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Ladies and gentlemen, good day, and welcome to the Q4 FY '24 Earnings Conference Call of Gateway Distriparks Limited and Snowman Logistics Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call.
These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. Today on the call, we have Mr. Prem Kishan Dass Gupta, Chairman and Managing Director; Mr. Ishaan Gupta, Joint Managing Director; Mr. Samvid Gupta, Joint Managing Director; Mr. Sikander Yadav, CFO, Gateway Distriparks Limited; Mr. Rajguru Behgal, President, Rail Gateway Distriparks Limited; Mr. Manoj Singh, President, CFS, Gateway Distriparks Limited; Mr. Sunil Nair, CEO and Director; Snowman Logistics Limited; Mr. N. Balakrishna, CFO, Snowman Logistics Limited.
I now hand the conference over to Mr. Prem Kishan Dass Gupta for the opening remarks. Thank you, and over to you, sir.
Thank you. Good afternoon, ladies and gentlemen. And thank you for joining us for our earnings call for Gateway Distriparks Limited and Snowman Logistics Limited for the quarter and year ended 31st March 2024. I hope that you have had the opportunity to review our financial statements and investor presentation, which have been available on the exchanges and on our website.
We'll be happy to address any questions or queries that you have and any clarification on any particularly issue will be addressed. With this, I hand over to the moderator for the Q&A session. Thank you.
[Operator Instructions] Our first question is from the line of Amit Dixit from ICICI Securities.
Couple of questions. The first one is on Red Sea issues. How do we see -- how do we see shaping it shaping up in the next quarter and possibly the year? And what was the impact on our business in Q4? That is the first question. And the second question is that if you can highlight the CapEx for next year and we grow the areas where it would be done?
so the Red Sea impact was especially on the rail side. We saw great lift because Red Sea crisis led to increase in freight rates and low-value commodities bookings went down. So primarily on account of waste paper and scrap, which we were doing allotted to Ludhiana and Kashipur. So we had an impact, and you can see that in the throughput of the rail numbers. CFS was more or less flat account of Red Sea. It's still continuing a bit as we go into Q1, but still there is an update that we are seeing.
So primarily, the worst of it is passed. On the CapEx guidance, it remains the same as the past that we are still looking for 2 new terminals. Once those are time lines, we'll let you know, there's no update on that as such. And with general maintenance CapEx would be about INR 20 crores for the next year.
The next question is from the line of Mr. Achal Lohade from JM Financial.
I wanted to check on if you could spell out the market share what we had in fourth quarter as well as for the full year in the NCR and the Ludhiana market?
Yes. So at NCR, we maintained our market share of 16%. And in Ludhiana, we maintained a market of -- market share of 22% and at Uttarakhand, so our market share was 27% in Q4.
And if you could help me with the base number, this is for fourth quarter, how was it in fourth quarter FY '23?
So if we look at FY '23, so there is a growth of -- in NCR, if we talk about the 2 terminals, so we experienced a growth of 5.5% in -- during and if you talk about Ludhiana, so there was a dip in overall volumes due to, as somewhere has mentioned, due to Red Sea crisis because there is a lot of import of scrap and waste paper coming. So there was a degrowth of minus 30%, but that was primarily on account of imports. At Kashipur, there was a dip of minus 19% over Q4, but if we see the overall Y-o-Y, so we experienced a growth of around 8% in Kashipur garments.
Just to clarify, the NCR market share has stayed the same between last year than this year. In Ludhiana, our market share went down from about 30% to 22% and this is annually on account for time City coming in the region. But we're still tied for the market leader in Ludhiana.
The line for the current question has dropped from the queue. So we'll move on to the next question. The next question is from the line of Krupashankar NJ from Avendus Spark.
My first question is on, could you share your EBITDA per TEU for the rail business and the safest business?
Yes. So our rail EBITDA is about INR 9,800 to INR 9,900 for the quarter. For the year, it comes to an average of just below 95,000. For CFS, we got some one-offs in this last quarter. So if we exclude that, it's about INR 1,300 for the quarter and about slightly above INR 1,500 for the full financial year.
