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TCI Express Ltd
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Good day, ladies and gentlemen. It's my pleasure to welcome you on behalf of TCI Express Limited and SKP Securities to TCI Express Limited's Q4 FY '24 and FY '24 earnings webinar. We have with us Mr. Chander Agarwal, Managing Director; along with his colleagues, Mr. Mukti Lal, CFO; and Mr. Hemant Srivastava, COO, Non-Surface Express business. This webinar is being recorded for compliance reasons, and during their discussion, there may be certain forward-looking statements which must be viewed in conjunction with the risks that the company faces.
I now hand over to webinar to Mr. Agarwal for his opening remarks, which will be followed by a Q&A session. Thank you, and over to you, Chander.
Good evening, ladies and gentlemen. I want you to -- I welcome you to the Q4 and financial year '24 earnings conference call of TCI Express. Let me start by giving you a brief summary of the economic conditions we encountered during the fourth quarter of financial year '24. Despite challenges in the operational environment during this period, TCI Express demonstrated resilience and adaptability in navigating the market dynamics. We maintained stable margins and consistent capacity utilization due to our strong customer base, robust network and operational efficiency, enabling us to outperform industry peers.
Aligned with our shareholder-friendly capital allocation strategy, the Board of Directors has recommended a final dividend of INR 2 per share. This brings the total dividend for financial year '24 to INR 8 per share, amounting to a significant payout of 400% on the face value, underscoring our commitment to delivering value to our shareholders.
Moving on to a brief update on the business developments. The Rail Express has garnered significant interest from customers, and our customer base has grown considerably and over 125 routes to cater to the growing demand. A lot of the air cargo business has also kind of moved towards the Rail Cargo segment is what we have noticed. Moreover, I'm pleased to announce the successful implementation of automation at the Pune sorting center. This 1.4 lakhs square facility is now equipped with AI-enabled automated cross-belt sorter, enhancing operational efficiency, streamlining sorting processes and minimizing errors. This advancement has resulted in faster deliveries and reduced inventory holding periods. These efficiency improvements will again firmly establish TCI Express as the innovation leader in the express delivery industry.
As we look ahead into the future strategy, our focus remains on investing in technology and automation to boost operational efficiency and deliver exceptional customer service. In financial year '24, we allocated a total capital expenditure of INR 46 crores towards expanding our branch network, advancing automation initiatives and fortifying our IT infrastructure. Throughout the fiscal year, we expanded our footprint by establishing 25 new branches, supporting our multi-model express business and enhancing market reach and customer accessibility. Now all our surface and non-surface products have their own team and which will contribute significantly to the top line and bottom line as we proceed.
Our strategic investments in technology and infrastructure have significantly ensured that we remain in the forefront of the industry. I'm also happy to announce that our sorting center in Jharkhand and Pune has achieved a gold rating in the LEEDv4 BD+C Warehouses and Distribution Centres rating system. This achievement underscores our company's dedication and also our approach to sustainability.
In the ongoing commitment to people first approach, we are proud to announce that we have been recertified with Great Place to Work, reaffirming our dedication to fostering a positive and inclusive workplace environment. Also, we are honored to have received prestigious sustainability award from CUMI, a leading manufacturer of coated and bonded abrasives in India. We have also been recognized as the best B2B logistics partner for '23-'24 by Royal Enfield. These accolades affirm our commitment to excellence and our strong partnership within the industry.
Looking ahead, the sector is set for substantial growth, driven by government infrastructure and policy initiatives aimed at enhancing transportation infrastructure especially at major freight routes, logistics parks and road and highway connectivity. With this favorable industry outlook, we are confident in our capability to capitalize on the opportunities in the Indian Express logistics market and generate long-term value for our stakeholders.
With this, I'd now like to hand over the call to Mr. Mukti to talk about the financial performance of the last quarter. Thank you.
Good evening, everyone. And at this time, we are not only doing like earning presentation, we are like rather giving full presentation to we have a feel about the company. That's why we moved on to from con call to like webinar. And I will be quickly run through this presentation and then we can be -- have the question-and-answer session. So we -- like you're all aware, we started this company after demerger from TCI 8 years back and almost we have the 3,000 workforce and 970 branches right now.
