Navkar Corporation Ltd

NSE:NAVKARCORP

Earnings Call Transcript 2023-Q2

[Operator]

Good morning, ladies and gentlemen. Welcome to the Navkar Corporation Limited Q2 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 and other guarantees of future performance 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 Suryawanshi from Phillip Capital India Private Limited. Thank you, and over to you, sir.

[Vikram Suryavanshi, analyst]

Thank you, Lilian. Good morning, 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 Manicare, Chief Financial Officer; Mr. Nitin Sharma and General Manager Finance; Ankit Thakkar, Senior Manager; Dipan Jani, Company Secretary; and Tim Masurana. Before we start with the question-and-answer session, we'll have opening comments from the management.

Now I hand over the call to Mr. Anish Maheshwari for their opening comment. Over to you, sir.

[Anish Maheshwari, executive]

Thank you so much. Good afternoon, and very warm welcome to [indiscernible] on the call. I'd like to give insights on the results of the current quarter, after that changes involved in the financials of the company after [indiscernible] Tom ICT business,

Here, I'm highlighting the detail about the continuous operations of the company followed by a glimpse of the turnover and profit of the discounted business for the quarter. Looking at the figures of results [indiscernible], I'd like to mention that despite the seasonal impact on the business of the company, the profitability of current quarter has shown growth on account of normal business environment with some stability after the [indiscernible] in the beginning of 2022. The priority of companies to include the profitability in line with the [indiscernible] growth of business volumes and current units of the company, the elements of the revenue of company during the quarter are as follows.

In case of CFS PFT, volume of exports continue and [indiscernible] 24,412 BUs from 33,800 [indiscernible] business, which has arised by 27.8% and from 18,900 BUs on a Y-o-Y basis these is now up by 28.6%. Volume of imports [indiscernible] declined slightly by 10.6% from 29,490 to 26,461 views on a Q-o-Q water -- and from 29,297 BUs on a Y-o-Y basis, the tiny 10% approximately.

Continue to advance turnout of CFS, the same is down by 8.7% down 79.4 crores to 72.75 crores. And amount the domestic turn of this quarter is only 2.46 crores. In terms of the number of trains handled in this quarter is 197 and this quarter comparing to last quarter 245.

In case of ICD PFT, which is discontinued operation now, volume of import [indiscernible] is down by 25.7% from 13,976 to 33,526 BUs is on a better from 264 [indiscernible] on a Y-o-Y basis, it shows a 27% rise and volume of exports container [indiscernible] is down by 4.6%, 16,335 to 15,580 views on a Q-o-Q basis and 19,614 cues on a Y-o-Y basis, there in a decline by 20% approximately.

Now coming to the ending terms of the ICT, the same rows slightly from 97.14 crores to 98.03 crores. In case of talking about domestic turnover of ICT from 46.6 crores to 39.96 crores. The domestic turnover would stay with the company even after slumping -- further the downward in domestic terminal current quarter is because of the reduction in export of steel due to imports of 15% duty on the same.

And the same reason name back to domestic turnover are impacted. In case of ICD PFC, the number of trains stand at 783 and comparing it to same payment positive quarter.

Now coming on the profit figures for the quarter 2 '22, '23, operating profit of the continued business for this quarter stands at INR 41.5 crores compared to INR 4.2 crores, which is 10.8% and when I compare the sales with turnover, the operating margins at current quarter is 38% in compared to 36% in the last quarter. Comparing the year figure, the same was 36.5 crores. Now, there is a rise of 13.9%.

EBITDA margin per quarter stands at 29.5 crores in comparison to 29.13 crores in [indiscernible] comparing year to year figure, the same was 23.02 crores from rise by 28.15%. Profit before tax of current quarter is 18.5 crores in comparison to 18.12 crores on a Q-o-Q basis which is a part from that 10.71 crores on a Y-o-Y basis the same up by 73%.

Now coming on the figure of profit after tax of the company, the same stands at 11.1 crores in the quarter as compared to 12.91 crores for the last quarter. I want to add that the net profit margin, 10.70 compared to 9.9 in last quarter. Further, the net for profit Y-o-Y basis was 6.80 crores. From there, it is an increase by 61%. And the performance in current quarter stands at [indiscernible] with the last quarter with reference to the turnout levels of the company.

