JSW Infrastructure Ltd

NSE:JSWINFRA

Earnings Call Analysis

JSW Infrastructure Reports Strong Cargo Growth and Strategic Acquisitions

In Q1 FY '25, JSW Infrastructure experienced a 9% increase in cargo handled, totaling 27.8 million tonnes, driven by new assets and robust demand. Their EBITDA rose by 24% to INR 609 crores, with net profit at INR 297 crores. A significant acquisition of Navkar Corporation aims to enhance last-mile logistics, supported by an investment of INR 1,644 crores. The company maintains a volume growth guidance of 10% to 12% for the full year, backed by successful projects and operational improvements. The management remains optimistic about returning to normalized margins as new acquisitions integrate into operations.

Navigating the Performance Landscape

In the first quarter of fiscal year 2025 (Q1 FY '25), JSW Infrastructure reported notable cargo handling improvements, achieving 27.8 million tonnes, marking a 9% year-on-year growth. However, it's essential to note that this growth was influenced by challenges such as a planned maintenance shutdown at the Dolvi steelmaking facility, affecting volumes at key ports like Dharamtar and Jaigarh. The initial expectation of 18% to 20% growth was mitigated, resulting in this 9% increase, underscoring the impact of operating conditions on performance metrics.

Financial Overview: Revenue and Profitability

Operational revenue surged from INR 878 crores to INR 1,010 crores year-on-year, reflecting a solid 15% increase. EBITDA also saw a commendable rise, growing 24% to reach INR 609 crores. Considering the financial implications, the profit before tax (PBT) reached INR 392 crores, representing a slight year-on-year decline of 5% due to previous unrealized foreign exchange gains. However, with adjustments, PBT growth was a more respectable 23%. Net profit after tax (PAT) registered at INR 297 crores, down 8% year-on-year, yet this translates to a 14% increase once factoring out prior year gains.

Growth Trajectory and Volume Guidance

The strategic growth outlook remains optimistic, with JSW Infrastructure maintaining a volume growth guidance of 10% to 12% for the upcoming fiscal year. This growth projection reflects the anticipated contributions from new acquisitions, including PNP and the liquid terminal in UAE. During the earnings call, management assured investors that the impacts of the Dolvi shutdown are temporary, and volume increases can be expected in subsequent quarters as the plant resumes full operations.

Acquisition Strategy and Integration Prospects

A pivotal highlight from the earnings call was the acquisition of a majority stake in Navkar Corporation, aimed at enhancing JSW's logistics capabilities. This strategic move is expected to improve connectivity between ports and inland facilities, aligning with a broader vision to create an extensive nationwide logistics network. The estimated enterprise value of this acquisition is INR 1,644 crores, with expected finalization by Q3 FY '25. Management is focused on integrating Navkar's resources, which include container freight stations and inland container depots, into existing operations, proposing a significant upside for revenue potential.

Commitment to Infrastructure Growth

JSW Infrastructure's capital expenditure plans remain robust, with expectations to invest around INR 13,000 to 14,000 crores over the next three years. Projects include the ongoing construction of the Keni Port and the development of new cargo berths at Chidambaranar Port. This commitment reflects the company's ambition to enhance cargo capacity to 400 million tonnes by FY 2030.

Profitability Pressures and Margin Outlook

Despite strong revenue performance, margins faced pressure, attributed to decreasing volumes at higher-margin port operations like Dharamtar and Jaigarh. The average operating margin declined slightly to approximately 51%, impacted by the cargo drop due to the Dolvi shutdown. As operations normalize, especially at these critical ports, management anticipates a recovery towards improved margins.

Market Dynamics and Sectoral Opportunities

JSW remains strategically focused on increasing third-party cargo volumes, which grew by 48% year-on-year, now accounting for 50% of total cargo. The move showcases the company's shift towards servicing broader market demands beyond captive cargo. With India's economic fundamentals remaining strong and infrastructure investments on the rise, the company is well-positioned to capitalize on both domestic and overseas opportunities, emphasizing the logistics sector's growth potential.

Earnings Call Transcript 2025-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to JSW Infrastructure Q1 FY '25 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Mohit Kumar. Thank you, and over to you, sir.

[Mohit Kumar]

Thank you, Steve. On behalf of ICICI Securities, we welcome you all to the Q1 FY '25 Earnings Call of JSW Infrastructure.

