Adani Ports and Special Economic Zone Ltd

NSE:ADANIPORTS

Earnings Call Transcript 2023-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to Adani Ports and SEZ Post Results Group Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Priyankar Biswas from Nomura. Thank you, and over to you, sir.

[Priyankar Biswas]

Thank you, Aman. We have with us the management of [ APSEZ ] for their opening remarks and subsequently to take your questions. From the management side, we have Mr. Karan Adani, the CEO and Whole Time Director, APSEZ; Mr. Subrat Tripathy, CEO of the [ Ports Business ]

[Operator]

Mr. Biswas, sorry to interrupt you, your audio is breaking, sir.

[Priyankar Biswas]

Is it better?

[Operator]

Yes, please go ahead.

[Priyankar Biswas]

Yes. So we have with us the management of APSEZ for their opening remarks and subsequently take your questions. From the management side, we have Mr. Karan Adani, CEO and Whole Time Director, APSEZ; Mr. Subrat Tripathy, CEO of the Ports Business; Mr. Vikram Jaisinghani, MD and CEO, Adani Logistics; Mr. D. Muthukumaran, CFO, APSEZ; and Mr. Charanjit Singh, Head of Investor Relations and ESG at APSEZ.

So without any delay, I will hand over to Karan and CJ for their opening remarks. Over to you, sir.

[Karan Adani, executive]

Ladies and gentlemen, a very good evening to one and all. Welcome to the quarter 1 FY '23 conference call to discuss the operational and financial performance of Adani Ports and SEZ Limited.

You will be pleased to know that despite the economic headwinds globally, APSEZ delivered its strongest quarter in the company's history wherein we have achieved various operational fees and established new benchmarks for ourselves.

These include post the record quarterly cargo volume of 91 million metric tonnes, which is a 16% increase quarter-on-quarter. With reference to Q1 of the last financial year, the cargo volume increase for the quarter is around 8%.

The quarter 1 last year had witnessed the post-COVID demand surge and was the strongest quarter of the year. The average monthly run rate of 30 million metric tonne in April to June 2022 is well aligned to our full year volume guidance of 350 million to 360 million metric tonnes.

Carrying forward this record run rate into July, APSEZ achieved 100 million metric tonne of throughput in just 9999 days, which is another record for the company. Our second achievement is the highest ever quarterly EBITDA of INR 3,005 crores, which is a good 11% jump over quarter 1 of last year.

And thirdly, it's about the record year-on-year expansion in EBITDA margins of logistics business by 370 basis points. I believe that APSEZ growth story will further gain momentum in the coming months supported by commissioning of new assets across both depots and logistics business segments.

In quarter 1, our logistics business added an MMLP at Taloja commissioned 0.5 million square feet of warehousing capacity and operationalized 3 new agri terminals having a combined capacity of 0.15 million metric tonne. Adani Logistics also added 2 new bulk cargo trends to its existing portfolio, which were put into operational from T1 itself. The business also deployed 125 trailer trucks for providing the last mile connectivity at 3 of its MMLPs, which include Patli, Nagpur and Kishangarh.

In the port business, too, we have 2 new terminals coming into operation during the year, which will drive cargo volumes and our market share. The container terminal at Gangavaram Port will become operational next month and will help us gain market share in the hinterlands of Eastern India.

The 5 million metric tonne LNG terminal at Dhamra is on track to be commissioned by December end. The terminal has a take-or-pay contract with a couple of oil and gas majors and the revenue will start soon thereafter.

During the quarter, we also made 2 strategic acquisitions. First, is the 100% acquisition of Ocean Sparkle Limited, which is India's leading third-party marine service provider with over 60% market share. Second is the bid for acquisition of 100% stake in the Haifa Port Company, which manages the largest commercial port of [indiscernible]. This winning bid was made in partnership with Gadot with APSEZ having a 70% share.

Our credit profile continues to remain strong, with the net debt-to-EBITDA ratio well within our guided range, while factoring all the organic and inorganic investments that we have announced.

Let me now invite Subrat, Vikram, Charanjit and Muthu for some more color on the operational, ESG and financial performance. Over to you, Subrat.

[Subrat Tripathy, executive]

Thank you, Karan Ji. Hello, everybody, on the call. Let me give you an overview of the performance of the port vertical and talking about the cargo volumes. Mr. Karan Adani has already highlighted that APSEZ dropped record quarterly volumes of 91 million metric tonnes.

This volume growth has been contributed by most ports with Mundra port traditionally as always, leading this group. Our Mundra port continued its glorious journey and reflected 8% year-on-year growth in cargo volumes, continued with Q1 cargo run rate into in line Mundra clocked another stage of reaching 50 million metric tonnes of cargo handling in just 111 days.

The port contributed around 47% of the total cargo volume share of the APSEZ during the quarter. From the perspective of East Coast and West Coast parity the cargo volume share, remained unchanged at 61% of growth on the West Coast and 39% on Coast on the eastern coastline of India. The year-on-year cargo volume growth on the West Coast was higher this time at 9% versus 6% on the East Coast.

Looking at the cargo basket of Q1, a dry cargo share is 55%, containers share is 35% of the total volume and liquid including crude and gas is around 10%. Crude and gas is at about 8% of the total volumes.

Talking about containers, APSEZ handled 31.5 million metric tonnes of container cargo during the quarter. The volumes grew by 3% year-on-year and 6% quarter-on-quarter. Mundra, what we used to be is significant and largest container handling port with 1.65 million TEUs in Q1 versus 1.48 million TEUs by JNPT. Our flagship port now handles 1/3 of the country's container cargo volumes.

We believe that our focus on improving rail connectivity at Mundra, special window of service for the shipping lines, integrated supply chain solutions to end customers and a partnership model with large shipping lines through JP's approach, including double stacking of containers is helping us drive this volume growth at Mundra Port.

