Navkar Corporation Ltd

NSE:NAVKARCORP

Earnings Call Transcript 2023-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to the Navkar Corporation Limited Q1 FY '23 Earnings Conference Call hosted by PhillipCapital India Private Limited. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the 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.

I now hand the conference over to Mr. Vikram Vilas Suryavanshi from PhillipCapital India Private Limited. Thank you, and over to you, sir.

[Vikram Suryavanshi, analyst]

Thank you, [indiscernible]. Good evening, and very warm welcome to everyone. Thank you for being on the call of Navkar Corporation Limited. From the management, we are happy to have with us here today Mr. Anish Maheshwari, Chief Financial Officer; Mr. Nitin Sharma, General Manager, Finance; and Mr. Kunal. Before we start with the question and answer, we'll have opening comments from the management. Now I hand over the call to Mr. Anish Maheshwari for opening comments. Over to you, sir.

[Anish Maheshwari, executive]

Thank you so much, Vikram for giving us an opportunity for Q1 call. Good afternoon, and warm welcome to anyone present on the call. I would like to give insights on the results of current quarter. It is pleasant to express that in current quarter also, the business of company continues the level of operations after revival mode the better operations level than the last as well as the same quarter of last year. The Indian logistic market is forecasted to have robust growth driven by the growth in demand for logistics services. While there are short-term challenges with fuel prices, global commodities, impact of Russia and Ukraine conflict, recovery and growth in the other sectors will further boost demand. In the scenario of global price due to Ukraine-Russia war, where the Exim business was impacted in huge manner worldwide, it is observed that operating levels of the quarter are in better position with previous quarters with 15% hike in the top line of company from INR 204.98 crore and INR 237.4 crores. And the same has risen on a yearly basis from INR 219 crores by 9%. Looking at the figures of the results printed, I'd like to mention that position of the current quarter has shown growth on account of normalization of global trading environment. The priority of company is to improve the profitability in line with the management growth of the business model in current business of the company. The elements of the revenue of company during the quarter as followed. In case of ICD at Tumb, volume of import containers annual rose by 22% from 30,335 TEUs to 36,900 TEUs on Q-o-Q basis and from 30,368 TEUs on Y-o-Y basis, it shows a similar rise. And volume of export container handling down by 16% from 19,346 TEUs to 16,335 TEUs on Q-o-Q basis and from 19,707 TEUs on Y-o-Y basis, the situation is almost similar. Now coming up to the Exim turnover of ICD PFT grown by 1.4% from INR 95.8 crores to INR 97.14 crores. Speaking about the domestic turnover at ICD, the same rose by 33% from INR 34.3 crores to INR 45.6 crores. In case of CFS, volume of exports containers handle stand by 33,811 TEUs from 29,084 TEUs on a Q-o-Q basis, which is rise by 16% and around 25,455 TEUs on Y-o-Y basis, the same is now up by 33% TEUs Y-o-Y basis. Volume of import containers handle declined slightly by 3% from 30,430 TEUs to 29,590 TEUs on a Q-o-Q basis, and 30,364 TEUs on a Y-o-Y basis. The same was down by 3%. Coming to the Exim turnover CFS, sales rose by 21.5% from INR 65.3 crores to INR 79.4 crores. Above the domestic turnover rose by 149% from INR 5.45 crores to 13.6%. In totality, domestic volumes, we did have around INR 59.2 crores, but last quarter was INR 39.77 crores, almost 49% rise in domestic turnover. And last year was INR 49.71 crores, which is 19.09% hike. In case of CFS, the trade handled in 245 this quarter comparing to 184 in the last one. In case of PFT, the number of trains we handled 784 in the last comparison with 657 in preceding quarters.

