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Navkar Corporation Ltd
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Ladies and gentlemen, good day, and welcome to the Navkar Corporation Q4 FY '22 Earnings Conference Call hosted by PhillipCapital India Private Limited.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not 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.
Yes. Thank you. 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 Maheshwari, Chief Financial Officer; Mr. Nitin Sharma, General Manager, Finance; and Mr. Kunal.
Now I hand over the call to Mr. Anish Maheshwari for the opening comment. Over to you, sir.
Good afternoon, and warm welcome to everyone present on the call. Thanks to PhillipCapital again. I'd like to give insights on the results of current quarter. It is a pleasant to express that current quarter also, the business of company continues to level of operations after the level more with the levels of twice part to the last as well as the -- last year as well as the last quarter.
In the scenario of global crisis due to Ukraine-Russia war where the EXIM business was impacted huge level worldwide, it is observed that operating levels of this quarter are almost in line with the previous quarter, but with a slight decline of 5.7% in the top line of the company from the last quarter, but the same has risen on a yearly basis from INR 673 crores to INR 850 crores, it's a rise by 28%. The priority of the company is to improve the profitability in line with the natural growth of the business volume in current unit of the company.
The elements of the revenue of company during the quarter as are follows. In case of PFT, comparing the annual figures, volume of -- in case of ICD and the PFT at home, the annual figure, volume of import container handled by -- and then rose by 11.2% from 104,033 TEUs to 113,720 TEUs. And in case of exports, have grown by 37.8% from 55,377 TEUs to 76,329 TEUs.
Now coming to the current quarter wise. Volume of import containers handled grows by 6.1% from 28,583 TEUs to 30,335 TEUs on a Q-o-Q basis and from 37,462 TEUs on Y-o-Y basis. This is the same down by 19% in the volume of export container and then rose by 10.1% from 17,573 TEUs to 19,346 TEUs on a Q-o-Q basis, and from 17,345 TEUs Y-o-Y basis. The same has increased by 11.5%.
At CFS, comparing the annual numbers, volume of imports rose by 23% from 103,226 TEUs to 127,042 TEUs. And in case of exports, grew by 18.8% from 85,822 TEUs to 101,988 TEUs.
Quarter-wise, volume of import container handled stand 30,230 TEUS from 36,950 TEUs on a Q-o-Q basis, this has declined by 21%. And from 32,388 TEUs Y-o-Y basis. We've seen it down by 6.4%. Volume of export handled increased by 2% from 28,269 TEUs to 29,084 TEUs on Q-on-Q basis, and from 28,000 TEUs on a Y-o-Y basis, which is slightly increased by 1.2%.
In case of CFS PFT, the number of trains handled is 1,012 trains in FY '21 -- '22 comparing to 972 in last year. In quarter-wise comparison, the number of trains handled is 184 in this quarter comparing to last quarter 216.
In terms of ICD PFT, the same state, 2,699 in comparison to 2,177 in preceding years, which coming to quarter-wise 57 in comparison to 68 in the last quarter. Comparing the sale with Y-on-Y basis, the trains handled was 322 -- 334 in CFS PFT and 774 in ICD PFT, which is overall increased by 23%.
Coming to the EXIM turnover, the sale rose by 29.1% -- 21.9% from INR 304 crores to INR 371 crores and the domestic turnover rose by 62% from INR 92 crores to INR 149 crores for the ICD. And the EXIM turnover for CFS grows by 14.9%, from INR 2,024 crores to INR 2,058 crores. And the domestic turnover by 29%, around INR 38 crores to INR 56 crores. Taking overall quarter, which comparing from EXIM and the domestic turnover in terms of this. EXIM rose by INR 159.15 crores to INR 161 crores on Q-o-Q basis, means [ 1.3% grow to 4.4% ] at same quarter. Last year, INR 168.28 crores.
