Adani Ports and Special Economic Zone Ltd

NSE:ADANIPORTS

Earnings Call Transcript 2022-Q4

[Operator]

Ladies and gentlemen, good day, and welcome to Q4 FY '22 Earnings Conference Call of Adani Ports and SEZ, hosted by Edelweiss Securities Limited. [Operator Instructions]

Please note that this conference is being recorded. I now hand the conference over to Mr. Swarnim Maheshwari from Edelweiss Securities. Thank you, and over to you, sir.

[Swarnim Maheshwari, analyst]

Thank you, Margaret. Good evening, everyone. I welcome you all on Adani Ports' Q4 FY '22 Conference Call. From the management today, we have with us Mr. Karan Adani, CEO and Whole Time Director; Mr. Subrat Tripathy, CEO of Ports Vertical; Mr. Vikram Jaisinghani, CEO of Logistics Vertical; and Mr. Charanjit Singh, Head ESG & Investor Relations. Without further ado, I will just hand over the call to Mr. Karan Adani for his opening remarks, post which we'll have a Q&A session. Thank you and over to you, Karan.

[Karan Adani, executive]

A very good evening to all the participants. Welcome to the conference call to discuss the operational and financial performance of Adani Ports and SEZ Limited for the quarter and year ending 31st March 2022.

Let me start with the highlights of FY '22 and refreshing memories on our strategic vision for APSEZ. 2 years back, when we embarked on our journey of making APSEZ the largest port company globally, it was clear that the strategy to achieve this stupendous feat had to be customer-centric. Given our 2 decades of experience in the Port business, we were aware of the customer pain points in the logistics supply chain, which form the building blocks of our decision to transform APSEZ from a port company to a transport utility. Our efforts for the last decade provided us with a robust foundation for vaulting into this new growth path.

In FY '21 and FY '22, while we continued our journey for port expansion to drive growth and also mitigate the business concentration risk, but alongside, we developed a road map for business transformation and started to action the plan of building our logistics capability. APSEZ' transformational journey reached an inflection point in FY '22 with various successful acquisition and some key project wins.

First, we gained 100% control of Krishnapatnam port through the purchase of the balance 25% stake from the outgoing promoter; second, we acquired 41.9% stake in Gangavaram port and signed for an agreement with the promoters for the acquisition of balance 58.1% stake, post the NCLT approval. Third was our acquisition for Sarguja Rail Corridor for its 70-kilometer railway line asset in the state of Chhattisgarh; fourth, APSEZ received LOA from Haldia Port Trust for a 5 million tonne per annum bulk terminal; and fifth, APSEZ won the bid for a greenfield deep sea port project at Tajpur, West Bengal.

These acquisitions and projects fit well with our strategy of focusing on the East Coast, not only from a portfolio diversification perspective, but also establishing our presence in regions with high growth. We recently made another strategic investment with acquisition of India's leading third-party marine service provider, Ocean Sparkle Ltd, that has 94 seaworthy vessels, including 75 Tugs. With 27 years of operations, OSL has presence across 28 ports in India and experience of working in key global marine hubs. All these acquisitions implied an investment of around INR 11,400 crores by APSEZ and alongside an organic CapEx of around INR 3,600 crores.

We successfully managed to keep our net debt-to-EBITDA ratio unchanged at 3.4x. The year also recorded some operational feats by APSEZ team, and we managed to set new benchmarks for India's maritime industry.

First, it was a record year of cargo volumes for APSEZ as we crossed 300 million metric tonne mark and achieved a cargo throughput of 312 million metric tonne, which also includes 150 million metric tonne of cargo handling at Mundra Port, first ever by a commercial port in the country; secondly, APSEZ recorded its highest ever container volume of 8.2 million TEUs with Mundra alone recording container volume of 6.5 million TEUs, which is 15% higher than its nearest competitor.

Another major milestone for FY '22 was the visibility on commissioning of various logistics assets, thereby providing sufficient surety that APSEZ is on track to achieve its announced capacity targets. These include investments in 100 trains, 8 operational MMLPs and total grain silo capacity of around 1.2 million metric tonne by FY '23. With 5 million square feet of warehousing capacity under construction operation, we are on track to achieve our guided capacity of 60 million square feet. Another noteworthy achievement of the year are 2 strategic partnerships.