During our last call in May, I had mentioned about our efforts to strengthen the position in container segments and the addition of 9 new containers services of which 6 that were added at Mundra Port and one each at Hazira, Kattupalli and Ennore.

Talking about dry bulk cargoes, the total dry bulk cargo volume handled in the quarter is 50 million metric tonnes, which is a turn of 11% year-on-year and 26% quarter-on-quarter. Within these segments, coal grew 13% year-on-year and 41% quarter-on-quarter and agri products have registered a growth of around 286% year-on-year and 72% quarter-on-quarter.

Moving to liquid cargo. APSEZ has handled liquid cargo volumes of 9.3 million metric tonnes, implied a growth of 6% year-on-year and 8% quarter-on-quarter. Majority of this growth was provided by chemicals at Mundra and Hazira ports respectively.

I now hand over to Vikram, to update you on the logistics vertical. Over to you, Vikram.

[Vikram Jaisinghani, executive]

Thank you, Subrat. Good evening to everyone on the call. Let me give you an overview of the performance at the logistics vertical. Speaking about logistics operations in quarter 1, Adani Logistics witnessed a 31% year-on-year growth in rail volume to 1,11,136 TEUs and a 54% year-on-year growth in terminal volume to 99,217 TEUs.

This has been achieved with the recommencement of operations at Kila Raipur logistics park in December 21. Decommissioning of Nagpur MMLP at the start of the year and the commissioning of Taloja MMLP during quarter 1 this year.

With the commissioning of these new MMLPs. The total count of operational MMLPs has increased to 7. Furthermore, the logistics park at Virochannagar and Panipat are under development. GPWIS vertical continued its growth trajectory and with new circuits added from mines to power plants to integrated steel plants. The bulk cargo transportation is gaining momentum that has enabled us to more than double the cargo versus the corresponding year last year.

In quarter 1 FY '23, Adani Logistics handled 3.11 million metric tonne against 1.42 million metric tonne in quarter 1 FY '22. We added 2 new rigs during the quarter. And with that, we now have 25 GPWIS rigs in our stable. Besides, orders have been placed for a total of 37 new trains under the GPWIS framework.

Coming to Adani Agri Logistics, besides the 3 agri storage terminals with a total capacity of 0.1 billion metric tonne commissioned during the quarter. 2 more terminals 1 at Darbhanga and another 1 at Samastipur are under construction with commissioning likely in the next financial year.

In our Warehousing Business segment, we continued our journey to emerge as a leading player in Grade-A warehousing with focus on the commencement of new projects, including strategic acquisitions of warehousing assets.

During quarter 1 FY '23, another 0.6 million square feet of incremental capacity was commissioned, thereby taking the total operational warehousing capacity to 1.4 million square feet. Construction initiated on 4.5 million square feet of warehousing capacity across 4 different locations, Mundra, Moriya, Ranoli, and Palwal.

We continue to work in line with our vision to become an end-to-end integrated logistics service provider in India by creating logistics infrastructure including multi-model logistics parks, warehouses, grain silos and complete rail solutions for containers, liquid, grain, pulp and auto cargo.

I will now hand over to Charanjit to update you on the ESG performance of APSEZ. Over to you, CJ.

[Charanjit Singh, executive]

Thank you, Vikram. And very good evening to everyone on the call. Let me start with our new strategy. There were 3 actions taken in Q1 focused on the agenda. First, we completed a rectification port retial out of a total of 30. For the remaining place, the work is in progress with target completion before the end of current financial year.

Second, we initiated the Mangrove reforestation on another 800 hectares of plant. This is in line with our increased target for Mangrove plantation from 4,000 to 5,000 hectares. Third, the energy team in the group has finalized the renewable electricity solution for implementation at APSEZ exports. The team is now developing a plan which will be rolled out in the coming months.

Coming to our second focus area that is ensuring water supply from noncompeting sources at our ports. We are currently evaluating possible solutions at Hazira, Krishnapatnam and [indiscernible]. Once the solutions are implemented, it will take us to 80% of the company's targets.

Our third focus area is community engagement. In Q1, we carried out impact assessment of 3 key initiatives. Undertaken in the last few years that were implemented by our partner Adani Foundation, finding of these assessments will help us to run more targeted programs.

Alongside these focus areas, we are now regularly engaging with some of the ESG rating agencies to better understand their perspective and use the inputs to proactively integrate ESG aspects into our business strategy and decisions making.

With this, so let me now hand over to Muthu for an update on the financial performance. Over to you, Muthu.

[D. Muthukumaran, executive]

Thanks, Charanjit, and I will now present the financial highlights.

For quarter 1 financial year '23, company's consolidated revenue is INR 4,638 crores. At that level, it was really flag on a year-on-year basis and supported by 18% growth in port revenues and a 34% jump in logistic revenues, whereas SCC segmental revenue is lower by INR 725 crores, which is in line with our expectations. Company's consolidated EBITDA for the quarter increased by 11% on a year-on-year basis to INR 8,005 crores.

Turning to port operations, quarter 1 financial year '23 revenue increased by 18% on a year-on-year basis to INR 4,090 crores, and the EBITDA also increased by 18% on a year-on-year basis to INR 2,885 crores, both of these are on the back of 8% increase in the cargo volume. Overall port margins stood at around 71%.

Now turning to logistics business. Revenues from this segment were INR 350 crores, a growth of 34% on a year-on-year basis, contributed by all its subsegments, namely container rake, bulk rake, terminal traffic and agri logistics.

Significant increase in EBITDA and in the margins of this segment is a result of our efforts to diversify into bulk cargo to eliminate loss-making routes and to improve efficiencies. EBITDA grew by 56% to INR 96 crores, and the margin expanded by 370 bps to 27%.

I will now turn to profit. Profit before cash for this quarter is INR 1,030 crores and after factoring a negative income tax of INR 61 crores, consolidated profit after tax of the company for quarter 1 FY '23 is INR 1,092 crores.