Domestic turnover stands at INR 39.77 crores in comparison to INR 55 crores Q-o-Q basis and the same was for last year. There are certain impact standing the performance of the company in the quarter of which rise. First is that the volume of TUEs down at CFS, but had grown at Vapi ICD.
Domestic business is also down in this quarter by INR 50 crores -- INR 15 crores on Q-on-Q basis, but in line with Q4 for the preceding years. The reason for this such decrease on quarter basis is that some customer for domestic turnover believe in fertilizers and have ammonia as main product which is imported from Europe. This supply is at all these current times due to the war situations between Ukraine-Russia war. The supply will be resumed in the second quarter of the coming year. And we are committed to the path of growth to expand the client base in the EXIM as well in the domestic turnover.
In terms of revenue as a business, this quarter stand to the little above the level in last one. There were challenges through the COVID but we have -- but the performance of the company was positive in terms of maintaining the group business volume.
Operating profit of this year stands at INR 298.9 crores compared to INR 238 crores, which is grown by 25.4% and the sale in the current quarter stands at INR 76.12 in comparison with INR 77 crores resulting, which is slightly down by 1.7%. EBITDA margins for both year is INR 194 crores comparing to INR 141.4 crores for last year with a great rise of 37%. The sale in current quarter stands 48.22% in comparison of 59.33%, which slightly declined by 2.3%.
Profit before tax of current year is INR 82.62 crores comparing to INR 32.7 crores, which is a hike of 152% and the same in current quarter of INR 20.4 crores in comparison to INR 21 crores and that was INR 14.6 crores Y-o-Y basis.
Now coming on the figures of profit after tax. The company stands at INR 67.5 crores In the whole year in comparison to INR 15.9 crores for the whole last year. There is a [indiscernible] due to the situation getting normalized after COVID impact in the preceding year.
While in quarter comparison, the same stand at INR 30.33 crores in comparing of INR 12.63 crores on a Q-o-Q basis and INR 8.15 crores on Y-o-Y basis. The reason such high use right quarter-wise, apart from the business profit, that the company has filed the tax benefit under Section 80-IA of Income Tax Act for this quarter in respect to operations of ICD company at [indiscernible] location. As for the Provisional Act we are allowed to retain the benefit at the any of the continuous year after 15 years starting from the year when the operations have being with it in FY '16/'17 in case of ICD. So the ATI option is exercised in the fifth year, in 2021, after an analysis of possible impact on the tax outflow for coming 15 years, including current year. And for this, we needed to wait till last quarter to see whether it is beneficial to take the ATI benefit or not. And which after that exercise, we concluded that we have to take a benefit from this current year.
Coming to the area of new process development continuing at Morbi, the current completion state of the project sales is around 40%. And the management is contemplating to complete the terms of LOI by the timeline and make the ICD operational by the time. The purpose of new ICDs have better connectivity network to serve the customers, both in domestic as well as the EXIM market. Management has the opinion that the new facility will be acquired new customers and increase the profitability of the company.
The company hopes to start operationally, maybe in third quarter of FY '22-'23. After analysis of above points, I would like to thereby say the company's performing with the growth of revenue was almost at par with slightly decline but on a high profitability from the corresponding years. Looking at the company hopes to sustain operations and profitability in coming 2 quarters beyond which is profitability is improved and capital also growing in a high side.
Now I just wanted to be -- open the floor for Q&A session.
[Operator Instructions] The first question is from the line of Neeraj, Individual Investor.
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[Foreign Language] which may take around 45 to 60 days. So we are targeting that case. [Foreign Language]. Third quarter means September. [Foreign Language] October onwards, we are trying to our targets to start operations. [Foreign Language]
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The next question is from the line of [ Dinesh Kotecha from Craig ].
I just wanted to ask 2, 3 questions. Number 1 is the total investment that we have made in the last 2 years was INR 282 crores nearly for the cash flow. Now are we seeking the benefits of that cash flow or that CapEx that we have made in the -- or from when we have got the full advantage of that INR 282 crores additional spend?