Firstly, a joint venture with John Keells Holding and Sri Lanka Port Authority for construction of Colombo West International Terminal II; and secondly, a partnership with Flipkart for the construction of over 0.5 million square feet fulfillment center in the upcoming logistics hub at Mumbai. Both these partnerships are ensuring sustainable business growth for APSEZ. APSEZ continues to be guided by the adopted ESG framework to drive sustainable growth. We continued working towards our goal of making our ports carbon neutral by 2025. Some actions undertaken to achieve the objective include electrification of rubber-tire gantries, electrification of mobile harbor cranes, purchase of electric internal transfer vehicles and building renewable electricity capacity.

To support our carbon neutrality goal, we are also doubling our Mangrove plantation target to 2,000 hectares. We will finalize our net zero plan during the year, in line with the commitment made by the science-based target initiative. In November last year, the APSEZ Board based on representation from the ESG and Risk Committee has decided to exit from Myanmar. Thereafter, we announced a time line of June 2022 to action the Board's decision.

My team has worked very hard to ensure that we deliver on this guided time line. I'm pleased to announce that we have recently signed an agreement for sale of our Myanmar asset. The share purchase agreement signed with the buyer will enable us to broadly recover the investment that APSEZ has made in the project. The deal will be concluded after receipt of proceeds in line with the agreed condition precedent. Let me now invite Subrat, Vikram and Charanjit for a brief on the operational and ESG performance. Thereafter, I will run you through the financials. Over to you, Subrat.

[Subrat Tripathy, executive]

Hello, everyone, on the call. Let me give you an overview of the performance at the Port Vertical. I will start with cargo volumes.

APSEZ continues to outperform all India cargo volume growth. And in FY '22, handled a cargo volume of 312 million metric tonnes, a growth of 26% as against 5% growth registered by all India ports. The said cargo volume of 312 million metric tonnes includes 30 million metric tonnes handled by Gangavaram port. Now to add on to what Mr. Karan Adani said earlier, it is a pleasure to see Mundra port continuing its journey towards glory and set new benchmarks at every turning point.

The team at Mundra deserves a special mention for such a spectacular achievement, and I'm sure they are ready for achieving newer heights and win further laurels for APSEZ. Coming to performance of Mundra port, it grew by 4% in cargo volume during FY '22, while the APSEZ' portfolio, excluding Mundra grew by 58%, non-Mundra ports in the portfolio especially on the East Coast are growing faster and have contributed 52% to the cargo basket, which is higher by 10 percentage points. This growth is primarily due to our strategic focus on achieving East Coast, West Coast parity and diversifying cargo mix.

With this, we are swiftly moving towards a balance between the West Coast and East Coast, which now improves to 62% to 38% from a level of 74% to 26%. Our cargo basket continues to see an all-India growth and constitutes 38% container, 50% dry bulk and 12% liquid cargo. Other products like LNG and LPG that we have added to a cargo basket continues to strengthen our portfolio.

Now let me share some segment-wise cargo data. First of all, on container cargo. During the full year of FY '22, APSEZ handled a total container volume of 8.2 million TEUs, a growth of 14% compared to an all India container growth of 11% on a year-on-year basis.

Mundra port continues to be the largest container-handling port with 6.5 million TEUs, which is 15% higher than JNPT. Our strategy of providing multiple entry and exit points by diversifying our geographic footprint, single-window service to the shipping lines, integrated supply chain solutions to the end customers, along with partnering large shipping lines through our JVs enables continuous gain in market share. Mundra currently has a market share in excess of 33% in all India container volume.

Our efforts to strengthen the position in container segment at newer locations and offer unique solutions to shipping lines resulted in the addition of 9 new container services, of which 6 services were added at Mundra port and one each at Hazira, Kattupalli and Ennore ports. This will contribute around 2,45,000 TEUs of container volume per annum. Talking about dry bulk cargo, during the year, the total dry bulk cargo handled was 156 million metric tonnes, which is a jump of 42%. Within the segment, minerals grew by 97%, coking coal by 39% and a total coal volume registered a growth of 32%. To enrich and diversify our cargo basket, we have added 4 new cargo types namely sulfur at the Dahej port, dolomite at Kattupalli port, Gypsum at Krishnapatnam and LD slag at Dhamra port.

We have added new customers at Dhamra port, including names such as Bhushan Power & Steel Limited. Krishnapatnam port, which was acquired in FY '21 continues to see the adoption of best practices of APSEZ. We are enhancing capacity by debottlenecking and mechanizing operations at a brisk pace. For the first time, limestone was handled through a mechanized conveyor improving port productivity and efficiency at the same time helping increase margin portfolio of the product.