Now I would like to discuss on the discontinued operation, where on a revenue was 109.6 crores. The operating product stands 33.25 crores. The EBITDA margin stands at 44.98 crores. The profit before tax [indiscernible] 33.9 crores and nonprofit stand 11.9 crores. We can conclude that the profit before tax also include gain of INR 24.66 crores on the [indiscernible] with tax of 24.03 crores as per the income tax at all the same further in terms of operations, the tax impact is negative by around 2.07 crores due to the fact of the company-level ATIA benefit resulting in the [indiscernible] remaining impact is due to reversal of tax to asset of the undertaking story.

I'd like to focus on line up on the [indiscernible] of objective company from [indiscernible]. As commented earlier, the primary objective for the [indiscernible] sale proceeds was paid off by existing debt of the company in comparison to total loan of book 589 crores on 2022. The sales stands at the book of 20 September [indiscernible] 403 crores still today. The total loan stands only on 6 crores.

[indiscernible] towards the secured loan, we are stemming the payoff some also as soon as possible.

So now almost company was battery with this repayment of the secured loan. This will expect to reduce our finance costs and [indiscernible] the profitability of great accents. Coming to the area of new project government of continue at Mobi, the current recent stage of [indiscernible] site project at around 80%, and the management is contemplating to complete the terms of LOI via the time line and make [indiscernible] operations at the time. The purpose of new [indiscernible] have better connectivity and network to serve the customers better domestic as well as the engine made towards the [indiscernible] The opinion of 2 facilities in the acquired new customers and increase the profitability to the company. The company hopes to start operation lately in the third quarter of '22, '23.

After [indiscernible] of the [indiscernible] point, I am would like to state that company's performance and grow revenue was quite better in this position, looking at this company hopes to sustain operational and actual profitability Q-on-Q.

I now would like to open the floor to our Q&A session.

[Operator]

[Operator Instructions] The first question from the line of Vikram Suryavanshi.

[Vikram Suryavanshi, analyst]

So basically, if you look at the volume, particularly on the NPT or continued operation, we are seeing big amount of impact, particularly on export side. So are we seeing that overall economy or input export itself is taking heat or how we are seeing a competitive environment and outlook on volume sector, sir?

[Anish Maheshwari, executive]

So basically, if you'll ask me about the [indiscernible] operations. We have seen, overall, there is a annual volumes due to certain government policies also like last -- in last quarter, you see that export duty on the steel was 15% the rides. So with the certain changes, that kind of impact happening in the export of India. And overall, we are in as then I can see that NPAT will be called a couple of quarters maybe. But after that, it would be a normal shape.

[Vikram Suryavanshi, analyst]

Because if you look at the quarterly run rate, now we have come down to almost like a 50,000, 51,000 TEU. When we were at least being close to 60 in good time. So can we see a bounce back to that extent? Or how will you...

[Anish Maheshwari, executive]

So basically, we move that in last quarter, I told you domestic [indiscernible] are getting very impacted into the export [indiscernible]. At the same time last year was the active volumes also, the impact will be for the next couple of quarters probably. But if you see year-on-year competitive, there is a positive very use permitting in the both side, [indiscernible]. So that will remain to continue. And then again, we will be on the same part after setting when they're modeling open. And from there also, we'll be getting the domestic as well as [indiscernible] benefit towards the [indiscernible] because the cross-selling, again, we discussed in past quarters to on our operations to a domestic start or the tale, then it will be getting positive here on a sector. So that will be all plus business for the addition business.

[Vikram Suryavanshi, analyst]

And if you look at domestic business, what we were doing, that will remain with us. And we were also supposed to view this logistic cost services for the [indiscernible] CD with our trailers and all that. But I guess we have also sold up the trailers and the transportation vehicles [indiscernible]. How that now business was basically a related area will remain us and how which business will go to Dani, can you explain that a bit?

[Anish Maheshwari, executive]

So basically, we will remain continuing with only the business to that domestic operations, which we did in past that reason correct. Other than that entire business will be shifted to the Adani only because when we start operations for them, there is a markup of 20%, 25% of profitable development. And they are unable to handle without trailers. They just come be discussed further on it, and we just realized with their own position. We will do better operations. So in that tailor operations, we just head over to them. And we will be in a position to them too. So this quarter, which we were proposing at that time, they will be earned around INR 8 crores to INR 10 crores with that operations for the next 8 months. The same profit we took our existing tellers also. Like we were having a good value of those sales around running to INR 20 crores, and we sold it out in a INR 135 crores. So it will not give me a much impact on the profitability for this year. But in this quarter, we'll be adding that profit. because that was [indiscernible] October result. So overall, you'll see a discounted of it with that relation. So really last -- we proposed that with that upgrading will be around 10 to 15 cores for next 8 months, which was already been taken from that is.

