VRL Logistics Limited (VRLLOG) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to VRN Logistics Q4 and FI26 Earning Conference Call hosted by Mottila Loswal Financial Services Ltd. 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 guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchdown phone. Please note that this conference is being recorded. I now hand the conference over to Mr. R. Lough Devra from Mutila Loswal. Thank you and over to you soon.

Thank you. Good morning, everyone, and welcome to the Q4 FY26 earnings conference call of ERI Logistics. So, today we have with us Mr. Sunil Nalavadi, the CFO of the company. I will now hand over the call to Mr. Nalavadi to provide some opening comments, and then we can take up the Q&A. Thank you, and over to you, sir.

Yeah, thank you, Alavadi, and good morning to everyone. I warmly welcome all of you to the earnings conference call of our company to discuss the financial and operational performance for the fourth quarter and year-ended FI26. On the onset, I would like to inform you that we have completed 50 years of service in the logistics industry. Our promoter, Dr. Vijay Sankeshwar, started this company in the year 1976 with self-driven single vehicle with one boot. Today, the company is operating with 6,000 owned vehicles along with the hired vehicles as well. Today, the operations of this company spread across 24 states and 4 Indian territories with around 1,300 branch networks. We cater to all the companies in the segment with Zendek Plus customer base. We are very much thankful to all those who supported us in this year. On the onset, I would like to inform you that we have completed 50 years of service in the logistics industry. Our founder and promoter, Dr. Vijay Sankivar, started this company in the year 1976 with self-driven single vehicle with one roof. Today, the company is operating with 6,000 owned vehicles along with the hired vehicles as well. Today, the operations of the company spread across 24 states and 4-unit territories with around 1,300 branch networks. We cater to all the commodity segments with 10 lakhs plus customer base. We are very much thankful to all those who supported us in this journey. I hope everyone has had an opportunity to review our investor presentation, which has been uploaded along with our financial results. We started this financial year with a strong background of rate rationalization and the strategic pricing reforms, including the identification and exit from the low-margin businesses. The year started with a deficit of 13% in our tonnage growth in Q1, and for the full year, we are in a position to restrict the deficit in tonnage growth by 7%. We achieved the year-on-year growth in tonnage by around 3% in Q4. The improvement in tonnage handling on quarterly basis in the current year, proving our efforts to increase in tonnage by adopting the right pricing policy. We are taking many steps to increase in volumes, especially by expansion in our network by opening new branches in untapped markets, improvement in service quality by focusing more on own infrastructure facilities, which in turn result in the better control of our services, route optimizations to reduce the lead time to deliver the goods, and having the lowest claim ratio as compared to other operators in the industry. When it comes to the financial performance of the company, the quarter for total income stood at Rs. 859 crores, up by around 6% year-on-year, and grew 3% sequentially, driven by improved realizations, new client additions, and the return of some previously lost accounts. Tannes saw a quarter-on-quarter improvement, supported by new account additions, growth in Tannes from the existing customers, and return of volume following contract restructuring undertaken in last year. Our daily tonnage costs 11,500 plus tons during the quarter, reflecting improving demand trends. The realization per ton stood at around 8,147 rupees, increased by approximately around 3% year-on-year, reflecting freight rate rationalization and route mix. We were able to maintain realizations with sequential revenue improvement by 3%. The yield improvement remains a key profitable driver and reinforces our focus on sustainable margin-led growth rather than volume-led expansion. On profitability, the EBITDA margin stood at around 21.4%, down by around 190 basis points year-on-year. I would like to inform you that the