Now I just wanted to share the profit figures for quarter 1 FY 2023. Operating profits of this quarter stand at INR 84.15 crores comparing to INR 76.14 crores, which is rise by 11%. Comparing year-to-year figure, same was INR 73.46 crores from there is a rise of 14.57%. EBITDA margins in current quarter stand INR 53.1 crores in comparison to INR 48.22 crores. In preceding ones, which showed rise by 10%. Comparing year-on-year to figure the same was INR 49.25 crores from which there is a rise by 7.8%. Profit before tax of current quarter was INR 29.99 crores in comparison to INR 20.42 crores Q-o-Q basis, which is rise by 47%. And from that INR 22.25 crores on a Y-o-Y basis. The same is up by 35%. Now coming on the figures of profit tax of company. The sales stand at INR 23.84 crores in this quarter in comparison to INR 30.23 crores for the last quarter. Here, I just wanted to add that the profit after tax of last year comes after giving the effect of 80IA benefit whole year in last quarter due to which the tax impact was the line of negative INR 9.57 crores. When we rationalize the impact of tax reduction after Section 80IA for whole year, the profit after tax of last quarter comes at INR 16.29 crores, which is rise by around 46% up to quarter ended. Further, in respect of profitability of company this quarter would like to few points. Profitability of company more had than that. I just wanted to highlight on the point. First is that we used to get 5% waiver in respect of railway crane in respect of transportation through rail and railways receipts issued by railways to us, but the same is withdrawn from 1st May 2022. The operating profit EBITDA margin is affected by INR 2.15 crores. But despite that, figures are positive. Further there comes better rise in profit before tax and profit after tax, as told earlier. This is because of company availing the benefit of Section 80IA, in case of property unit because of which effective debt rates are maintainable at the considering lower rate. Coming up to the area of new project development continuing at Morbi. The current completion stage of aforesaid project is almost 70%. And the management is completing [indiscernible] the complete term of LI by the timeline and make the ICD operation by that time. The purpose of the new ICD having better connectivity and network to serve the customers better in domestic market as well as Exim market towards that Saurashtra region. Management is of the opinion that the new facility will help to acquire new customers and increase the profitability of the company. The company hopes the start -- we are going to start operations lately in third quarter of FY '22, '23. After analysis of above points, I hereby like to state that company's performance and growth of revenue, while in quite better position, looking at this company's hopes to sustain the operations and profitability. Now I would like to hand it open for the floor for Q&A session.

[Operator]

[Operator Instructions] The first question is from the line of [ Vignesh Iyer ] from [ Sequent ] Investments.

[Unknown Analyst]

I just want to know about this ICD Morbi. What is the status of the project as of now? And how much we have spent and how much is left to be spent on? If you could just brief us on that.

[Anish Maheshwari, executive]

So basically, the project cost is almost in the range of INR 135 crores, out of which we had already been achieved INR 94 crores over there. And financial tie-up was with the Canara Bank. So I can say that 70% work has already been completed over there.

[Unknown Analyst]

Okay. And by when are we expecting it to be commissioned quarter 2 or quarter 3, maybe?

[Anish Maheshwari, executive]

Lately quarter 3. We are trying to completion partial COD by September or October. We are hoping that will be started by the late quarter of quarter 3.

[Unknown Analyst]

Okay. Okay. Late part of the quarter, okay. Can you tell me if any the company plans to take any rate hikes or I've already taken some rate hike in July?

[Anish Maheshwari, executive]

Revisions are already been there. Certain revisions, we have already been made in May, certain means we had already been did in July also. So this is online activity wherever we required if the price hike over there in a diesel and all, we just pass it through over the period of time. Otherwise, this rate hike, which we have taken around 2% to 3% in July.

[Unknown Analyst]

Okay. In July, I have taken 2% to 3% rate hike right if I'm not wrong?

[Anish Maheshwari, executive]

In fact we'll be coming in this quarter 2.

[Unknown Analyst]

In quarter 2, okay. And can you tell me on a quarter-on-quarter basis, how much 16% revenue growth we can see on a quarter-on-quarter basis? Can you give me a breakup of what is percentage in relation to the volumes and what percentage is in relation to realization? If you could give me a breakup of that.

[Anish Maheshwari, executive]

But I can say that volume we are having were there at ICD, we have a volume in this quarter is in totality 53,242 TEUs and a CFS 63,401 TEUs.

[Unknown Analyst]

Okay. But just as in the blended volume increase, if you could give me a figure of like from INR 205 crores?

