an ARPU increases and last time we nor has been added in the just end of the year, so full year depreciates coming and other assets also coming. So I think, yes, you rightly said around INR 3 crore kind of CapEx -- sorry, this lease hold has been, otherwise, it's INR 29 crores on EBITDA level and PBT level, obviously, is the same otherwise. .

Right, Sir, secondly, I wanted to understand this thing that will it be possible for you to provide volumes for non-surface?

No on surface volume, sir, this is very unpredictable on the sense because this is like -- in international, there are different, different countries we're serving. So volume is, again, supporting is going Canada or U.S. is approaching UA. So volume is really highly unproductive and there is no value on that. But in air and rail, we don't want to be give once it will become like in a sizable one, then we will be start to disclose. Otherwise, again, a very niche segment on rail and all because we're doing through the passenger trains. So this is really very nice segment. So we really don't want to be disclosed on that, please.

Got it. Will it be fair to assume that the realization that we are getting on rail passengers, as you are saying, is somewhat equivalent to what we have in Road software express?

No. So it is -- on that sense, yes, is it mid of air and surface -- so it is almost like 2.5x to 3x -- sorry, 2.5x almost to surface basically. That is there. Pricing [indiscernible] Charging INR 15 for surface, rail would be in the range of INR 35 to INR 40. And obviously, a region, again, INR 80 to INR 100 this way -- so I'm just giving you an example. It is not like a number, but I'm saying on that way.

So as we are -- as we're using passenger trains, we are not liable -- so generally logistics and less, if I'm not wrong, becomes profitable when there are 2 and from movements of goods taking place in a particular trailer or a truck. But when it -- and similar when it comes to railways also, if it would have been direct-fed corridor . Way of doing things, we would have required -- to become profitable, we would have required 2 and from movements of goods taking place. As we are doing it through passenger vehicle, will it be fair to assume that we are profitable on operating levels in our rail business? .

Yes. So good question. So basically to -- for clarity, for everyone. So in rail, -- and here, it is not applicable, what you say, like 2 not required. Air operations are completely different, where we're hiring that space on because these prices are also completely different. There is like big route is having a different prices and empty route has a different prices supposing I bring the material from daily to Kolkata is a different price, even for rail and air also. And from Kolkata back to Delhi, prices are very low. So this is not applicable on that. It is -- we're hiring only space wherever we required from the directly railway also and through agent network also. So this is a good profitable business in air in and air side. Same when air, they're providing the belly space to be directly having now connection with the biggest airline in India. So that is also advantage here. That's why I'm saying on air prices, we have taken very high control and now it is under control, and we will show the margin improvement in spite of the all ATF increase and all because we are now direct we've taken the direct stock from the biggest airline in India, and that will be really giving advantage to giving a preference of the cargo also and obviously, price stability also in this challenging environment. So on that sense, gross profit in both the cases is more than 30%.

Got it. 30% . Good to hear that. And similarly, are we seeing demand escalating towards this compared to service? Because in my understanding, what happened in last 1 year, is that the air express industry has not grown, maybe broadly 2 percentage. However, the surface industry have seen growth like in double digit. It is just that we have not seen that kind of growth compared to peers listed and unlisted space.

So again, you rightly said the number is showing that, but we see which like segment has been growing on for which product I'm saying or transportation is growing. So basically, if you see autos have not grown that much. This consumer durables has not grown that much. Lifestyle product has not grown that much. But other products like if you see paint industry has grown very well like home, like pharmaceutical is growing very well. So it's depending upon product to plant related to like e-com-related product is also growing very far because e-commerce is like encouraging. . So depending upon that, but if you see in other industries where we like also dealing in where reserving. So almost everyone is on a same platform in Q4 if you see the numbers. I think the same number on that. Wherever looking people are like depending upon the e-comm industry, they are growing slightly higher. This is fine. So we now, again, and another thing, air industry is, we have very municipal share so now we're putting in more branches to getting more business from the SME customer from the like majorly from Tier 2, Tier 3 cities. That is really good results to us. And for the rail also, we have the same strategy where we're getting the more we're putting more branches, more and team where we're getting the material from the Tier 2, Tier 3 cities. This is really giving a good positivity in the business. We will keep continuing with this strategy only.

Got it. Got it. So we are somewhat focusing more towards the multimodal logistics and focusing that our revenue from that particular segment increases practically compared to our earlier business?