Your voice is not clearly audible here.
See, what I'm trying to say is that from the cash flow I found out that we have been -- we have spent INR 282 crores in the last 2 years for CapEx. Now when shall we get the full benefit of that cash flow? The CapEx that we have made?
So basically, in that context, I can say you, this industry itself is a heavy CapEx-based industry. If we don't have infrastructure facilities with us, then can't be achieved these kind of numbers. So the question which you are asking that a cash flow, which will be free cash flow for the company. Once the all projects will be done, then after we'll be taking the commit of 100% cash flow, repaying the loan or the -- improving the efficiency of the working capital.
Sir, the last quarter results show that the tax benefits we have got of the extent of INR 9.57 crores due to deferred tax. And that is also we got a PAT of INR 29 -- PAT of INR 29.99 crores. Now I mean, why did sudden change which you have made in the taxations under ATIA?
So basically, what happens, ATI positive, which I told you, I'm again visiting over there. The ATIA exemption itself is you will get a benefit in the 15 years from inception of your operations, correct? So we started operation over there at ICD in 2016-'17. We were -- we'll have to wait for the profits, which will be in line with the taxability of the provisions, correct?
So til now, looking at profits, we -- if the profit is higher than our expectations, then we'll have to take the benefit any of the 10 years out of 15 years, correct? So last year itself was a very -- we were having a planning to take the benefit in 2019-'20 because we got a sense in 2017-'18 that profitability will be high. But due to COVID, that was not happen, correct?
So we evaluate this year. Till last quarter, our profitability, which was we assume, we'll have to wait for the last quarter this year. And then we will wait for the next 15 years, we do the exercise. If I'll be not willing to you take the benefit of ATIA, then what will be the position for the net tax outflow for the next 15 years. So either I will have -- I have a choice to take the tax provision or I'll go into the net flow in ATIA. After that exercise, we want to know, now we'll have to take the benefit, that's why we just made that. So ultimately, I can say year, my tax rate was 33%, which is now 18%.
Right. Sir, I also wanted to know the breakup of the turnover in terms of your segment-wise results of CFS, ICD, temperature control, warehouse and logistics services. Breakup of the sales.
The presentation we have uploaded over there in the website, you can take from there. Because that earlier also, I've given the fairly brief around the entire numbers. So you have further queries, you can directly call Investor Relations team.
Okay. Sir, another thing is that container freight is -- what is the -- what is the capacity now that we are utilizing from the whatever capacity we have got?
So we have all together 1 million TEUs capacity, which is on net, we are almost on a 50% utilization overall.
So in this year, what have we planned for the capacity utilization?
So our target after Morbi, our total capacity will be plus 1 million TUEs and our target on the same side, on higher side, we are always in the low part of 10% of capacity utilization that may be the same number for current year.
And sir, can you give me also the number of new customers that we have got in the current year? Either customer percentage, repeated customer?
So in CFS or ICD, there are repeated customers, correct? [indiscernible] which I can add over here like, MG Motor are -- MG Motor, JSW, [indiscernible]. They are the big clients for us. Smart Can, correct? MG Motor added in this year. And Morbi, we have already been talked about around 2,000-plus clients on the tile as well as paper industries over there, chemical industries over there. And they might be added from third quarter of this year.
[Operator Instructions] Next question is from the line of Sudarshan, Individual Investor.
Congrats for the good results. My question is regarding the top line impact. You see quarter-on-quarter or year-on-year, on particular Q4, we see a dip in the top line. What are the specific reasons, sir? Is it because of any capacity issues in terms of trends? Or what is the reason for the dipping up.
Last quarter, there were declines due to the Ukraine-Russia war, or some of our clients were having a fertilizers domestic business and their main product for them is ammonia, which was not imported in the first quarter, which will remain same for this quarter also. And we are getting some kind of slight impacts from them. That may start from the third quarter -- second and third quarter from this year. So that will again come to us. This is the only reason. Otherwise, if you see our EXIM as well as domestic volumes, only domestic volumes were declined by INR 50 crores, it will directly impacted to my top line.
