TCI Express Ltd
NSE:TCIEXP
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TCI Express Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '22 Results Conference Call of TCI Express Limited, hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I'll hand the conference over to Mr. Chander Agarwal, Managing Director. Thank you, and over to you, sir.
Thank you. Good evening, everyone, and welcome to the Q4 and Full Year Financial Year 2022 Earnings Call of TCI Express Limited. I would like to thank all of you for joining us here today.
I will start first with the industry and business overview for the quarter, and then we'll hand over the call to Mr. Mukti, CFO, to discuss the financial performance of the company for the quarter. Our earnings presentation has been uploaded on the website and stock exchange, and I hope you've had a chance to review it.
So Q4 financial '22 was a mixed quarter, where production and logistics movements slowed down in the month of January and February due to the new wave of COVID-19. However, it picked up again in the month of March. Both the data for index, for industrial production and e-Way bill generation showed a recovery trend with INR 7.8 crores e-Way bill generated in March 22. The IIP growth was led by all sectors in March, with an index increasing 1.9% to INR 131.5. With the revised economic activity, express logistics industry performed well. However, the slight increase in the inflation at that point of time added to the macroeconomic environment.
With broad-based recovery across industries, TCI Express continued to set operational benchmarks and delivered a year filled with new accomplishments. The company has delivered highest quarterly revenue of INR 300 crores, registering a growth of 6.7% year-on-year and 4% on a sequential basis. The growth was primarily driven by strong demand from both SME customers and corporates.
EBITDA for the quarter stood at INR 52 crores, registering a sequential growth of 6.5%, with strong margin of 17.4%. Margins remained stable, backed by higher capacity utilization and operational efficiencies. Our profit after tax stood at INR 36 crores with a margin of 12% compared to INR 43 crores in Q4 financial year '21.
If you remember, the Q4 financial '21 net profit was exceptional as it had INR 1.5 crore of nonrecurring other income and around INR 2 crores of tax reversal.
I'm elated to share on an annual basis, the company has delivered a strong performance despite the first and fourth quarter of the year being impacted due to the pandemic. In financial year '22, TCI Express recorded a revenue of INR 1,081 crores from operations with year-on-year growth of 28%. EBITDA grew by 29% to INR 183 crores and our EBITDA margin remained strong at 17%, even after reversal of certain costs an increase in employee cost during the year.
Profit after tax grew by 28% to INR 129 crores. In the light of strong performance during the financial year '22, the Board of Directors has recommended a quarterly dividend of INR 2 per share, taking total dividend to INR 8 per share for the financial year '22, representing a payout of 400% on the safe value of 24% of the EPS. In addition, the Board has approved the buyback amounting INR 75 crores through the open of a route at an indicated price of INR 22,050 per share, which is subject to shareholders' approval.
Now coming to a brief update on sorting center. We have successfully commissioned India's first and largest automated B2B sorting center in Gurgaon, aptly named GIGA Sorting Center, spread over 2 lakh square feet area, equipped with 600 meters of fully automated loop sorting system with a throughput capacity of 15,000 parcels per hour.
Additionally, the system is capable of loading and unloading over 140 [ container ] stocks in a single one, reducing parts and handling time and vehicle holding time by 40%, while also increasing operational and fuel efficiency. Following the success of automation of the sorting center, the strategy will now be implemented in other sorting centers as well. Pune Sorting Center has been operation since June 21, and we will be using the learning from Gurgaon Center and will implement automation in this coming year.
During the year, to augment our business growth, we have added 45 new branches and 10 branches in the fourth quarter. This allows us to penetrate deeper in the key growing markets, primarily in the South and North regions, catering to the growing demand of the SME customers. In addition, the 3 new launch services, [ Pharma ] Cold Chain Express, C2C Express and Rail Express, which has not only received positive response from our customers, but also aligned to our growth as a multi-model express delivery company in India. These are new offerings and we expect it to contribute meaningfully by the end of financial year '22.
So overall, the logistics industry contributes significantly to the country's economic growth. Government effort to expand the integrated logistics and multimodal connectivity via massive infrastructure investments, as we all know, the [indiscernible], the Bharat Mala project, and the PPP is certainly a positive step for the logistics industry in India.
Capital expenditures, infrastructure developments and policies to support the survival and growth of SMEs are some of the key focus areas of the budget '22, '23. We expect the -- logistics industry is expected to clock a robust growth, while growing demand for faster delivery, government initiatives, policy supports, improved road connectivity and reducing the turnaround time.
Given our wide network of branches and balanced mix of large corporates, TCI Express is well positioned to capitalize on growing market opportunities and deliver long-term sustainable growth through its asset-light and comprehensive excess offerings.
