[0:00]we have the logistics players joining in. Vineet Agarwal who's the MD of Transport Corporation of India now joins us. Typically, the second half of the year a lot better for this industry than the first half.
[0:11]Vineeth, thank you for joining in. Season's greetings.
[0:15]The wonderfully colorful background that you have of the globe, may there be as much color and joy in the world in 2026 as well and for your shareholders too.
[0:25]The first half of this year, you did about 8% revenues, you expected about 10 to 12% this year because the second half is typically stronger.
[0:33]So let's ask you, you're in the middle of the second half, you're at the end of the third quarter.
[0:39]How have business volumes picked up and what are your expectations for the remainder of this year?
[0:45]Hi Mangalam, thank you for having me and seasons greetings to you and the team as well. Um, yes, you're absolutely right. The second half of the year is always better and things start picking up.
[0:56]Let's do a little bit of short recap actually. I was thinking about what happened in the whole calendar year, and you know, we started off with all the tariff disruptions and not forgetting the Indo-Park skirmishes that happened.
[1:08]Um, those were the some of the negatives and really had an impact on the market also on the local industry as well.
[1:14]Um, and subsequently that then we had a very weak summer as you recollect you know, some of the consumer segments from the beverages or even air conditioners sector had a a weak summer.
[1:28]Then MSMEs were down as well and capital goods sector was also not had not picked up that much.
[1:34]Uh, the silver lining of course in the last few months has been the auto sector uh with the GST cuts that have happened that has triggered a a really a tremendous amount of movement across the country for the finished goods.
[1:49]Simultaneously, we are seeing on the consumer goods with the GST cut also there has been some impact.
[1:54]Volumes have started to move up in this third quarter as it always does, um post Diwali, things were a little soft, but then now things are still uh picking up.
[2:08]But um on with the GST cut, I think the most important thing that has happened is the sentiment change.
[2:15]The the the fact is that there are consumers that are wanting products, so we are seeing the reproduction or rather production restarting everywhere as well as restocking happening.
[2:27]Clearly, the the flavor of the day and the flavor of the last few months has been quick commerce.
[2:32]Uh, volumes there has been tremendous, the growth has been tremendous.
[2:37]Addition of new warehouses has been really, really high and we are seeing this continuing.
[2:43]In terms of the next few months, I think these trends will continue.
[2:48]We definitely see quick commerce adding to volumes for the sector as a whole, driven by consumer trends also.
[2:56]Uh, the GST cut will certainly help and you know, more income on people's hand will also help.
[3:00]So for a player like you, you know, how does all of this stack up for your own performance?
[3:06]Because at in the middle of the year when we spoke, you were looking at 10 to 12% sort of revenue growth, the first half was 8% that put the owners in the second half for you to at least meet that range.
[3:17]So, one, are you on track for that range? And secondly, quick commerce, you have some exposure there, but not as much as say some of the quick commerce players themselves.
[3:28]Um, so what's your exposure to quick commerce right now and how will this likely to pan out in terms of growth for you?
[3:35]So, I talked about quick commerce as a trend. Clearly, it is not a very large contributor to our business.
[3:41]It is a very small percentage but um but what will contribute to that 10 to 12% uh guidance that we have given is essentially the growth in all of the other things as well.
[3:52]Multimodal is growing a lot. Uh, we are seeing that rail traffic has increased and we do container transportation across different modes of transport, whether it's sea or rail and road.
[4:04]And we've seen that that has started to pick up. Uh, warehousing is picking up and consequence of the quick commerce is warehousing also.
[4:10]So, we do a lot of the backend fulfillment for our customers, uh for the quick commerce companies or for other customers, and that backend fulfillment centers, the warehouse centers are growing quite uh rapidly.
[4:23]So, uh, the growth will come from these areas, uh, multimodal, automotive as well as uh the backend fulfillment centers, which are warehouses for quick commerce companies, for e-commerce companies, for even you know, there are large consumer durable companies that are now looking for larger spaces.
[4:50]I think the trend is shifting towards moving from smaller multiple smaller places to much larger uh facilities where the inventory management, where the uh the quality control as well as the deliveries to all these multiple channels is becoming more precise.
[5:01]Uh, so here larger companies like us which have the bandwidth of creating infrastructure as well as uh delivering the quality, the the KPIs that all these customers need is uh is driving some growth for us as well.
[5:12]Uh Vineet morning, thank you for joining in. Compliments of the season to you and your team as well.
[5:18]You know, based on the changes that you are noticing right now and as you just highlighted, how much are you looking to spend uh the next year considering the demand that you're witnessing and the change that you're witnessing part one.
[5:31]And clubbing in another question as well, we are just a month shy from the budget. What are you expecting as an industry from the finance minister this time around?
[5:40]So capex-wise, the last 10 years we did about 1,000 crores of capex. The next four years, uh, three to four years, we are going to do 1,000 crores of capex.
[5:50]Uh the next the the current year, we are looking at about 350 to 400 crores, uh similar kind of capex 350, 400 crores.
[5:58]Uh, we have placed an order for two new ships that should come in in calendar year next year, end of calendar year next year.
[6:04]Um and of course the trucks, the warehouses, etc, those are ongoing investments.
[6:10]We also put in money for two new automotive rakes, uh for railway rakes as well.
[6:15]So net-net 1,000 crores is what and most of it will come from internal accruls versus with very little debt that we plan to take on.
[6:23]In terms of the budget, I think it's a very interesting times.
[6:26]I think the infrastructure spend that the government has been doing needs to continue.
[6:31]I've always been saying that we really built for the past. We really need to build for the future, we need to continue investing into infrastructure the way that we have been for the last two, three years on the budget.
[6:41]Um it's there's never going to be less of that.
[6:44]It's uh we are a country where we're trying to catch up on infrastructure, so it will help our sector from a multimodal perspective, the roads, the rails, the railway networks as well as the um the connectivity through ports, etcetera.
[6:56]So, uh, more and more on infrastructure is my number one request from the government.
[7:00]All right, uh, more and more on infrastructures your request from the government. Just a final question, you know, the last few trading sessions we've looked at some of the exchange disclosures that have come in and in that, uh the promoter entity has been marginally inching up some of their stakes.
[7:16]Uh, could you explain the rational behind it? You believe more in the future of the company, you have some extra cash that you want to deploy back, or was it uh just uh, you know, something that usually happens?
[7:27]No, we, we keep looking at trends and we see that okay, we can invest more into the company and we we want to keep doing that. We are fundamentally very, very clear on the growth for the next 10, 15 years actually.
[7:42]So, so I think, uh, it's always a good time to buy. All right, uh wish you good luck uh Vineet and wish you and your team a very happy New Year as well.