During the period, we have added 12,000 square meters of covered godown to handle agri products. We continue to add new customers at Krishnapatnam port and this will go a long way towards achieving the full potential of the port.

Moving to liquid cargo. APSEZ has handled liquid cargo, including crude of 34.7 million metric tonnes, implying a growth of 19%. All India liquid cargo handling ports registered double-digit growth. This was led by higher volume handled at Hazira and Mundra ports. As a part of our cargo diversification, we have added LPG and LNG cargos into our portfolio. In FY '22, APSEZ handled 1.5 million tonnes of LPG and LNG. With the rise in demand for gas products as a greener source of energy, we expect to see volume growth in this segment as well.

I'm happy to inform that the LNG terminal, which was under construction at Dhamra is now nearing completion and is expected to be commissioned in November '22. As you may know, this is a 5 million metric tonne capacity terminal, that the user pay contract with IOCL and GAIL.

Coming to the performance in Q4 of FY '22, we've handled 78 million metric tonnes of cargo in Q4 FY '22, which is a year-on-year growth of 7%. This growth was led by Dahej, which grew by 58%; Ennore, 61%, and addition of Gangavaram. Cargo volume without the GPL was subdued on account of lower import of coal by key IPPs and lower trading coal volume, which was impacted due to higher commodity prices, disruptions in the supply chain. We believe with the revival of demand from coastal power plants due to increase in power demand and softening of prices globally, coal volume in coming quarter is likely to improve.

I will 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 operation in the last 1 year, Adani Logistics has witnessed a 29% increase in rail volume as compared to last year. That is 3,13,273 TEUs versus 4,3,737 TEUs. This has been achieved with recommencement of Kilaraipur logistics park operations in December '21. We have also commissioned Nagpur multimodal logistics park in December '21.

With this, we now have a strong central India presence and have 6 multimodal logistics parks. Furthermore, the logistics parks at Virochannagar, Taloja and Panipat are under development as per plan. GPWIS vertical continued its growth trajectory. And with new circuits added from mines to power plants, the bulk cargo transportation is gaining momentum and helped us achieve a 100% growth in financial year '22.

During the period, Adani Logistics handled 8.81 million metric tonne against 4.41 million metric tonne in financial year '21. We have also commissioned 13 new rigs during the period. With that, we have 23 GPWIS rigs in our stable, with 2 more rigs to be added by quarter 1 FY '23. Adani Logistics now operates 75 rigs as against 61 rigs in financial year '21. We will continue to add realized assets as we expand our network footprint and scale up in existing and adding new circuits.

Coming to Adani Agri Logistics, 3 projects of 1,50,000 metric tonne capacity at Panipat, Kannauj and Dhamora have been completed last financial year. Darbhanga and Samastipur projects totaling 1 lakh metric tonne capacity are under construction and progressing as per plan.

In warehousing, our new Grade A warehousing facilities at Mumbai, Indore, Palwal, Ranoli, Kochi and Virochannagar are under construction, totaling 4 million square feet which will be commissioned by quarter 4 FY '23. We have successfully signed and closed deals for 0.8 million square feet cumulatively. Furthermore, we are also in final stages of signing LOA with clients for 0.5 million square feet build-to-suit warehouse.

Adani Logistics is on its trajectory to emerge as a leading company in Grade A warehousing with the commencement of new projects while also focusing on strategic acquisitions or warehousing assets. We are working in line with our vision to become an end-to-end integrated logistics service provider in India, by creating logistics infrastructure, including multimodal logistics parks, warehouses, grain silos and complete rail solutions for container, liquid, grain, bulk 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 warm wishes to everyone on the call. APSEZ ESG effort in FY 2022 gain the momentum on various fronts.

On the environmental side, the focus is now 3-prong. First, achieving carbon neutrality by 2025; second, targeting water supply from noncompeting sources only; and third is progress towards biodiversity positive status. As emphasized by our CEO, we are marching firmly towards our target of achieving carbon neutrality with various initiatives underway. Besides retrofitting of RTGs and key cranes, APSEZ has also initiated a transitioning of EITVs from IC engine to battery type. We are also actively exploring low carbon solutions for reach stacker, empty container handlers, shunter, dumper and other equipment.