quarter four of FI25 was an exceptional quarter with a margin of 23% plus. On account of our new initiatives, such as rate rate rationalization, route optimization, etc. were introduced. The margins in the current quarter compared to last year were impacted due to increase in laurier service by around 1.73%, increase in salary by around 0.74%, and increase in vehicle repair and maintenance by around 0.85%, whereas the fuel cost, which is reduced by around 1.77% to the revenue. The fuel cost remain well controlled in the current year. Fuel cost as a percentage to total income declined by around 24% from 25.7%. Due to declining fuel consumption quantity and cost is increased to some extent on account of increase in the fuel procurement cost per litre from Rs. 84.50 to Rs. 85.54 due to decrease in purchase quantity from the refineries supplied to our own firms. The quantity directly purchased from the refineries is reduced from 41% to 36%. We restricted the bulk purchase quantity on account of increase in the bulk purchase rates. The lower-year charges increased on account of more higher-held vehicle engaged to carry the additional finish during the current quarter and also due to increase in the lower-year rates. The employee price has a percentage to protein income increased from 17% to We continue to view these increases as investments in our people, particularly given the industry-wide shortage of skilled drivers, where VRS on-roll driver model remains a key competitive advantage. With these changes, during the current quarter also, we are in a position to achieve the 21% plus EBITDA margins. The sequential EBITDA margin is increased by around 48 basis points, supported by improved realization and strict cost controls and better asset utilization. And profit for the current quarter stood at around 72 crores. For the full year FI26, our total income stood at around 3,245 crores, EBITDA margin stood at around 20.8%, expanded by nearly 190 basis points year-on-year, supported by a 10% improvement in realisation and sustained cost efficiency. The profit for the year is increased to Rs.237 crores, as against the last year profit of Rs.183 crores, with a robust growth of around 29%. The higher profits resulted in an increase in cash flows from operation to Rs. 668 crores from Rs. 583 crores in the last financial year. The cash flows of the company have been effectively utilized for the purpose of capital expenditure to the tune of Rs. 298 crores, mainly for the purpose of addition of commercial vehicles. To the extent of Rs.101 crores, and Rs.165 crores has been invested into purchase of land and building facilities in the critical locations of our operations. The cash flow of Rs.175 crores also utilized for the payment of dividend in the current year. Our balance sheet remains strong, net debt stood at around 440 crores as of March 26, and also the trade receivables to turnover ratio is at around 36 times. of the revenue, which will work out the retrieval days around 10 days, among the lowest in the industry, underlining the strength of our collection mechanism, and diversified customer base of over 10 lakh GST registered customers. Due to the higher returns, the return on capital and period of the company increased to 25% from 21%, and return on equity is increased from 21% from 18%. Operationally, our network continues to scale. As of March 26, we operate around 1,293 branches and 50 transshipment hubs across 24 states and 4 in-end territories. The fleet rationalization continues with the older vehicles being scrapped and utilization of home assets improving. Around 77% of our fleet is totally debt-free and 14% is fully depreciated, providing strong operating leverage. Our strategic priorities remain unchanged, profitable, and volume growth, disciplined, cost management, and tight working capital control. We are actively managing the risks caused by current georofill development, and potential thereof to cause volatility in fuel rates and other input costs. Looking ahead while near-term macro uncertainty is perceived, we remain optimistic, improving demand conditions, stronger marketing initiatives, Lead rationalization and expansion in under-penetered geographies position to well drive the gradual volume recovery while sustaining the profitability. With this, I would like to conclude initial remarks. Now, I will request participants to open for questions and answers.