[Anish Maheshwari, executive]

CFS, we get revenue of around INR 79.4 crores for Exim volume. And ICD INR 97.14, crores, in totality INR 176.55 crores. And domestics, we have at ICD INR 45.6 crores and domestic INR 13.6 crores, in total INR 59.20 crores. So our total revenue was INR 237.84 crores.

[Operator]

[Operator Instructions] The next question is from the line of Vikram Vilas Suryavanshi from PhillipCapital.

[Vikram Suryavanshi, analyst]

Sir, this Morbi operation, will it start -- when we can see the rail operation will start from Morbi? And if you can highlight on our plans to add more trains for Morbi operation as well as growth in existing business, how the rate addition will happen?

[Anish Maheshwari, executive]

Right away, we are just wanted to be commencement first. So we are targeting that by September, we can do our more development work, infra work over there. And we'll start partial operations with the partial COD. For that, we required a notifications for which we have already been applied for. So once we will be receive in September or October, then we'll start operations in Vapi by road. As well as we are trying to reach around 2 to 3 months by rail also. So this is our plan right away. So if I can say, operating -- starting operations will be quarter 3, starting operations by rail will be in quarter 4.

[Vikram Suryavanshi, analyst]

Okay. And as per your expectation, what could be the cost difference between road and rail for Morbi? And to what extent rail can really help us to get market share there?

[Anish Maheshwari, executive]

So basically, I just wanted to lever here. There is no such ICD over there in that reason. So by road also, we will be getting some good business. And after that, railway, I can say almost price benefit, which will be going to pass on to the parties. Because what happens now, in early calls also, I just giving you a late on the movement over there in that region. Empty movement is much higher because all the time, they will have to take the content from the port side. And then at the same time, they have do we share that container to be shipping area or the port. So after that ICD over there in Morbi that will help to reduce the cost by the operational efficiency towards every moment, which would be getting less, point #1. Point #2, after railway, it will further 1/3 cost will be getting down. That is our expectations right now. Then once we start operations, how much we have movement over there by railway, they're not real sense.

[Vikram Suryavanshi, analyst]

Got it. And what kind of rate addition or a railway addition we are expecting for Morbi as well as existing growth?

[Anish Maheshwari, executive]

Yes. So right now, we are not biggest plans towards that. But yes, once our operations will be start, then we'll get the fair sense about the need of railway lines. So primarily, we will be handling our operations by our existing facilities or existing railway modes. Like we have a lease rate in total where we are running around 16 to 17 trains. So with that we start operation gradually by our own reps because we have right away. Then we will gradually decide then how will move further after the operation start.

[Vikram Suryavanshi, analyst]

Got it. And in terms of a domestic railway operation, what kind of growth we are expecting or new routes we can see in the domestic side of the business for growth along with the Exim business?

[Anish Maheshwari, executive]

So basically, if you see Vikram ji in the past [indiscernible] quarters, our domestic operations have always been higher. Like last quarter, we did INR 39 crores volume in totality, which on this quarter of INR 59 crores. Wherein Reliance also, we have [indiscernible], which we had already told then Smartchem. So there are a few industries, which we are catering in the domestic market and on a huge level. Domestic is having a high score. On that, we are also focusing more on it. As there is margin a little bit thin compared to the Exim, but yes, I can say that volumes are very high.

[Vikram Suryavanshi, analyst]

Okay. Because what we are seeing is that like in case of Concor and all that, they are -- domestic growth is almost like 30% plus/minus, and they are really focusing on like bulk cement, industrial salt. So are we seeing like the new markets coming for domestic market or any new routes we can start which can...

[Anish Maheshwari, executive]

Definitely, and we are exploring in Morbi also because there is a volume from to and fro, correct? So there is a market, which is catering towards the -- Morbi is a tile hub and consumption of tiles were very less over there in that particular market. But from there, across India, there is a supply. So definitely, we are going to focus on that, too, for the domestic market supplies and all. And we have a railway network and we have railway -- 3 trains we have already been owned. One might be coming in the next 1 or 2 months. So after that, we will be having owning our 4 trains and around 12 to 13 will be always be on a lease basis. So we just wanted to be monetized over there. And that operations, we are hoping that, we're more focusing on the Exim as well all domestic market because Morbi is the new area further for us. There is industries like newspaper, tiles, chemicals, that is definitely there. And the -- then also, if you see from Udhana, we are doing operations for [indiscernible]. In the middle line, we are doing options for Smartchem, Deepak Fertilizers. We are doing options for Reliance. So domestic is having a score and in last quarter, you can see there was INR 39 crores top line by domestic, which is in this quarter INR 59 crores, almost 46% growth. So domestic market, we are focusing over and all.