To discuss the results today, we have with us Mr. Arun Maheshwari, Joint Managing Director and CEO; Mr. Lalit Singhvi, Whole-Time Director and CFO; and Mr. Vishesh Pachnanda, Head, Investor Relations.

We'll start with a brief opening remarks by the management, which will be followed by Q&A. Over to you, sir.

[Arun Maheshwari, executive]

Thank you, Mohit. Good evening, everyone, and welcome to our quarterly earnings call for the period ending June 30, 2024.

India's economy remains robust compared to other major economies driven by solid domestic demand, growth in manufacturing and continuous infrastructure investments. Around 1.5 month back, India chose a new government with the forward-thinking and energetic leadership of our Prime Minister. I believe the ongoing reforms and significant measures to enhance the logistics sector efficiency and effectiveness will continue. At JSW Infrastructure, we have a clear vision of transforming the company into a complete logistics solution provider, delivering cost-effective last-mile connectivity to our customers.

The acquisition of a majority stake in Navkar Corporation, which owns container freight station, inland container depot in key locations aligns perfectly with our strategy to establish a nationwide network. This is the first step towards that. Additionally, it grants us access to extensive land resources within Mumbai metropolitan region and Gujarat for further development and expansions of these facilities. The enterprise value of this acquisition stands at INR 1,644 crores, and we expect to consummate the transaction by quarter 3 of 2025.

I'm pleased to share that we have obtained an acceptance letter from South Railway division for the construction and operation of Gati Shakti Multimodal Cargo Terminal in Arakkonam, Chennai. The terminal has a superb connectivity to railroad and in close proximity to the port of Chennai and Ennore. This initiative is in line with the goal of creating a nationwide logistics network to enhance last mile connectivity.

On the growth projects, construction of 30 million tonne Keni Port is progressing well. The hydrographic and geotech studies have been completed. At JNPT liquid berth, pipeline construction and connection work is in full swing.

We have signed a concession agreement on 2nd July with Chidambaranar Port, which is Tuticorin in Tamil Nadu to develop a new 7 million tonne cargo berth and further discussions are underway for equipment specs and ordering. In an effort to combat global warming and climate change, I'm pleased to announce our commitment to curtail our direct greenhouse gas emissions and achieve net neutrality by 2050.

Moving on to the operational and financial performances for the period April '24 to June '24. The total cargo handled stood at 27.8 million tonnes. This is 9% year-on-year growth. Our third-party cargo grew by 48% year-on-year to 13.8 million tonnes and the share of third party in quarter 1 of FY '25 increased to 50% in the overall mix cargo from 37% a year ago. Total revenue for the quarter stood at INR 1,104 crores, reflecting a growth of 20% growth year-on-year. EBITDA for the same period stood at INR 609 crores, which is 24% year-on-year growth. And net profit stood at INR 297 crores.

With this, let me hand over to Mr. Lalit Singhvi to take through the financials and other details. Thank you.

[Lalit Singhvi, executive]

Thank you, Arun, and good evening, everyone.

In Q1 FY '25, the company handled cargo volumes of 27.8 million tonnes as compared to 25.4 million tonnes in the quarter ended June '23. This 9% cargo growth is mainly driven by the incremental volumes from the newly acquired assets, PNP and liquid terminal, UAE. Also, the volumes at Paradip coal and Iron Ore Terminal grew by 50% and 15%, respectively. Cargo handled volumes at Dharamtar and Jaigarh was impacted by a planned maintenance shutdown at Dolvi steelmaking facility of the anchor customer.

On a year-on-year comparison, Jaigarh and Dharamtar volumes were lower by 1.2 million tonnes and 1.5 million tonnes. Third-party cargo has increased to 13.8 million tonnes from 9.3 million tonnes representing 48% growth and share of third-party volume stood at 50% versus 37% a year ago.

The growth of volume resulted an increase in operational revenue for the quarter from INR 878 crores to INR 1,010 crores, a Y-o-Y growth of 15%. Other income for the current quarter is INR 94 crores as against INR 40 crores in June '23, mainly driven by an increase in income from fixed deposits and gains of mutual funds. EBITDA for the quarter ended June '24 was at INR 609 crores from INR 491 crores in the quarter ended June '23, an increase of 24%.