Got it. So when we note relating to the Jaipur ICD, there are specific challenges which have emerged audit qualification also has been put across. Just wondering what are we doing with respect to resolving or is there any significant delay which one can anticipate in the Jaipur facility. Can you throw some light on that, please?
So we have announced this last quarter itself because the notes. So it's the same matter going on with no fresh update as such. But file has moved from Jaipur to Delhi and it's in progress. It's a legal process that we have to go through, but we are confident of a favorable order. We had already announced last quarter that we'll only be operational in the next financial year in Jaipur. So that remains on track.
Okay. Last question from my side. On CSM's business, you have seen a significant deterioration as such. Have things stabilized overall in the CFS business? Or are we seeing competitive intensity in the space, which can have a trivial effect on the EBITDA per TEU?
Arun, are you on all? Okay. Yes.
Okay. I'm on call.
And can you just give some light on the CFS numbers?
Yes. So on the CFS side, the competitive intensity remains and is expected to remain in the foreseeable future. the headwind as far as increasing top line remains because of competitive intensity. So we are looking at cost, how we can control costs. And in the foreseeable future, it will remain.
Got it. So 1,300 per TEU should be the new normal.
can was on account of some one-offs. So closer to INR 1,500.
Okay. Understood. Understood. If I may -- if I may ask -- sorry go ahead please.
Krishnapatnam CFS, we have a plan for de notification as container volumes has stopped there. So there's a one-offs expected in the coming quarters for that as well. But at 1,500 is what we are targeting for the rest of the year.
Understood. If I may, one more question from my side. So on the real side of things, how do you envisage growth in FY '25-'26 on the rail business? I know you are scouting for new terminals, but from -- based on the existing operations, what sort of growth rate are you looking for?
We're still looking at double-digit growth. So we have to see, but we have seen a volume uptick and expect that trend to continue going forward into next quarter, Q2 should be better than Q1 and even the pipeline ahead of that is also strong.
Just to add to that, some of the dips, which we are seeing right now are more because of geopolitical issues. And structurally, in this industry, we are very confident that there will be growth in manufacturing and in exit volumes. That's why we have the sample.
Okay. Fair enough. So -- but are you not seeing any incremental volume growth because of given that even Barnam has been or to Vadodara, the DFC is operational. So JNPT-led volumes, perhaps you can bring it on a double stack from Gary to and then JNPT can be created. Are you seeing any incremental volume growth coming in because of this?
We are already doing that from but unless the entire section is double or the entire line up to the new Bombay or wherever it ends, then that benefit will not be available in full from. 100% and 100% in the sense, the capacity is the volume of our Gateway rail business depends on the volumes.
So I think it's all linked to when the DFC is 100%, I think that on the.
The next question is from the line of Nihal Shah from Pudin Broking.
Am I audible?
Yes, sir, you are audible.
My first question is in the terms of realization. So have you seen an uptick in realization of the train throughput because our volumes have gone down by 7.5%, but the revenue has stayed flattish. And if yes, then what are our expectations for the rail charges will going forward?
Yes. So it's increased year-on-year basically because of the daily season surcharge. But if you look at -- we focus more on EBITDA per TEU, the revenue per TEU is more a function of what railways charges than we had our margin on crop and so that. Other than that, we've not had any divisions to our handling or road transport. So that trend will continue. But EBITDA per TEU has more sections get double stacked, especially Faridabad, which should happen railways is constantly doing work on that, that will help push our margins.
Sir, 1 thing I would mention here is that going forward, the revenue and expenses or differently as per the auditors. So the revenue net of discounts or incentives will be due to the revenue, and there will be no separate call for other expenses or discounts and incentives. So even though the growth might be there, the numbers at the revenue level might look muted, but it will have no impact on the EBITDA or any P&L amount.
Yes. This is primarily on the CFS side, there will be a change in accounting standard from next quarter.
Okay. And another question was that what are the volume growth that we're expanding for the ICDs as we are only going at around 60% of capacity? So -- and what was the number of TEUs that we handled in this year, FY '24?