[Vikram Suryavanshi, analyst]

And when we say that the domestic business is around like 40 crore quarterly, what kind of growth we'll see in that business? And what are the catchment area? Typically, we are catering for this domestic type of business?

[Anish Maheshwari, executive]

Really in that business till now, we were having only that is still accidents well as a client. Now we are thinking more about the cement having commodity only. So in that, we will do that kind of operations for some steel and so any commodity, like project cargo. So that will purchase out our entire an team behind it. And that team [indiscernible], all types. And we are more noting for with that station maybe for the domestic operate because we are on to the non-committed for the [indiscernible]. So in that location, we are not setting much agile side, but definitely, we are hoping that we'll add more commodities over there in the next couple of quarters, other than steel.

[Vikram Suryavanshi, analyst]

And for this [indiscernible] what kind of rate addition will require -- and what are the plans there?

[Anish Maheshwari, executive]

So right now, we have 3 [indiscernible] with us, and [indiscernible] almost [indiscernible] is completed. So we'll definitely added -- we have already placed order of 7 lakhs in past, which will be used for Molbiaswell as our domestic operations. So in the planning earlier, we will have to take around 16 lakhs, which now stop will be only took 10 lakhs this November. So which was already being placed order towards the [indiscernible], which will take in the next 3 to 6 months, when more opportune start, when that will be only. And the 1 thing we did in order to be add over the year, we are more focusing on the cement business, where we would like to place 3 or 4 sets of in the specialized operation since a couple of quarters. So that's also in line.

[Vikram Suryavanshi, analyst]

So cement will be mostly domestic moment? Or are we looking.

[Anish Maheshwari, executive]

Mostly will be for the nominating [indiscernible] We are not into doing any kind of pricing volume for the [indiscernible].

[Vikram Suryavanshi, analyst]

And the cement is with the flexi bags or like the typical small bag -- because I think what we heard is that con call and all that [indiscernible] trying with this is that bulk remain movement through container...

[Anish Maheshwari, executive]

We are also planning for the team itself. We are discussing announced so many cement grinders, and we were having to behind it like on that container, which this will be the specialized contract for the bulk movement of cement. And then we will be definitely for the [indiscernible].

[Operator]

[Operator Instructions] Next question is from the line of Ganesh Shetty and Individual Investor.

[Unknown Shareholder]

Sir, a good amount of [indiscernible] sale to Adani Logistics. And with that money last con call, you have touched upon a point that the dividend beyond can be possible. So is there any possibility of it driving these less coming quarters or this year its set?

[Anish Maheshwari, executive]

So we just wanted to be clear that book in this quarter. Next month, I can say. Then after, we'll be evaluating it and compared to the market. We are definitely doing something that might be in lending or it might be in on whatever is. The company in [indiscernible], that will be completely played secured. And after that, whatever cash company will be having will definitely come up with the market and term that what we are doing with that cash.

[Unknown Shareholder]

My second question is the other market cap of the company [indiscernible] compared to the [indiscernible] which you have gone public on that considering the [indiscernible] company.

[Anish Maheshwari, executive]

[indiscernible].

[Unknown Shareholder]

Considering the value of the company and the financial side of the company, can you go for any type of buyback or like that so that as we see the investors will get...

[Anish Maheshwari, executive]

Definitely, we are open for taking of those things, like one we like to be evaluated, how it will be give the value to the shareholders that we are definitely thinking on it. It might be in any form, but our discussion is going on in time. Buyback, tripping dividend, whatever it may be, but it will definitely be the value for the shareholders that we are thinking about.

[Operator]

[Operator Instructions] The next question is from the line of from Deep Poddar, an individual Investor.

[Deepak Poddar, analyst]

[Foreign Language].

[Anish Maheshwari, executive]

[Foreign Language] But in all, it will be in a peak 280 crores scale at the company. [Foreign Language]. Secondly, that you ask me for the next 3 years, what will be the plan for company, the next 3 years are planning towards [Foreign Language] now will be coming up with a mobivery fast as soon as possible. We are completing that project. Secondly, we are looking at certain avenues where we can start small [indiscernible] on domestic operations. Using the [indiscernible] of certain parties or either if we can make another small, small item over there in straight device reasons, like we are thinking of Puna, we are thinking of [indiscernible], we are thinking further down the line. [Foreign Language].