Please note that these profits are after providing for noncash mark-to-market loss of INR 1,201 crores on the dollar-denominated loan, which is also the main reason why we have a net negative tax at the company level.

APSEZ continues to enjoy investment grade ratings by all 3 rating agencies. While S&P and Moody's have been maintaining a stable outlook, even Fritch recently improved its outlook to stable from the earlier negative.

I will end by mentioning that the company continues to maintain all key ratios within the desired level in spite of the rapid growth.

With that, let me hand over to Mr. Karan Adani for his closing remarks.

[Karan Adani, executive]

Let me summarize our performance for the quarter. It has been a stellar period for APSEZ particularly from an operational perspective, where we experienced record cargo volume and highest ever quarterly EBITDA in the history of the company.

Looking forward, while the developed was appear to be in economic steady, but India growth slowly appears resilient with the limited impact of the global environment. APSEZ given its formidable footprint along the India cost line. Access to over 90% of country's internal and its growing asset base across the port and logistics business segment is all set to capitalize the opportunity that comes its way.

Our cargo volume run rate of 30 million metric tonne in the initial 4 months of FY '23 is in line with our guidance of 350 million to 360 million metric tonne for the full year and will enable us to deliver our guided EBITDA of INR 12,200 crores to INR 12,600 crores.

Let me conclude by saying that our focus on customer centricity and sustainability will enable APSEZ to achieve its growth ambitions and become a global force in the ports industry.

With this, we can open the lines for question and answer. Ladies and gentlemen, a very good evening.

[Operator]

[Operator Instructions] We have the first question from the line of Sumit Kishore from Axis Capital.

[Sumit Kishore, analyst]

Good evening, my compliments to the management team on a very strong performance in the logistic business, your continued leadership in the ports business.

My first question is in relation to your vision to be the largest port and logistics platform in the coming decade. If you could elaborate on this vision? Who are you benchmarking against? And where are we at present? That's the first question.

[Karan Adani, executive]

When we look at the -- we have set a goal that by 2030, we want to be the largest transport utility. And on that front, basically, we are looking at the whole value chain from the factory gate to -- from factory gate to the port. And basically, we are looking to create a model horizontally as well as vertically in each of the business lines that we would be entering.

So just to give you an idea, we are already there on the rail business. We are there on the ICD. But now we're looking at warehousing. We are looking at trucking business. We are looking at the ports. Ports, we are already there and in ports, we are adding like marine services.

So I think we will keep adding businesses as we go to make sure that we get the full control of the cargo when it comes to the -- when it comes to the whole logistics chain. And basically, the idea is that you integrate all of that and remove the middleman in each of those transactions and give an end-to-end visibility, end-to-end service as well as commercially and operationally to the customer.

I think to be honest, globally, there are not a lot of people who are doing this across the board. And basically, in each of those verticals that we would look at, we would look at benchmarking it individually. So that's how we would look at it.

And I think we would keep adding businesses every year to ensure that we bring in -- we reduce that volatility into the volumes to bring that more stickiness in the volumes at all our -- in all our business. So that's the goal.

[Sumit Kishore, analyst]

Sorry, my audio went away for a moment. I heard large parts of what Karan said. Can I move to the next question, please?

[Operator]

Yes, please.

[Sumit Kishore, analyst]

Yes. Karan, my second question is on the ROCE profile of your logistics business, which appears to be well below your mature ports, given new port plans outlined post the FY '22 results to raise capital allocation for logistics. Could this prove to be a bit of a drag in the interim on the consolidated ROCE target of 20% of Adani Ports. So could you please speak about the ROCE profile for your incremental investments in the logistics business?

[Charanjit Singh, executive]

Sumit, Charanjit here. That's not the case ,if you look into a bit more detail with respect to the financing, what we are doing and the amount of ROE generation. And you don't have to look over a year or two , you will have to take a longer time frame into consideration. And if you average it out over 10-plus years, you will see that the ROCE is well in line with -- it is closing towards the port numbers what we have given.

And from an ROE perspective, I think that is even higher generation -- higher ROE in comparison to even the port because it's more like an annuity model, and our financing is primarily largely debt post the construction of the warehouse.

So very happy to discuss in detail the numbers because we have the model for that, and we can run through -- run you through the model in case you are interested.

[Sumit Kishore, analyst]

My last question is on the EXIM rail container volumes for Adani Ports, which were well ahead of market growth. And you clearly gaining market share. I just wanted to check whether there is any sacrifice on margins because the market leader or countries call change that some private players were gaining market share, but they were pricing aggressively to achieve that just some commentary with you?

[Charanjit Singh, executive]

Yes. No. So our revenue on a per TEU basis, we have not taken any debt. Actually, we have increased our prices across the board on the container. And if you see, we have gained market share on the railway side where we get -- where we have an advantage over other consumers -- other ports.

But to answer your question, our EBITDA margins have been north of 70% on container and our pricing has also increased on a per TEU basis.

[Operator]

The next question is from the line of Mohit Kumar from DAM Capital.

[Mohit Kumar, analyst]

And congratulations on a good set of numbers, especially on the port revenue and EBITDA side. My question is, given the geopolitics, how do you see the cargo especially if you can keep cargo wise's outlook in the sales container, crude and coal, are you more bullish about coal and crude this year compared to containers? And do you see any risk in merging on the container in the second half?

[Unknown Executive]

So far, we are not seeing any slowdown on any of the commodities. And we see our run rates being not -- be crossing 30 million ton mark every month. I think on a short-term to medium-term, we are not seeing any slowdown as of now.

[Mohit Kumar, analyst]

[indiscernible] crude and coal this year compared to last year?

[Unknown Executive]

No. I think as manufacturing base increases in the country, I think energy is going to increase. So we are not bullish, but I would say we believe that energy imports in the country are going to continue. And I think you will see more addition of power plants or manufacturing units, which will enhance the consumption of the energy.