So we, like in this year and continuously, we will be focused on offering comprehensive logistics services across multiple domains, including rail, air, C2C and Surface Express and tailored to diverse client needs. We continuously will be focused on asset-light model. We will be like carrying high-value cargo and continuously expansion of services and we will be continuously focus on automation of our sorting centers.
This is our like geographical footprint. So we are present across India, which not other companies are. We are like West to South and North to East, we are everywhere present. And we are offering like all the services, surface, pharma, cold chain, rail, e-com, C2C and domestic and international air express. So 2 years back, we established first fully automated center in our Tajnagar Center, which is near to Gurgaon. And now second one has also like Mr. Chander has mentioned, the second one, we also launched in Pune in March month, and we're now streamlining the things. And this is also like with the sustainability where we have the solar in Tajnagar as well as in Pune, both we have the solar electrifying through solar only. And with that, we have almost like -- we reduced the turnaround time of this cargo almost by 40%. Yes.
So these are the like service offering, which we started like 2 to 3 years back, like Rail Express is getting high good traction. Right now, we have 4,500 customers. And now currently, we are operating of 125 routes and is continuously increasing the numbers of customers and all. And this is, again, a very -- customers are very happy with the services and our target is to be like converting air business into like rail business with the 1/3 cost. Yes.
Same way, cold chain express, we are only focusing on pharma. We are not going on to other field of like food and other related products. So that's why we will keep the same thought where we keep ourselves asset light and we will be -- hire the assets on like outsourced model, and we will keep the same way. Yes.
C2C Express, yes, this is a new niche segment where we're creating the business for like Fast Trucking and Milk Run model where we like collecting the cargo from 2 locations and delivering on 1 location or vice versa, where we picking from the 1 location and delivering 2, 3 locations. And again, same we will go with the outsourced model, and we will keep ourselves asset light, so return would be higher and this is having a very huge market, and we're converting into in gradually in our favor. Yes.
So now move on to like Q4 highlights. So we have achieved a total income of INR 320 crores, EBITDA is INR 47 crores, which is EBITDA as percentage margin is around 15%. We announced the final dividend of INR 2. So totality, it's for the whole year is INR 8 and 400 basis -- 400% on face value. And utilization level of trucks in this time in -- is around 83.5%.
So this is the financial performance. You can see like we've grown in this quarter almost like de-grew by 2.5%. And accordingly, PAT is also lower. On a full year basis, we've grown 1%. And at EBITDA level, we de-grew around 3.5%. So same way, we have like achieved INR 46 crores of CapEx in this year. And in totality, we have added -- for the full year, we added 25 branches. And in this quarter, we added almost 10 branches, especially focused on our multimodal express business.
This is a quarterly performance. We compare Q4 and then Q3 of last year and -- sorry, Q4 of last year and Q3 of this current year. So you can see the numbers like margin is in between 15% to 17%; PBT margin still in the highest in the industry in the range of 13% to 14%.
This is FY '24 highlights and -- which you've seen like we have achieved a revenue of INR 1,261 crores, which is 1% higher. And EBITDA is also INR 194 crores with a margin of 15.5%. So in this year, if you see, we achieved a cash profit of INR 151 crore in compared of like INR 150 crores of -- INR 154 crores of last year. So cash profit side we are almost the same what we achieved in the last year.
This is the annual performance of last 4 years, where we -- revenue is in increasing trend, EBITDA is also like an increasing trend, and PAT margin is, again, still is the highest in the industry. These are the key ratios, where our return ratios are in high range in the range of like 25% to 35% over the period of the last 4 years. And cash conversion ratio is, again, very robust. So we're converting almost 70% cash and -- EBITDA to cash ratio. Leverage, we maintained continuously like receivable days is hovering from 50 to 55 days continuously. And since 1 decade is also in the same line. Again, payable days are we are also having a very good scheduled payment system. So that's why payable days also in the range of 35 to 38. And accordingly net working capital cycle is also like 14 to 16 days. We are maintaining that since last 1 decade.