[Vikram Suryavanshi, analyst]

All right. And just to understand the competitive and the improvement in the JNPT business. Are we seeing like pricing getting stabilized? And how is the pricing between -- because during COVID, we had benefit of ground rent income substantially for CFS operation. But now if you can give a sense between how the pricing has been? Is it stabilized or within that ground rent and handling income, how things are looking in terms of competitive scenario at JNPT?

[Anish Maheshwari, executive]

Vikram, can you replicate the question again?

[Vikram Suryavanshi, analyst]

Just wanted to get sense about environment at the JNPT for CFS operations. Is the pricing stabilized at the overall CFS operations at the JNPT industry and how do you see profitability at the JNPT CFS?

[Anish Maheshwari, executive]

So basically, you see CFS last quarter and last year same quarter, we are raving last quarter around 33,811 TEUs, which was in last quarter, fourth quarter of 2021, '22 was 29,000. So there is kike of 15%. And Y-o-Y basis, you will see the 33%, correct? Same quarter last year was 25,255. I can say that there is limitations towards Exim volumes with the CFS, and there are very few CFS being the [indiscernible] they are. In that scenario, we are focusing again on that. And CFS volumes if you see since last 3 or 4 quarters are -- we are in the improvement rate. And price power as we all know, after DPD, there is no such price power with us. Yes, I can say they may be a 2%, 3%, 4%, 5% hike over the period of time, but we are more focusing on the volume side because we have a facility over here. So Exim as well as the domestic, again, I'm telling you, that is the core focus area for us for this facility too.

[Operator]

[Operator Instructions] The next question is from the line of Vishal Modi, an individual investor.

[Unknown Shareholder]

I want to know one thing. You said operating expenses, this finance share, it shows that is very high compared to quarter-to-quarter and year-to-year as well. Can we get some justification why are operating expenses so high currently?

[Anish Maheshwari, executive]

So basically, based on the operating expenses, we were getting 5% rebate from the railway earlier, which is getting stocked. In that account, almost we are having a loss, I can say, or that incentive loss is around INR 2.15 crores. So that was the impact of the, one. And secondly, in a fair manner, if I'll be having a domestic operation high, there is a margin which will be a little bit lesser than the Exim volumes. So if you see, last quarter, our total revenue was INR 39 crores in the domestic business, it is in this quarter INR 59 crores. So there is a margin there is a cash of margin in the domestic volumes where we are getting less margin the comparative to Exim. That is the major region. Because operating cost over there is higher than the Exim volume.

[Unknown Shareholder]

Right. Okay. And second question, are you increasing your customer base compared to last year? Have you increased any customer base in your database?

[Anish Maheshwari, executive]

So basically, in our operations I did say in database it is...

[Unknown Shareholder]

New customers added or you're running with the same old customers?

[Anish Maheshwari, executive]

Basically, if you'll ask me if we running with the same old customers, it's not a tricky question for me. Because in this business, once we're capturing the business from the CFS shipping line or the exporter or importer then we will remain the same for the period of time. Is there any further addition or the commodity mix change, then the customer will come to us. So I just want you [indiscernible]. More of the customer, more of the time remains same. There may be a [indiscernible] of 5% to 10% eaten every quarter. Maybe the -- commodity-wise remain possible some customers will be getting down or there may possibility there in the coverage the customer will [indiscernible]. So practically, you will ask me, gradually we will be arranging with that model. And we were having a 2%, 3% customers will be in a change mode or additional. Otherwise, once your ICD will be set up, 4, 5 years after later on, the customers will remain same, their operations will be getting high always.

[Unknown Shareholder]

Operations would be higher.