Strong EBITDA growth was mainly on the increased revenue. Depreciation was INR 135 crores and finance cost was INR 74 crores in the current quarter as compared to INR 95 crores and INR 71 crores, respectively, in the quarter ended June '23. Profit before tax stood at INR 392 crores, which is lower by 5% year-on-year. It may be worth noting here that in Q1 FY '24, finance costs included an unrealized foreign gain of INR 87 crores. If we remove the unrealized gain, then PBT growth is 23% year-on-year. Similarly, PAT for the current quarter was lower by 8% at INR 297 crores. And we -- if we adjust for the unrealized ForEx gain of last year, PAT growth is 14%. As of June '24, we have a net cash of INR 195 crores and one of the strongest balance sheet in the sector.

This, coupled with steadily increasing annual cash flows from the current asset base, we are well positioned to pursue a growth plan to enhance our present cargo facility capacity to 400 million tonnes by FY 2030 or earlier.

With this, I request the operator to open the line of questions.

[Operator]

[Operator Instructions] The first question is from the line of AlokDeora from Motilal Oswal.

[Alok Deora, analyst]

So just a couple of questions. First is on the volume side. We have seen Dharamtar and Jaigarh volumes declining on a Y-o-Y basis. And one of the reasons you have mentioned in the presentation also is the Dolvi plant shutdown. So what is the status there now? And I mean, could we expect improvement in the second quarter in that -- in these ports?

[Arun Maheshwari, executive]

Yes, the entire shutdown period is over and the plant has been running full since the last 3 to 4 weeks now. So we don't see any such kind of reduction in volume in the rest of the year. So this was known which will be coming up though, so this cargo drop is because of that shutdown.

[Alok Deora, analyst]

Sure. And also, we have seen a 9% growth in volume that's primarily driven by the new contribution from the PNP as well as this liquid terminal in UAE. So for the full year now, what's the volume growth we are looking at based on the run rate of new ports also contributing and also Dharamtar and Jaigarh...

[Arun Maheshwari, executive]

So we'll maintain our guidance what we had mentioned earlier, 10% to 12% kind of volume growth would be there for the full year -- full year basis. This will -- we will be able to achieve that.

[Alok Deora, analyst]

Got it. Just one last question. So on Navkar, since we did not have a call after the acquisition. So just if you could spend some time on how we are looking to integrate this with our operations and also the CTO license, which they have, how are we planning to use that or just some thoughts on that?

[Arun Maheshwari, executive]

So yes, a very pertinent question because this is one of the forays for any port company, it is important to have a complete last mile connectivity and logistic solution provider. So we are -- this is the first step towards that. So if you see our journey very closely, we have started from a captive cargo company we got from third-party businesses, then we got into different product segments. Now these are different service segments, which we are getting into. So this is the first step towards that. And it is a very strategic location near Mumbai and Gujarat, which are the very high potential business locations.

And with the kind of assets what they have, apart from the strategic locations, they have their own trains, CTO licenses and ICD, CFS and PFT both, all 3 are there. So it adds value when we start integrating with our existing operations as well as the new opportunities what we get in the way for this.

So our whole vision is that we should become a complete solution provider from the port angle as well as from a distribution and delivery purposes. And this is what we intend to be. Maybe another couple of years' time, we would like to increase this business more robustly and integrate with our existing other locations.

[Alok Deora, analyst]

Sure, sir. So once this transaction gets completed, how much time it could take for the integration?

[Arun Maheshwari, executive]

So this is the first piece of the entire growth journey what we have. So many such opportunities, either by building acquisition or by integrating with other solution providers. This could be a larger game. This is the first piece of that. And once we consummate the entire deal by quarter 3, '25, then we'll start working on to that, though we already have a blueprint ready. But I think in the months to come or in the quarters to come, you will start seeing the results out of it.

[Operator]

The next question is from the line of Priyankar Biswas from BNP Paribas.

[Priyankar Biswas, analyst]

So coming to your question about inland logistics that Alok asked, specifically on Navkar. So sir, can you give us a road map how exactly you plan to go into inland logistics? Because the way I believe is that when you gave the INR 30,000 crore CapEx plan, this probably wasn't within that. It seems like it is beyond that.

So what sort of CapEx level can go for us to go into inland logistics? Any pipeline of further acquisitions? And furthermore, it seems that Navkar's revenues were kind of flattish for a prolonged period. So what are we going to do to actually bring this asset up?