Okay. And you're adding 4 more trains [indiscernible] buying 4 more trains. So will this be augmented to the existing capacity to carry more or will you reduce some of the leased train?
No, capacity is enough with me. It's no problem of capacity.
Okay. So because we are adding some more trains in May, right, sir?
Some more?
You're adding some more trains -- 4 more trains by May 2022. That's what we heard in the last call.
We're decreasing the trains, we are not adding now. We are decreasing the train. Everything we have a total 14 trains, which out of that, 2 is owned by the complete, 12 are on a lease. And nowadays after Gati Shakti Scheme proposed by the government, we are assuming that gradually, we'll have to be migrate our leased trains to the ownership model. Because once the PFT [indiscernible] getting started, then we will have to replace any issues. So we are just replacing those leased trains to our ownership trains.
Okay. I have one last question. So this regarding the dedicated free corridor, which potentially could come by this year, I think. So how do you see in terms of the top line or net profit with DFCC?
And all now after DFCC, the operational efficiency will be definitely much, much better from today's business model. And secondly, the benefit of freight, which is usually for the same tracks and after DFCC will be getting down, which will have to be passed on. Freight benefits, we'll have to pass on to the customers and the freight benefit will have to keep with us. So that is definitely giving us a profitability improvement. The number -- once the operations will start, then I'll be getting proper visualization on that once the DFCC is getting started.
The next question is from the line of Anurag Patil from Roha Asset Managers.
Sir, for this new CapEx, how much was the total CapEx plan and how much is completed as of now?
So in totality, we have a INR 135 crores total CapEx. And out of which, we have a tie-up with the Canara Bank of around INR 100 crores. So rest, company is giving by cash flow. And I think so in totality for new CapEx, I will be going to add this year around INR 200 crores with replacement of trains and INR 100 crores will -- INR 100 crores to INR 135 crores will be going to repay of the loans. So in totality, INR 75 crores CapEx will be -- loan will be added this year and total CapEx was at ICD around INR 135 crores.
For ICD, sir, how much we have spent till FY '22?
FY -- March '22 -- till March '22, we -- around INR 30 crores we have already been spent.
Okay. So total CapEx for that would be INR 165 crores approximately?
No, no, total CapEx will be INR 135 crore. Out of that INR 30 crores to INR 35 crores we have already been made that in last year.
Okay. And the capacity will be 2 lakhs, okay?
Yes, yes.
Okay. And sir, as you said this new capacity will add the margin improvement. So how do you see the margin trajectory going forward? Any color you can provide or the key growth drivers for the margins, if you can break it down, that will be helpful.
So basically, if you see since last 2, 3 quarters, if last quarter when there was no legal hike or the Ukraine-Russia war issue, there was definitely been a very positive sign. But still, we manage the business in a very fantastic manner, and which will gradually going in the positive side itself. And after Morbi, I can say, we'll add -- we are targeting to add at least INR 50 crores from the first year revenue. This is our initial target, which was taken by the marketing team.
INR 50 crores on the revenue side you are saying, sir?
INR 50 crores in the revenue side. And there also may be a profitability of around -- on the operating side will be around 22% to 25%.
Okay. So blended margins will steadily improve with margin?
The issue is what we know, it will not be the first full year for operations, correct? So operations will gradually up and running, and we will definitely start -- try to get start the ICD Morbi by third quarter, correct, in only 2 quarters for this year.
And sir, the utilization at Morbi increases, assuming 2, 3 years down the line. So what can be the margins possible there?
So margin today, we are having around 24%, that we are targeting around 30% overall in that next 2 to 3 years.
Okay. And the key growth driver for this improvement will be the Morbi capital?
Capital growth is the [indiscernible] ICD growth as well as Morbi growth as well as the cross-selling business for all 3 premise: Mumbai, Vapi and Morbi.