[Anish Maheshwari, executive]

Yes. For a particular industry, if there is exports getting down or import getting down in the particular industry, like last whole year, we were not having a single PD customer. And this year, we were handling almost 800 to 1,000 containers in per month. Well, last year, they don't even rely on. So there was no much more of PTA. So this kind of a commodity mix teams and the customer will come. Further, there are certain percentage of the customers, they are getting high, and then they will be come to us if they will be getting compared by their current operations. But there is a very, few, few changes in the customer list...

[Unknown Shareholder]

Okay. And 1 more thing I wanted to ask. I understood on last con call, interest costs were very high for the company. Interest what you are seeing -- so has that been reduced or the interest cost remains the same? Honestly, I haven't gone through about interest cost. But has the interest cost reduced for the company this year? Or interest...

[Anish Maheshwari, executive]

Interest cost was high cost, I can't say, high percentage wise there was not high, but cost, if you say because our Morbi project is up into running. Last year, we took 3 trades. Our [indiscernible] project came for that, we had taken INR 95 crores. So definitely, for the next couple of years, there might be interest costs remain same, then after gradually it will getting down.

[Unknown Shareholder]

Okay. And Morbi operations, I understand, as you said that it will be into operations in September, October, right?

[Anish Maheshwari, executive]

So I can say that we are trying to achieve that date October, November, December will be the quarter, September, I can't say that because quarter 3, we are targeting. And we can say that we will be achieved that by November or December.

[Unknown Shareholder]

Great. Okay. Finally, last question, sir, as an investor. So when can we expect breakeven of our price? What we have invested like [Foreign Language].

[Anish Maheshwari, executive]

[Foreign Language].

[Unknown Shareholder]

[Foreign Language] it's not giving good feeling. No, obviously, last quarter has been good as an investor, but...

[Anish Maheshwari, executive]

If you see last quarter, what was my share price in this quarter, what is my sale price?

[Vikram Suryavanshi, analyst]

Exactly, exactly. [Foreign Language].

[Anish Maheshwari, executive]

Share price, I can only say the share price [Foreign Language]. Then price prices always be matter as the market will take you positive. [Foreign Language] What is our duty? Our duty to perform positively with our best of our efforts that we are doing.

[Unknown Shareholder]

[Foreign Language].

[Anish Maheshwari, executive]

[Foreign Language]. They will do their best. So I can only assure you that. [Foreign Language] In worst case scenario, we will be taking [indiscernible] INR 10 crores minimum. [Foreign Language] on the operating level, that might be coming around INR 10 crores. So we are trying our best to get achieved the numbers. [Foreign Language] So basically, this is the point where we can put our efforts in the right direction, definitely...

[Unknown Shareholder]

[Foreign Language].

[Anish Maheshwari, executive]

[Foreign Language] then we'll definitely come with the policy of dividend.

[Operator]

[Operator Instructions] The next question is from the line of [ Vignesh Iyer ] from [ Sequent ] Investments.

[Unknown Analyst]

Yes, sir. Refining the Morbi facility like ICD in Morbi, if I'm wrong, we have got a first mover advantage in this area. So I just wanted to know what is our preparedness in terms of tying up clients? Because if I'm not wrong, on last call, you had said that we have been in engagement with our clients, and we were like trying to finalize as to the clientele list because if our facility is going to start in Q3, and we are trying to start our facility and have a target of around INR 50 crores, so can you just give us an idea as to what is the preparedness of the company in that aspect?

[Anish Maheshwari, executive]

Basically, in last quarter Q3, you see we were also around the 30% to 40% work done over there, which is 70% now. Morbi infra, we are having time of that will be completed infra work by October and with partials we will start the operations which I told earlier too. Second point, which you arrive by you, that customer base. We are in that region since last 2 years. Our marketing team were there and exploring the customer base. They are going to need them. They are just going to understand what is the mode operating, which kind of operations they are having right away. How they have an arrangement with the transporter as well as the logistic solutions. With that, we are having a fair sense that we almost treated around 2,000-plus clients in 2200 plus clients till now. Out of which so many customers, they are giving us a comfortable. Once you will start with your operation, we'll be the first mover. Because the issue is that if you are going with some math, right now, you are doing this, after we, when the Navkar will establish over there, that will be our cost, correct? So I will just give you an example like for particular some operations, if you are paying INR 10,000, with Navkar, that will be cost you around INR 9,000 or INR 9,500, party will definitely move to us just for a check whatever we are saying, correct or not. Once it will getting done, then section of party will be 100% moving towards us. It was happened in our past history also when we started Tumb. So the customer base was 17,000 containers in the first year. Next year, we reached around 40, third year, we were having a 1.5 lakh containers volume almost. Got my point? So what happens once we start operations, there may be a comfort because the issues is they're also having the different kind of arrangement with different kind of logistic players. So in the day can be changed, correct?