[Arun Maheshwari, executive]

So Mr. Biswas, thanks for asking this question. This is -- this segment is making sense provided you have some port assets as well as some of you have inland logistics, some kind of visibility and the vision what you believe in India. The way the economy is growing, the way the kind of consumption centers are growing into the rural India and the entire India. It is not limiting to certain geographies.

And this needs a wider network. We have studied the other geographies how they have grown on this particular sector. And we look at the other Indian companies the way they are looking at this sector. It is definitely a very, very high potential sector. And this will be a synergy to the existing port businesses. So it is not that independently we are doing this. It is well thought out when we are investing so much of pipeline of projects are there for developing the ports or the terminals or the other businesses on the port side.

That will not be very value accretive unless we have this piece of the business also with under our control. So this is a step towards that. Now as you said that in INR 30,000 crores pipeline, this was not mentioned. So we are seeing this as an opportunity which is coming up. It could be a lease model where the CapEx would be very miniscule. It is not worth mentioning in INR 30,000 crores or any such opportunity which comes up like Navkar, we will not be averse to looking at those opportunities. If that happens, then we can always -- because the pipeline is big enough, the balance sheet is strong enough. And if it is value accretive, we can definitely leverage our balance sheet to acquire any such opportunities.

So it is a moving target for us, which opportunity will come our way. But if I have to look at on a lease model, then it is not costly affair. The project costs are almost negligible. So we can always develop that as well. But we would continue to grow in this particular segment, either way of acquiring, by way of developing ourselves or by way of synergizing with another such players within the segment. It would be a combination of everything. So it's difficult to put a number of the project on such style of businesses today.

[Priyankar Biswas, analyst]

So sir, would it be correct to say that since your company has broadly ROCE level of roughly 18%, so eventually, also in the long term, when you are developing this inland logistics network, so you would also have something of that as an aspirational ROCE broadly?

[Lalit Singhvi, executive]

Priyankar, this is Lalit Singhvi. So ROCE on an immediate basis may have some effect because of this CapEx. But over a period of time, we don't see because any infra project, when you put in a money or CapExes, it tends to come down. But as utilization grows, and we are quite confident that utilization of this facility will also grow. There will be synergies with some group also. There are other things are there. And as we grow the chain, then utilization of Navkar assets will grow rapidly. And with this, ROCE will again come, ROCE may go down for a few, say, a few years, 2, 3 years when the CapExes are there and utilization is lower. But we see long-term ROCE of 18%, 19% will be there.

[Priyankar Biswas, analyst]

Okay. That's very helpful, sir. Just if I can just squeeze one more in. So in the presentation, you had mentioned about the Arakkonam this Gati Shakti Terminal. And you have mentioned the anchor customer as well. So if you can throw some more details like what is the strategic sense of Arakkonam because it does not seem to be within the container built assets?

[Arun Maheshwari, executive]

So the thing is that you see now we're having Navkar with us and having bought the CTO license of Sical earlier. So we -- if we have to be logic sector with the last mile connectivity, we need to have a network of such locations across India. Length and breadth of India has to be covered by such things. Now we are fortunate that we are part of the group wherein the group is also growing very fast, and they also need this kind of network across India.

So Chennai was one such location and incidentally, Arakkonam was one such asset, which was perfectly fitting into the requirements of one of our anchor customers. So we said, okay, it's not a bad idea to build on to that because the location is very rewarding. There were many players who are bidding for it, who arrived for it. The hinterland is very, very good over there. So we can connect it over there, and we can use our licenses and we can make this good for it. So the anchor customer could also become the base cargo for this particular location, and we can build on to our businesses from there on as well in that location.

So it's a journey which we have to travel with all the locations. And thereafter, we have to imbibe with all the other value accretion port assets.

[Priyankar Biswas, analyst]

Sir, if I can just squeeze one more in. So what I see is in the Paradip coal asset, there has been a Q-on-Q drop in the volumes. Is it seasonal in nature or like -- or do we expect the volumes to come back to like 5 million tonne plus levels, which we were doing in fourth quarter?

[Arun Maheshwari, executive]

So Q-on-Q, generally, there is -- because see, what happens is the power plants generally start stocking up in the month of February and March because the power demand speaks up in April, May. And that's where you see seasonally, it slightly goes up. But then if I have to see the drop is not very significant. It's just about 0.7 million.