With this, I would now like to hand over the call to Mr. Mukti to discuss the financial performance of the quarter. Thank you.
Yes. Thank you, Chander. And now I would like to discuss the financial performance of the company. Our total income stood at INR 300 crores for Q4 as compared to INR 289 crores in the previous quarter and INR 283 crores in the same period of last year. The company posted a sequential growth of 4% and year-on-year growth of 6%. This growth can be attributed to multi-factors like growth in demand from SME, which contributes around 52% to the revenue, pick up in economy activity and increased demand from rural areas. So our EBITDA for the quarter stood at INR 52 crores as compared to INR 49 crores in the previous quarter and INR 57 crores in the same period last year.
Despite rising fuel costs, we have been able to maintain strong EBITDA margin of 17.4% with our state light model, high-capacity utilization and various cost control measures. The net profit of the company stood at INR 36 crores with a margin of 12% in this quarter. On a full year basis, the total income for FY '22 stood at INR 1,090 crores as compared to INR 850 crores of last year, registering a robust year-on-year growth of 28%. EBITDA for FY '22 was INR 183 crores as compared to INR 142 crores for the same period last year, registering again a robust growth of year-on-year growth of 29%. This improvement can be attributed to growth in top line as well as improvement in overall efficiency.
Net profit for the whole year was again INR 129 crores with a margin of 11.8%, registering a year-on-year growth of 28%. So we continue to generate a strong cash flow INR 111 crores and maintained a cash balance of INR 104 crores. With flexible capital structure, we are well positioned to fund our strategic growth plan.
During FY 2022, we have incurred a CapEx of INR 80 crores towards construction and automation of our new sorting center at Gurgaon and other one, and we'll continue to implement our automation strategy in other sorting centers to enhance overall operational efficiency, and ultimately, drive profitability further.
So thank you very much. And now I would like to open the floor for question and answer. Over to you, moderator, please.
[Operator Instructions] We have the first question from the line of Mr. Ravi Naredi from Naredi Investments.
Mr. Chander, you are really doing very good in spite of margin down in this quarter. First, I would like to know the reason in year-to-year, what is the reason?
So if you see operationally, we have no problem. It is only that the salary cost has gone up because for the new products, we have added the new team, and that will equalize this quarter. So that is one of the main reasons only. And of course, last year, we had the sale of a property and some tax reversal. So nothing operationally if we see no problem.
Okay. Okay.
To what Mr. Chander is saying. So if you see on a gross margin level, we are -- again, it is in a 34% gross margin we have. [indiscernible] last quarter we have [indiscernible].
Yes. Yes. Sir, due to Gurgaon Sorting Center start, which type change we may expect in current year and after the Pune Sorting Center will start. So can -- what type of changes we may expect in current year? That is my question.
So I think we will have labor reduction, then we will have faster delivery of goods. And then the turnaround time will be much faster, usually now 12 hours of truck stand in our sorting centers. With this, it has come down to almost 5 to 6 hours. And that's the biggest game changer. When we will show it to the whole of India and whole world that the kind of savings we are doing, I think it will be phenomenal. So we are happy because our customers are also very happy now.
Right. Right. Right. And last, my point is there after the -- how is Air Express going on? And after Air Express, what is new thing in your super genius mind? What you will do in the company?
Air Express in India is not growing. So everybody who is doing Air Express is only doing e-commerce and trying to do Air Express by putting their material in train. But the real fact is that the capacity of air cargo in India has not increased. You see the air cargo companies like Spice Express, they are not doing domestic as much as international. So every company has their own strategy to utilize Air Express in different ways.
My point is the other way, Air Express, which we are doing with train, how is that going on and how we are seeing new things in company?
On air side, so whatever we are doing, we -- in the same ratio what we are doing in surface, we are growing on that part. And new changes, like it is not, we are not robust on air side because India lands are not big one like U.S. and China have. So our more focus to convert other competition Air customer into a rail customer because in that, we're almost matching the same time of delivery. Like maybe delay by like 24 hours, but it is okay. The customer is okay with that because in rail and air, if you see, air cost is almost 4 or 5x higher than this Rail Express. So they are happy to get these service.
We take the next question from the line of Rajesh Kothari from AlfAccurate.
A good set of numbers in an otherwise kind of a still challenging market. Sir, my question is a little bit more elaborate on the new initiatives right now, what is the progress over there? How much has it started contributing to your revenue? And what kind of ramp-up you are looking for that.
Sorry, we missed the first line, Rajesh.
My question was that the new initiatives that you started, particularly the pharma cold chain in the [indiscernible] initiatives.
Yes, that is 15% now of our revenue, and we will take it up to 25% by 2025.
It already touched 15%, which is a good progress. Okay. And you mentioned that by '25, you want to double revenue kind of thing. So you are talking about there is FY '25, that's what one should assume?