So I think -- and that will indirectly anyway benefit the ports. So I don't see -- we don't see any slowdown on coal imports or on crude as well.

[Mohit Kumar, analyst]

Sir, on the Gangavaram, what is delaying the completion of acquisition of Gangavaram and the -- there been fabulous improvement in the Indian regular EBITDA of the Gangavaram, can you please throw the light on that?

[Unknown Executive]

Sure. So the NCLT process of Gangavaram is at final stage. We expect the final hearing to close by end of this month. And we should be able to consolidate -- I mean, we should be able to take over the port by end of this month. That is the expected time line. In terms of -- sorry, what was your second question?

[Mohit Kumar, analyst]

The flash performance of Gangavaram has been superb. So if you can please comment on that? What is driving that performance?

[Unknown Executive]

No. So that is -- as -- if you remember the -- when we took over the -- when we took over the port, we had outlined our various initiatives that we will be doing to improve the margins and improve the revenue. So these are -- whatever you're seeing are the numbers of the actions that we are taking, which we had outlined at least when we took over the port.

[Operator]

The next question is from the line of Ashish Shah from Centrum Broking.

[Ashish Shah, analyst]

So the first question is that in terms of the realization, there's been a visible improvement in the quarter. So are there any specific tariff hikes that you would have taken during the quarter?

[Unknown Executive]

Yes. So first quarter is generally when we renegotiate all our contracts, and this is an effect of that.

[Ashish Shah, analyst]

Right. And to that extent, it can obviously be expected to continue?

[Unknown Executive]

Yes, that's right.

[Ashish Shah, analyst]

Sure. Sir, secondly, on the Krishnapatnam Port. So there has been a significant drop in the container volumes handled at the port. Anything that you want to highlight, what are you really doing to get the volumes back because when we acquired it was doing something like 0.5 million TEUs. So anything you could have in the [indiscernible]?

[Unknown Executive]

So if you look at the southern sector, and that's where we have kind of reclassified the way we handle the containers and the penetration in that particular interland. I would not like to see Krishnapatnam in isolation rather in the southern sector where we have been consistently growing at Kattupalli and Ennore and the Krishnapatnam was earlier linked to the feeder services which have had a little bit of disruption.

To that extent, we have regained our share and recast the way we handled the southern market at Kattupalli and at Ennore, and you will see addition of new services as well as if you look at both these at Kattupalli and we have been growing very healthily. Krishnapatnam, we are reworking on a new strategy to see that we get into the feeder business of the South Asia region.

We're also looking at certain of the initiatives of the Government of India in the WindTech region. As and when they mature, we will see that we get the feeder volumes back from Krishnapatnam in this catchment area of Bangladesh, Myanmar, et cetera, and this will become a transshipment hub for these geographies in the future.

So watch out for Q3, where we will be certainly getting back our services in Krishnapatnam, certainly. But incidentally, on Krishnapatnam, while on the container story, it has been a little subdued. Otherwise, especially on the old volumes, happy to note that when we took over, we hadn't had cap facilities in all the handling of the boats.

Today, we have more than 4 boats we are enabled entirely called cap facilities and we are doing very, very well on the coal front at Krishnapatnam particularly as well as serving the catchment area of the steel plants in the Southern sector, namely JSW and the power plants, which Karan has elaborated both for APGENCO and for the Karnataka Power as well as for the other private power houses, namely Sembcorp in Andhra. So watch out Q3, we will have a revival of containers in Krishnapatnam certainly. Thank you.

[Ashish Shah, analyst]

Sir. And last one from my side. In March, we have signed an agreement with IOCL for handling incremental 10 million ton of crude annually. Any further development or anything that you could pencil in terms of our future expectations?

[Unknown Executive]

Yes. So there -- this is linked with the Panipat expansion. So as and when the expansion of the refinery happens, which is expected in '24, the volumes will flow into Mundra.

[Operator]

The next question is from the line of Girish from Morgan Stanley.

[Girish Achhipalia, analyst]

Sir, on the realization, is there something more than normal that you've taken this time now, which is it appears that the realization increase Y-o-Y is certainly much higher. Is it specifically to do with cargo mix as well or something more than usual?

[Unknown Executive]

No, there is. Yes, there is no major change in realization. except for that, if you look Y-o-Y, there were some one-off revenues, which were from the sale of JP and land leasing, which are finally in the SEZ segment. So otherwise, if you try to compare on the port side, then there is a nominal increase which is happening and also whatever changes you see is also a resultant of the change in the current trend.

[Girish Achhipalia, analyst]

And sorry to hop on this question. But on the coal volumes, I think we did probably about 12%, 13% growth Y-o-Y. Karan, what's the outlook here on coal and containers, obviously have seen sluggish growth. I don't know if it's basic, like, but if you could highlight, I mean, what's the outlook for coal in containers?

[Subrat Tripathy, executive]

For -- first, on container, you would have, as Karan bhai has explained, you would have seen that we are going through a very good cycle until in July is the first month that we have seen a little drop in exports. And that's because of the volatility of the international market. But happy to note, you will see that India has sustained penetration in the world market, as far as retrading penetration is concerned, is growing by the month. The high pricing of crude oil, et cetera, has meant that the balance of trade has deferred. To that extent, there's a slight, I would say, hesitation in the volumes in July as far as exports are concerned. But India's penetration into value-added engineering groups means that we will continue to see a rise in exports, barring 1 or 2 months aside.

So on the EXIM front, you will see that our container growth has been quite sustained and the fact that Mundra emerges as the gateway of the EXIM trade in containers of India. We clarified to you that at 1.65 million TEUs versus JNPT, which was the traditional gateway at 1.48 million and since the last more than 1.5 years, we have been well ahead in the race. So we are not very concerned about container export per se.