So if I have to see year-on-year because that would be the real comparison, which is a significant increase. So I think the current barometer in port assets, especially when the monsoons are very heavy in the Q1, second part and Q3 -- Q1 second part and Q2 full. So year-on-year would be a right barometer to understand the volume movement.

[Operator]

The next question is from the line of Noel Vaz from Union Asset Management.

[Noel Vaz, analyst]

Yes. Just one follow-up on Navkar. Now we have -- I think you had mentioned that there is a plan to improve the utilization of the asset. So what additional CapEx are we expecting for this particular asset?

[Arun Maheshwari, executive]

Immediately, we do not see any additional CapEx is coming in for that particular asset because that asset has completely have a very good asset base over there. There are trucks, trailers, gantry cranes, they have containers, they have their own railways. So it is well equipped. Like we -- on an immediate basis, if I have to look at it, we don't need to do any major CapExes over there. It is only just because of -- we will have a very strong management, very strong network of our other assets, which we would like to utilize, and we'll have a very focused approach. We see a very good traction in that particular thing. We have envisaged and we have done those studies, and we expect it to be a good addition to our assets.

[Lalit Singhvi, executive]

Just to add that Morbi is still unutilized. It has just come into operations. And this will be utilized over a period of now onwards. So this year and next year and all that. So this is a brand-new facility, which is just come into existence.

[Noel Vaz, analyst]

Okay. But if you're talking about taking these assets to full utilization, what is the rough time line that we are looking at?

[Arun Maheshwari, executive]

So in any of these assets, full utilization -- because there is no capacity nameplate over there. So how best to utilize those like Morbi, if I have to look at today, that facility started just about 6, 8, 10 months back.

And the potential that to take it full will be maybe 2 years, maybe 3 years, it could be that kind of time line. But then that is an amazing facility at a very strategic location where the cargo generation and consumption both at the one location. So nothing can beat that part.

And Mumbai facilities are in the heart of Mumbai, wherein hardly any 1 or 2 assets are there, we are connected in that region. So this is one such facility, which gives a very, very good reach to the entire hinterland from Mumbai by rail. So these are the advantages which we have looked at and the cargo visibility is very clear at both locations.

[Operator]

The next question is from the line of [ Dhananjai Bagrodia ] from ASK Investment.

[Unknown Analyst]

Congratulations on good set of results. What were the reasons for the margin dip? And what would be the third-party revenue share in terms of value?

[Arun Maheshwari, executive]

Sorry, what was the first question? Sorry.

[Unknown Analyst]

Your margin -- OP margin, what would be the reason for the reduction in OP margin? What would be steady-state OP margin you would look at?

[Arun Maheshwari, executive]

Operating margin.

[Lalit Singhvi, executive]

Operating margin is 14%. Operating margin reduction is 51.4% to -- it is 51%. It is almost similar margin. 0.4% has come down because that Jaigarh and Dharamtar, as we said, that cargo has come down because of this Dolvi facility shutdown.

So there, the margins are at around 65% and at our terminals, margins are lower. So average margin is 51%, 52%. So this is the reason that cargo has dropped at our captive ports where the margins are higher.

[Unknown Analyst]

Okay. And sir, going ahead, what was your third-party value for this quarter?

[Lalit Singhvi, executive]

Third-party revenue is around 49% in the total and group company is around 51% in terms of revenue.

[Unknown Analyst]

Yes. And sir, would you be -- the CapEx guidance would be similar INR 14,000 crores for the next 3 years?

[Lalit Singhvi, executive]

Yes, it is approximately level INR 13,000 to INR 14,000 crores we plan to spend.

[Operator]

The next question is from the line of Nidhi Shah from ICICI Securities.

[Nidhi Shah, analyst]

Again [indiscernible] but just wanted to know...

[Operator]

I'm sorry to interrupt. Your voice is muffling a little bit. Could you speak a bit louder, please?

[Nidhi Shah, analyst]

[indiscernible]

[Lalit Singhvi, executive]

Your voice is breaking.

[Arun Maheshwari, executive]

Mohit, we are not able to get it properly.

[Lalit Singhvi, executive]

Operator, why don't we take another question and then, Nidhi, maybe can come back.

[Operator]

Okay, sir. We'll move on to the next question. Ms. Nidhi, if you could please queue again.