Yes. We will be achieved by 2025.
Okay. Financial year 2025.
Yes.
Perfect. Perfect. And in terms of the freight index and our pricing power, what are the recent trends and how do you see that?
Yes. So pricing is -- we, just like in our company, we make a system to be as price hike on annual price hike from the customer apart from the diesel. Last year was also a challenging year due to the spike in the diesel rate. So annual hikes was slightly less. But in this year, I think, hopefully, diesel will not be increased. So we will be, again, go for annual hikes much for that. So we're anticipating almost price increase of 4%, 5% in this FY '22, '23. Last year, we're just able to take a kind of like 1.5% to 2% in overall basis on account of annual hikes.
Okay. And the last question from the competition perspective, how do you see that? Any specific trends which you are seeing? Is it becoming a little bit more aggressive in the market? Some color on that..
See, and nobody in what is happening in India is that there are 5 people running off of the same business, okay? Ultimately, the customer goes to the company that gives the best service and the best feedback, customer feedback. So that itself is shown by -- and of course, which means that which company has the most profitability also has the best quality of customers. So I don't think there is any challenge as such. The business is -- the market is very, very big. Opportunities are humongous. So we are not unfaced by competition.
We take the next question from the line of Shalini Gupta from East India Securities.
I just had a few thoughts. I mean, there is a likelihood of crude prices coming off now. So I mean, how you will have to pass on the benefit of lower prices to your customers. So does the target of INR 2,000 crores still hold? Because if you have to hold that and prices are coming lower, you would have to do that much higher volume.
We have missed your question, ma'am, because it was -- the line was getting disconnected.
I'll just repeat myself. So there is a likelihood of crude prices coming off.
Shalini, you're still -- your voice is not clear.
Just hold on. Just hold on. Sir, is my voice clear now?
Little better.
Okay. So sir, my question was that there is a high likelihood of crude prices coming up because of world recession or world slowing down in the rest of it. So you will have to pass on the benefit of lower prices to your customers. So does the target of INR 2,000 crores top line by 2025 still hold? Because if you have a situation of sales coming, I mean, you would have to do that much more volumes to be able to reach that in a situation of lower prices.
So we will explain you, we are not a traditional transportation company. So we provide transportation to MSMEs and large corporates in the high-value segment. So in that, the freight doesn't really come down because the component of this facility, of this express facility is before time, on time, in containerized vehicles. So it's a value addition. So here, we don't see the propensity of pricing coming down.
Okay. And sir, you have talked about in the presentation, you've talked about pulling your sorting centers in major metros. Sir, I'm just asking you, how will this help because are you expecting a shortage of warehouses? Or what is it?
No, it is because we don't want to compromise the operations and certain locations require that we have the -- I mean, the overall cost of ownership is very low because they are not in the city, they are far away from the city.
Okay. And sir, like right now, capacity utilization is something like 85-odd-percent. So at what capacity utilization will you have to increase capacity? And I'm leading to this, once this happens, do you see a dip in margins?
Sorry, Shalini, come again, last -- what you said?
Yes. Sir, what I'm saying is that right now, our capacity utilization is close to around 85-odd percent. So, sir, when will you increase capacity? And why I'm asking is once this -- once you increase capacity, will you not see a dip in margins because of higher costs?
No, no. So currently, we are utilizing 85% in this quarter, we utilized almost 85%. We're supposed to be to around 86%, but January month was hampered due to the regional lockdowns. So our capital utilization was slightly on January month. That's why it keeps around 80%. But we -- our endeavor to be increased to at least 50 to 100 basis points in each year on capacity utilization level, and that will keep continuing on that.
Yes, that's what I'm saying thing, sir, like, let's say you are at 90% capacity. Then at that point, will you not have to increase capacity? And once that happens, you not see a dip in your margins because of higher costs?
No, no, no. So this is -- I'm just explaining, Shalini, this is not working like that. It is a very dynamic one. So like supposing I have running 1 9-ton truck right now, tomorrow supposing I have started to have a cargo regularly 12-ton on that route, I will be just referring the truck with the higher capacity truck. So then why in its cost even reduce further? So this way, it is always there is a room to change the capacity utilization level. And ultimately, we will be seeing something there. Which benefit you've seen on like '21, we changed our capacities dramatically like we changed from 9 tons to 11 tons, 14 tons to 17 tons, and that benefit we get like 400 basis points margin improved in a 1 year itself.
So this journey or this kind of dynamic changes in capacity utilization and replacement will be continued, because we also have the policy to change the truck once we reach to 7-year age, then we have to replace the truck. So this way, it will be continued to replacement of the capacity. In that sense, we will not be as another truck of 9 ton, rather, we will be replaced the 9-ton capacity into 14-ton truck capacity.