This is the balance sheet. We're showing here like balance sheet size has been grown from INR 735 crore to INR 850 crore. And if you compare it, so there is no big difference is there like only trade receivable has increased from INR 211 crores to INR 231 crores. Assets increased by almost 30 -- net assets increased by INR 35 crores and rest increased like whatever surplus fund we have, it increased in short-term investment, which grown from INR 32 crores to INR 90 crores. So almost INR 60 crores has grown in there.
Same way if you see it on liabilities side, everything is added to our net worth, and trade payables are also same. With the cash flow, as I mentioned, it's like we have very good cash flow from operations. This is the like -- we're showing the comparison, our margin profile with the industry players. So still we are whether it's EBITDA or EBIT or PAT, we are the highest one. These are the 9-month results, we are comparing because still a few industry players will be launched or giving their results, they are in waiting. So that's why we compare with the 9 months results. .
So last ATR take is like the location, our location has grown from like 32,000 locations to 60,000 locations and branch office increased from 500 to 950-plus and sorting centers from 26 to 28. Customer base is also usually increased from 1.5 lakh customers to 2.25 lakh customers. So that will be -- and if you see a EBITDA grow -- has been growing in the range of CAGR of 17%.
So these are strategic and outlook where we -- again, we'll keep the same way of balance in between of SME and big customers. We will continue to focus on metro and Tier 1 cities. We will keep adding the new services, which is realized -- started in 1 or 2 years back. And our planned CapEx for the last 5 years is INR 500 crores. Of that, we already incurred around INR 170 crores in last 2 years, remaining INR 330 crores will be spent in the next 3 years.
These are the studies by 2030, where we want like 1/4 of the share of multi-modal services in overall revenue. Rest, we want to be like create wealth for shareholders accordingly. And we will keep -- continue focusing on a asset-light business model, and we will be -- increase the customer base. And we will keep the sorting center, like strategy the same way where we want to create the big sorting center from least owned one.
These are the industry numbers where we are like we have the market share by volume transported by us is around 7%, which is almost like 7% market share. So again, government is also like pushing hard. This improve the infrastructure continuously. And last year, they did like INR 11 lakh crore plus kind of carve-out the money, capital expenditure for infrastructure development in '24-'25. That will certainly help us to improve our efficiencies.
This is our management team. We're our Chairman, Managing Director. So sustainability is also like our core pillar, and we are working hard on to like all the ESG component environment, social and governance, and we soon will release our ESG report. First ESG report. You can find this on our website also.
These are the recent awards which we got as Mr. Chander has also mentioned. So no need to repeat again like Pune sorting center then awarded by the Royal Enfield and CUMI.
These are capital market information, where we like given a CAGR of -- since last 8 years, we've given a CAGR of like 14% plus in our share returns.
Thank you so much. Now we can have the question answer.
Thank you, Mukti. As we now open the floor for the Q&A session. Anyone wishing to ask a question, request you to raise your hand, we'll unmute you and take your question. And friends, if you can introduce yourself with the name of the company or the fund house that you are representing. Wait for a couple of minutes while the questions line up. .
We have a question from Alok Deora. Alok, please go ahead.
Yes. So good evening sir and this is Alok Deora from Motilal Oswal. So just on the reasons. Firstly, if you could share the volume number for fourth quarter and the full year and how it was Y-o-Y in the fourth quarter?
Yes. To start with, like, yes. So tonnage number for this quarter is exactly 2,58,000 tonnes, and that is almost like 2% in negative of same year last quarter. And for the full year, we achieved 1 million tonne exactly.
So sir, there is actually -- I just wanted to understand, we have -- so it's been a pretty muted quarter and even a muted year if you see the full FY '24. So what is really happening at the ground level, if you can just give some insights because -- the growth has not come through and we have been forecasting nearly -- at least a 10% to 15% sort of volume growth, and we have closed on a flattish number. So how do we see the FY '25 panning out and our long-term guidance on the revenues of nearly INR 2,000 crores, how those numbers stand? Any color on that, please.