The next question is from the line of Sai Siddhardha from Kotak Securities.

[Sai Pasupuleti, analyst]

Firstly, congratulations on the results. I just wanted a clarity on the effective tax rate. For the 1Q FY '25, it has been around 24%, wherein for FY '24, it has been around 20%. Can we kind of get a guidance on how to look at the effective tax rate and why it is kind of showing higher in this quarter?

[Lalit Singhvi, executive]

Tax rate, what is happening that our income from -- other than non-ATI is increasing. There are certain terminals where ATI benefits are over. And that is the reason that effective tax rate is going up. So this will -- this trend will continue for some time because the net credit is available in our books, and we are utilizing that. Till then we can't go to migrate to the new regime. So that is the reason that tax rates are going up -- I mean, effective tax rate is going up.

[Sai Pasupuleti, analyst]

Understood, sir. So how do we look at the same for the future years?

[Lalit Singhvi, executive]

Yes. So this will -- this is around 24% or so. And it will further go up a bit before when we migrate to the new regime.

[Operator]

The next question is from the line of Arpit Shah from Stallion Assets.

[Arpit Shah, analyst]

Yes. I just wanted to understand more on the Navkar piece. What are your thoughts around the risk of DPD for the Navkar CFS business? And my second question would be, does the JSW Group have any kind of revenues with Navkar Corp currently?

[Arun Maheshwari, executive]

So DPD, the challenges what DPD posed on CFSs across India is already factored now. So I think there is no more downside we see rather the upside from here on because whatever factor has to be done has been done and port has a limitation to handle the DPDs.

So eventually, the cargo will -- we expect the cargo to flow back to CFS to an extent. That is one part of it. But then CFS is not the only business what we are looking out of Navkar. It is much beyond that, which we had mentioned in our earlier strategy. Now coming to your second, is Navkar also handing JSW Group cargo, very miniscule. I believe they handle somewhere around close to just about 3% or 4% of their total revenue is JSW Group, nothing beyond that today.

[Arpit Shah, analyst]

And you see that expanding going forward?

[Arun Maheshwari, executive]

So, we being now a group company, we'll definitely utilize our group strength for that matter because the locations are very strategic for JSW Group overall, whether it's steel or whether it's cement or anybody else. So we would like to leverage those strength on a case-to-case basis, which we have been working with the group now. Let's see how we span it out in the days to come.

[Arpit Shah, analyst]

And the long-term aspiration would be what, let's say, 3 years, 5 years out? I know it's a part of a big acquisition that you want to build a complete logistics company. But how do you fill in Navkar today? And what do you see after 3 or 4 years, where does it fit into the complete picture of JSW?

[Arun Maheshwari, executive]

So if you have seen us like we have been bidding for the new terminals, we have been building new -- we have a pipeline of building new ports as well and we want to get into this logistics solution providing for -- across India. So this is, as I said earlier in the call, that this is the first step towards that. So it will -- I hope and I expect and I wish we will not stop here, and it will further grow from here on. And we have to make and start somewhere and Navkar is the first step towards that. And we are looking to GCT happen thereafter and thereafter, we are -- we hope that we will get more and more such opportunity or synergy or tie-ups in these lines.

[Arpit Shah, analyst]

And post the open offer, do you see it as an independent company or it will be like -- will it be a separately listed company? Or are you looking to merge that into JSW?

[Arun Maheshwari, executive]

That is too early to say anything now. I believe as the time passes, we will take a call and then we'll inform all the concern parties.

[Operator]

The next question is from the line of Nidhi Shah from ICICI Securities.

[Nidhi Shah, analyst]

Am I audible this time?

[Arun Maheshwari, executive]

Yes, it's clear now.

[Nidhi Shah, analyst]

So again, a lot of questions have been asked on Navkar, but just one more on that piece is the current ports and terminals that we have in our portfolio, how does Navkar as an asset aid in those ports and terminals that we currently have? That is number one.

And number two is by when do we think that we can successfully turn around this asset and see good amount of revenue flows from this asset?

[Arun Maheshwari, executive]

Thanks, Nidhi. I believe there have been a couple of questions on this aspect earlier. But then I think, as I said, if you have a port, if you don't have a logistic company, then the question could be why -- when can we have the logistic company. So it is -- you have to start somewhere, and we have started over here.