Yes. And sir, my last question, sir, what are the value-added services that you are offering better than competition, which the others are not offering? So actually about this question, but I was just curious.
So basically, like you've seen, we added 2 new services, C2C and Rail Express we provided to customers. Other than that, we are also giving the specific deliveries for B2B customer like mall deliveries, army deliveries, secure deliveries like malls, I say, saying, please come only on 10:00 night after mall closes. So these kind of services has further, we are also giving the life of out of delivery area services also like supposing somebody saying. From my brand, that is 300 kilometers. So I am still delivering there. Obviously, charging premium on that, and the customer is ready for that. So this way, we are far ahead in providing these value-added services to our customers.
We take the next question from the line of [ Rushabh ] from Ares Capital.
Just for the sorting hub that we're adding. What kind of technology are you using? Is this something different from other players? Because even seeing other competition is heading aggressively. So could you please explain on that?
No, there is nothing very different. We are doing what is required, planning, and we are doing the normal things. We are not doing anything out of exception.
Okay. And second thing, sir, are you using an electric vehicles in a fleet if you could under...
India does not have the infrastructure or the availability of electric vehicles. When it comes here, then we will see.
Okay. And sir, how much price hikes have we taken in this full year?
It is around 2.5%.
For the full year?
Yes.
The next question from the line of Mr. Dhruv Jain from AMBIT Capital.
Sir, could you please -- volumes for this quarter please?
Your voice is actually breaking, Dhruv.
Sir, is it audible now?
Yes, better.
Sir, just if you could just let us know the volumes for this quarter?
Yes, volume is -- in this quarter, we achieved a volume of 235,000 tons.
Okay.
For the whole year, we have done almost 855,000 tons.
Okay, sir. Very helpful. I had a question on your value-added products. So you mentioned that about 15% of your overall revenue is about [indiscernible] your value-added mix. So if you just do...
It's not value-added mix there, more of additional services.
Okay. So maybe C2C Express, Air Express and [ Pharma ] Cold Chain services.
Cold Chain services.
Okay. So sir, what would be the share of these 2 new products that you have added in this year?
We intentionally don't want to be diverse, because these are not the sizable ones. If you put together, we are at the 15% as Mr. Chander has mentioned.
Okay. So basically, you are saying that currently, if it is about 15%, that means close to about INR 160 crore revenue comes from that right now. In the next 3 years, that will go to about INR 500 crores.
Yes, that is true.
Okay. And sir, what would be the key risks, right? Because this is a very solid target. I'm sure looking to do your best to achieve it. But what would be the key risk in your to basically achieve that? What do you foresee?
Economic risk in India slows down, shuts down, then we have a problem. Our growth driver is only the Indian economy. So if the economy is doing very well, we will also do very well.
We take the next question from the line of Radha from B&K Securities.
Am I audible?
Yes.
And I'd like to congratulate you on your extremely resilient performance. So I just wanted to ask 1 or 2 questions. My first one was including this Gurgaon and Pune Sorting Centers, what would be the total area under management for the company as of today?
So it is not really a matter for us, because this is not the warehousing space. It is basically sorting center, but I think it is around -- we have the 2 million square feet area right now, which is real owned one right now.
This is, in total, including all the sorting centers that we have?
Yes.
2 million square feet. Okay. Also, my next question would be, you mentioned that 15% of your revenues were from these value-added services. Now -- and previously, our target was that these new services would have an EBITDA margin of about 20%. So are we in that range for these new services or are we on path to achieving that range for the new services?
Yes. So we -- whatever services we added, we -- with the full thought, we added these services and all are the what kind of service and other SOPs for sorting business. That kind of SOPs we are also following like -- which like asset-light model, we are not reading any assets for that. Margin has to be in the range of like 17% to 20% EBITDA level. That be following these services as well. So we aren't getting the profit at the same level what we are getting kind of service business.
We take the next question from the line of Ankit from Bamboo Capital.
Sir, in this quarter, if you look at it on the volume terms and volume you saw a growth of just 4.4% compared to last quarter in Q4. So if you can tell us what size you spoke about?
Your voice is not clear, Mr. Ankit.
Sure. I'll speak a bit louder. So on -- in Q4, we saw the volume growth of this 4.4%, and if you look at it from a month by perspective, did we see the growth in January and February and then March picked them? How would it like? What was the key reason for low growth in Q4 FY '22?
We can -- still cannot understand, possibly you can speak a little softer?
Sure, sir. So I was asking about the low volume growth during Q4. Is it better now?
Yes. [indiscernible].
So in Q4 FY '22, we saw volume growth of 4.4%. And you did allude to January and February being soft month because of the...