So we handle all India basis rail 3.68 lakh TEUs. The CFS side, it was 3.62 lakhs TEUs, so 7.3 lakhs overall. So we have enough capacity, especially on the ICD side, we can grow 4x of our volume as and when we hit 70%, 80% utilization, we just have to expand the container yard, which is a very nominal incremental cost, and we keep doing that year-on-year. So capacity won't be a constraint at any of our ICD locations.
Okay. And just one last question, like what is the total number of TEUs on an average that we carry per trains like train that can be handled? And like, obviously, by double stacking can get it to 184. But that will also get an idea of how much double stacking is possible is happening?
Last quarter, we handled about 950 per train per month. But in the past, we have hit 1,100 as well. So -- but we've also increased the rail capacity by 3 more trains now and instead of 180, we can carry 192 deals on a fully double stack basis. So our capacity also on the rail side has gone up and we won't see any constraints there. So as and when the volumes import, export pickup, we'll be more than capable to handle it.
And in the last quarter, the double stacking dipped by around 5%. So even though the -- yes, from 40% to 35%. So it is the main reason for the profitability of the revenue going down. So whenever the volumes pick up, our double stacking will go up, and it is also pertinent to mention that Faridabad terminal will be double stack soon. Some works by the railways going on, and we expect that to happen in the next 3, 4 months.
So like from the current levels of 35, how much do we expect it to go up to a double stacking in FY '25 or FY '26?
Yes. So once it was only to JNPT and Faridabad also add we want to go closer to 45% to 50%, which in the past we've done about 43% and 44% are the highest. So we are more than capable of doing that, but it all depends on the volume mix and overall import export imbalance.
The next question is from the line of Mr. Achal Lohade from JM Financial.
Sorry, I got disconnected. Could you please repeat if in terms of the market share, I understood for the fourth quarter, you had mentioned about the market share if you could talk about the full year market share, please?
Basically, NCR, we are still at 16% to 17%. So year-on-year, that's not changed that much. Our overall volumes have gone up, but even NCR market has gone up. In Ludhiana with that came in, our market share went down, but we're still tied for the lead over there. And third, we've increased it nominally year-on-year our market share primarily because Q4 was waste paper and both and if that was there, then our growth in market share would have also been much higher for that region.
Understood. Secondly, with respect to the Faridabad connection on the DFC, how do it change for us in terms of the offering, in terms of the pricing, et cetera? If you could give some more clarity?
Yes. So we can then do double start directly from Faridabad other than right now we are doing it by us. So we'll be in a position to offer more discounts to customers, especially which are slightly further away from our catchment areas when loans become a bit more viable to us. So that's the main advantage that we have.
Is it possible to get some utilization numbers for ICDs for each of the ICD?
One of them, like Ludhiana will be closer to 17%. Faridabad, Kashipur and, we have enough capacity right now. We will be probably closer to about 50%. But we have more than enough plant and get all these locations to handle enough capacity up to 4x the current volume we're doing.
Understood. And just 1 more question, if I may. How do we look at the margins for both -- I mean, CFS you have mentioned. But what about the ICD business, rail business, what kind of margins one would look at for FY '25?
So we 9,500 for this financial year. So I think that it will fluctuate a little bit up and down depending on quarter imbalance and volume mix, but this is a good change to be here.
Understood. And if you could remind us, with respect to the Ludhiana terminal, the last we spoke a fair amount of competition and discounting. Has that seen some or is as in terms or it's getting worse?
It continues. So it's the same time as last few quarters.
Understood. And just a port mix, if you could, in terms of Mundra Pipa and JNPT? How much of the volume goes from Mundra, how much goes to Pipa or how much to JNPT?
so Mundra 60%, Pipava 35%; and JNPT, 5% to 7%.
The next question is from the line of Bhoomika Nair from DAM Capital.
Yes. Sir, we were looking at kind of monetizing some of these CFS plan, any kind of progress on that aspect of any -- of any of the land being kind of monetized?