Thank you, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question, may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets only while asking our question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

We have a first question from Krupa Shankar N.J. with Evidence Spark.

Please go ahead.

Hello. Good morning, and thank you for the opportunity, sir. So my first question is good to see that the volume growth is coming back on track, and then you have registered a first Y-O-Y growth during the quarter. I just wanted to get a sense around how do you expect the volume growth momentum in 537? And what are the efforts you are taking towards boosting volumes on that front, sir?

Yeah, in terms of volume growth, we are expecting to grow at least around 6% to 7% for the full-year basis. And we are expecting that at least around 2% quarterly growth on a sequential basis, even for the financial year, so the 7. So, on a full year basis, the expectation is around the...

And what are the efforts you are taking towards pushing those volumes, sir?

The effort is basically our rate rationalization exercise is already completed, and the customers are very well aware about the structure of the rates and other things, and we are pushing, you know, a lot of marketing activities, and we are identifying who are the large customers endorse. And just to inform that, we are getting a lot of new customers also, especially wherever we are opening the new branches, new geographies, we are adding the new customers as well. So that is giving a lot of confidence for us to increase the volumes.

Sir, sir, but the diesel prices are also going up, right? Are you planning to further increase your prices to offset that impact of higher fuel costs?

Yeah, of course, diesel prices are increasing, and it is increasing to every operator, and ultimately the cost, whatever additional cost will come, that needs to be passed on to the customers. And during the recent movement, whatever the rate increase is there. So, to pass it on that expenses, we have not increased the rate, but some of the selective routes, wherever we are offering some kind of a discount, and wherever actually the volume groups are coming, we identified such routes, and wherever the rate tweak is required, we have already done it. So, for the month of April also, we saw that the year-on-year volume growth is around 8% and we are maintaining EBITDA percentage in the range of around 21% plus.

Understood. But given the fact that, you know, there is going to be further increase on selective routes, does that put pressure around the volume growth expectations? Because the hikes have been quite recent, right? And then, just to get a sense, how do you…

Volume growth pressure is not on account of the increase in fuel rate, but basically what's happening, some of the commodities' demands are affecting. For example, the products which are related to the petrochemicals and oil, which are directly related to the crude oil. Say, for example, plastic products and all. We are already saying, you know, acknowledging in the market that the demand of such product is coming down. So those things may impact on the volume, but because of the increase in freight rates and all, because of increase in fuel rates, so everybody in the market or a geek and every operator has to take up all that. It has to be passed it on to the customer.

Understood. Understood. And I could also see in the presentation that you're not currently awaiting the direct procurement due to increase in bulk fuel rates. I just wanted to get a sense that, you know, do you see any, while you have guided that the first water margins will be moving at around 21%, but do you see an impact on your margins because of the proportion of bulk supply coming down?

Yeah, to that extent, you know, the EBITDA level, definitely we are having, you know, we are very flexible to maintain at around 20% level. So, some basis points may impact on the margin because of this facility has been withdrawn. The bike purchase is already lost.

Understood. The last question from my side, if I may, sir. Just wanted to get a sense around the capex which you will be incurring in 527 towards fleet and any hubs which you will be adding during the year.

Yeah, we identified around 2-3 locations now which are in the pipeline, especially places like Nagpur and Raikur is there. Some additional locations we are looking, but overall capital expenditure will be around 300 pros for this year. Now, in the current year also, we invested almost around 300 crores. Out of that, around 100 crores for the vehicle and remaining most of the capital expenditures for the land and building facility. And even going forward also, the mix will be like that. Around 100 and 150 crores for the vehicles and around 200 plus crores for land and building. So, on a full year basis, we are expecting around 300 to 350 crores capital expenditure.

Understood.

Thank you for answering my questions. I'll get back at the chat.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and run on the test phone telephone. Our next question comes from the line of Pramod Dangi from Ratanathrai Investment Management LLP. Please go ahead.

Yeah, thanks for the opportunity and congratulations for the, you know, good set of numbers. So, you know, on the CAPEX, can you hear me?

Yeah, please.

So, you know, as you just explained that going forward, the CAPEX will be around 100-100 crore rupees on the vehicle and the 200 crore rupees on the... London buildings or the warehousing. In the last three years, you know, in 2025, we have done the huge capex of 400 crore plus. Where we see our recycling, you know, the refinancing or the vehicle purchase cycle coming back into the picture in 2027 or five years, seven years down the line?

No, this calculation is a continuous cycle. See, now what happened, the government has put a restriction of the life of the vehicle for 15 years. Even though it is not mandatory, but there are a lot of restrictions to operate the vehicles which are crossing more than 15 years. That's the reason whatever capacity will cross the 15 years, we need to add those vehicles. And apart from that, whatever tonnage growth will come, to carry the additional tonnage growth also, we need to have the vehicle capacity.

So normally, do we replace the vehicle in 5 to 7 years or we keep it till, you know, end of the life, 15 years in our fleet?

Normally, end of the life, up to 15 years.

Okay.

And you mean certain circumstances which are outdated or major accidents happen? Such weapons will be scrapped even before that time.

Okay, okay, great. And second, as we in the last one year, we carried out the loss making or the lower margin businesses. Going forward, will the 10% volume growth rate will come back or it will be like in line with the industry of 5, 6, 7%?

Yeah, currently, the trend is there are certain pressures in the market. As I said, some of the commodities are impacting because of the increase in the oil price. So, the products which are related to that, it may be some of the plastic goods or some of the, you know, the oil-related commodities. So, there, actually, demand is already constrained. So, in spite of that, actually, we are expecting the growth in Chinese in the range of around 6% to 7% in the next year. Because of our, you know, the network and catering to many products in the industry, we are not depending on any line of commodity or line of customers. So that is giving a lot of flexibility for us to increase the volume.