With India being a water-stress nation, we are making necessary efforts to ensure that our water supplies are from noncompeting sources, such as treated non-potable water, harvested rain water or desalinated water. Around 50% of our total water requirement is now being met from such sources. This lower proportion versus the last year is due to inclusion of Krishnapatnam. But the efforts being made at our end, this number will be in the range of 80% to 90% by 2025.

APSEZ has also intensified its effort towards biodiversity improvement. The company is credited for the management of 6,000-plus hectares of Mangrove plantation are recorded by any corporate in India. Mr. Karan Adani has already announced another 2,000 hectares of Mangrove plantation to further support our carbon neutrality objective. We continue with our endeavor of supporting the communities in line with group's agenda of growth with goodness.

Our social initiatives are currently reaching to around 800,000 people, and we are targeting to take this to 1 million people in the next few years. Our third-party impact assessment of some of the key community focus initiatives is in progress and will enable us to have a more targeted approach. More importantly, we have ended the financial year with outperformance on most of the environmental and social metrics against our targets.

From the corporate governance perspective, APSEZ' decision to make 3 of its key Board Committees, that is Audit Committee, Nomination and Remuneration Committee and the Corporate Responsibility Committee. Fully independent is a strong reflection of company's management walking the talk to achieve ESG leadership. Not many companies in India and other emerging markets have achieved this feat.

With this, now let me hand over to Mr. Karan Adani to update you on the financial performance. Over to you, Karan bhai.

[Karan Adani, executive]

Now speaking of the financials. Consolidated revenue grew by 27% year-on-year to INR 15,934 crores in FY '22. This is backed by 21% growth in Port revenue, Logistics revenue growth by 26% as well as higher SEZ and port-led development income.

During the corresponding year, total EBITDA grew by 22% to INR 9,811 crores. Speaking about Port operations, in FY '22, revenue increased by 21% year-on-year to INR 12,964 crores. EBITDA for the same period grew by 21% year-on-year to INR 9,120 crores, in line with the increase in cargo volume. Overall Port EBITDA margins stood at 70%.

Speaking of the logistics business, in FY '22, revenue from the Logistics business stood at INR 1,208 crores, a growth of 26% on account of improving container and bulk grade and terminal traffic along with improvement in rolling stock, both for container and bulk cargo movement. Our efforts to diversify by adding bulk cargo, elimination of loss-making routes and operational efficiency resulted in a significant increase in EBITDA and margin.

While Logistics business EBITDA grew by 41% to INR 320 crores, the EBITDA margin expanded by 283 basis points to 26% on a year-on-year basis. During the year, profit before tax stood at INR 5,946 crores, and PAT stood at INR 4,795 crores. During the period, the tax incidence was lower due to the lower composition of profit from APSEZ stand-alone entity, which was impacted by the ForEx movement.

During the year ending 31st March 2022, trade receivables reduced by 10% from INR 2,386 crores to INR 2,170 crores. This is despite a 27% increase in total revenue. Accordingly, DSO has improved by 29% from 69 days to 49 days. During the period, net debt to EBITDA remained within the guided range and stands at 3.4x. The same net debt to EBITDA does not include EBITDA and cash from Gangavaram port. If included on a pro forma basis, the net debt to EBITDA stands at 3x. Net debt to equity during the year has improved 2.85x in FY '22 compared to 0.89x in FY '21.

APSEZ continues to maintain its investment-grade rating and 2 of the 3 major international rating agencies, namely Moody's and S&P, have maintained a stable outlook. The company has been maintaining key ratios within the desired range while growing rapidly.

Moving into FY '23. I'm confident of APSEZ' growth prospect that are supported by a number of catalysts. Firstly, India's GDP growth rate for the year is estimated to be 8% to 9%. And with the government targeting to make India USD 5 trillion economy by mid of the decade, we see a [ good post to India XM ], increase in iron and steel trade which can be attributed to China's decision to cap it steel production to the 2021 levels and absence of exports from Russia. This is likely to boost coking coal import by -- in India.

Another key growth catalyst is the increase in India's power demand and a higher fuel cost allowed as a pass-through by some states, thereby resulting in a recovery in coal volumes at port. Then there are some APSEZ-specific catalysts such as the start of operations at Gangavaram Container Terminal and Dhamra LNG, wherein we have already signed delivery contracts. Similarly, for our Logistics business, we have signed some leasing contracts for the warehousing facility where the construction was started in FY '22. Our cargo volumes in March and April are a good reflection of the improving momentum. Considering the mentioned catalyst, we are guiding for volume for FY '23 to be in the range of 350 million to 360 million metric tonne.