No, no, no. So this is not that way. Actually, I am saying slightly higher growth in multimodal, which is like we want to become currently is around 18%. We want to become not much, but like 20% to 25% in next 3, 4 years by 2030, we won 22 plus kind of share from these services means surface will be also increase on assembly, but slightly because these are a mature market or you can see it like existing product where we can be growing at 10%. But obviously, these other services are niche segment where we certainly grow in a 20%-plus kind of growth. So they will be having a slightly higher share in each year. But not much like 1%, 1.5% and each year will be increased on that part. So I'm saying on that way. The focus is just for all services because my surface is an anchor product, so that has to be -- must be growth for that. .

And it's possible for you to provide the revenue mix from SME and nonmiclints?

Yes. This is -- since last 2 decades, we maintaining in a 50-50 right now is around 48 to 52 because again, everyone knows SMEs are under stress slightly. And that's why this ratio is -- but we are trying hard to be getting back into 50% plus, obviously. And in this year, results are very good in the last 2 months. So hopefully, in each quarter, we will be maintaining this year onwards in 50-50, which we maintained since last 2 decades. .

Got it. So 1 thing, it has been -- I'm happy to see that we have made volume of 267,000 for the particular quarter. If I look at last 24 quarters, this is the highest volume that we did. Just wanted to understand that going forward, will it be possible to maintain the current run rate of volumes and make sure that we would be able to grow on a conservative basis because I understand that this is industry dynamics where the sales comes from the perspective when the logistics industry is booming, the client person industry is moving. But just wanted to be very clear that on a conservative basis, also we in that we would be able to grow our volume to 10%?

Yes, yes. So 10% is achievable, and we will be surely achieved for that and we're making lots of effort for that. I said, like internally, in surface, we also put on people all vertical-wise like each team is like giving a special focus on new segments also like EV vehicles and solar defenses kind of products, we're also exclusively giving it. This is a new segment where we don't have the business approaching on EV, we are very less in this. Now we're giving a focus on that. And you see many, many electronic small vehicle companies is coming. So we started to doing like a relationship with them. So certainly, internally in surface cargo, also, we will be have the focus for the different verticals to getting more market share from the like customer and all. And obviously, price hike is also happening this year. So overall growth will be finished in the range of 12% to 15% with the price hikes also. So volume will be -- certainly, we will be getting more than 10%.

Got it. Just 1 last 1 from my side. As the prices of things have increased. I understand that we would be able to pass it on to our clients, maybe in a slight lag manner. But I just wanted to have your view on unit economics related to EBITDA per kg, like today, we make what INR 12.3 , INR 12.4 per KG revenue and our EBITDA is around INR 1.25 to INR 1.27. We have been in the range of almost INR 2, INR 1.8 EBITDA per kg historically. I just wondered your guidance, how we can provide on our operating expenses so that we can actually reach back to those levels again?

So I think I already replied on that, but again, to repeat that. So basically, like if supposing these fuel hikes have already been stabilized, and there is no hike happen in the future, which we also discuss with our client and handsomely passing on to customers almost 85% will be passing on as on to customers. But supposing tomorrow again, is increasing up to like INR 7 or so. Then this is slightly challenged and might be like we also bear that cost for some extent. So this is all depend. So supposing any disruption on it, is this Gulf war going on longer period. then indirect impact also there because there is 2 impact. One is digital cost, but certainly, other input cost is also increasing gradually. Like dollar is what you've seen is in a worse condition rupee dollar ratio and all and labor cost is still bound because government want to give us social security to these guys, minimum wages is increasing continuously or -- and over and above, like state government also want to be like putting very high pressure to implement these norms by every state, and we are a Japan India company. So slightly it all depends. But we are very confident to be like passing on everything and to customer. And environment in that sense, customers are like very positive to accept these increases because they are also aware about the situation. And there is an overall pressure for that from each service provider for these customers. So by these conditions, yes, we will be improved supposing this is stabilized in current time. Then certainly, we will improve the level of around 100 basis points to 150 basis points in EBITDA level, for sure.

We will take the next question from the line of Vivek Emkay Global.

Just wanted to have an understanding on your branch expansion and manpower addition plans going forward?

Basically, branch expansion edge, we opening up the branches almost like in last year, we opened around 70 branches were majorly open for the AR and rail business because these are new businesses where we want to in a different focus to getting more revenue from that. That's why we're opening up the separate branches also and around 15, 20 branches in the surface business. So in this year also, we have a very good setup. We have a very good study in our hands where we have to be open the branches for these all products. So again, in this year, 40 branch would be open for surface business and 60 branches for the rail and air and C2C put together. So again, expansion plan for the 100 branches will be there in this year.

Got it. Also, I think I might have missed out on that point. Could you provide your reason -- could you provide some reason on the increase in depreciation for this quarter and going forward, what can we expect to be a sustainable rate or amount of depreciation on a quarter or on an annual basis?