Yes. So we just finalized that yesterday's board meeting basically in some land of Krishnapatnam, we're monetizing. So there will be about INR 20 crores inflow coming in from there. We are looking at some other monetization also, especially Krishnapatnam and Cochin land also that we've talked about in the past. So we are in discussion with some parties, and we'll keep you updated as more happen. And that INR 20 crores plant, basically, it was on last quarter and Snowman Logistics will be taking and converting it into cold storage. So it works out to more companies where Krishnapatnam is a high-demand location for seafoods and Meghalaya warehouse which will take long to convert and invest their revenues and margins and for Gateway general warehousing anyway and excess activity over there. So it's no issue for both companies.
Okay. Okay. So this INR 3 crores are you selling is external is Snowman, I didn't quite get that.
20 crores of basically 7 acres plus some warehousing. But actually, there was additional also through the year, 2 more acres. So that was also. So will be left about 34, 35 acres in Krishnapatnam and originally, it has started, it was at about 48, 49 acres.
Okay. Okay. Got it. Secondly, with this Jaipur termnal getting a little delayed in terms of getting all the approvals and thereby starting work on it. What is the progress in terms of other terminal that you were looking at? Are we kind of fast tracking that? Are we likely to see another terminal being identified and getting operational anytime soon? If you can just talk a little bit about that from a more medium to long-term perspective?
Yes. regarding Jaipur, we are whether the road building CFS, which is the CRT just across the land that we have, where the land where we do not have issues. I'm talking about that piece of clients. And alternatively, we are working a plan if we can buy some more land and rail line if possible that ICD can be done straightaway rather than in CFS. So it is delayed, but we had anticipated that because of this litigation going on on the Jaipur land, part of it. So it will be operational in FY '26, and we will be taking a call very soon on whether to be both on the CFS or the straightway buy some more land and. And regarding others, we're still actively looking, but nothing finalized yet. An acquisition is a bit of a challenge and so we are actively looking, hopefully, we can update you in the next quarter on the.
Sure. Understood. So nothing lately in advanced stages or anything that we're looking at. So per se, at least in FY '25, there will be no additional ICD, which will likely come up?
The ICD might not come up, we might buy some land. We have at various fortunately a standing in UP or other side of the NCR in Haryana. The only problem is that the land parcels and the logistics policy, which have come in some players, what is it has been changed and we hope that some really like 60 feet wide road and on that and any of the earlier lines, 58 been they're used to 25 acres. And during this election period, nothing much was happening on that front. So we expect that, within this year, we will buy the land. But of course, it takes [Technical Difficulty] on the date acquisition of land.
Right. Right. The other thing was, obviously, the imbalance kind of hurt our rail EBITDA per TEU this quarter. How are things kind of looking ahead into 1Q and also the outlook that you're seeing from major shipping lines in terms of an improvement? And what was the double stacking index for the full year of FY '24?
So in balance for the full year 43% export 50,000 imports. Double-stacking, we went down from 40% to 35%, with the first 3 quarters we're on about 40%. So it's anywhere around 38%, 39% for the full year on double stacking. Going forward, we don't really have a clear plan shipping lines also are committing to what the mix will be like, but maybe a slight improvement will happen more in favor, exports.
Okay. Okay. So I mean, no material improvement into 1Q, then we need to look out for beyond that, right?
So in Q1, probably we expect double stacking to be better than Q4. Even though in balance, maybe not what it was earlier, 60-40, it will be slightly better than that.
The next question is from the line of Vardia from Earth India.
Yes. Am I audible?
Yes, sir.
So I have a couple of questions regarding Snowman Logistics. So my first question is what are the operating margins for owned versus a build-to-suit warehouses?
Can you please repeat your question?
Yes. My question is what are the operating margins for owned versus build-to-suit warehouses?
I'll take this question. See, In case of own warehouse, I'll talk about EBITDA. We are somewhere around 55% EBITDA if the land is owned and if the land is leased, then it is around 35%, 36% EBITDA. When we do a DTS kind of operations where the land as well as the infrastructure is completely owned by the landlord and we rented out the complete warehouse, then the EBITDA is somewhere around 14%, 15%.