[Deepak Poddar, analyst]

[Foreign Language]

[Anish Maheshwari, executive]

[Foreign Language]

[Deepak Poddar, analyst]

[Foreign Language]

[Anish Maheshwari, executive]

[Foreign Language]

[Operator]

The next question is from the line of Nitin Gardner an individual investor.

[Unknown Shareholder]

Yes. Thanks for letting me to speak. And my question was that as you previously spoke about that just a transaction with canine revenue will be lost, right?

[Anish Maheshwari, executive]

Yes.

[Unknown Shareholder]

Can I know what was the major mute behind the selling that unit? Because at 1 point you were telling that it was contributed 50% of your revenue top line. Yes. And your company has done a transaction and sold the unit of a business owner. What was the major reason for [indiscernible].

[Anish Maheshwari, executive]

In single line, if I ask, I can ask you -- I can please tell you that, we just evaluate that opportunity, and we got concluded at the time of the management discussion that it is going to see that unit today with that kind of business position with that kind of EBITDA or profit margins, what will have to take that decision. We got that understand in next 5 or 7 years, we will be getting the benefit of that profit, which we'll be making by that event. And after that, we'll evaluate why we are going to be the regiment of the sale or the profitability of that business. Then that repayment was very competitive in that particular discussion. So we just take -- sold that unit -- the debt repayment of entire unit, the entire company, and we make because [indiscernible] in our hand. So with the mouse and the profitability of in the next 2 or 3 years, the [indiscernible] be replaced the same, then it will be the big decision to take that call to debt repayment. We absolutely get the answer from the entire team for the same. That will be the best idea right now, it will be making that of the company and then some of the mobile.

[Unknown Shareholder]

And as I saw your current financial statements, I think 69 crores are still pending with it, sir? In your balance sheet?

[Anish Maheshwari, executive]

It is INR 9 crores a quarter. That in balance sheet about INR 69 crores. Right now, it's only INR 24 crores, INR 25 crores, less on the [indiscernible].

[Unknown Shareholder]

Okay, and is your company planning to pay dividends to investors? Because in many days, your management has not done.

[Anish Maheshwari, executive]

So that question was in the past also. We are first reaping the debt in this month again. what will be going to do to add the shareholder values, which will definitely give the shares itself. In any other form, it might be dividend being or adding value for the profitability. So that is the point, we'll be evaluating them and get to the market value.

[Unknown Shareholder]

Yes. Okay. And any new business is an akeroperation entering in same settlement?

[Anish Maheshwari, executive]

We are inventing so many avenues to enter into the new businesses. But our board target and poor idea should be the asset right. How we will use our facility, which we have ability there in Mumbai and [indiscernible]. So once we'll be all on operational, how will we be making profits, adding profits towards the same assets without adding any further heavy assets. That is our core problem.

[Unknown Shareholder]

Okay. And 1 last question, can I know who are the top clients?

[Anish Maheshwari, executive]

So if you'll ask me an industry top 10 shippers top 10 clients who are in India, we all are [indiscernible]. So we had over here. We are not having any kind of plan to make a game company with the debt. That is for sure. That is very clear. In the next couple of years, 2, 3 years down the line, we are not having any kind of a plan or we just wanted to take, use that money, plus our cash surplus, which we'll be adding to the company or our new upcoming projects or the business expansion. We are not going to take any other debt. That is for sure.

[Unknown Shareholder]

Okay. And I think have you told that after the repayment of all the refund you will be in cash with INR 180 crores, right, nearly?

[Anish Maheshwari, executive]

Yes, 125, 150 crores.

[Unknown Shareholder]

And can we expect the next 2 years to come up with the same revenue?

[Anish Maheshwari, executive]

Yes, that's what I do. After Morbi, we can expect that around 2 or 3 years down the line, 3 years, you can take a horizon, will be in the same line of [indiscernible].

[Operator]

[Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Vikram Suryavanshi for his closing comments.

[Vikram Suryavanshi, analyst]

Yes, we thank the management of Navkar for giving us an opportunity to hold the call and taking time out for interacting with the stakeholders.

Before closing, sir, do you have any closing comments there, Anish sir?

[Anish Maheshwari, executive]

So thank you so much to each and every participant. I can say that company will be in a positive growth again, once we'll be considering all the debt position and we'll pay the debt. Then after we come up with new plants and new updates with the market. That is for sure. We are trying to move in again with the same level of profitability in game of business in the next 2 to 3 years.

[Operator]

Thank you, members of the management team. 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.

[Vikram Suryavanshi, analyst]

Thank you.