Total Transport Systems Limited (TOTAL) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good afternoon and welcome to the Total Transport Systems Limited Q2 and H1FY27 Earnings Conference Call, hosted by RIC Capital. We have with us today from the management, Mr. Makarant Pradhan, Managing Director, Mr. Shrikand Nibandhe, CFO and Director, Mr. Bhavik Trivedi, Company Secretary and Compliance Officer. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you require assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Before we begin, I would like to remind everyone that today's discussion may contain certain forward-looking statements. These statements are based on the company's current expectations, assumptions, and estimates regarding future events and are subject to various risks and uncertainties. Actual results may differ materially from those expressed or implied in these statements. We encourage participants to refer to the company's filings with stock exchanges for a detailed discussion of the risk factors. I would now like to hand over the call to Mr. Makarant Pradhan, Managing Director of Total Transport Systems Limited, who will begin with his opening remarks and provide an overview of the industry and business environment. This will be followed by Mr. Srikant Nibande, Chief Financial Officer and Director, who will discuss the company's financial performance for the quarter. Thank you and over to you, sir. Thank you.

Good afternoon, everyone. And thank you for joining Total Transport Systems Quarter 2 and H1 Year 2027 Earnings Conference Call. I trust that you all had a chance to review the investor presentation and financial results, which are accessible on the NSC website. To begin, I would like to start with an overview of the economic outlook. And the update on the logistics sector economy. The Indian economy continued to demonstrate resilience during the first year of 2026, 2027, first half of 2026 and 2027, supported by domestic consumption, infrastructure spending, and manufacturing activity. The RBI has projected India's GDP growth at 7.1% for the year 2026-27, reflecting sustained domestic demand and investment activity. India's export performance remained robust, with merchandise and service exports reaching approximately US$476.2 billion. During April. September 2026-2027, registering 13.84% growth year on year. However, global economic conditions remain challenging due to geopolitical tensions, particularly in West Asia. Fluctuations in crude oil prices and uncertainty surrounding international trade policies. These factors continue to To influence commodity prices. Transportation cost and global supply chains. India's economic outlook remains supportive of trade and logistic activity, although global uncertainties require continuous monitoring. Logistics sector update. India's logistics sector maintained positive momentum during the first half of 2026-2027, supported by higher trade activity and infrastructure development. Targo handle at major Indian ports increased by 7.2% during April to September 2026-2027 year. JNPA recorded container throughput growth of 17.67% during April to September 2026, reflecting healthy container movement. Air cargo traffic also registered approximately 12% growth during April to September 2026. The industry, however, continues to face challenges from fluctuating pretreats. Higher fuel costs and geopolitical disruptions affecting international shipping routes. These developments have implications for shipment schedules, transit times, and overall logistic costs. Meanwhile, continued investments in highways, ports, and multimodal connectivity are expected to strengthen India's logistics infrastructure and improve freight movement efficiency. Long-term outlook remains supported by India's expanding international trade, infrastructure development, and increasing demand for integrated logistics solutions. Any operational update? Total transport system recorded healthy operational performance in Q2 FY27. The LCL consolidation segment handles total volumes of 1,07,980 cubic meters compared to 91,504 cubic meters in Q1, FY27, And... 1,09,163 CBMs in Q2 FY26. Import volumes stood at 52,104 CBMs, compared with 45,025 CBMs in the previous quarter, while export volumes increased to 55,876 cubic meters from 46,477 cubic meters. In FCL freight powering, total volumes stood at 4435. FY27 compared with 4,025 TUs in quarter 1 of FY27. Export volumes were 3,777 TUs against 3,544 TUs in the previous quarter, while import volumes stood at 658 TUs compared with 481 TUs in quarter 1.

Financial Year 27.

The air freight segment recorded total volumes of 549 tons, compared with 434 tons in quarters 1 FY27 and 439 tons in quarters FY26. Export volumes increased to 483 tons from 345 tons. In the previous quarter, while import volume stood at 66 tons compared with 89 tons in quarter 1. Alongside volume growth, the company continued to focus on improving margins, strengthening its business operations, and maintaining consistency in growth. Software implementation initiatives are progressing with encouraging results from AI-related initiatives aimed at improving operational processes and efficiency. On the business development front, the company continued to pursue new client acquisitions and expand its presence through business development and pitching activities across various locations. The air freight business is all... Good morning, everyone, and welcome to the call. To expand to 20 locations. Thank you. performance for quarter two and H1 for year 2027.