Ankit, we are not able to hear you. Please come again after a few minutes.
Is it better now?
No, no, no. It's not clear. We can take the next caller.
We'll take the next question from the line of Aman Vij from Astute Investment Management.
Are you able to hear us? Actually, I think the problem is from your line side because we are able to hear all the questions properly.
Mr. Aman, you are audible, so you can go ahead with your question.
Can you check please the moderator?
Sir, I can hear you loud and clear in the conference. There's no problem with the line.
The incoming voice is not clear. Incoming voice is breaking up.
Give me a second.
Now it's better. Now it's better for a second.
Mr. Aman, could you please go ahead with the question, sir?
Yes. Yes. I will now.
[indiscernible] clear.
Now is it better, right?
Yes. Yes. Yes perfect.
So the first question was you talked about there was the growth in January and maybe February. If you can talk about the growth, what number percentage would we see in January? And now the traction in March and April, what was the growth?
Yes. So January basically was around same level of last year. That was flat. And February month has -- then I think it was 2% minus on over last year January, and flat in the February and then March, we have around to double-digit growth. And ultimately, we achieved a growth of 7% in this quarter.
And for April and May, are we seeing that healthy growth double-digit back?
Sorry? Come again, Aman, please?
Sir, I was asking in April and May, are you seeing that very healthy growth like in March coming back? Or are you seeing some slowdown?
Yes, March onwards, growth aspect is fantastic. There's a robust growth going on.
Okay. Okay. FY '23, what kind of volume growth do you think for full year you can achieve?
Are you talking about FY '23?
Yes, sir. Full year, what is the volume growth you see [indiscernible].
So we will be -- we are targeting to achieve in this year on the volume side in the 16% and revenues in the range of 20% to 22%.
Sure. That's very helpful. Second, region-wise split. Are we dependent on any particular region? Or is it like 20%, 25% across the 4 regions, North, South, East, West?
Yes. So always, we're focusing across India, and that's why our utilization level in truck is always high because we penetrate very deeper across India. And we usually grow all sector or across zones like North, West, South and slightly East is always is a transaction center. So that is also growing in the same pace, sometimes maybe like 1 or 2 basis points is okay. That will happen.
But we are not dependent on any particular region, like 43% from a region? It's like...
No. No. No. That is not -- Yes. so we are like 85% revenue is coming from 3 regions, South, West and North put together, and 15% revenue is coming from East sector.
In terms of both C2C across all the regions, any region, which is growing faster, any region which is growing slower.
No, that is not there. And all sectors are -- all zones are growing in the same range.
That is also good to know. The final question I have is if you -- you talked about 15% of the revenue, so roughly INR 150 crores came from the new services. So sir, if you remove that portion, the base business is like INR 900 crores only. And we did not have most of these services 3, 4 years back. So it doesn't seem like our base business, if we exclude these services, has grown much.
No. No. No. Basically, this includes our existing service of Air Express also actually. So put together, Air Express, internal Air Express, Rail, Cold Chain, Pharma and C2C. All put together, that it is becoming a part...
[Technical Difficulty]
Mr. Agarwal, so is the question answered?
Yes.
Because I noticed the line dropped.
Yes. It's okay. We'll take the next question.
We take the next question from the line of Vikash Khatri from Aviral.
So my question is, this year, we have registered very good growth. So what is our 3-year CAGR? Because in between, there was a negative year of pandemic. So how is the 3-year CAGR? And attaching to the last question, that 15% is the contribution from new services. We do agree that ARR was hovering around 5% to 6% here 3 years back so on [indiscernible] surface CAGR is how many for the last -- in last 3 years? And second question is, what is the impact in terms of bps on EBITDA due to automation of these 2 sorting centers? These are the 2 questions.
Yes. So I am giving the answer for the last question first. So basically, we mentioned on last call also, so we will be getting the benefit once we will be fully automated and stabilize the operations, which we just started in quarter 1. So benefit will be almost 50 basis points in -- by this 1 center. And regarding other services, we also said like earlier, we have -- so earlier, we have almost around 12% kind of revenue by Rail -- from the Air Express and other put together, we have these kind of services. Now it has reached 215% because we just started these services last year only, not before that.
Okay. And what is the overall CAGR for 3 years?
So 3-year CAGR, I think, is almost 5% only, because 2 years was just like washed out in this corona time.
We take the next question from the line of Krupal S from Spark Capital.
Krupashankar from Spark Capital. Just wanted to understand on -- with respect to the pricing services. So you alluded the fact that you will be taking on a 4% to 5% price hike. And do you believe that given the hyperinflation and perhaps relatively pressure on volume side, you will be able to pass on this sort of a general hike increase?
No, Krupashankar, we are not able to hear properly. Your voice was not clear. Can you repeat again?