Got it. And normally we give a tonnage, but do we have the, you know, other metrics of the tonnage with the kilometers? No, we do not. And lastly, how is the competitive scenario in the industry? I understand that a few of the companies have also increased their prices, and the likes of the delivery, Uber, games at the lower price, they are also going on the price hike. So how is the competitive scenario in the industry as of now? It has changed in the last few months, or is it still the same?

It's a competitive scenario, yet the industry is highly depending on the unorganized operators. But that ratio is coming down day by day. And the unorganized market is converting into the organized industry. So many of the organized players are actually taking share of the unorganized operators. But about the fuel rate is concerned, whatever increase is there, everybody has to increase the rate, and accordingly, everybody is taking the call to increase or pass it on to the customers.

Okay, great.

Thanks.

Thank you.

Thank you. Reminded to all the participants, if you wish to ask a question, you may press star and 1. Our next question comes from the line of Nishita Shashkesha from Sapphire Capital. Please go ahead.

Oh, yes. Hello. So, I just wanted to understand you mentioned that we'll maintain the data at around 20% and that we are able to pass on our price increases to the customers. So, is there any lag with which we pass on the prices or we can like directly pass the cost, increased cost to our customers?

Yeah, there will be some lag. See, now, in the last one week, there are two times increasing the rate. So, we cannot increase like this. But definitely, we will analyze the trend over a period of at least one or two months, then we will take a call. Now, because of some disturbance in the bulk supply, what will? So, we got impacted, and because of this price increase of 3 rupees also, we have already increased some of the freight rates in selective route, not in the entire routes of the company. So, that is giving, that is taking care of whatever additional costs we are incurring, it has been already parted on to the customers. Like that, in the future, whatever changes will happen, we will analyze for some period, and again, we will take a call to increase the rate.

Okay, so we've already taken a price increase in some routes only, like not all of our routes.

Yes.

Okay, okay, so like even with the lag, are we going to be able to maintain the 21% margin?

Yeah, that lag will be not much longer period. It will be very short period, say within a month or so.

Okay, okay, understood. And my next question is, like, how many branches do we plan to open in FY27?

This year, we have opened around 110 branches, and out of that, around 55 to 60 branches, which were closer to the existing branch, and some of the non-performing branches of Rural are closed. But in the current year also, we are expecting 100 plus branches, new branches to be opened.

Okay, so 110 net branches have you opened or gross? Like how many branches did we close, you said?

Around 60 branches. Net branches are around 40 numbers.

Okay, and even in FF27, we plan around the same number, like 100, 110 new gross branches, and then we close around 50 branches.

No, in going forward, the closer branches will be lesser. Net branches itself, we are expecting at least around 100 numbers in the coming year.

Okay, okay. Thank you. Thank you so much.

Thank you. Our next question comes from the line of Anshul Agarwal from MK Global Financial Service Limited. Please go ahead.

Thank you for the opportunity. The first question I had was on pricing in the industry versus VRL. So since we've taken price hikes in Q4, FY25, and I believe industry did not follow suit, our pricing was slightly premium or premium versus unorganized operators. Now in a fuel inflationary environment, when unorganized is expected to sort on fast on these hikes. Would this lead to a convergence of pricing or should we think that, you know, that difference, that premium range should be maintained because even we'll sort of pass on these fuel hikes as in when the prices are hiked?

Yeah, now what is happening, it is, you know, inevitable to each and every operator in the industry to increase the rates or put it on this fuel increase cost to the customers. So, accordingly, we will analyze the competitor movement, and accordingly, we decide our pricing strategy. But with respect to whatever rationalization and other things have been based, you know, defined based on our costing, that will never change. So, for example, in some of the route, our margin is, say, hardly anything, or some of the customer contact is giving very low margin. We don't wish to do that business. We used to maintain certain operational margin, and accordingly, we are going to fix the rate, irrespective of any other operator in that particular route or that particular customer.

Got it. So, to say, the Q4 F525 price hike, which led to a divergence in R versus sort of industry pricing, that should sustain slash remain, despite this fuel inflationary environment.

Yeah, and even in the market, many of the customers who have already left us, they are coming back to us. So that's the reason for the quarter four, we are in a position to grow in volume by around 3% on year on year basis.