Now we have an aspiration to develop some other ports or some other bid for some other terminals in the nearby vicinity. We have our own group companies within the vicinity of this particular location, especially in Mumbai region. We don't have any presence in Gujarat as a port or as a manufacturing entity. So Morbi it's a good entry point for us to get into the tie-ups with the existing terminals over there, which can add value to other terminals as well as to Mumbai region or any other tie-ups what we are looking here and there across India.

So it would be a larger game. Probably the story may unfold after some time. It is too early to comment and to give a glimpse of that. So as the time, probably you'll have a look at it. Now coming to the revenue, how fast it will grow, who knows, as a company as a group, we have always been very aggressive in our approach. And we would like to turn it around or it is already a good asset. If we did not turn it around. It is only we have to fill up those assets. And with the group strength and with the network of our other aspirations, we would like to make it a good success story within 2 years' time, something like that, if I have to look at it.

[Nidhi Shah, analyst]

Okay. And other thing on the financials. Firstly, that the staff cost has been down significantly this quarter, whether we look at it quarter-on-quarter or year-on-year. So what is the reason for that? And is that something that is sustainable, number one.

And number two is the other income has been significantly higher for the last 3 quarters as compared to before that. Again, will we see these levels of other income sustain for the upcoming quarters and years?

[Lalit Singhvi, executive]

So employee benefit expenses, it was an ESOP charges. The employee stock options was given to them, and that is why there was a provisioning for that, which is actually now tapering off.

It was last year, we had a full year basis, we had charged INR 150 crores. And quarter-wise, INR 41 crores was charged in Q1 of '23. And this '23-'24 and '24-'25 this time it is it is INR 16 crores. So there is a INR 25 crores coming out of ESOP only when you compare this cost.

And other income, it is increasing because we came out with IPO in September end. And after that, we got the IPO money, which is lying in fixed deposits. So that is the additional interest income, which is flowing in. This money is yet to be deployed, major -- some part is deployed and some part is still lying. So that is the reason of other income being higher. Q1 FY '24, there was no IPO. IPO came in end of September.

[Nidhi Shah, analyst]

All right. All right. Last -- my absolute last question would be the ongoing projects that we have currently. What is the status of the 2 liquid berths that are at JNPT, that is number one.

And two is that we already have, say, terminal operations at Fujairah and Dibba. Are we planning to do anything else outside of India in the form of terminals and ports?

[Arun Maheshwari, executive]

So on JNPT liquid terminal, if I understood your question correctly, when it is likely to start, right?

[Nidhi Shah, analyst]

Yes, whatever is the update, what phase is it at currently?

[Arun Maheshwari, executive]

The engineering work is already in progression. And we expect this terminal to start operating by March '25. This is what we expect today. Hopefully, we'll be there in the time lines. Coming to Fujairah and Dibba port, those are in O&M. There is no asset base over there, and we are running those ports very successfully and very efficiently.

We are very concentrated towards India because it's a growth story, and it's offering a very great opportunity for a company like us with a great balance sheet. However, we are not very averse to looking at overseas opportunity if it is value accretive, like what we did earlier with the oil tankers terminal what we bought in Fujairah. It is great value accretion for us in terms of balance sheet. So any such good opportunity coming our way, we would definitely assess it, reevaluating. And if it makes sense, we won't say no to any good opportunity, which adds value to all our stakeholders.

[Operator]

The next question is from the line of Aditya Mongia from Kotak Securities.

[Aditya Mongia, analyst]

The first question I wanted to ask you was when I see the assets that are comparable Y-o-Y on an organic basis, there appears to be a decline in volumes. Could you kind of give us a sense of how much was the impact because of the Dolvi stoppage this quarter? And if there was the same effect last year same quarter or any other quarter, if you could quantify that as well?

[Arun Maheshwari, executive]

Yes. Good question, Aditya, and happy to answer that. As you said, because of this quarter, there was a shutdown in Dolvi, there was a drop in group company cargo, especially Dolvi plant, which impacted Dharamtar and Jaigarh. The total impact was close to about 2.7 million, 2.8 million, somewhere around that. And incidentally, that is the only volume which came from the acquired terminal, which was not there in the same quarter last year.

So had those shutdowns not been there, the growth would have been 18% to 20%. Just because of the shutdown and third party coming in, which was not there earlier, the growth is 9%, muted to 9%. Had this acquisition not been there, the growth would have been flat. So this is what the overall scheme goes like.