Coming on the coal front, you will see that there has been quite a rally around growth about coal, and that is because of 2 factors. Certainly, the core sector growth foiled by POL, fertilizer and the industrial growth, you will see that the conventional energy generation has grown by more than 15.6% in India in YTD basis, which means like never before while the winds of recession are going across the world, India stands as a very splendid example of growth over here. And in coal per se, when we look at APSEZ, we have grown at more than 20%. And at a YTD basis as on the end of July, while in the quarter we were quite well set at a 13% growth, we are actually growing when I look at a YTD up to July, having handled about 41 million metric tons last year, and now at 49.49 million, which is a very healthy 20% growth.

So we see coal going quite northwards. And in that segment, of course, EXIM -- import coal for the power sector does grow. But also happy to note that coking coal, which is an input to the steel plants, and that is where our ports at Dhamra, Gangavaram, Krishnapatnam, where we play a crucial role in the supply chain and the management of the steel plants starting from sale and starting from TATA Steel, Rashmi, Jindal, JSW, we are well entrenched into that. So we are extremely bullish about coal. And in the coking coal segment, both in market share as well in growth, we are ahead of the all India figures.

[Girish Achhipalia, analyst]

But just a clarification. I mean, in your 360 million target, what kind of coal volumes -- I mean, thermal coal volumes are you baking in? Because the government, as we see, given the sluggish July numbers and obviously the inventory that has happened, increasing the coal-based power plant, has already relaxed the condition to import coal. So just want to understand what numbers are you working with in your annual guidance for coal this time.

[Subrat Tripathy, executive]

We will -- in fact, as clarified when we did the budgeting exercise in the annual guidance, 2 things. We stick to -- we see we've been logging 30-plus million every month consistently, which is in line with our guidance of 350 million to 360 million. That is point number one. Point number two, when we sat down, we had a little more kind of a more optimistic picture on the minerals. A certain kind of a course correction or a certain kind of a relook into the sector has been done by government in imposing export duties on iron ore and on steel, which has meant that while the core sector growth is very bullish, the input coal has certainly come in. To that extent, our expectations are belied by more rally on EXIM coal.

We will stick to the guidance. In fact, we will go beyond on the coal at large. We will also recover on coking coal, where, as I clarified, we are quite, I mean, slightly ahead. But on EXIM input coal, yes, you are correct. I can come back to tell you that traditionally, in the month of -- with the onset of monsoon, Indian coal mines are besotted with the problem of waterlogging, et cetera, and the coal offtake from the coal mines does come down. Notwithstanding that, since the comfort level in the power plants has come back to a certain level, we do expect that the expectation that the blending, which the government has given a guidance from 20% has been relaxed down, gives an apprehension in the mines that coal volumes may come down.

But let me clarify. At this moment and with vessel nominations for the next 1 quarter, we are seeing quite an amount of healthy nomination on all our ports, especially the Western ports of Mundra and Dahej, which are linked to the Central Indian powerhouses. There's a very large uptake of coal. And if you look at it further, while the Indian coal that goes from the Eastern sector, that is from Jharkhand, Bengal and from Chhattisgarh and Orissa would be resorted as monsoon, the northern powerhouses for import substitution will depend on Mundra and Dahej. And you'll be happy to note that not only are we receiving healthy volumes, we are also at record offtake in terms of Indian Railways giving us rates at both these ports. So we are extremely bullish about the coal outlook.

[Girish Achhipalia, analyst]

Just one bookkeeping question. Can you share the CapEx number for the quarter and any ballpark on the net debt number, please?

[D. Muthukumaran, executive]

See, our guidance for the full year remains same, and we generally don't give the quarterly numbers on the CapEx. So -- and we are on track with respect to the guidance, what we have given.

[Operator]

[Operator Instructions] we have the next question from the line of [ Abhiram Iyer ] from Deutsche Bank.

[Unknown Analyst]

Congratulations on a good set of results. My question is pertaining to the ForEx losses of INR 1.2 billion that you took this quarter -- sorry, INR 12 billion that you took this quarter. Could you let us know, because the USD bonds have dropped in value and because you're taking MTM losses on ForEx, is there any plan to buy back some of the bonds?

[D. Muthukumaran, executive]

There are no plans as such for the buyback.

[Unknown Analyst]

Got it. So the current cash balance that you have, which was significant as of March, that would primarily be used for the capital expenditure and for the acquisitions that we are doing currently.

[D. Muthukumaran, executive]

That's it.

[Operator]

Our next question is from the line of Swarnim Maheshwari from Edelweiss Securities.

[Swarnim Maheshwari, analyst]

Sir, in your opening remarks, you mentioned about you have added about 125 trucks for the last-mile connectivity. So there seems to be some change in our approach because earlier, the trucking business was supposed to be on a leasing basis. Now over here, we are actually owning those trucks. So what is leading to such a change, if you can just highlight that?

[Karan Adani, executive]

Swarnim, this is -- as part of our moving into a transport utility, we believe that the time is right now to enter into the trucking business and to start with giving the last-mile connectivity from our ICDs and basically, with that, able to divert volumes from competing ICDs as well at the same time, reduce the operating costs -- I mean, reduce the logistics costs for the exporter and the importer. So that's the reason why we have looked at it, and we believe that time is right to enter this market and to scale it up going forward.

[Swarnim Maheshwari, analyst]

Got it. Got it. So this would be 100% CapEx, right, no third-party overhead for us?

[Karan Adani, executive]

No. No, it's 100% CapEx.

[Swarnim Maheshwari, analyst]

Okay. Sorry, any sort of guidance that you would like to give, what kind of trucking -- what kind of trucks are -- we are looking at the end of FY '25, something -- some guidance over that?

[Karan Adani, executive]

No. I think it's too early to give guidance on that. But with -- at an appropriate time, we will come out with the whole plan for trucking, the similar way what we have done for warehousing.