Sure. Sure. So what I was asking was with respect to the pricing side, so you did allude to the fact that there will be another 4% to 5% price hike. And so I just wanted to understand if the tonnage comes under pressure, would it be possible to indicate such a steep price hike in such a market? Even fuel is also going up. All these aspects have to be considered, right?
Yes, actually you are right. Because in this year, in FY '23, we are anticipating not an increase in fuel price because government is also concerned about that and RBI as well also. So that's why I'm saying. So we are looking for an annual hike in this year. Because last year, again, [indiscernible] was sharply higher then we have passed it on to customer very efficiently. And if this year is also happen, then we will be again pass it on to customer and maybe like restrict it to 2%, 3% only then. That all depends on the circumstances that will be happening in this year.
Right. And also in addition to your overall strategy of adding new branches. Now in FY '22, you have seen around 45 new branches getting added. So what's your target for FY '23? And the tonnage growth was -- you have alluded to earlier about 16-odd percent. What is the extent of automation you're expecting from the newer branches?
So it will be about -- we plan to add about 100 branches across the country. And yes, so new branches take about almost 6 months to 9 months to come into stream. So it's tough to say how much they will be adding because it will depend also a lot on the economic activity of India, how we are progressing.
Right. Okay. Got it, sir. And 1 last question, sir, if I may. I did note that you have CapEx plans scheduled over the next couple of years, at least. And there is a healthy dividend payout as well. So any rationale behind a buyback because your cash balances, including cash and bank balance [ all there ]?
Yes. So basically, retinal on buyback because we have the surplus funds, like INR 100 crores we already have. And in this year, we will be generated almost in the range of INR 175 crores to INR 200 crores this year. So if you put together, we will be have over INR 300 crores cash available by year-end. On CapEx side, we have a plan to spend up to INR 100 crore. And this buyback of INR 75 crores is easy for us. And ultimately, we will be retained, again, the same way of like INR 75 crores to INR 100 crores by year-end.
Other thing, good thing in our business to run the daily operation. We do not need any money like our just networking -- networking level cycle is hardly 15 days. So you've also seen in balance sheet. And we also have given 400% dividend. So we have done dividend, we are doing investments. So excess cash, big buyback.
Got it, sir, and best wishes.
That is [indiscernible], please.
Yes, sir, please go ahead.
So like this year, you've seen we almost generated a profit of INR 150 crores out of that. We added assets of INR 80 crore. We disbursed a dividend of INR 30 crore and then remaining we have put into our investments. So very simple cash flow balance sheet and P&L we have. So nothing to be worried about that.
Got it, sir. And just I just wanted to say that if we have such a CapEx plan, I think it would have been better to invest towards growth prospect is what I was perhaps alluding to. But yes, of course, I do get your point of view.
We take the next question from the line of Srijan Jana from [indiscernible].
Sir, of the CapEx that you are doing, how much time does the sorting center take to reach, say, in what should I say, irrespective utilization say some 75%, 80%. And also, in your earlier comment, you mentioned once your Gurgaon Sorting Center fully comes online, it will contribute 50 basis points to the entire revenue margin, is it? The entire revenues or only part of [indiscernible].
As soon as the sorting center starts, it's like 100% utilization. So there is no difference in that. Now when you do automation, we do trial run, we do -- we are learning. We have to do reprogramming, rerouting, all that process takes about 1 or 2 months. 2 months usually. So that process is on, and it becomes easier after the first sorting center is made. Then if we just follow through with the same processes everywhere. So then it becomes cut, copy, paste, safe to say. And we are in that learning stage and we will see the results coming out definitely by Q2.
Okay. And impact on margins, you said once it is fully operational, it's 50 basis points on entire revenues that we will do either?
Yes. Yes. Yes, up to that, yes.
Okay. And broadly, what would be the IRR for these kind of sorting centers that we are targeting?
Yes. So we are targeting this period is payback period in the range of 6 to 8 years max.
Okay. And majority of INR 500 crores CapEx in 5 years that we are talking about? I'm assuming is sorting centers only.
Yes. That is correct.
We take the next question from the line of Mr. [indiscernible] from [indiscernible].
Congratulation on the great results and your buyback proposal. I wanted to know, this quarter, we have seen logistics companies getting impacted by COVID, which as we seen, more predominant in Northern region, especially in the surrounding areas. So as you said that the mix is not concentrated. So does that mean in any specific region, if it gets impacted during this particular period, and we assess the entire volume for in that figure. Any one reason that impact can affect volume growth? Because there is a movement so and so from a particular region.
So what is your question?
So like -- suppose Delhi was under lockdown,[indiscernible] lockdown about 45 days compared to other regions, which were not under lockdown. But since to and for from Delhi to other regions might be impacted, so overall volume growth standing there is that impacted for the company.