This will translate to consolidated revenue to be in the range of INR 19,200 crores to INR 19,800 crores. Consolidated EBITDA to be in the range of INR 12,200 crores to INR 12,600 crores. Port revenue range of INR 16,700 crores to INR 17,000 crores. Port EBITDA to be in the range of INR 11,600 crores to INR 12,000 crores. Logistics business to generate a revenue between INR 1,500 crores to INR 1,600 crores. CapEx for the period to be in the range of INR 8,500 crores to INR 9,000 crores.

Free cash flow from operations after adjusting for working capital changes, CapEx and net interest costs during the period is expected to be in the range of INR 1,400 crores to INR 1,700 crores. Net debt to EBITDA is expected to be in the range of 3 to 3.5x. The Board has recommended a dividend of 20% of PAT for the year, which is as per the dividend distribution and shareholders' return policy.

In conclusion, let me summarize our performance in FY '22. It has been a stellar year for APSEZ on multiple fronts. This includes a record cargo volume, organic and inorganic investment and the strategic partnerships formed during the year. It also marked a critical point in APSEZ' transition from a port operator to a transport utility. We believe that APSEZ is all set to emerge as a proxy to India's growth story of becoming the third largest economy in the world.

With the zeal to make India an alternative manufacturing hub, the government of India is making significant initiatives to boost the country's infrastructure, which is likely to boost the country's economy in the coming years. The analyst estimates are reflecting India's GDP to grow at higher than various other key emerging economies. APSEZ with a formidable footprint along the entire [ shoreline ] of the country and with access to over 90% of the country's hinterland is all set to write this growth [ wave ]. Our investments in logistics infrastructure, including a network of multimodal logistics park, container and bulk rolling stocks and warehousing facility are enabling us to reach the customer [ care ].

To enhance customer service, we are integrating technology into our infrastructure platform for a tailor-made single window solution and capture a higher wallet share. I'm sure with all this, we are on track to achieve our FY '25 business growth targets.

Let me conclude by saying that our focus on customer and sustainability will enable APSEZ to achieve its growth ambition and become a global role model. With this, we can open the lines for question and answer.

[Operator]

[Operator Instructions] The first question is from the line of Mohit Kumar from DAM Capital.

[Mohit Kumar, analyst]

Congratulations on a very good year, especially on the acquisition of some of the marquee assets. So my first question is how much is the tariff hike you are taking in the current guidance given that the cargo guidance is of around 12% to 15% hike, or 15% increase. However, the revenue guidance is around 28% to 30%. And are we expecting any improvement in coal supply to Mundra power plants given that the last year, I think one of the major reason of slightly muted growth was primarily because the Mundra power plants were operating at a very, very low PLF?

[Karan Adani, executive]

So we are -- in our guidance, what we have given, we have not taken a major growth in coal volumes. We have kept it at the same level as what we did last year. In coking coal, we have taken a significant -- I would say, 10% to 12% growth in the coking coal volume. But on the coal volume thermal coal, we have kept it more or less at the same level as what was there last year.

[Mohit Kumar, analyst]

The tariff hike, sir?

[Karan Adani, executive]

Sorry.

[Mohit Kumar, analyst]

Tariff hike, have you taken any tariff hike you're baking in the current guidance because cargo is 12%, 15%, while revenue guidance is 28% to 30%?

[Charanjit Singh, executive]

Yes. We have also -- see, there is certainly a tariff hike in line with the past trends, but also the revenue number includes OSL.

[Mohit Kumar, analyst]

Okay. Understood. Understood. And secondly, on the APL, we are looking to expand the new capacity, CT5. Is this expansion of new capacity, CT5 is contingent on the renewal of concession agreement? And have you heard anything on the renewal? Can you, please share a bit?

[Karan Adani, executive]

Yes. So this is not a contingent to the extension of the concession agreement. At Mundra, our existing terminals are operating at 90-plus -- 90% plus capacity, and we are seeing a robust customer demand. And that's the reason we are very confident that whatever CapEx we are putting, we would be -- the payback would be within the concession period that we have.

In terms of -- from a concession period point of view, we are at the last stage of policy rollout, we expect the policy rollout of -- from Gujarat government to come out, hopefully, by this year -- this calendar year, and we are hopeful for -- to give clarity -- to give that clarity to all the investors once the policy is out.