[Swarnim Maheshwari, analyst]

Okay. Sure. Sure. Also, there was a media article on our collaboration with the AD Ports Group for infra investments in Tanzania. So if you could just highlight, we are looking towards the African market now with just kind of expanding not our just port gate operations but also our boundaries. So if you could just highlight our take on this Tanzania foray.

[Karan Adani, executive]

Yes. Sure. So it's -- as we've always stated that outside India, we are looking at Eastern African regions. And the reason why we have partnered with AD Ports is because it gives us a sovereign cover from a risk perspective. And basically, what we are looking at is we are looking at existing terminals both on bulk container as well as liquids in -- to start with in Tanzania but eventually, to roll it out across Africa and create that network. So that's what we are looking at. And the reason -- as I said, the reason we chose AD Ports is apart from being a credible partner in the ports and logistics, they also -- it also gives us a sovereign cover from a risk perspective.

[Operator]

[Operator Instructions] Our next question is from the line of Sanjay Parekh from Sohum Asset Managers.

[Sanjay Parekh, analyst]

So I have 2 questions. One is in this global acquisition of -- one of them that we recently did and the one acquisition globally, what sort of efficiency gains can we guide? I mean, clearly, we are very, very efficient. So that is one area that I had.

Second is in terms of our group ambitions itself in terms of CapEx in different sectors, will that become meaningful for us in terms of capital goods imports and later on regular annuity volumes? That's the second.

And third is pricing. I mean, the EBITDA per tonne, per se, over the next 2 years, can we see that growing at, let's say, 3% to 5% in terms of EBITDA per tonne?

[Karan Adani, executive]

Sanjay, can you repeat the third question?

[Sanjay Parekh, analyst]

Yes. The EBITDA per tonne that we have today, which has done well over 2, 3 years, can we see this growing up 3% to 5% per annum?

[Karan Adani, executive]

Yes. So let me answer the third question first. The EBITDA on a per tonne basis will keep increasing because as we have always guided that revenue on a per tonne basis will increase by 1.5% to 2%. And we are always looking at ways to reduce our costs, to increase our EBITDA margin. So on an EBITDA per tonne basis for ports, we will keep increasing by 2.5%, 3%. That is -- we're on target.

I think your second question on the group perspective, as you know that we -- Adani Enterprise has announced the Adani New Industries, which is the hydrogen-based economy. And that whole thing will be set up in Mundra. And as it gets developed, it will become captive volume. It's hard to give you the numbers on what it is because the plans are being finalized. But as and when it does get finalized with -- when we have more clarity on the numbers, we will definitely communicate.

On the first question, that is on the -- I'm assuming you are asking about Haifa Port.

[Sanjay Parekh, analyst]

Yes. And generally, is -- there certainly would be efficiency gains as you acquire them? And globally -- so that's the idea that when you acquired them, the meaningful change in EBITDA per tonne of realization, I mean, if we can get some perspective of the gap they have, what we can get out of it.

[Karan Adani, executive]

Yes. So on Haifa Port, we have a detailed presentation in terms of what -- which we will send across to you. But in Haifa Port, more than the efficiency gain, it is more of increasing our volumes on the bulk side. And second is the real estate development. These are the 2 big value drivers over there. Yes, there is efficiency gain, but the efficiency gain is roughly 10 to -- so the majority of the efficiency gains with respect to Haifa are coming from the retirement of existing employees, where they have signed for a voluntary retirement plan a couple of years back. The cost of that is also factored in -- was factored in 2 years back. And we have given a detail in the presentation, which reflects roughly ILS 100 million savings just on account of those retirements. We don't have to add any further employees for the volumes that -- which we see. So the detailed plan with respect to the pessimistic scenario and our base case is provided in the presentation. I'm happy to share that after this call.

[Operator]

Our next question is from the line of Lokesh Garg from Credit Suisse.

[Lokesh Garg, analyst]

I just want to ask you basically on the logistics business, you have had to suspend the growth over the last 2 years. And government obviously has been delaying CONCOR divestment. Let's say, in a hypothetical scenario of this divestment getting delayed further, so in our judgment, you have already reached roughly 1/4 the size of CONCOR and EXIM business. Does -- as you sort of grow organically, does this inorganic acquisition start to sound less attractive over a period of time?

[Karan Adani, executive]

No. I think it is not one or the either. I think the way we would look at it is we would look at both, and we look at both the engines independently and keep growing. I think India has a long way to go in terms of our logistics potential. And I think there is -- personally, if you ask me, there is room for not just 1 CONCOR, but I think there is room for 2 or 3 CONCORs.

So I think that's how we would look at it. And I would not say that because we are growing, we would not look at CONCOR.

[Lokesh Garg, analyst]

Sure. My other question is related to Dhamra LNG terminal, which you say is coming up in later part of the year. What is the total CapEx schedule over there? How much is our equity? And any sort of visibility on LNG, LPG volumes that we had in the quarter alongside that?

[Karan Adani, executive]

Yes. So Dhamra LNG, as you know, is a 50-50 JV with APSEZ and Total. The total project cost is roughly INR 4,500 crores, roughly. I don't have the exact number, but it is roughly INR 4,500 crores. And it is at 70-30 debt equity. And we expect the terminal to get commissioned by November end. And the -- so the commissioning cargo is coming in November, and we expect the terminal to get fully commissioned by December end. And as you know, Dhamra LNG has a take-or-pay contract with the IOCL and GAIL. So it is a 5 million ton per annum terminal, and there is a 4.5 million ton take-or-pay contract with both IOCL and GAIL.

[Lokesh Garg, analyst]

And we aim to retain the terminal in this 50-50 structure? Because usually, we are interested in marine side of business and not in regasification [ at all ]. But in this case, you will retain the full terminal 50-50.