Once, they will start services taking services from me, they will get that comfort. After that, they will gradually migrate to us. So this is the process of operating situations. It might take 3, 6 or 9 months. But once the party will having a complete circle with me, they will understand how we are doing operations, what cost they are saving. Then after definitely, they'll come to us. If you will see in Vapi, there is no second choice of the party. The same way in Manaba, there is no second choice of the party. There's no second ICD over there. So whatever business we'll be taking from the existing market because we are not going there and making new markets or we are taking new business over there. We are just capturing the existing business, which is already been there. Morbi is a tile hub. There is a volume -- volume is there. We just want it to shifting from there to us. That is the point.

[Unknown Analyst]

Right. Got it. So it is correct -- it would be correct to say that we have got some pricing power and also the fact that we have a combination of mix of rail and road. So I call -- it will be cost efficient plus having a pricing power over our existing business. Would it be right to say?

[Anish Maheshwari, executive]

So basically, if you tell me pricing power, I can't see like it was, because if I will be going with the cost benefit matter to the party. Definitely, party will join me with the good hands, and that is my core also. In past also, we did the same. We are being good position in business at a good valuation, with good value of the price. So partly definitely try me. And once they will try me, they will get understood what is the price which we are paying earlier and now where we are getting the benefit. So that will also remain continue for the Manaba also -- Morbi also. They is no railway lining with anybody else. There is no railway ICD over there. So we'll be ending up is movement. And railway is always be cheaper than road.

[Unknown Analyst]

And then there is a delay, et cetera, as well. It is quite smooth compared to any other...?

[Anish Maheshwari, executive]

Correct.

[Unknown Analyst]

So is it fair to assume that they say for this quarter, we have made a margin of around 22.3% EBITDA margin. We can say that starting on Morbi facility, that facility would surely have like 250, 300 bps more margin than the existing business?

[Anish Maheshwari, executive]

So, sir, right now, I can't comment on it. Once my operations will be getting started, then only I will getting that understanding of how I will be doing pricing power and how will I have to be add the EBITDA over there.

[Unknown Analyst]

Okay. Okay. And coming to the debt part. So currently, the short term of long-term is around INR 560 crores. And I'm assuming long-term is around INR 480 crores. So are we -- so what level of debt are we comfortable with? Or are we planning to prepay some of it in financial year '23? What is the plan when it comes to that?

[Anish Maheshwari, executive]

If you will ask me for Morbi, we are having a plan to further debt of around INR 40 crores to INR 50 crores in this current year. After that, this year, we are already being paid advanced EMI till February 2023, it is almost -- for this year, we were having a payment of INR 150 crores, which is sufficiently able to pay. And gradually it will remain the same. Yes, if you ask me for adding new loans, we are not having any kind of [indiscernible] towards there. For Morbi, we are having already financial indictments that with the Canara Bank, and out of which we have already been INR 57 crores which have already taken, around INR 37 crores remain pending with them, which will be complete till this October, parcel COD. Then after, there is no further need of loan. I can say, gradually, it will be getting done year-on-year. If there is a [indiscernible] the company, we try to repay the debt. First, target, first priority for the company is that any kind of a cash -- further cash with the company from the business, we will definitely repay the debt. That is the core objective of the company.

[Unknown Analyst]

Okay. So we can say, more or less, we will be maintaining debt around this level for the next -- for this financial year, at least?

[Anish Maheshwari, executive]

Yes. Not more than that.

[Unknown Analyst]

Okay. Fair enough. And I mean -- yes, so I forgot to ask about Morbi at a peak level -- what could you -- can you give me a rough estimate of the turnover? Or can you give me the asset turn as to what would be the peak revenue when it comes to Morbi.