[Operator]

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

[Ashish Shah, analyst]

Sir, first question is on the INR 23,000 crore CapEx plan that we have on bid or what period is this plan? And second, if it changes or anything in our 500 million tonne guidance. So does the guidance get increased because of this CapEx plan?

[Karan Adani, executive]

So INR 23,000 crores CapEx that is keeping in mind, not just port, but it is for whole APSEZ, that is Ports, Logistics, the Marine business, the Truck business, Storage business as well.

As you know, in this, we -- last year, we had started the new business, which is warehousing, and that is a big -- if you see almost from this year's guidance, 1/4 of the CapEx goes towards the new business. From our point of view, the INR 23,000 crores is in -- until FY '25. And that does not -- this only helps us not just up to the 500, but also part of it helps us to move after the 500 as well.

[Ashish Shah, analyst]

Sir, secondly, in terms of the expected return from this CapEx, I mean, prima facie, just a little back of the envelope kind of a number, seems to suggest that INR 4,100 crores is the EBITDA at an optimum level from this INR 23,000 crores CapEx. Then the post-tax ROCE probably could be lesser than maybe 11% or 12%. If there is any clarity if you can provide on that, it would be helpful?

[Charanjit Singh, executive]

Ashish, Charanjit there. We have all the numbers with you. But given that we have only a few minutes left for this call, right, 15, 20 minutes. So I request that we focus on the strategic questions in this call. For each and every number, the IR team will give you the data points. We have every number with us. Does that make sense?

[Ashish Shah, analyst]

Yes.

[Operator]

The next question is from the line of Parash Jain from HSBC.

[Parash Jain, analyst]

Karan, I have 3 questions [indiscernible]

[Operator]

Sorry to interrupt you, sir. Your audio is not very clear. It's not audible as well. Can you please check? [Operator Instructions] It's actually breaking also. I think it's the network.

[Parash Jain, analyst]

Could be actually. I'm dialing it from home. I don't know. Otherwise, for I'll reach out to CJ after the call.

[Charanjit Singh, executive]

Parash, we can hear you. Go ahead.

[Parash Jain, analyst]

Okay. Yes. So first question is, Karan, the whole world is debating about whether we are heading in [indiscernible] You're embarking on [indiscernible] versus a capacity will there be a room of improving utilization as a way to grow your throughput? And secondly would be what's going on in Colombo, does it change? Or do you need to adjust your time line or CapEx with respect to your upcoming venture?

[Karan Adani, executive]

Parash, you were breaking up a little bit, but if I understand correctly, your question was with the uncertainty, global uncertainty, is it the right -- what is the confidence level on the CapEx program that we are embarking on. Am I correct?

[Parash Jain, analyst]

Yes, yes.

[Karan Adani, executive]

So if you see, Parash, in terms of our CapEx, half of the total CapEx is in the logistics, and it is focused on warehousing.

If you see the breakup, part of that also, we are very confident on that is because of the -- it has nothing to do with the growth, but it is actually to do with the mindset change from consumer going towards more of digital. And we are replacing a lot of Grade B and Grade C warehouse to Grade A. So if you see, we do believe that out of the total CapEx, INR 2,500 crores on warehousing, we are very confident on, and we don't expect any changes on that front.

50% of the CapEx on the port side is focused on the container segment. And mainly, it is in Mundra, Gangavaram and Dhamra. And the second is the 2 greenfield projects, that is Vizhinjam and Colombo. In Mundra, we are already 90%, as I said earlier. So there we need to expand because we are seeing significant growth coming in and demand coming in. And we don't expect that demand slowing down.

Gangavaram and Dhamra, Gangavaram is again a new site for us, new territory. We do expect to take volume out of Vizag port over there because we'll have better facility, deeper [ draft ]. And same on Dhamra, we've been talking about starting container business in Dhamra, when we took over. So we do expect Dhamra to compete and be a hub port for not just Bangladesh, but even Kolkata.

And as I said, Vizhinjam and WCT that is the container terminal in Colombo, we are very confident, and we are very confident on closing on that -- on those 2 terminals. I will answer your Colombo question next. And then the remaining 50% of the CapEx on the port on that -- from that also 50% is in Dhamra itself. And we are seeing the kind of volumes that are coming in. We do expect a lot -- that we are actually running short of capacity on that front. And even in Dhamra, a lot of the CapEx is mechanization.

[Parash Jain, analyst]

Yes. Yes.

[Karan Adani, executive]

So on Dhamra, a lot of the expansion that we are doing is mechanization and expansion of capacity, but mechanization. And it's predominantly to do with the hinterland development in terms of mining and the steel plant expansion that we are seeing.