14%, 15%, understood. And my next question is, what is the as a percentage of revenue for build-to-suit warehouses? And also, is the rent only cost difference between the 2 warehouses models?
Percentage, I will have to check on that. I don't have handy. But in case of the difference, yes, the rent is the main difference in the whole thing.
Understood. My next question is, what is the reason behind the drop in the margin in transportation services from approx 7.3% in FY '23 to 3.15% in '24. Also, could you please elaborate on the subdued growth of 5.8% growth in this segment for the year?
In case of transportation, our EBITDA margins have gone up as compared to last year.
Revenue growth, I'm talking about revenue growth.
Revenue has gone up by 6% in transportation.
What is the reason behind the subdued growth of 5.8% in the transportation segment for the year?
Yes. So it is basically because some of the trucks that we had attached on the SnowLink business model, they had the -- it was from one of the large operators in the country who have decided to wind up their business. So those many trucks were out of the circulation of usage by us. So time for us to replay them, which is done now. So that has affected our overall revenue from a market vehicle point of view.
Can you just give me margins for transportation services for this year in FY '23?
Sorry, your voice is not very clear to me.
am I audible?
You are audible, but not very clear. You're saying margin.
margins in transportation services for FY '23 and FY '24?
So we look at the EBITDA margin, and our EBITDA margin in case of FY '23 was 7.1%. And in FY '24, it is 8.5%.
And my one more question is regarding Snowman order management system. I want to know how does it work? And is it a value-added service like SnowLink or it is an software used by Snowman to increase operation efficiency.
So it is both. So it increases a lot of efficiency for us because today, what does comes to us over email and we make the data entry in our ERP system. With this SoMS, the app is that the customer can directly enter order. In that case, we can save on the -- so this will bring in a lot of efficiency for us. At the same time, the app is made in such a way like someone will have a visible to mail or phone calls. So the customer have tough time. We expect that the cost of this whole system is compensated or paid by the customer in terms of subscriptions.
Understood. And my last question is when can we expect the Kolkata and Lucknow warehouse to commission?
Lucknow use in July, Kolkata will be in September.
The next question is from the line of Aditya Mongia from Kotak Securities.
First, that was linked to one of your peers suggesting that Faridabad would be used to terminal. I wanted to get a sense from you whether that presents to us should we be using that terminal and whether we'd be interested in them, sir.
So your voice was breaking a bit, but are you basically asking our us terminal that shall be?
That is true. And whether that presents an opportunity for other players to see...
Yes. So basically on the rail side of the terminal, it terminal. If they go into the new policy of the and licensing period. The handling side remains with the terminal, owner or operators. So we have to wait and watch to see what actually happens, then we can only comment on it.
Understood. The second question that I had was more on your double stacking cushioned, which has been declining over time. So could you give us a sense whether this is because of things outside the control or can we do something to get terminal backup plan?
So it was pretty stable between, say, 40%, 42% this quarter that is declined as much mainly on account of the Red Sea crisis that happened. There was a related R&D of volume. We had to run some empty trains, one directional trains. So there was higher underpinned cost resulting into lower double stacking.
Like for example, suddenly, there was a discharge of a few containers that. So we had to run some trains there to airport. So it was a bit of a commercial call as much, but we expect it to go back to the standard 40% within the next 2 quarters.
Understood. Sir, this should have a bearing on EBITDA per TEU, right? We still saw through flattish guidance for next year. With this double stacking cushion also increase, would it not have an impact on our profitability?
So we would expect that to be higher. It could have possibly gone about 10,000 per TEU in this quarter, but we do expect some discounting to increase going forward as competition picks up, especially in Ludhiana and Kashipur. So we're factoring that in and keeping it conservative at 95 bucket plus the annual increments and costs also, manpower, labor, other vendors also also were factoring in saying 95, 100.
Sir, the other question that I had was more on the model coefficient of key ports and then not having changed even though DSP has been commissioned. I'm talking people. Is this aligned with your expectations so far and what more needs to happen for those co-efficients to start rising over time?