Hello, good afternoon, everyone. Moving to the financial performance of Total Transport Systems Limited delivered a very healthy performance during quarter two of FY27 with very strong growth across revenue and profitability parameters. On year-on-year basis, consolidated revenue from operations increased by 73.7%. Thank you. 4.27 increase to The built-up margin improved to 3.7% compared to 2.9% in Q2 of FY26 and 3.3% in the previous quarter. For H1-27, EBITDA stood at 16.9 crore, registering a growth of 84.5% over the corresponding period for the last year. The built-up margin improved to 3.5% from 2.9% in H1 of FY26. PBT, that is profit before tax for quarter 2 of FY27, increased to 9.1 crores. Margin improved to 3.2% compared to 1.9% in the... That is profit after tax for the quarter stood at 7.1 crore compared to 2.4 crore in For H1 FY27, PBT has increased to 14.6. 11.2 crores, registering growth of 112.2 crores. H1 of FY26. The H1 fat margin improved to 2.4% from 1.7% in the corresponding period. TPS for H1 27-2. Thank you. And wish you all very happy and healthy, happy Diwali and healthy New Year coming ahead. And now we are proceed and open for the question and answer session.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then 1 on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and then 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, you may please press star and then one now. Your first question comes from the line of Abhishek Verma with Cloud9 Family Office. Please go ahead. Hello.

Hello, Abhishek Verma. Good afternoon. Good afternoon, sir. Thank you for giving me the opportunity to ask the question. My name is Abhishek Verma, and my question is, what are the key strategies to improve profitability and maintain consistent practice?

If you are aware, the freight levels have increased drastically in these two quarters, because of which there is a possibility of higher freight margin. Of course, we have to keep in mind that our costs don't escalate in the same proportion. Which we are trying our level best to ensure that we plan our bookings in advance. Because today the situation is, if I have to book a container for freight forwarding or for my consolidation business, we have to book in advance. Otherwise, I would get a date. If I start booking today, I will get a ship date of nearly one month ahead. So it all depends on our good planning. And execution, because of which we are able to keep the cost under control and have a better profitability.

Second question is, will today's US election result will be going to affect?

Write this. Hello, you are breaking off, Abhishek.

Okay, so, my second question is, will today US election result will be going to affect flight I'm going to affect tight rate.

We don't think so that the freight rates will come down for the next two quarters at least.

Okay, so one last question. What sustainable EBITDA margin can the company achieve over the next two to three years?

Next two to three years? Yes. We can talk about two or three quarters at the most. Two to three quarters. See, if the freight levels remain the same, we will be able to maintain the abidita margins, which we have done in this quarter, which are one of the best as of date.

Okay. So one last question. How will the company monetize its presence across 89 countries to drive an international business growth?

Firstly, 89 countries, we don't have our offices. We have our agents network there. So there is no question of monetizing. The business which is today being done is coming through all our partners, and vice versa, we are giving business to our partners for handling. Okay? We are already monetizing the network that we have. And we will continue to expand our network and do better.

Ask a question. You may press star and then 1. A reminder to everyone to register for the questions. You may press star and then 1. The next question comes from the line of Darshan Chandra, an individual investor. Please go ahead.

Yeah, I'm audible. Yes, you are. Yeah, congrats for the good sets of numbers. Thank you. Can you throw some light on the ability when you, means, last time you sold the process 75% but it didn't happen? So, anything on that, what the company is doing going forward?

Ambilaya, now we are, as a core business, we are doing this last mile delivery for Amazon as well as Flipkart, and now we started with the delivery also in Maharashtra, some stations. Amazon and Flipkart. Now, the next step, what we are doing with Amazon is we are handling the dark stores of Amazon now in Maharashtra, Karnataka, as well as in Tamil Nadu, which we are just handling the manpower and supporting their system. We seem giving the good revenue point of view because we have some fixed costs and they gave us X plus 2. Subsequently, we are now expanding the same handling of dark store business with Flipkart now, which they have promised after Diwali season, they will look into it since we have a relationship for past six years. We'll be adding up our top line as well as the... The office are on with them, so probably after this season gets over, early December or mid-December, we can start handling this.

That is, but my question was regarding the sale of Abilaya. Last time you sold Abilaya for 70, 75%.

Yeah, the sale of Abilaya, actually the investment, the buyer who was willing to do that, and we are about to do that. But he got a funding issue since the war started in February itself, and they're all funds were supposed to come from the Gulf. Arrange for the funds from So that's how the whole deal got cancelled. We've waited for a long time, but looking at the situation and looking at their fund position, So, that's when we cancel it in the month of February last year.