On Colombo, we are very confident at the business. So let me answer the first question. That is the business rationale for doing a terminal in Colombo does not change. Actually, with the kind of disruptions that we are seeing, we do our conviction on actually, the capacity enhancement between both Vizhinjam and Colombo is more solid, and we do believe that, that is the right option to drive choice.

Given the current situation, we are working in terms of how do we give as much orders as possible through local contractors and basically to support the local contractor growth and local employment. We don't expect -- as of today, we don't expect any major changes in the time line. And so we do expect that by FY '24, we will have the first phase of Colombo terminals up and operational.

[Operator]

The next question is from the line of Vibhor Singhal from PhillipCapital.

[Vibhor Singhal, analyst]

So Karan, just a couple of questions from my side. I think you just talked about the overall CapEx plan and 50% of it being logistics, especially in the warehousing, if I look at the next year, CapEx of around INR 2,500 crores, how do you see that playing out over the next 3 to 4 years? Is it going to be kind of a recurring CapEx plan? Or is it like a front ended in FY '23 and then it's probably going to taper off. So how do we see this in [indiscernible] warehouse subsequent?

[Karan Adani, executive]

Yes. So on warehousing front, as you know that we had last year, given our vision statement of 50 million square feet, this INR 2,500 crores gives us 9 million square feet, which will get operational by Q1 of FY '20 -- by next year, by Q1 of next year. So we do -- so till the time we don't reach 50 million square feet, you will see more or less similar recurring CapEx happening in the warehousing sector.

[Vibhor Singhal, analyst]

So the [indiscernible] could be for, let's say, around 10 million square feet you would spend around INR 2,500 crores. You could use that as Mangrove...

[Karan Adani, executive]

Yes, 10 million is INR 2,500 crore. So let's assume for next 5 years, another 10 million square feet will keep getting added.

[Vibhor Singhal, analyst]

Keep getting added. Got it. Got it. That's very helpful. Also just wanted to check on the margins front. So I mean, basically, how do you -- I mean our port margins are [ overall all India ] is 70%, and we are definitely trying to -- I mean whatever cost that we acquire, we -- [ post tend to take them ] to the similar level. On the paying front, where do you see the overall margins for the company going and any of the cost -- and would that also be applicable for Gangavaram port of taking its margins to around 70%?

[Karan Adani, executive]

So your question is on the margins, right? EBITDA margin?

[Vibhor Singhal, analyst]

Yes, on the margin. Yes, EBITDA margin.

[Karan Adani, executive]

Just specifically to ports or you're talking overall?

[Vibhor Singhal, analyst]

So Gangavaram ports and overall, what is the outlook for the 3 margins separately?

[Karan Adani, executive]

Yes. So Gangavaram, our target is after the acquisition is completed, we would be taking it up to -- we have a plan ready, which will take the margins up to 72%, 71% to 72%. There are certain costs which we can't touch until the acquisition is not completed. So once that is done, we do expect -- we will be reaching to 71%, 72%. We've already 66%, 65% if I'm not wrong. Overall margins, I think we will keep pushing teams keep working on it in terms of -- from a Board point of view and our guidance still continues that we will keep pushing for 1% to 1.5% growth in our EBITDA margins -- for overall growth.

[Operator]

The next question is from the line of Nikhil Nigania from Bernstein.

[Nikhil Nigania, analyst]

My question I had is the container market share for Adani Ports, we do see some pressure in maintaining that market share in the last few quarters. What could be the reason for that? And how do you see it changing going forward?

[Karan Adani, executive]

So I think if you see the pressure that we were facing on the overall container business was mainly on the south side that is between Krishnapatnam, Ennore, Kattupalli. I think on the north, combining both Hazira and Mundra, we are -- we've not lost any market share. Actually, we've been gaining. I think on the south side, we have a few opportunities which we are working on and a few lines that we are looking at shifting. I think we are confident that this year, we will recover on the south side, we should be able to recover -- we should be able to recover significantly. On the West, we do continue -- we do continue to push. And as the rail coefficient in Mundra keeps increasing, we are very confident that we will continue to grow our market share on the west side.

[Nikhil Nigania, analyst]

Understood. One last question. This one big ForEx cost in this quarter. Any view if you could share on that would be helpful because a big number?