So I think this is just a temporary phenomena because we know that the ground level consumption has been badly hit because of high prices. And in general, we have seen the consumption taper, especially from the Q3 onwards. Surprisingly, the Diwali that what we expected wasn't a bumper Diwali at all. So that kind of influx of high cost -- and even the fact that cash was pulled out of the market. So India being a cash market, I think that also played a very important role in not enabling growth in the service sector.
Just 1 last question. And so what kind of growth we are now looking in FY '25? And margins will remain in this range? Or could we see some improvement there? That's my last question.
We expect about 10% to 12% growth. Also, Q1 is a election quarter. So we have to be very careful about that. And profitability, yes, will be remaining the same, and we will try, of course, our level best to increase it by 100 basis points.
We take the next question from Lavina Quadros. Lavina, please unmute yourself and go ahead.
Yes. Lavina from Jefferies. Just wanted to check. See, on this volume angle, right, can you just let us know which industries, if you can give us a broad sense on which industries have seen a decline? Because CapEx seems to be picking up. Manufacturing is doing well. So exactly which industry has disappointed on the ground and broadly a volume composition? That would really give us some color on what's exactly happening on the ground.
So basically, Lavina, we -- manufacturing has been growing, but consumption has not been. So I mean, if you look at the pricing that's happening, the major price increase at the ground level, it's not as opposed to, say, the top level or the medium level of the economy, the income level. So it's pertinent to understand that the consumption in, let's say, travel tourism and all that, which has been high is a factor of several reasons. But if you look at sectors like even though we are not in that consumption and even textiles, electronics, all of them have not been growing. So the high price that we are looking at has -- the high prices that we're looking at has really made the consumer, not just in India, but globally, I'm seeing that the consumption levels have come down. So it's probably a temporary thing with the high interest rates and the high inflation. It's -- hopefully, this year, as we're expecting that the interest rates should start easing out by September, then things should start getting better.
Also to add what Chander is saying. So basically, I think we also face already inventories are so high with like all the showrooms and all the like B2B customers. That's the one-off reason. Now I think once consumption will start, though manufacturing is there, but movement of goods is not there where we are in picture. Where we have to be come into picture. So that's also one-off reason. Where dispatches by these manufacturers is less because they already have the like inventories there. So that's why.
Can you give us some industry color, like, let's say, on your volumes, how much is approximately consumption back, how much is manufacturing back so that we just get a sense that whenever consumption picks up, what could be the impact for you all? On your broad cargo volumes, just a broad sense.
Yes. So basically, if you see like except auto, all the sectors are not growing whether it is lifestyle products or pharma because after COVID time, pharma is still in flattish growth, they are not growing. Also, like I mentioned in our last call where they restricted some -- to be sending the sample to doctors. That has not like picked up again because they limited some sending these goods to doctors for -- as a sample. So these are the -- again, engineering goods item is, again, not that much growth. They had a very low growth. So these are, I think, except auto, every sector facing a challenge on consumption side.
Thanks, Lavina. We take the next question from Ashwini Agarwal.
My name is Ashwini Agarwal. I'm the founder of Demeter Advisors. A quick question. I mean just looking through the pricing and the premium margins that you have versus the industry, is it possible that your growth reflects your premium positioning and competition is kind of capturing the growth because business environment is challenging and people are looking for deals? Are you losing market share? Do you have any proxy for that? How do you maintain your competitiveness -- on the service side, I understand. But on the pricing side, are you being edged out on growth because of pricing? That's the real question.
So if you see -- your concern is right and you may -- but that's not the case actually because if you see all the industry numbers, 9-month number are available and no one has grown. So this is as mentioned by Chander. So basically, it is a industry-wide phenomenon where no growth has come. Everybody is facing the challenge on the revenue side. But if you see price-wise, this industry is really not price hungry because earlier, I also said there is -- sometimes what freight we are charging in comparison to their product value is less than 1%. So they're really not concerned about the pricing. So pricing is not a concern at all. It is an overall economic situation and customers are like less dispatches are there. That's why it is happening. Once this volume will be back, we will be there. So there's no case at all where we even think for like losing markets share.
Our margin is a premium margin because this is happening because we had a like widespread across India presence. Then second is our utilization of vehicle is fantastically on high side because we are getting the business across India, that's why utilization level is higher. So this is not the way like we are like losing market share that is not at all.