Sir, second question was, any particular reason why our lorry higher charges have sort of increased? I believe we have adequate number of vehicles to sort of manage our own tonnage, and the purpose of sort of doing this higher capex on vehicles was to sort of ensure that, you know, lorry higher charges sort of remain at a minimal. So, any particular reason why these have increased?

Now, the overall number of vehicles, the vehicle capacity has been reduced compared to last year versus the Q4. For example, last year, we were at around 6,100 plus vehicles. Those numbers have been reduced to around 5,900 vehicles. Because of, you know, reduction in the capacity of the vehicle, and on the other side, the tonnage has been improved. To carry that additional tonnage, we engage outside vehicles.

Got it, sir. And given that our capex plans or vehicle spend plans are stable in the current year as well, do we anticipate a similar number of vehicles being scrapped as is current year?

No, scrapped age will not be there, but there will be addition of vehicles. So, as we planned earlier around 500 vehicles addition, out of that around 100 plus vehicles have been already added. So, the remaining 400 vehicles are going to be added until December.

Got it, sir. The next question I had was on the tonnage contribution from the new branches that we have added in the current year. Would you be able to share that number?

Yeah, new branches in the current year, addition is actually around 1.5% crore. No, those are contemplative. These are all new branches. So, we'll just… They are, you know, adding the new customers, and the current year, the contribution is around one hundred and a half percent.

Got it. Any particular plans or strategy of sort of extracting more volumes from these new branches in the coming year? Because I think we are adding net, you mentioned, 100 branches on a base of, say, 1,300. That should sort of contribute 7 to 8 percent volume on our overall base, or they'll take time to ramp up?

It will take time to ramp up, but on a full-year basis, again, we are expecting that if we open, you know, gradually the funded numbers, we are expecting that on a full-year basis, these branches may contribute around 2 to 3 percent in the tunnel. And apart from that, around 4 percent, we are expecting the normal growth, either from the existing customer or new customers in the area where we are operating. So that's the reason we are in a position to reach around 6-7% volume growth on a full year basis in next year.

Go ahead, sir. Very clear. Just one last question. Any guidance on what could be our depreciation charges for the next two years, considering that, you know, we have added a lot of hubs in the current year. I see depreciation has sort of not hinged up in the current year, despite the capex we have done. So, any sort of number that...

The depletion cost will not increase because... The most of the new profit is where we are investing. The value of the land is very high. So, land is a non-depreciable asset. There will not be any depreciation cost from that. Only some portion of the building or infrastructure, what we are creating on these facilities will be depreciated. Again, it is for a longer period. So, there will not be much impact on the depreciation because of new facilities.

Great. All the very best for the next year, sir. Thank you so much.

Yeah, thank you. But in spite of that, what is happening, because of investment in these own facilities, the rental expenses are coming down, and even the lease liability and rate of use in the balance sheet are coming down. So that will further strengthening our balance sheet.

Yes.

Thank you, Anshul. Our next question comes from the line of Mr. Archal Lohade from Noama Institutional Equities. Please go ahead.

Yeah, good morning, sir. Thank you for the opportunity. So, just wanted to understand, you know, with respect to vehicle makes if you could call out, and what are the typical kilometers it actually travels on a daily basis on average?

Sorry, I'm not hearing you properly. Will you repeat your question, please?

Sir, my question is, in terms of the vehicles, if you could call out what is the average damage and what is the average lead distance typically travels on a daily basis?

The lead distance is in the range of around 270 to 280 kilometers. I am telling you about across all the vehicle categories.

Right.

And the capacities are in the range of around 15 to 18 tons.

Understood. Any particular reason why we don't maintain 10 km data, sir? Like, is it not?

No, 10 km, since we are handling n number of routes, it's basically the 1,300 raised to 1,300. That is the kind of route where we are operating. That's the reason. Because of, you know, the bulk information, we are unable to compute that information. But we are trying to do that. Let us see. If possible, definitely we will share that information to you.

Understood. The second question I had, if you could give some clarity for FI26 for the full year, what is the mix in terms of the, you know, the industry mix, what you used to give earlier?