[Aditya Mongia, analyst]

I just want to confirm, just asking on this question. What are the similar impact last quarter is one of a shutdown? Or is it something unique to this quarter and that's...

[Arun Maheshwari, executive]

No, no, no, no. It is all -- the shutdown is over. So the plant became full production in June.

[Aditya Mongia, analyst]

Okay. So in 1Q FY '24, which was last year same quarter, there was no such issue.

[Arun Maheshwari, executive]

No, no, no. There was a shutdown last year same quarter.

[Aditya Mongia, analyst]

And what was the impact then, sir, if you could quantify?

[Arun Maheshwari, executive]

Sorry, what was that?

[Aditya Mongia, analyst]

The way it was 2.8 million tonnes of volumes lost this year, this quarter.

[Arun Maheshwari, executive]

2.8 port volume was lost because of the shutdown in Dolvi steel plant.

[Aditya Mongia, analyst]

Understood. So I'm assuming the guidance still remains kind of unchanged for organic -- on an organic basis. This year, we were flat year on volumes, right? Would that be a fair...

[Arun Maheshwari, executive]

The guidance for the year is 10% to 12% growth in the volumes for overall as a port currently...

[Aditya Mongia, analyst]

That -- and again, just trying to dissect numbers slightly better. You said about INR 25 crores of Y-o-Y increase in your numbers has happened because of the ESOP expenses going down. And whatever there is in other income, there is another INR 50 crores is because of the IPO expenses, right? It's because of the savings or the interest [indiscernible] so if I take these 2 elements away, your PBT basically is broadly kind of flat on a Y-o-Y basis. That is INR 75 crore increase that you reported otherwise.

I'm just trying to kind of clarify that INR 25 crores is the ESOP part of the benefit that is happening on your PBT and about INR 50 crores is the benefit on the other income side, which is happening because of the IPO proceeds being there. So in effect, your PBT as of now isn't kind of growing on a Y-o-Y basis. I wanted to check whether seen in this light, the remaining 3 quarters of the year would be any different or similar?

[Lalit Singhvi, executive]

See, this benefit of this ESOP cost will be, say, 64 -- INR 60 crores or so for full year. So every quarter, INR 15 crores, INR 16 will come. And last year, full year, we have charged around INR 150 crores. So this will continue. And the other income, the interest part, that depends on the cash balances with us. We are going for Navkar and other things. So that income may come down as we make payments towards that.

[Aditya Mongia, analyst]

Understood. So last question...

[Arun Maheshwari, executive]

Aditya, your voice is breaking.

[Operator]

Yes, sir. Aditya is on the line. I guess there's some network issue from his end.

We will move on to the next question, sir. The next question is from the line of Alok Deora from Motilal Oswal.

[Alok Deora, analyst]

Just one question related to the previous question only. So this guidance which you are mentioning is for this organic guidance or we are including the newer ports also because, I mean, in this quarter, if we see, I mean, even despite the plant shutdown at Dolvi, we have still done 9% and now we are talking about 10% only for the full year. So just wanted to clarify that.

[Arun Maheshwari, executive]

So see, this 9% growth year-on-year basis because last year at the same time, the new acquisitions were not there in the last year. So that's why this 9% growth is coming. And if I have to look at full year basis, 10% to 12% is the overall growth with all the assets imbibed into it.

These assets were acquired sometime in Q3 last year. So those impacts considering last year was also partial impact was there in the volumes. But this year, the full impact is coming. And all in all, the existing assets prior to these acquisitions are also adding volumes to our businesses because of the natural growth. So the overall growth would remain around 10% to 12% on the volumes.

[Alok Deora, analyst]

Got it. And since this Dharamtar and Jaigarh would be up and running are already up and running, the margins will move back towards a normalized?

[Lalit Singhvi, executive]

Definitely. We don't see any doubts about that. Rather, it will improve because the new acquisitions are slightly better.

[Operator]

Ladies and gentlemen, that was the last question for today's conference call. I would now like to hand the conference over to the management for closing comments.

[Arun Maheshwari, executive]

Thank you, everyone, and it was indeed a great pleasure to interact with all of you once again, and good to interact and good to have more questions. And we'll keep coming to the market, giving more guidance and looking forward for your active participation. Thank you.

[Operator]

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