Yes. This is true actually in some point of -- some point because supposing, you rightly said, Delhi supposing is under lockdown. So the to and for will be impacted accordingly. North India is the plate manufacturing up, and the consumption is done in all over India. So it really impacted the overall consumption cycle. Production types, of course.
Yes. And we have more -- we have not pushed for increasing market share or dilution of prices in terms of growing our revenues as we see in other players. So we will be employing the same strategy going ahead also, right? You're not...
Yes. Yes. We will keep same strategy.
Okay. And the other thing was in terms of CapEx going ahead, as you say INR 100 crores of CapEx per annum. So is it -- would it be mixed in automation in existing -- are there any greenfield automation centers coming up over the next 2 to 3 years for the company?
Yes. Yes. So 1 existing in Pune, which is already operational on -- in this current year only, in FY '22 only, that we will be put on automation. Other 1 will be the new greenfield one, not put in all one.
And which locations and region-wise locations?
So we will be [indiscernible] kindly ask them separately. I will be provide that.
We have the next question from the line of Mayur Parkeria from Wealth Managers.
Am I audible?
Yes.
And congratulations on a decent set of numbers. Sir, I had a couple of questions. How many customers would we have added in FY '22 in such challenging environments, new customers?
So we added almost 5,000 customers in this FY 2022.
5,000 customers. And would the base be now closer to 2.5?
No, no, no, no. It is -- we have almost 2 lakhs. So it may be like 220,000 customers right now.
And pre-COVID, sir, what was the trend of roughly annual addition? I mean, just trying to understand that is this number already back to -- and on the growth side? Or is it below the pre-COVID?
So pre-COVID level, we have around -- because in last year, we added the customer, pre-COVID, that was around 2 lakhs, 10,000 customers we have. And this 2 year onward, 2 years, we have done almost 10,000 additions. And major, obviously, in SME customers, big customers number is less, obviously.
No, annual addition pre-COVID would have been in the same region, 5,000 plus/minus or...
Yes. Actually, I need to check that again. I don't have a ready figure.
No problem. No problem. Sir, the other thing was -- I mean, this is a very broad question I'm trying to ask here, may not be relevant for 1 quarter. But just your thoughts would help us to understand because our margin expansion would be based on 2 large factors would have been increase in the share of SME business and also increase in the share of international Air Express, right?
No, no, no. There's so many things. This is -- will be helped to improve our margin level. One is obviously operational efficiency in terms of utilization level increase...
Sorry, I meant on the product side. Sorry, sorry, I just clarified. On the product side and on the offering side.
Yes. Yes. So basically offering, so all our offering whatever we started in last year only, that will be contribute very good on this current year and as years to ahead.
No, sir, what I'm trying to understand, is the SME mix gradually improving the way you earlier was thinking? And will it help in improving the margin on that side?
So actually, to increase the business with in proportion to big customers is not possible in a big way. Like we can't change the ratio of SME like 55% and other big customer 45%. This is not possible. So that's why we always want to maintain the ratio of 50-50, where we get the good prices from the SME customer at good volume, or you can see high volume with the big customer. So we -- that's why we are able to maintain our operating efficiency as a rate of utilization level, 85% plus kind of one thing also we have to keep in mind that SME, some SME also become large customer. So that also happens. So it is always important to have a large SME base because that 1 customer can certainly become a very large top 500 company also. We have seen that happen in 10 years that many companies which are small have suddenly become very big.
Okay. Okay. That's great. That's great. Sir, final question from my side. Sir, India has been focusing the ministers have been focusing a lot on improving the coastal waterways and for the domestic transportation and improving the water infrastructure. I know it's a very work in progress and slow progress on 1 side. On the other side, if we look at some of the countries, developed Asian region, very high share of waterways in the logistics...
Those countries, you are talking about a GDP per capita must be $20,000, $30,000. Ours is $1,600, $1,700 to [Foreign Language].
[Foreign Language] and we are not seeing any inquiries or anything from our side right now as [indiscernible] country.
[Foreign Language]. They don't want to spend on cost, they wanted free on everything.
We take the next question from the line of Mr. Alok from Motilal Oswal.
Sir, I just had a couple of questions. Sir, one was on the -- this Gurgaon Sorting Center. So since it got operationalized a couple of months back? What's the progress there? How is it shaping up? Because I believe that after the success of that, we were going to look at whether automation will be doing it Pune or no. So just some insights on that.
I think the [indiscernible] has gone pretty swift, and we experienced a thunderstorm also in Delhi recently, and you saw what would happen. So we had the scenario also laid out. And in general, the understanding is very clear now. What we are working on is how do we reduce the overall time it takes for -- the halting time and everything. So we have come to the levels that we wanted, we are achieving, and we will replicate the same in Pune without any issues. So the next phase of this automation will start possibly in H2.