Next question is from the line of VIgnesh Iyer, Individual Investor.
Yes, I just wanted to ask about this operating expense that you have shown in your income statement, right? So when I analyze it, I found out that almost in operating expenses as to the percentage of sales has reduced by 4% to 5%. I just wanted to know what is the nature of the expenses or the operational efficiency that we have achieved that resulted in this fall of expenses in spite of the revenue being almost flattish?
So there are two major reasons that we see out of -- last quarter, we did INR 217 crores versus this quarter, we have around INR 204 crores. And mainly done by domestic operations, as I told on the call. And the domestic operations are giving me a slightly lesser profit. But if my EXIM operation will be high, then the profitability will be improved. Because in domestic market, there is a price war and always will have to be competition with these local transportation. This is the one main reason. Secondly, if you see my operations via rail has improved. So the operations via rail versus road, comparably expenses will be in a slightly downside.
So this is a key driver for the less trains, which we handle. The operating cost will be getting a little slightly higher side. The more trains we handle are the operations which we do by rail that will be giving me a better profitability.
Although you can see last quarter, the dividend cost was almost increased by 20%, which is not 100% pass on til now. It will be passed on after June. So that also will be added with our profits from second quarter of this year.
Okay. But can the company give a better breakup of all the operating expenses, considering the fact that it is almost more than 60% of your total income revenue and it has been categorized as only operating expense?
Yes. So basically, if you see the whole year balance sheet, you can definitely get from there. If you compare with the past year's balance sheet also. There's a full detail of the operating expenses.
Right. Right. I guess the suggestion for you a better to understanding the quarterly numbers as to what has changed in terms of the expenses, but I get the idea. Sir, I just wanted to ask you about the CapEx that you are doing in Morbi. If I'm not wrong, so the amount is INR 135 crores, and it is 10 lakhs per 1 million TEUs, right?
Yes, 1 million TEUs, for Bombay and Morbi until now. After Morbi, it will be plus over there because in Phase 1, when we start the modified areas, it will be minimum 10 acres of area, and then time will get to know what CapEx will be added over there. So over and all, we are making 2 lakhs TEUs capacity over there. But we'll get to know after notification of the ICD Morbi, then we will give you a fair idea about the exact capacity, which will be over there.
Okay. And then you mean after Morbi commission, your total capacity will be 1 million TEUs, right?
No, no. Right away, I have 1 million capacity. Out of that around 4.74 lakhs over there in Vapi and rest is from Mumbai.
Right, right. I got it. Sorry, in isolation i wanted to know what's the capacity of Morbi would be?
2 lakhs -- so Morbi, we are going to build 2 lakhs TEUs capacity with the railway domestic. Once the operational stage will get, then after we'll get to know how much we are going to use in a Phase first.
Okay. Okay. So assuming the fact that you guide that clearly within in 45, 60 days. What would be the expected revenue in this year and as well as what could be the peak revenue that comes from Morbi?
So we are targeting almost in the range of INR 50 crores in first year and the peak revenue from Morbi will be in the range of around INR 400 crores.
[Operator Instructions] The next question is from the line of [ Rushabh Shah from RS Capital ].
Yes, you have mentioned about INR 400 crores peak revenues from Morbi. Over what timelines can we expect this?
Next 3 to 4 years, we are targeting.
Okay. And sir, in interaction with government, what is the implementation of Gati Shakti? What are the key benefits that you are in the industry, we can see over the next couple of years or the pace of progress?
Anybody will have to migrate into the Gati Shakti, and we are also trying to pitch up for that. Gati Shakti is having benefit for the customer itself. They will just share that policy for the another ease of doing business. So again, PFT positive having so many costs and so many different variations of the cost structure. In Gati Shakti, do we assumed all. Like I can give you one of examples. Like there was licensing fee with GST exempted, it is got now with the Gati Shakti Scheme. So this is not that benefit when there was a cost for the establishment of the railway people over there in PFT, but in Gati Shakti they waved off.