[Karan Adani, executive]

So marine side is 100% owned by DPCL, by Dhamra Port. The only -- the backup infrastructure, that is the tankage and the regas facility, is a 50-50 between Total and APSEZ. And we will retain that 50-50 ratio.

[Lokesh Garg, analyst]

Yes. My last question relates to this GPWIS, General Purpose Wagon Investment Scheme. Now can you just -- the scheme obviously gets you to invest in assets of railways, and railways in turn give you some incentives. But often, there are restrictions related to circuits on which some of your trains can run and tied in customers on both ends and things like that. So you have been able to obviously create a fairly large business in that niche. Can you just explain a little bit more about that business, how is it running now, how is it getting created? And what is the revenue model out of it? Because I think primarily, at least it used to operate when it comes to general freight rates or ranges.

[Karan Adani, executive]

No. So I think the business model is very robust. Over and above the rebate that railways gave us, we also charge a premium in lieu of assured services, thereby giving our customers a lot of other benefits like lower inventory costs, increased service levels. And if, say, for example, somebody has to run a power plant, and this plant has to be starved of coal, that cost is much, much higher than giving a little premium for getting assured services in the form of [ rate ].

So this is working out very well for us in terms of return on investment and also the customers, who see a lot more other benefits in their operations because of getting reliable services and all. So works out well, and that is how the model is serving the test of time. Business is growing. Our demand is actually increasing quarter-on-quarter, and this is likely to continue.

As far as the circuits are concerned, you're right that these circuits are preworked with the customer. The customers have a good visibility for the next 6 months on how this circuit will work, basis that prior approval has to be taken from the Indian Railway. And they have, in fact, been now more flexible in giving permissions. In case of certain changes, like sometimes the import of iron ores and all those things get impacted because of change of policy, we always go back to the railway with different circuits, modified circuits. And that operationally has served us well without any loss of business or any loss of service to the customer.

And railways has been very supportive because they also believe that this complements well with their growth of trade strategy. It's a win-win for everyone, railways, us and the business and the customers.

[Operator]

[Operator Instructions] We have the next question from the line of Abhishek Nigam from B&K Securities.

[Abhishek Nigam, analyst]

Just 2 questions for me. One, the rise in employee expenses, if you could just give us some more details around that. So that's my first question.

[Karan Adani, executive]

Say, can you repeat that question?

[Abhishek Nigam, analyst]

Yes. So the rise in employee expenses on a Q-on-Q basis, seems like a fairly big rise over there. So if you could just give us some more color on that.

[D. Muthukumaran, executive]

Yes. So there was a onetime incentive paid to all the employees for -- as a special incentive for crossing 300 million tonne mark. So it's a onetime expense. It's not a recurring expense.

[Abhishek Nigam, analyst]

Okay. And my second question is a couple of quarters back, we were talking about another terminal on Gopalpur. I wanted to check what's happening there because I was on the Petronet LNG call on Friday, and they have basically announced that they are in advanced stages of doing an FSRU. And so just if you have any more color over there, like is there a similar plan or something?

[Karan Adani, executive]

So we don't have anything in Gopalpur. So we have signed an MOU with IOCL for LPG in Gangavaram.

[Operator]

Our next question is from the line of Mohit Kumar from DAM Capital.

[Mohit Kumar, analyst]

Sir, my question is, are we seeing the impact of DFCC? I know it's very difficult to segregate the impact. Are we seeing the impact of DFCC on the rail coefficient? And if you can broadly lay out the -- for some color in the sense how it is -- the shift that's happening within rail and road.

[Subrat Tripathy, executive]

Well, thank you. See, the DFCC, as I understand, connects the -- as contemplated to connect NCR to JNPT. And the node would come from the mainline at Palanpur to Mundra, which is on a JV model where we, along with the Kutch Railway Corporation, are one of the partners in developing the last-mile connectivity to Mundra port. As of today, the DFC has been harnessed best in favor of Mundra. One is the advantage of distance that Mundra enjoys over JNPT for a distance of about 330 kilometers and over Pipavav with a distance of roughly about 100 kilometers, 97 kilometers to be very precise.

Now this has meant along -- the DFC may not be seen in near isolation. The fact that it has a proximity to the NCR region has led to a predictability in train running. Hither to the DFC, the Mundra is only port where between the container trade operators, Indian Railways and the port, we are able to run predictable services in the export stream. Hither to the DFC coming, a train would normally take more than about -- unpredictive pattern of more than about 3 days. Today, happy to announce that we are able to run predictable trains in less than 30 hours. That is -- and we wish to do this also for the import stream as we go forward. We are working very closely with the CTOs and Indian Railways.

The other thing that has been kind of a derived thing from the DFC and particularly in favor of Mundra has been the double stacking. You will see that over the years, our penetration into the NCR region has been growing. And today, the rail coefficient at Mundra is at -- if we are doing at about close to 37% rail penetration, we seem to have stabilized at that. But before the COVID, we were less than 30%, but now we have stabilized at more than 37%. And as the years come, we will intend to grow on that. But that also mean of the choice of the pattern of the export and import that will take place.

The second more important aspect of the DFC is the double stack benefit, which is on a per TEU benefit that the customer is deriving from carrying about an additional 45 boxes on each train. Happy to announce last year, we had guided you that we are concentrating very, very significantly in aligning with the CTOs and the ICD operators, including our own operation at partly. So today, as a result of these actions, the double stacking is at about 58%. It's showing a growth of close to -- more than 14% on a year-on-year basis. So these are the kind of pretty significant developments which have arisen out of the DFC. Thank you.

[Mohit Kumar, analyst]

Sir, a clarification. In the expansion of Kutch Railway Company, which was happening, is it complete?