And our service levels are top in the industry. So there's no way that I don't think that the pricing is making a difference. It's just that the dispatches from the manufacturing companies are less and because of less consumption.
So my follow-on question along the same lines, is that obviously, the government has spent a lot of money on augmenting rail capacity in the last 4, 5 years. Is it possible that the traditional road network is becoming less competitive and rail capacities are taking away some of the share we have.
I would like to interject. It's actually the -- all the money is going in passenger rail network development, not in cargo of it. So in the western world, you have a separate line for cargo and freight. And that is not the case in India.
Okay. So that's not the reason either, okay. Fine. I'll come back in the queue. All the best.
Thank you, Ashwini. We'll take the next question from Jainam Shah.
Yes. Sir, firstly, on the data point part. So if you can share the railways share in the total freight for 4Q as well as full year FY '24?
Sorry, can you come again? I just missed your question.
Yes. So what is the proportion of the total freight has been contributed from our railway and other services in fourth quarter and for the full year?
So yes. So basically, it is hovering around 17.5% to 18% continuously last year. So for the full year, it's also 17.5% to 18%.
Okay. Okay. Got it. And sir, if we -- of course, this year has been quite muted for us. And if you see the trend for the last 3 years, we have grown substantially at 17%, 18%. So what we can see from a 5 to 10 years perspective in terms of growth. Along with that, in terms of margin, have we taken any price decrease because of cutting diesel rates or something in the second half of the March, or we are continuing with the same pricing?
Yes. So I mean, our strategy would be like growing 2x of the GDP, except this year was not great and muted for everyone. But next year onwards, we hopefully again come back to that process where we will be growing 2x of GDP. And on margin side, yes, once we will come back with the higher volume, certainly, our margin will be further improved by 50 basis point, 100 basis point. And again, what the second you asked? Jainam?
Jainam, you had a follow-up question?
Yes. So of the margin, I was asking about the overall growth for like over a longer -- medium to longer term. And that is like 2x of GDP, right?
Yes. And margin, certainly, we will be improving in time to come once volume will be back. So otherwise, if you see our strength is there in this year also in a low volume, even we maintain our gross margin at the level of 32%, which was the same in last year. So whatever degrowth in slight margin is there due to manpower cost and increase in manpower cost only even admin cost is also like same what we had in last year.
Got it. And sir, this last question was on the pricing part. And we did have a decrease in the pricing with respect to the rate cut in the diesel price in the second half of March or something?
No. So basically, if you see, we have the only price hike growth. We don't have any growth which is supposed to be reduced. So wherever price is increasing or decreasing is a positive arbitrage for us because why I'm saying once price is increasing, then we're passing on to everyone, every customer in all the time, we're able to passing on almost 85% customer overall. And then we are passing on to our suppliers also, but on their prices. So on my cost. So arbitrage is there. I'm passing on my price to customer on my prices, means sales price. And I'm passing on to my supplier on my cost price. So that gap is almost -- obviously is around 30% to 35%. So it's always positive arbitrage. .
Once prices decrease, we are not decreasing prices. Exceptionally, 2 or 5 customer or 1% or 2% customer is okay. Otherwise, we are not reducing it directly. We keep return with us. We also like reducing the price of our suppliers. So that's why this industry is working. And no need to be like reduce the prices because again, that cut was not a big one that's hardly -- they reduced the price by 2% to 2.5%.
Okay. Got it. And sir, on the -- 1 more question from my side...
Jainam, let's just keep this as the last question because there are a lot of participants waiting. We'll take the next question from Krupashankar.
Sir, quick question. See, I just wanted to get a sense around -- any specific sectors as such, which is -- which can deliver better performance in FY '25, which you were having a positive outlook around? And that can be a key growth catalyst with respect to volumes. What are your thoughts around that first -- on the first part?
Yes. So basically, our thrust to be like improve, hopefully, in engineering goods and basically in pharma. These 2 sectors we are seeing, obviously, auto will be continuing to grow. We are not so optimistic about like, again, this one lifestyle products or you can say like textile market -- textile products. So we are not so optimistic about that. But otherwise, we are hopefully, every segment will be increased, every product will be increased. Otherwise, we are also focusing on this time on like defense sector and also like in solar sector because government is also pushing to be install the solar on like 1 crore houses in this -- in next year. So we are also focusing that products.