Any other deal with some, any other talks going on regarding the sale of 25, at least 25 percent or maybe 50 percent, anything going, you can inform the. Okay, and in the last corn call of 25, you said that Abhila, you are looking to scale Abhila to 200 crores. And at that time, the pad will be on Abilia from the pad will be at least 5 to 6, 7 crores. Are you sticking to that timeline? Yes, yes. Definitely it will happen. But in this quarter, the Abilia sales has gone, but the pad number has gone below the Q1. Can you throw some light on that?

Because second quarter was, there was some, you know, first month was August, July-August was not so, shipments were happening. It started happening from the month of late August to September, since all the seasons started, like Ganpati, Navratri, and now the Diwali, which is coming to third quarter. So, there is a little low volume in those first July and August. Now, since we have picked up this third quarter, and December also will be achieving the good volume, sir.

So, what kind of EBITDA margin do we, as a shareholder, as a company, expect going forward for Abilia business and for the main total transport business? It can be maintained in the 3.5% to 4% range?

Yes, definitely. Yeah, Abhinaya will be less, but total transport definitely 4%.

Okay, but as you said by our MD in the last con call, when the freight rate goes up, the margin increases of the company and the volume increases and the margin also increases. It works that way. Maybe VA has crude has come down and maybe that is going to improve our transportation on freight.

Do you see the 3.5% and 4% range will be maintained? Definitely. This crude and all, this is not affecting to the rate levels.

If Hormuz opens and everything goes, at least 50% less transit happens, then it helps us, the company, to maintain the margin at 3.5 to 4%?

Even if a Hargoos opens tomorrow also, it will take minimum six to eight months to get the things regularized. This is mainly because the freight levels are, you know, shipping lines they come up with. Although two basic things, one is the container inventory management, where their containers are pressing out. And secondly, the routes of the ship. As on today, whole Gulf region is having close to 650,000 containers are stuck. Empty plus loaded. So getting those number of containers into all the systems, it will take minimum eight months. Furthermore, there are so many ships which have come on the different routes. Again, the challenge for that. So things will not be immediately happening to the normal if it is Harmoos gates open and no war situations like that. Furthermore, we are diversifying little more and focusing more on the air cargo and taking some good team on board will be the last quarter of this year. So those things will be additional revenue should start for the next year for us. Furthermore, our project division is doing very well now. We have recently signed up some. Also, we have retired.

And one last question. Can you throw some light on the trade receivables? Your receivables have gone up from 98 crores to 179 crores, and cash flow, outflow? H1, outflow of the cash is 21 crores. Because of that, our borrowing has increased to 52 crores. So how will we maintain the cash flow positive? Means receivables, can you throw some light on that one? That is the main question.

Yes, this is Bakral Prasad. What we control is the DSO, the number of days that we are getting our money back. When there is increase in the turnover, The outstanding, when we are giving two months to three months credit, it is bound to go up. Freight levels have doubled up. If you have seen, for Dubai, they have gone up by 10 times.

Yeah, yeah, right.

That is one of our main markets. So when you see that there is an increase in the freight level, obviously our outstanding are going to go up. But till the time our DSO is not increasing over 58-59 days, we are in a very comfortable situation. Yes, that means we have a good problem that we are not able to 100% service the business that we are getting. That is also helping us to push our margins so that, you know, we get the customers who are giving us little better profitability. We are able to pick and choose the business. Outstanding is not of a worry till the time, but DSO is in control.

Right. So, how many in the next quarter can we see the receibles going down?

No way. If the business is growing, how can you see the receivables going down?

Yeah, this 178th quarter, at least you said that 60 days DSO is there. So, it means that in this quarter, it may be coming into next quarter three, right?

But we are also going to continue doing business, right? Yeah, yeah, got it. So, if I am going to do more business, how do you expect my outstanding go down? Bulldog. Got it, got it.

Yeah, if I have a question, I will be in the queue. Thank you, sir.

Thank you. A reminder to all the participants, you may press star and then one to ask a question. Once again, to register for a question, you may press star and then one. Your next question comes from the line of Sashi Singh with Dalar and Bracha. Please go ahead.

Thank you. Congratulations, sir, on the great set of numbers. I have only one question. You mentioned the freight rates would be similar kind of in next two quarters. So, do we expect H2 would be better than H1? Or we can deliver the same? Not exactly.