[Karan Adani, executive]

Yes. So as you all know, it's a mark-to-market cost. As you know that we have a natural hedge, it is not a cash flow item, but it is more of mark-to-market and because of the natural hedge that we have, we actually -- because of the dollar income that we get, we don't hedge our debt. And we have always seen that -- we always look at it is look at the mark-to-market more on the 5- to 6-year horizon. And if you see that it's more or less nullify itself. And it makes sense not to hedge it because our interest cost remains -- interest cost keeps -- is at the lower side of the -- lower side, and that's what we focus on. So I don't -- to be honest, I don't have any guidance or thoughts, but this is what we can say that we continue with our strategy of not hedging, leaving it as a natural hedge. We focus on -- and we look at more on the net interest cost on an overall cash -- and this is not a cash flow item for us.

[Operator]

The next question is from the line of Nikhil Abhyankar from DAM Capital.

[Nikhil Abhyankar, analyst]

I've got just 2 -- a couple of questions. What is your expectation of monetization of land in the medium term, given the ambitious plans of the group companies? And the second question is about, is there any update about stake in CONCOR, any update from the [indiscernible]?

[Karan Adani, executive]

So it's hard to give a longer-term on the SEZ because there are multiple one-off items which are coming in terms of land sale, but we can give you this year's guidance, we have roughly INR 350 crores of -- worth of land sale, which will happen and which we have a very good visibility -- actually, we have a full visibility of it, not pretty good, but we have a full visibility. I think there are multiple land deals that we are working on, but it's -- on an overall long-term basis, you can take INR 700 crores to INR 800 crores every year is what we would be targeting on.

And on CONCOR, sorry, go ahead. You had a question on that? You want me...

[Nikhil Abhyankar, analyst]

No, I was just saying -- I was just asking about CONCOR.

[Karan Adani, executive]

Yes. So on CONCOR, it's -- I'll just restate our thoughts over there. We are very keen on it. It is a strategic asset. From our point of view, as you can see, the balance sheet, it is -- it will be a fully funded -- it will be a fully funded acquisition as and when it comes. Timing of it, it's difficult to see, I think there is -- and very difficult for us to give a time line because, I think, as you all know, one of the big issues -- I mean, not issue, but one of the big steps that government needs to solve on is how will they treat the land and what will be the land licensing fee. I think once that is done, once that is approved, we do expect then the sales process to fast track. But it's very hard to give a time line as of now.

[Operator]

[Operator Instructions] The next question is from the line of Sagar Parekh from Deep Financial Consultants.

[Sagar Parekh, analyst]

Just -- just hopping on the [ ForEx ] loss, again, I understand it's not a cash flow item, but does it mean that this INR 500 crore loss is basically so as the rupee depreciates, your loan amount in absolute terms increases by that much? Is that the right way to look at it?

[Karan Adani, executive]

No, that's not the right way to look at it because we -- our loan is in dollars and as well as our income is in dollars. So as part of our policy, the way we look at it is the 5-year -- we look at our 5-year dollar inflow. And any repayment that has to happen at a particular year, we -- as part of treasury policy, we keep that income. We provide for it in our cash flows, so for that -- during that particular year. So I don't think because of the dollar movement, our debt increases.

[Sagar Parekh, analyst]

Okay. So in the presentation, you have given about $580 million of revenue in dollar terms. So in FY '22, so how much would that be in FY '23? And how much is the dollar-driven repayments that are coming up in FY '23?

[Karan Adani, executive]

I request CJ and finance teams to answer that.

[Charanjit Singh, executive]

With respect to the growth, what we are factoring you can consider in the same proportion of revenue.

[Sagar Parekh, analyst]

In terms of repayment, liability repayment in dollars for FY '23?

[Charanjit Singh, executive]

Yes, there you see the chart that we have given on Slide #27, I think, 26 to be more precise, we have given the coverage what we have. So we have a coverage of around 2.5 to 3 from a longer-term perspective and even for FY '23.

[Sagar Parekh, analyst]

Okay. So basically, the $600 million of revenue -- in dollar terms will take care of the liability repayment is what you said?

[Charanjit Singh, executive]

Slide #26, 2-6.

[Operator]

As there are no further questions, I now hand the conference over to the management for closing comments.

[Karan Adani, executive]

Thank you, everybody. Our IR team is always available to answer any questions and to clarify. And even me and my team are available if there is any doubts that are not settled by the IR team as well. And thank you for your support and look forward to hearing from all of you.

[Operator]

Thank you. On behalf of Edelweiss Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.