The industry is again predominantly to be driven by the textile and cloth industries, cloth commodities. So currently the contribution from this segment is around 17 to 18 percent. That trend is going to be continued. And the next line of item is about the agriculture product, agriculture against heat, equipment. All put together, fertilizers, all kind of pesticides, all put together is contributing currently around 10 to 11%. Again, the same line of contribution is going to continue. Only new thing is, we are signing a good contract with some top corporate entities. So, again, predominantly their products are related to either some of the materials are related to textile and similar to that product.

So, industry mix will not change the tactical.

So, textile, agri-products combined is about 30%. What about the balance, sir?

Balance, again, industrial goods are there. There are pharmaceutical industries, again, books and stationery goods, automobile products.

All are in the range of 56%. Okay. They are all in 56%.

Yeah.

Understood. And how about the MSME, large enterprises, and the spot bookings?

Spot booking, again, see, two-pay booking, what we call it, two-pay and paid booking, which is a spot payment, what we are getting from the customer, that is, again, contributing in the range of around... 80%. And account customers are contributing in the range of around 15-16%. And remaining FTL, around 6-7% full truckload is there. Actually, the mode of booking will be all the mode of booking, two-page, eight-and-a-c-one.

6-7% is FTL through full truckload, you're talking about, sir?

Yeah, yeah, yeah.

Understood. And how about door-to-door mix? What is that ratio in FY26?

Door-to-door, earlier it was around 33-34%. Now it is increased to around 38-39%. Close to 40% of the commodities are door-to-door.

And what is the price difference between door-to-door and the others?

The relation will be around 1-1.5 rupees per kg will be more in door delivery.

Understood. I wanted to also understand, you know, in terms of the competition, given the price hike or, you know, what we have taken, how are our rates compared to the immediate beer? Is that substantially higher? Is that comparable or is that lower?

So, compared to the unorganized players, actually we are offering some premium rate to the customers. And again, serious point is, in our operations, the customers are, our competitors are different in each leg of our operations. For example, the express cargo companies, they are not directly competitive to us. Wherever, you know, we are having some account customers, corporate clients, only in those scenarios, the express cargo rates can be comparable. But in corporate, actually, our rates are more or less comparable with, you know, this express caro company. In the rest of the cases, again, it will change the routeways and commodities also. For example, we are handling most of the textile commodities from Gujarat to rest of the country. There are competitors are against the local operators. Means, root-wise operators. Say, for example, if textile is moving from, say, Gujarat to Andhra Pradesh, we need to compete with one operator. Gujarat to Karnataka, again, another competitor. And within cities also, there are different operators. Say, for example, Surat Bangalore, one operator is there. Surat Hupli, another operator. Surat Hyderabad, another operator. Like this. So depending on the product and depending on the root, again, we need to compare with the competitors and accordingly we are charging. But compared to unorganized players, yes, we are having some pre-memory. But in terms of organized players, we are more or less comparable to them. And the rate also depends on demand and supply. Say, for example, some of the operators will not provide service properly or 24 by 7. In those scenarios, definitely we are offering some premium rate.

Understood. Yeah, I think that's about it from mine. Thank you so much, sir. Yeah, thank you.

Thank you. Our next question comes from the line of Tanish Jain from A54 Partners. Please go ahead.

Hello. Thanks a lot for the opportunity, sir. Am I audible?

Yes, you are. Please.

Perfect. Tanisha, can you talk a little about the bus business which you have? We are seeing a lot of new buses on the road. So, like, how many buses do you have? What's the revenue? What are the margins like?

No, currently, we are not into bus business. This company, the promoter, another company is having a bus business. It is an unlisted entity.

And there is no, so we have seen cargo, etc. going there, so that is at arm's length there. No, nothing. Understood. Thank you.

Thank you. And next question comes from the line of Mr. Alok Devra from Mutila Losfal. Please go ahead.

Hi, sir. Just a couple of questions. So, you know, if you take all these charges, you know, on diesel prices increase and bulk procurement coming down and also, you know, the toll charges increasing, how much we are now in a position to increase the freight rates? We have increased at certain routes, but in general, and, you know, the talks are that the prices will increase further, like today also, there was a price increase of nearly 80-90 pauses. So, sir, how do you see this? I mean, when would be a situation where, say, in a case where 3-4 rupees is increased further during the next three months? So, how are we looking at margins at the gross and EBITDA level to pan out? Would we be able to maintain this fourth quarter run rate or can it come under some pressure? Any thoughts on that?