[Anish Maheshwari, executive]

Peak revenue will be around -- we were having a capability over there 2 lakh containers in Phase 1, correct? So if I will be taking INR 20,000 per TEUs margin -- per TEUs realization will be around INR 400 crores on Phase I. It's a rough estimate I just wanted to give you.

[Unknown Analyst]

Okay. 2 lakh TEUs and INR 400 crores on Phase 1. So -- okay, we have some plans post this as well in Morbi you meant to say? Or is there any something on drawing board?

[Anish Maheshwari, executive]

Correct.

[Operator]

The next question is from the line of Abdul Kadar from [indiscernible].

[Unknown Analyst]

I would just like to know wondering. Sir, if you could just throw some more light on the CTO license, which you have, again, just in the few -- in the past weeks in the Category 1?

[Anish Maheshwari, executive]

[indiscernible] earlier, we were having a CTO license Category 2. And Category 2 license will be the purpose of a specific food. And now we are getting the category 1 license, which we have taken from ARC -- Edelweiss ARC. And it got transferred to us. In category 1, I can do all kind of a railway operations for the [indiscernible] across India from any of the port, for any of the port, for any of the destination. It can be domestic as well as Exim volume. So this is the liberty which we get by CTO licensed Category 1.

[Unknown Analyst]

Okay. And sir, like any payment which will have to be done for this?

[Anish Maheshwari, executive]

Yes, we paid almost around INR 12 crores for the CTO lucence.

[Unknown Analyst]

Sorry, sir, I could not get your voice, sir?

[Anish Maheshwari, executive]

INR 12 crores. We are to sail the CTO license Category 2, which might be done in a couple of months probably. So we did take CTO license Category 1, or category 2 was in INR 10 crores. And now we spend INR 12 crores for the Category 1. So originally if you say -- if you will ask me Category 1 license, we will have to pay INR 50 crores as we got this license in auction in INR 12 crore. So that license having remained 8 years' time, 9 years' time. So for that, we pay INR 12 crores.

So our end our duration for the Category 1 license is 20 years. For that, you'll have to pay INR 50 crores to Government. And we have the license for the next 9 years as we've taken this license from auction. So for that, we paid INR 12 crores.

[Operator]

The next question is from the line of Parth [indiscernible] from Robo Capital.

[Unknown Analyst]

I had a question, like, can you tell us about how will be the revenue growth for FY '23?

[Anish Maheshwari, executive]

Revenue growth, you are asking me?

[Unknown Analyst]

Yes, revenue growth.

[Anish Maheshwari, executive]

So if you see in first quarter, we were having almost -- container wise, if you'll see we were having a growth over there. And revenue wise, we were having around 60% to 70% growth in quarter 1. So we are hoping that in similar line we'll be targeting and the Morbi will move at a quarter 3 or quarter 4, and it will be in addition to that.

[Unknown Analyst]

Okay. Okay. Okay. And also like how do we see the EBITDA margins in the next 2, 3 quarters going ahead?

[Anish Maheshwari, executive]

So EBITDA margin, if you will ask me, right now, we are at 22% to 23%. We just wanted to be maintained there first because past 2, 3 quarters, it was in the range of 21%, 22%, 23%. So our first target is 23% to 24% will have to be maintained. After Morbi will come in picture, then we'll see and revise the number, but we will relook at that what we are getting and what we are earning from that. So that is our core target. And our historical if you will see, our number was almost in the range of 37% to 38% EBITDA. But we're targeting in a couple of years, or I can say, we just first target, we are taking 30% of EBITDA in a couple of years, 2, 3 years, I can say.

[Unknown Analyst]

Okay. Okay. And can you tell me what will be like the tax rate for this financial year?

[Anish Maheshwari, executive]

We are under math for both ends. So it may be in range of around 20%.

[Operator]

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

[Anish Maheshwari, executive]

So thank you, everyone, for joining us for the quarter call. I would like to thank you again to the chorus and PhillipCapital for giving us an opportunity to highlight our business operations as well as the [indiscernible] as well as a profit. Thank you so much.

[Operator]

Thank you. Ladies and gentlemen, on behalf of PhillipCapital India Private Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.