It is more or less going to be the same thing. Okay. More or less, say. Little bit different. Because if we have little bit more money at our disposal, which we are looking at, we will be able to do little bit more business.

Understood, sir. Thank you so much, sir, and I wish you all the best.

Thank you. Thank you. Participants, you may press star and then you want to ask a question. A reminder, once again, to register, you may press star and then one. Your next question comes from the line of Abhijit Waagmare with VP Capital. Please go ahead.

Good afternoon, sir. Good afternoon. I am Abhijit Waagmare. My question is that, how is the company using a technology to improve operational efficiency and reduce the logistic cost?

Currently, what we have been doing, we have been analyzing on the volumes that we have done for the past one and a half years. We are using AI to give us the data court-wise, and we are booking our requirement of containers ahead of time. That is giving us two advantages. One is we are able to plan our shipments much better, giving a better service to our customers. Two is we are booking containers at a little lower rate than our competition is doing, you know, when we book it in advance. So these are the two things which we are putting to our advantage using the AI tools. The other thing that we are doing, if you are aware, government has come up with this Advanced Cargo Declaration, SCMTR. In this, all the consolidators, all the carriers are supposed to declare in advance what cargos are coming immediately after the vessel says the international port. Now, in that, we have... We put all our efforts to ensure that we master that act. In the last two months from the time this SEMTR regulation started in August, 30th of August, there were nearly 800 containers across India which were stuck because there were problems in SEMTR filing. But I am happy to inform that our company did not have even one container stuck there. One of the better support of our customers, because once the container gets stuck in the SCMDR problems, we are paying heavily for the detention and damages. So this is the second area that we have done better than our competition. The third area we are doing Good morning, everyone. We'll take, uh, Having the documentation. Lastly, Thank you. These are some of the AI and robotic tools that we are using. Over the period, we will keep on trying options where all we can use these technologies for the betterment. At the same time, we have to ensure that we have to keep our cost of technology low and don't go over. We have our limitations. We have to use our money currently for doing business also. So these are the things that keeping a proper balance, we are doing as much user technology as possible. Hello?

Hello. Sorry to interrupt. We are not able to hear you clearly. Mr. Markmare, we are not able to hear you clearly.

Yes, sir, my second question is, what is the associated cost roughly for this technology?

These AI tools are not so expensive. As per the requirement, we get this attached to our main system. So, this is not so expensive, okay, what we do then. It ranges between 5 lakhs to 10 lakhs per annum as their service provider to each segment.

Abhijit sir, does that answer your questions? Sir, if you can unmute yourself and proceed in case if you have any further questions. Sir, we are not getting proper audio from your line. I would request you to return to the queue in case if you have any further follow-up questions, please. Participants, in order to register for a question, you may press star and then 1 now. Once again, it is star and 1 to ask a question. The next question comes from the line of Adarsh Sharma from Springtree Investor. Please go ahead.

Good afternoon, sir. My name is Adarsh Sharma. My first question is, how does management plan to optimize working capital requirements while in supporting business expansion?

It's optimization means we are taking some more funding from the banks and some other institutes to meet the requirements. And then again, we are trying tightly controlling the credit rates also. So which will also help us to collect our outstanding and not much overdue amounts are there with the customers. So this is all the whole process is supporting the cash flow.

Mr. Sharma, does that answer your question?

Yes, sir. Thank you, sir.

Thank you. Father Supan, see my best star and want to ask a question. The next question comes from the line of Darshan Chandra, an individual investor. Please go ahead.

I have one question. In the investor presentation, on the volume growth quarter to quarter, Q2, Q2, FY23, and Q2, FY27. LCL consolidation has decreased by maybe from 109.163 to 107.980, and FCL freight has decreased from 5013 to 4675, and your freight has gone up from 439 to 549. So can you explain the increase in turnover was from maybe a higher freight rate or that is the whole increase was in the result?

You know, as you are aware, the war between the U.S. and Iran has opened up in the end of February. Yeah. That is in March last year. I mean, this year, the last financial year. So the shipment movement was very slow in the first quarter of this financial year. People started, you know, settling down or finding out some other routes and started moving cargoes in the Gulf from other ports by road and all these things. If you see that the second quarter, there is a growth in the volumes compared to the first quarter. Of course, this freight levels also keep on, you know, increase a lot in the second quarter compared to the first quarter of this financial year. So this is how you can see the volume vis-a-vis the cost.

My question was, the growth of this kind of level of 73% year-on-year growth has come from maybe a little bit on the air cargo, but the main growth has come from that increase in prices of the freight and anything and insurance, right? Am I right on that front?