Sure, sir. And also wanted to understand, have we taken any price hike in April with because of the sharp increase in diesel during the end of March?
Yes. So price hike is completely set process Alok. Because the -- our agreement with the customer is rolling over in each -- they are spreading each year like some customer -- each month, even I say, on a daily basis, like some customer may be make an agreement with us on April, May, June. So this is always we have to be more for a price hike, annual price hike with the customer. So diesel is completely not affecting our price hikes. Diesel is completely separate on wherever it is increased, we have to pass it on to customers.
Sure. And just 1 last question, sir. So I think I missed on that number because of -- there was some network issue. So what's the growth we are looking at for, sir, in FY '23 on the volume, and basically on the top line and the margin should be at similar levels only? Just wanted your thoughts on that.
Yes. So by FY '23, we're looking for a growth of -- revenue growth of 20% plus kind of 2021. And on the volume side, it will be around 16%. And margin, again, we are looking for to increase -- improve by 50 to 100 basis points.
We take the next question from the line of Rahul Sony from Smith Limited.
Am I audible, sir?
Yes.
Yes. So, sir, as you said before that this quarter, you picked up late. So I would like to understand by what margin you fell short of your targeted volumes during Q4.
We fell short. We were expecting to be growing more than Q3. But unfortunately, that happened, the COVID thing happened. So we couldn't achieve the targets.
Yes. Because if I see the last 12-quarter data, is 235,000 per ton volume is the highest volume, I guess. And still, it is just a 2.2% Y-o-Y growth over last year.
Yes. I think growth of almost 4% over last year's same quarter. And you rightly said that was the highest revenue quarter.
Okay. And during Q4, we didn't take any price hike. I'm not asking about diesel fuel price [indiscernible].
No, we are able to get that actually price hikes to annual price is a different one from this fuel hike. Fuel hike is and where is happening, but other process for to increase the price with customers is different, completely different and we are getting this price hikes. But again, it is impacting slightly where diesel starts to increase, then we are able to get the, obviously, is a less percentage. If it is not happening, then we maybe charge like slightly higher. That is [indiscernible].
And 1 last question, as you said, 15% of your revenue is coming from Eastern region. So what percentage of your total branches are located in the Eastern region? And whether they are performing at par with compared to other regions, they are underutilized to -- or they are performing in line with the economic growth in the Eastern region?
So that is happening. But right now, I don't have a ready available number about that, what the numbers and all. But usually, that's what I'm saying. Even I can say each sector is more performing well because they filling our trucks as a return load because, otherwise, our [indiscernible] will be reduced. So they are also equally performing across the year in a whole year.
We take the next question from the line of Mr. Naveen Bothra, he's an individual investor.
Congratulations for a good set of operating performance even in the challenging. Sir, my question is regarding the capital allocation policy. We have announced the INR 75 crores buyback at a price of INR 2,050. So in the press release, it has written that through an open offer, if you can explain this through an open offer...
You have to check online. We can -- we have to discuss if you have any other pertinent questions regarding operations is something we can tell you.
Because the buyback, can we say that it will be a regular because since we will be generating around INR 200 crores year next...
I would say because each year will have different set of investment cycle. So maybe with our investments in sorting centers will grow more. So very tough to say at this point.
Yes. If I may, will [indiscernible] be participating in this time?
No, no, they will not.
So the 1 question I have regarding your interview now, you said that in next decade, we will be having EBITDA of around INR 3,500 crores compared to INR 2,000 crores. If you can throw some more light on this for the benefit of all the shareholders.
So it is a very simple calculation. When we have INR 5,000 crores, let's say, revenue, then add about 25% margin, 25% margin we will have about approximately INR 2,000 crores, right? So that is the calculation.
We take the next question from the line of Ms. Radha from B&K Securities.
We -- can we close after this question [indiscernible], please.
So just wanted to know, you mentioned your guidance for FY '23, but could you just say from a 3- to 5-year perspective or your volume and margin guidance?
Yes. So we have given like INR 2,000 crore revenue by 2025 with a margin level of 20%.
That was the last question. I hand over the conference to Mr. Chander Agarwal for the closing comments.
Thank you, everyone, for joining us today. The year ended with a positive note with strong numbers and broad-based recovery of port industries. We remain optimistic of the growth trajectory that we are on and excited about the opportunities that lie ahead of us. With our strong value proposition, we will achieve our targets.
We look forward meeting again the next quarter. Please be safe, stay healthy and free to reach out in case any questions are not answered. Thank you once again.
Thank you, everyone.
Thank you. On behalf of TCI Express Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.
Thank you.