Sorry, again, it was a bit unclear there was more shift from road to rail, you're saying?
Sorry to interact. Aditya sir, if you're using the speaker mode, maybe request to use the handset to ask a question, please.
I'm on the handset side, is it any better right now or having the same problem...
No problem, sir. Please go ahead.
I think you got the question right. This was -- so the model co-efficient of Pipavav and Mundra has not changed meaningfully for the last 5 years, while the DSC has been commissioned in the past 2 years or so. I wanted to get a sense of that this was on expected lines the way it has moved so far because we are needing to be exposed to these 4 terminals? And what needs to change for these numbers to start kind of growing up?
Yes. So basically, since the start of 2020, they started transform of DSC has been the intent. So even the shift at that time, especially during move to lockdown when the very slow primarily by the markets we operate are long distance and it is kind of already on rail. Some of it which is signed cargo, cargo that still go by road and continues to do so because a lot of it goes to JNPT. Once JNPT goes through double stack and becomes connected to DST and outside also will naturally come as part of that. We expect some growth to from that area. But for Mundra, the order has start happened already.
Okay. Now maybe just your view on some last question. DSC has end up creating what more capacity out of the sales capacity, while getting through low-period volume growth in some way has it been lessened from a margin perspective so far, at least because obviously, you run faster which obviously meant at more capacity is now when the pricing start to end up in a...
Yes. I'm sorry. I'm not able to understand your voices coming right.
I'm sorry, I'll try once more, if it's the same problem, I'll probably get back into the queue. Am I audible to you right now?
Sir, please go ahead, yes.
Yes. DST having a margin are effect by kind of creating a lot more supply because things happen faster, okay? And while not giving you volumes to kind of use that supply, which actually has now. As it has retrofit effect kind so far because we currently co-efficient having gone up and can't see model co-efficient going up, but obviously, we can see faster transit...
Sorry, we're only catching like a few words here that's coming up, maybe let's connect offline and we can kind of just the.
[Operator Instructions] Our next question is from the line of Pranay Khandelwal from Alpha Invesco.
I wanted to congratulate Snowman on being the 14th largest cold chain company in the world. And I wanted to ask a question on the revenue share from the different segments. For the past 3, 4 years, you see that QSR and daily revenues have increased, but meat and poultry segment is not doing that. Can you comment on that?
So yes, sorry I was on a mute. So yes, the industry itself has been growing good 20% plus CAGR last 3 years. So the contribution is improved. And in terms of the meat, most of the meat exports have moved into a rail real operations. And strategically also, we are putting less focus on new meat as a segment. So that is the main reason only in locations we have meat storage now, and we are trying to reduce at one other better yield segments.
Okay. But the seafood must be a high-yielding segment, right? And being on the port, I believe a lot of our capacities are near ports. So even there we're not seeing much traction?
No. So if we have not added much facility in the coastal areas in the recent past, and most of those facilities are fully utilized. So the growth is fragmented as of now. Is there any plans that you have in terms of building one in Krishnapatnam and in Bhubaneswar, the contribution will start increasing. It's only because of capacity that we're going to have.
I believe Krishnapatnam and Bhubaneswar you have been yet been started, right, like currently on the pipeline is called Kolkata and Lucknow. What's the color on that when shall we expect that them to come on in sizing the guidance for the FY '25 is that we'll have 2 lakhs pellet capacity. So...
So we is under construction and will be functional in July. Kolkata will be functioned in September. In the case of Krishnapatnam and Bhubaneswar, we already have one facility in each location and therefore we are doing some further expansion in the sea levels.
Okay. And will that be completed within this year?
In Krishnapatnam, yes, and Bhubaneswar, no, it will go into FY '26.
Okay. Also, can you give an outlook from the ICL business, how are things moving over there since it looks like the revenue has been new growth in revenue. Anything on that? Any new customers anything any new developments?
No, if you see last year, we did INR 83 crores of business, whereas this year, which is INR 141 crores. So it is not maybe last quarter versus this quarter, it should be a little.
quarter-over-quarter.