Yeah, there will be some temporarily disconnect or some variance will be there. But definitely on a full quarter basis, we are planning to maintain the similar EBITDA numbers. The reason is, say, for example, now because of the disturbance in the bulk diesel supply or through refinery, we have already tweaked in some of the routes that wherever we are offering at a lower rate and all, or wherever there is less competition, so where actually we have already increased some of the rates. And we have changed certain metrics also within the chargeable weight and all. For example, earlier we used to charge 1 cubic feet equal to 8 kg. Now for certain routes, we increased from 8 kg to 9 kg. So straight away, the quantity will increase in such routes, and definitely it will take care of whatever additional cost. And similarly, certain... You know, line items. For the customers, we are charging different, different expenses also. Like, one is the basic rate. Then second thing, we are adding some of the loading, unloading costs, some of the freight on value costs, some three, four additional items. There also, we are increasing certain metrics. And for account customers or contractual customers, we are adding one line item in the contract that the fuel such as. So, that fuel searcher, depending on the fuel rate, that will change. For example, today also, if we increase certain rates, but minimum rates, they will expect at least around 2 rupees, increase 3 rupees, increase in certain contacts. Based on that, fuel searcher will apply to the customers. So, because of these steps, we are confident that we are going to maintain the EBITDA similar level. There may be some basis points impact, but not in a big way.

Ok, got it. So, the price increase which has happened till now in diesel around 4 rupees or so, 3 plus the 1 rupee today that is so, that is not having any real impact because that is basically more or less passed on.

Yeah.

Got it. And on tennis terms, as you mentioned, one of the in your presentation, also some of the customers has come back and, you know, now it's, you know, we could see. So basically, what you had highlighted during the first half of the year has actually happened, where at the end of the quarter, the loss in volumes have reduced and we have actually turned into the growth phase. So, now how confident are we of getting the 7-8 percent volume growth for 27 or could it be higher or you know lower any risk factor to on either side of this or would it largely be in the 7-8 percent based on what you are seeing.

No, the tonnage has been already constrained in the last year, this current year as well as the last year because of some of the exercises what we have taken. But considering our service level, most of the customers are coming back. And also, we are adding the new customers. For example, in Q4 year-on-year basis, our quantity, around 17% of the quantity is contributed by the new customers. Year-on-year, I am saying. And the left customer share is around 14%. And existing customer growth year-on-year is around 1%. So, on a total of all days, actually, we are in a position to grow by around 3% in the volumes. So, apart from whatever the left customers are there, we are getting the new customer quantity also, better than them. And there is a volume increase from the existing customers. So, that is giving more confidence. And moreover, even though if we achieve, you know, 7% growth in the tonnage, that deficit is already there in the current year. We see on the full year basis that the tonnage decline is 7%, and predominantly it is from the customers who are already know our services. They are already experienced with the VRL. So, we are, and because of this juncture of increasing the fuel rate, increasing the freight rate, again, definitely, they will come back to us. That's what we are hoping. The major fear will come from them also.

Oh, good, sir. Yeah, I think that's from my head. Thank you.

Yeah, thank you. Thank you. Our next question comes from the line of Gaurav Gandhi from Glow Retail Capital Management. Please go ahead.

Thanks for the opportunity, sir. Just one question. Sir, do you see any risk to the volume growth because of the Western DFC going live now? Some shifts might happen to the railway side. Do you see any kind of risk to the volume growth?

No, DFC is directly related to the full truckload. So the commodity what we are carrying is not directly linked with the railway services. So, that's the reason the impact of DFC will not be much on our commodity or our quantity.

Okay. Okay. Thank you. That's it from myself. Thank you.

Thank you. Ladies and gentlemen, that was the last question for today. I would like to turn the conference over to management for the closing remarks. Thank you and over to you, Tim.

Yeah. Thank you once again to all the participants and your patient hearing. Yes, everybody. Most of the questions related to about the recent trend in the fuel rates. So, considering our network, considering our customer base, and customers, considering our service to the multiple commodities in the industry, we are hoping that definitely we can pass it on this course to the customers and maintain the EBITDA margins in the range of around 20% plus going forward. With this, I wish to complete this course. Thank you. Thank you so much, sir.

Ladies and gentlemen, on behalf of Motila Losbar Financial Services Limited, that concludes this conference. Thank you for joining us, and we may now discuss the comments.