Yes. So again, I just -- yes, I have gone detailed reply for that, but this is basically on -- due to ROU has increased. That's why this number is there. But I think in run rate would be for the whole year or INR 30 crores to INR 32 crores in next year because this is around INR 2.5 crores around amount has been increased INR 2.5 crores to INR 3 crores increase due to ROE, we have taken in this quarter, and it will be also same in the next quarter as well. .

Got it. Sir, just 1 more thing. On the volume growth, you said that you expect a 10% sustainable volume growth on a conservative basis. Based on the volume growth, what kind of revenue guidance would you give out?

It is, again, because now is the price hike time, and we're also passing on to customers handsomely. So for sure, 15%-plus.

This is for FY '27 or you're targeting for a long-term basis?

So again, it is very hard to say after that. But again, for FY '27, we are for sure like 15% in revenue growth, I'm saying and volume is 10%, 10%, 11%. .

We will take the next question from the line of Jana Shah from Equirus Securities. .

I have joined the Q rate, so I might have reset this. What has been our capacity utilization for this particular quarter? .

Yes. So capacity utilization slightly improved over quarter-on-quarter basis. So in this quarter was around 83 percentage utilization was there in this quarter.. .

Is it 83%, right? .

Yes, 83% plus -- so kind of like 83.2?

We will take the next question from the line of Pravesh Kuda from for Elian Capital.

First question, multimodal revenue last year, FY '25 was 17% to 17.5% and Therefore, what was the full year growth in multimodal business.

So this year is in like an around -- it is now or around 18.5%. So overall, whole growth was around 20% in this segment all-time other.

For the full year FY '26.

FY '26, yes.

Okay. Got it. And for FY '27, do we expect this to continue on the multimodal side?

Yes and even slightly increase, but for sure, yes, 20%. .

Got it. Understood. And last question on the e-commerce business. Can you give some more color on who you are competing with what segments you are in? And what kind of work you are doing?

Yes, yes. Great. So basically, in e-commerce business, we earlier also do like 4%, 5%, but over the period, that has been reduced because we do not have any strategy to be like doing for the new service provider was there and all. But now we're refocusing basically more into a D2C segment where brands directly deliver to customer. And where we have our like stand there because everywhere we have our branches. So we're refocusing on that and B2C also. So we're targeting very SME customer, not the like big giants. These are again 2 big boys and all. So we are giving an in-city deliveries -- sorry, intra-city deliveries and within the state kind of we've put more focus on that one. again, because our target is to having the only profitable business in this segment, other way, we will not do that. So our strategy is very clear. We will be with the again -- again, client which is in this top 2 or like top 5 and then second line. So we are always targeting in a second line and very small SMEs, which is directly sending to the D2C segment. So our target is that. And to ultimately, right now, we are around 2.5% kind of business in e-com, which we want to be increased to like 5% also. And also, we're putting for effort for the B2B segment also in e-commerce, which other companies are also doing the same way where material going from their merchant to like warehouses or warehouses to return to merchants, which business, we're also focusing for this e-comm segment. This is also giving a good results. We are very near to close on 1 big account for that. So we're refocusing on that sense also, where we will do the B2B segments in -- within Dave e-com vendor.

And you have mentioned uComm also within e-com. What are we doing there exactly?

U-commerce, we are really not going under that. This is not in our strategy actually. I'm to see D2C and within e-commerce, B2B movement, where they're happening from merchant to these all warehouses of these platforms. That segment I'm saying. .

Got it. Are we working with any kind of players like ship pocket shadow fat kind of something? Or it's directly with the end SME customer?

Few customers are there. A few customers we are focusing, you rightly said, we're focusing on that platform also, how we can be like more competitive and more revenue can we be taken from these platforms. So we're focusing on that as well, yes. We're getting the business -- small businesses from there as well and direct, obviously, our major strategy to get the direct approach from the SM is because we have very good relations across India. So we know the market, we know the geography. So our focus is to giving these small customers or direct going to them. But obviously, this platform is also giving an opportunity to everyone. So we also register ourselves in these 2 platforms and getting business from there as well. .

Thank you very much. Ladies and gentlemen, we will take that as the last question. And with that concludes a question-and-answer session. I now hand the conference back to the management for the closing comments. Thank you, and over to you, sir.

Thank, everyone, all the shareholders to attend this call and looking forward to speaking again next quarter. Thank you very much. .

Thank you. Thank you, everyone. .

Thank you, members of the management. On behalf of PhillipCapital India Private Limited, we conclude this conference. Thank you, everyone, for joining with us today, and you may now disconnect your lines.