So these kind of small, small benefits, they just give you the companies who have in hiring [indiscernible] PFT. Here also applies for the same. And I think so we'll get the approval in next 1 or 2 months.
So the net-net, what is the incremental margin benefit will you get due to this? Is there an incremental benefit whether you're working capital...
Basically, our operating margin, which we'll see now in the range of EBITDA level we see 23% to 24%. Earlier also on calls I told that our first target -- primary target after considering the DFCC, Gati Shakti, Morbi operations, our first target is bad debt will have to be improved to 20%. This is our core target in a couple of years.
Okay. And sir, DFCC by what timelines are expecting full-fledged operations?
So there is no clear guideline on it. Once it will be -- that announcement should be come from the government side actually.
The next question is from the line of [ Sahil Chopra from KISS Street Capital ].
Yes. So going ahead, what kind of tax rate we can work with?
18% from now onwards.
Till when?
It will be for the next 5 years.
Next 5 years.
The next question is from the line of Vignesh Iyer, Individual Investor.
Yes, sir. So considering [indiscernible] now, what are -- what is the expected utilization as for the FY '23 and '24 that we're targeting? No, no, this is excluding Morbi. I don't want Morbi figures -- excluding Morbi.
See, on peak when we were having a CFS, we did -- we will have almost capacity of 310,000 till 2015. And in 2015-'16 itself, we crossed 310,000. So I can say 100% also be possible. But it is all depends on the side of government policy, side of business volumes. If there are no problems -- if there was no problem of DPD with us, then our actual utilization of this total capacity will maybe more than 700,000 TEUs, which is now almost 50%. So we are targeting that gradually, it should be in an improvement kind of 10% minimum. As I told you on the past questions also that our core target on the improvement of in total profit numbers. Capacity may be here and there, but our core target is achieved the 30% of the EBITDA.
But sometimes what happens not only in our EXIM side, like we are focusing on the domestic as well as the cross-selling business towards all 3 locations, correct? In that case, we may not be -- EXIM only in capability may arise. But domestic if you see, we're going to hang in INR 30 crores number, which is almost in a INR 200 crores range. So it might get more than that also.
Okay. Okay. Also, considering this container nonavailability due to China and Russia, are we seeing like container pricing is being at peak? Or is it looking like a sustainable level on maybe 10% lower because historical base has never seen this high, right?
So basically, I can tell you on the ocean trade side, in last quarter and gradually now, we have seen that, that ocean trade is getting down. It means the container availability is there on the market that we are having our assessment. And that will be [indiscernible].
Exactly. So can you give me a rough estimate as to how much percentage the rate is down from its peak rate, ocean trade?
I honestly won't give you any kind of a number on ocean trade because we are not linked with the ocean trade right away.
Fair enough. Fair enough. Okay. So considering this Morbi -- ICD in Morbi so do we have any agreements have clients lined up or already we have clients who are going to route their business through Morbi, anything like that? The tiles and the chemical players?
So basically, we got understand from our marketing team, there is no such ICD over there in that region, in Saurashtra region. Even the first mover advantage. If you -- we had already been met almost 2,000-plus clients and we got some fair sense almost from 1,200-plus clients. They were ready to start business with us. But once we'll have to be doing for the notification. And then also we'll get because our marketing team is there itself in the Morbi region. Our 4 people are there in the market to finding. When we assess for the Morbi ICD, we were having only thought of our tiles market will be there. But there are cross-selling also because all tiles as well as the people industry chemicals have come to Mumbai.
So once we are going to there and access our ability and viability over there with the clients, then we got to understand that the industry is having also the companies, correct? So attraction is [indiscernible]. Clients are giving us three hopes. Once you will commence with the occasions with the efficiency, we'll definitely come to you only. Because pricing, if I'll be giving them at 10% less from the existing one, that also will be benefit for them.