Yes, partially you are right. If you see, compare the last year's report, our full container volume has increased. This constitutes 1.75% of the global trade. So we are in a niche market. So, the growth of NPL is limited. We have been doing, if you see our sector-wise bifurcation, 30% of our volume was into the Gulf. That gets affected by nearly 40 to 60 percent. It is obvious that... Second quarter, we recooked, we built up volumes for others at the same time for Gulf also. We have bought nearly 1,000 cubic of Gulf Carbos, but we don't have containers for them. Situations are there. We are fighting over it, and we will slowly come over it. But it is not that there is no increase in the trade. Of course, the trade has increased for the betterment. Of course, as you said, the increase in freight levels have also contributed quite a lot because of this. Thirdly, if you see, our imports have gone up drastically. Import LCL. Yeah, right. For 450 has gone to nearly 700 containers. So we are looking at possibilities of increasing the business from whichever stores that we can get. We are not sitting tight on this is our market and this is what we have to do. We are, when there is a situation in one sector, we are pushing the other sector to increase our business. If the LCL volume itself is overall low. The CFRs handling the LCL have confirmed that they have a drop of nearly 25-30% of drop, but our drop, if you see, is not more than 10%. That means we have bought into other markets with our aggressive sales efforts, and we have added more customers to it. Got it.

So what can we expect from next quarter and maybe Q3 and Q4 on the revenue front? That is fine. On the EBITDA front, on the revenue will be same as this level?

More or less the same if the freight levels don't change a lot. Okay.

Now you said the freight levels will don't change for the next six months.

We don't expect, but again I am saying you, these are our expectations, and that is coming from our experience and knowledge.

Has Harmoos opened, Iran has opened for Harmoos shipping for India, China, and Qatar. This is some news. Yeah, but it has opened, so what do you expect the FI going for of Q3 and Q4?

See, as Srikansar said, even if Hormuz opens up, even if they give, but it is not certain that it is going to open up. As Srikansar said, that there are nearly 650,000, 680,000 containers stuck in the Gulf. By the time they will ease out and come into circulation, it is going to take a lot of time. Six to eight months is a good time. And that is the reason we say that we do not expect the freight levels to change a lot.

It might change a little bit, 10 or 10 percent here or there. Yeah, but not a lot. So, sir, the PAT of 7 to 9 crowds, can we see in the H2 also the same or it will be much better than that?

I think, no, no, it will not be much better, but it will be more or less sustained.

Yeah, thanks. Thanks for questioning and arranging a call for that. And, sir, can you see that Abilia sale at least of 25% or whatever, maybe, in this financial year or it will be not possible in this financial year?

We cannot say anything. We are trying our level best. We have got a lot of people who have approached us. We are dealing with them appropriately. This is what we want to do. But at the same time, it all depends on what they offer, what we want to accept, and all those things. If it happens, it is good, and we are looking at it.

Did that kind of offer again come for 75 crores, for 75% stake or 79% stake? Means you are easy to sell for that kind of thing?

No, now the parameters have changed because we have come into profits, the business has gone up, things have changed, so we cannot look at the same offer now.

Yeah, definitely, yeah. It has one year has gone by that time.

So, we will take care of all those things in a proper manner. We have got good consultants who are guiding us properly. We will not be taking that offer, definitely not.

Sir, for a 200 kind of Avilia business, what kind of valuation means you are looking for that? So, as a shoulder, we can see that.

We are in the process of taking this valuation report from the consultants. Thank you very much, everyone, and welcome to the call.

Sir, let me inform the investors. What was this last time? We also did a business sale and we were waiting for some money. Money will come, money will come, money will come. But later in February and March, the deal will cancel. It affected our share price from 90 to around 50. Look, we don't see long-term, but what's happening? My name is Long-term.

Yeah, sir. Thank you. Thank you.

I got a report to tell you. from the participants.

I now hand the conference back to the management for closing remarks over to you, sir.

Hello, again, Glockam. Thank you very much, participants, for attending this call. We are highly grateful for your support and the questions that you ask. Keep us on toes and push us to do well. Keep on doing well. I take this opportunity to wish you all a very happy Diwali and a good year ahead. Thank you.

Thank you, members of the management. On behalf of Total Transport Systems Limited, we would like to formally conclude this Q2 FY27 earnings conference call. We sincerely appreciate your participation in this event, and we kindly request that you now disconnect your lines. Thank you for your time and engagement.