[Subrat Tripathy, executive]

The latest targets for is a certain amount of a doubling. It would have been but for COVID, it has a little reset. The latest is that it will be completed by December. So the section from Palanpur to Samakhiali and then on to Mundra will be an entire double-line section. And from Palanpur to Delhi, double line on the mainline in this case. So our last stretch of our 90-odd kilometers, which is well into the thing, is getting doubled. Also, the fact it's getting electrified, and this electrification would mean fit for double stacking. And in turn, in line with that, we are also electrifying a line from Adipur to Mundra on the last leg of our own last-mile connectivity on what is the JV -- on the AGR line. And so that is in tune with the KRCL doubling as well as the electrification.

[Operator]

The next question is from the line of Vijayakumar Bharani from Spark Capital.

[Bharanidhar Vijayakumar, analyst]

This 350 to 360 metric tonnes of expected volumes for this year, does it include Haifa Port?

[D. Muthukumaran, executive]

No. It does not include Haifa Port.

[Bharanidhar Vijayakumar, analyst]

Sir, what would be the debt at the Haifa Port Company?

[D. Muthukumaran, executive]

Right now, it's just cash surplus company. There's no debt in that company.

[Bharanidhar Vijayakumar, analyst]

Okay. My second question is on the opportunity coming up from the major port terminals in India. I know we have covered most of the geographies and hinterlands by expanding till now. But we had a bid for a few terminals in JNPT recently, and we were not able to bid for some terminals on the East side. But what are the opportunities coming? What would be our interest? And some color on how our capacity in the major 4 terminals will grow.

[Karan Adani, executive]

See, at a portfolio level of APSEZ that we have and the penetration into 90% of India's hinterland and with a very robust capital -- CapEx structure that we have, we would like to consolidate the APSEZ portfolio itself. So in line with, let's say -- let's take 1 or 2 instances to give you a little more color. In Mundra, along with the 4 terminals, we are going ahead with the addition of another container terminal at city 5. We are rationalizing one of the cities so that we go from a capacity from about 0.7 million, 0.8 million TEUs to about 1.2 million, 1.3 million TEUs. So we would rather that we expand at each of our ports.

Likewise, you saw at Gangavaram, where we saw the opportunity, the container terminal is ready to receive vessels. In fact, by the time we announce the next time we're doing a call, we'll be happy to announce that we've had the first vessel on. Similarly, we would be also looking to exploit and grow our Ennore terminal, which we already are there, and at Kattupalli. We would also like to see that in the Northeastern part of the Indian Eastern coast line, we have Dhamra port. So as and when we develop Dhamra, we want to see that, that part of the large hinterland, which is landlocked but for the deep seas at Dhamra, we are developing a container terminal. So we'd rather that we consolidate our own portfolio and have the containers to us. As and when opportunities do come up, we'll evaluate, but we would like to grow the APSEZ portfolio and strengthen it further.

[Operator]

Our next question is from the line of Pulkit Patni from Goldman Sachs.

[Pulkit Patni, analyst]

The first one is more of a clarification. I think there was some confusion at the start of the call in terms of realization. Is this understanding correct that because of rupee depreciation and quite a lot of our revenue comes in U.S. dollar, the realization on a Q-o-Q basis, which has gone up from 421 to 450 in my calculation, a large part of it is contributed just by the depreciation of the rupee. Is that understanding right?

[D. Muthukumaran, executive]

No. That understanding is not right. Part of it is -- only a small part of it is because of rupee depreciation. A large part of the increase is the actual increase in the -- in our revenue on a per tonne basis. And the second is a large part of the increase is also to the mix change, cargo mix change.

[Pulkit Patni, analyst]

Okay. And could you highlight what is that per tonne revenue increase that we would have taken on a Q-o-Q basis?

[D. Muthukumaran, executive]

The details we can give you later in terms of -- we'll look into the details of the number and share it after the call, if that's okay.

[Pulkit Patni, analyst]

Okay. That should be fine. Sir, my second question is, if you were to explain more in a layman's language, what is the advantage for, say, an exporter or an importer based out of NCR to work with Adani Rail vis-à-vis CONCOR? So what I'm trying to understand is because now that we are owning trucks, we own the ports, can you just explain what is the advantage for a user to work with Adani Rail vis-à-vis any other CTO?

[Subrat Tripathy, executive]

So I think Karan explained it earlier, but let me amplify our offering, okay? We are the only player who can offer end-to-end offering to a customer. A customer will need reliable port services. A customer will need reliable train services, and I think we excel -- very happy to say that we were awarded the best national logistics -- rail logistics player very recently by the Ministry of Commerce. Obviously, we have done a lot to merit our rail efficiencies and the services that we provide to all the customers. Customers are not just satisfied with this. Then they look at very specialized infrastructure to give the specific needs of the supply chain, special warehouses, okay? They need specific end-to-end, first-mile, last-mile delivery or trucking to suit their specific requirements.

So I think we are the only ones who can give all this in one offering. Let's say, CONCOR, CONCOR does not give you trucking. CONCOR does not give you this kind of warehousing services that we have given. We are very proud that many, many years back, the kind of warehousing facilities that we developed for Maruti for their end-to-end auto structure is still considered the best-in-class infrastructure for the auto sector. Similarly, we are building a lot of such specialized facilities or tailor-made facilities, custom-made facilities for all of our customers. And that makes us quite unique. That makes us very formidable in terms of giving an end-to-end solution with the person -- customer does not have to look at anyone else.

[Pulkit Patni, analyst]

Fair point. Sir, very clear and that, I would guess, would also make the cargo very sticky once you do customization.

[Subrat Tripathy, executive]

That's the whole strategy. That's where we kind of come out as a complete end-to-end transport/utility company.

[Operator]

Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing remarks.

[Karan Adani, executive]

So thank you, everyone, for taking out the time to join this call. Hoping that all your questions or queries have been answered. In case there are still any pending and especially where we said we'll come back to you, you can call us after this call, and we'll be happy to provide any details.

[Operator]

Thank you very much, sir. Ladies and gentlemen, on behalf of Nomura and Adani, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.