Okay. So this is a very promising asset for us that we're expecting major growth in our long-term vision coming out of those segments. So it is promising just quarter period for this particular vertical should show growth numbers.
Okay. And there are no new customer alone, right?
There is a customer, as I told you last time, and there are more additional products. So it's not typically customer to using additional products that results in the higher revaluations for the...
Okay. And can you also quickly comment on the deferred tax results what has happened over here?
Samvid, you would like to comment?
Yes. So you were asking also that assets for last year...
No, no further Snowman for the last quarter, we have seen that there's an increase of the deferred tax.
Yes, yes. So this was basically the other item in auditors that we neither one-time reversal of -- we assessed and I mean this was one of the 8 years of where is the different opinion between the test at achievement and accounting. So as a lending, we have taken that it is not like a cash outflow. It is just a decrease in the deferred tax -- deferred debt deferred that asset.
The next question is from the line of Jainam Shah Equirus Securities Private Limited.
Yes. Am I audible?
Yes, sir. Please go ahead.
Sir, this question relates to the day to days report. So we just wanted to have the number from your side, what could be the market share for us at the JNPT portal given the number of our volume share in that JNPT, but what could be the market share of ours at JNPT total volumes?
JNPT down 4%, but it will be very negligent since we only 5% of our business is for JNPT and JNPT UP, MP, Karnataka South and Central India part basically where we don't operate.
Okay. So sir, basically, if we see after let's say after working on JNPT, let's connected to the DST I'm sure you very nominal and our total volume share is at 37% that has been for the last few years. So what kind of benefit will be having in the total volumes? Can you assume that whatever could be the DSC benefit is already flowed in for us? And maybe some gradual increase could be there was nothing kind of we share probably could be well because of JNPT getting connected.
Yes. So the pioneer I think I also gist of the question. Basically, right now, it's a loan percentage that post BSC connection, because possibly tearsheet in the port allocation shipping line. So JNPT volumes could possibly go up. Historically, JNPT, Mundra, Pipavav used to be equally spaced for the North business, then because of distance and time, they shifted more towards Mundra and Pipavav. Northern shipping lines, anyway common JNPT to prefer one for more north and the local volumes. So we'll have to wait and watch how it happens, whereas one thing that we have a license and are all CPUs are items. So we would be gaining more of the JNPT volumes meant for the north compared to the other GPUs that are there right now. Thus we can have an advantage in terms of imbalance routing and spoke from distribution across different terminals from there itself.
Okay. Okay. Got it. Got it. Sir, other question is related to the ICD addition that we have been talking about. So I guess we have been talking about this since last 1 year. So is it because are we not seeing that much volume that our internal rate of return or maybe land value might not be coming in because of that we are delaying the acquisition or we are not not able to finalize the location. So any specific reason for the maybe delay or maybe some time that has been taken to around the ICD since last 1 year as we are having the cash balance and we are already generating the cash to deploy it somewhere in the business.
Yes. No, it's more a regulatory issue. We have to then order constraints and finding the right for entity. You have to be near a railway station, really present a 1 kilometer. We have to have good road access, you have to be near the business or probably manufacturing or you need 1 kilometer and a longer infiltration to allow you to get the residing inside and then all of this in contiguous speeds at a good rate. So with all those factors are down average by quite a bite. So we are actively pursuing this, and you should probably see something happen within this financial year. But it is a work in progress.
Got it. Got it. And sir just last final question from the financial side, this depicts that we are having benefit of this in the Gateway. So till what time will be having this tax at benefit. Of course, we are paying in cash, but on the reported basis, at what time -- by what time this benefit will be going out? It was somewhere around 20 or something.
So currently, we have been made our taxes at the lag, which is 17.47% because of API benefits. There are 2 more locations where we have pending API benefit, which will continue for one location of to '27 FY '27 and another location since FY '28. So after that, we'll have the benefit. So maybe if the company's profit goes the way we are going and there is a growth, then definitely, this benefit will get reversed, or the deferred tax is going to happen in the next I mean, basically, by maybe using the large credit that we generate in FY '27 and '28 by FY '32 is our projection. So till then effectively, we are paying back against the market. Right now, our effective tax rate is about 2%. Next year, one location is going away, so it may go up to 5%, 6%. And then '27 is when the full tax rate, then we'll start becoming a but we use the for 4 years after that.