Today, what happens because in that reason, there is no ICD or the rounding rules, particularly. So what they'll have to do operationally, they will have to take the [indiscernible] also from the various yards or from the port. After our ICD, that cost will be having -- first cost which is the movement of the empty containers will be saved by the company for the vendors. The impact more than 10%.
Okay. So considering the fact that you have talked with a lot of clients and also the overall ceramic industry looks good in terms of domestic as well as exports and we have heard that Morbi has done some kind of expansion as well. So there is a lot of business. As a company having our first mover advantage, you can obviously scale the business quite faster, right? So your initial target of INR 50 crores seems to be a bit conservative on that part.
Basically what I'm concerned, based on our past experience, that Vapi also, first year, we did around INR 32 crores business. You got my point? So we are assuming that because we will get only the half year of this year. After commencement of the operations, correct? So there might be a higher number, but this is our first target. It might possible we'll get the INR 10 crores to INR 15 crores business in the first quarter itself. This will get a fair idea after we start the operations.
The next question is from the line of Anurag Patil from Roha Asset Managers.
Sir, this year, how much trains we are replacing?
So today, right now, we have 2 trains owned by the company. One we are added already in this May month. This year, we'll replace, in totality, 7 trains more.
Okay. So total 8 owned trains will be there at the year-end.
So 10 trains may be owned by the company by the end of March 2023. Because train availability is also an issue. Train availability -- train, if I'll order today, then it will take more than 10 to 12 months. Our lifetime is very -- Gati Shakti and DFCC, the vendors, there are only limited vendors, 4 or 5 vendors are only there. So if there is an availability, then definitely we'll be go for that.
Okay. And sir, as you change to this ownership model, how much savings can this result for our operating expenses?
So I will give you the numbers on it. Now the lease sale is almost in the range of INR 16 lakh per month approximately. After ownership, the cost for the interest and EMI principal, which will be maybe around INR 10 lakhs to INR 11 lakhs. So INR 5 lakhs each train each month. So if I'll add 4 trains, then it might be a number of, I can say, around INR 2.5 crores per annum. This is a number which I'm seeing with the current operations. If I'll have my own trains, then my operational efficiency will also be improved.
Right. Sir, apart from that, in the near term, what are the key risks do you foresee on the revenue and the margin side?
Key risk, I can say that 3, 4 years, we'll see COVID as an [indiscernible] there is no financial stability in current 2, 3 years. So those are the risks which I can't predict. Otherwise, business-wise, we are targeting growth. Every day we are going to meet new customers. Every day we are trying to make new vendors because we are having facilities. We are having 2 facilities -- 3 facilities over there in Mumbai, 1 is in Vapi, which is [indiscernible] good attraction.
So based on that, we are -- we don't foresee that there is something else in the business. Apart from that, the scenario, the situations can't -- I can't be right on me take the part, what is going in the market or industry may be policy seen here also. So repeating, we've never behind the part of [indiscernible] only for me, for the entire industry was the nice move.
We are evaluating now onward. Till 2015, I can say that we ever never behind the thought this industry will be having any kind of a pain. But after DPD we got understand. This any industry can be, that might be different in terminology that they can be having any kind of pain or any of the risk.
Right. And sir, diesel prices, any impact we see in the coming quarter, Q1, et cetera, on the margins? Or we are covered as of now?
Yes, definitely, in the past 2 quarters, diesel prices were again high by 20%, which was not 100% transferred to the customers yet. But as we discuss with the marketing team, and we are going to hike around 2% to 3% in the next 2 or 3 months. Then after the diesel cost also will be no impact for me, it will be effected and passed on to the customers.
As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
So thank you so much to everyone for taking interest to the company, and we are hoping that in that kind of a situation company can [indiscernible] we are going to achieve our targets very soon. Thank you so much. Thank you to PhillipCapital also.
Thank you. Ladies and gentlemen, on behalf of PhillipCapital India Private Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.