The next question is from the line of Koundinya Nimmagadda from Jefferies.
Couple of questions. First one, I mean you have to incline, but it's unclear when you spoke of the pen the call. So just tying understand, what is the current situation on the Red Sea crisis? I mean have the volumes bottomed out in your view in 1Q? Or do you see the issue sustaining for a couple of more quarters? If you can help us understand that EBIT came better, please?
Yes. So what I is that orders have started growing well, but down there is a problem with the port condition because a lot of the vessels, they have taken some longer route via cable to road. So their location has affected and some of the like Singapore and all. So there is a port congestion also which has happened. So though there are no booking done there, we have seen some minor OpEx, but again, it is too early to predict or say that everything can be back to normal, we need to wait and watch maybe another 1 or 2 months till the volumes start coming in. So if you see the containers are there from the origin to the destination ports, but again it is taking longer time. So the drivers are getting impacted. But there have been spots where in one way used to very good arrival than the port. And again, the next week again there is a run. Again, there is right. So there is no consistency as of now. So we have to wait and watch.
Understood, sir. And sir, my second question is on the potential benefit of JNPT gets connected. I mean to answer to one of the previous questions, you said due to the fact that shipping lines may shift some of the volumes to JNPT. That's fine. But if I were to measure our performance from winterland, 80% of those volumes are already captured, I mean, we are always expecting those volumes, right? So maybe you may have some benefits on 10 kilometer prices. But on a sustainable basis, where do you see potential benefit with them? I mean how do you see market share gain or some kind of some of benefit, you can help me understand it a bit better, please?
Yes. I think 12 to 15 container train operators only about 4, 5 under JNPT license. So we are under that why we should see an increase in market share in volumes move towards the JNPT side. It will be more a pricing benefit costing benefits that are starting coming in and turnaround time is also improving right now, it takes us to anywhere up to 72 to 90 hours for JNPT that is up down to 24 hours. So we'll be able to utilize our fleet better. So that is other operational advantage. And then a lot of cargo, like we mentioned earlier, which is time sensitive, consolidation cargo and cargo, a refrigerated cargo that we can start targeting once JNPT. Those are the main benefits that we see.
The next question is from the line of from Kotak Securities.
Am I audible, sir?
Yes, sir, please go ahead.
So I just wanted to follow up on the question of my colleague, Arisa. So basically, has the DFC been margin dilute on our operations, given that it has increased supply in the country, while not giving much volumes due to any model changes not happening? Or has it not improved the double stack co-efficient for us on the same lines?
So it has increased our margin actually because we've increased our double stacking, like earlier there were certain routes where we couldn't double stack down town to Mundra with nonrth part of them, but now we can help all our volumes from North to and Mundra kept it started. Similarly, Faridabad, will also added improvement in quiet. It also has slowed the cost of logistics for the end consumer. So we do pass on some benefits of the DFC. But we don't have special I think for BSE or downstaging versus non-double stack routes. So we try to retain most of the cost advantage that for this.
On the volume trends, how has the effect been, sir?
So volume is we saw big shape of rail when it's initially started being more gradual. But we are seeing more of an operational benefit thing rather than revenue benefit event for us. Despite DSC being transit apart from, there won't be any other incremental volume coming all the...
For other than DSC that our target tax improved like you said, it boosts our supply side. So the same volume under which we and right now, we would have been at a rate at the. And we are able to maintain our cost. We are able to use our network and are in spoke. So with that, we are able to be more competitive in the market and.That's how we can get on...
Ladies and gentlemen, that was the last question for today. Participants missed out due to time constraints, they can reach out to the management and SCA for Gateway Distriparks or Churchgate Partners, for Snowman Logistics. With that, we conclude this conference. Thank you for joining us. You may now disconnect your lines.