Got it, sir. So now based on my understanding of the sector, so lifestyle and textile constitutes a big portion of the B2B express industry. Are you not seeing any green shoot at all? Because we are seeing that there are companies which are reporting relatively better growth in specific pockets at least. Is it -- where is the gap is what I wanted to understand. Is that the growth or wherever TCI Express is present much more, the growth is not happening on those pockets and that's one of the reasons why we are not able to see that volume growth happening?
So interestingly, we're doing the work with only premium brands, whether a name of all big brands. And I think they are not in that shape or in growth. That's the only reason because pocket, they maybe grow because we don't do like regional much transportation for the regional level or in intrastate basically. We are doing like interstate. So we're doing the work majorly for the like big brands. And I think that is still in a -- they have some pain.
So if then that is the case, then is it likely that -- I mean, is there an annual price hike anticipated in the first half of the financial year?
Yes. So we will be -- yes, last year, as we didn't taken any price hike because there was muted numbers and volumes are there. So we have not initiated the process. But this year, we are initiating the process again. And hopefully, in this year, we will be finished with the 1.5% to 2% price hikes in TCI.
We'll take the next question from [ Dhanan Bagrodia ].
Sir, what were the total volumes for the quarter?
Volumes are like 2,58,000 tonnes for this quarter. And for the whole year is 1 million tonnes.
So, 2,58,000. So 1 million is total. A volume decline of 2% year-on-year?
No. It's not declining. It's almost flat or I think 0.5% growth over last year.
For the quarter?
Yes, quarter is -- yes, minus 2%.
Take the next question from Anshul Agrawal.
Question for Chander and Mukti, both. So I was reading your comments that we have jettisoned a few customers which are unprofitable in nature. Wanted to understand, are these SME customers? And what would be our mix of SME customers be in our revenues currently?
No. So basically, these customers, which is not profitable, one is in big segment actually. And no our customer on SME side is nonprofitable one. So that's why.
And what would be our mix, Mukti, for SME customers, SME customer mix in our overall revenues currently?
Yes. Currently, it is around -- like this quarter, we maintained around again 51 big customers and 49 is a small customer and for the whole year is again 50-50 because we intentionally don't want to be -- get to that balance. So since last 2 decades, we're maintaining that.
Great. And the remaining CapEx of INR 300-odd crores that we intend to spend in the next 2, 2.5 years, could you help us understand which all hubs would we plan to automate and where this CapEx will get used?
Yes. So a very good question. So as I mentioned already 2 sorting centers already automated. Now in pipeline are like Ahmedabad, Kolkata, Mumbai and Chennai. And then these are the 4 ones which is in the pipeline. I think in next year, we will start the -- construction we will be starting this year in Ahmedabad or Kolkata, in 2 places.
But the project will get completed only in '26 for Kolkata and Ahmedabad?
Yes. Yes. Yes.
So these benefits will only come in '26. Would that be correct?
Yes. That is correct.
Despite that, we are saying that we'll see margin expansion in the current year?
Just margin expansion, like this is a very good thing where we like at least started these 2 sorting centers. So at least on the lag between Pune to Gurgaon, we will have some benefit on that because there's both way we have the like simultaneous automation. So certainly, we will get the benefit in that, what we earlier understand estimated. So we will get the benefit here.
The next question is from [ Naysar Parikh ].
Thank you. Sorry, my question is for Chander. So this year, we can maybe understand when we look at the last 5 years, right? Pre-COVID to now, we've practically not grown. We were INR 1,000 crores already in FY '19, and now we are some INR 1,250 crores. Whereas competition has grown significantly. Blue Dart has gone up from INR 3,200 crores to INR 5,200 crores so INR 2,000 crores. Safexpress gone from INR 1,600 crores to some INR 3,500 crores, so another INR 2,000 crores. And Delhivery has gone up from INR 1,300 crores to INR 5,200 crores, so that's another INR 4,000 crores. So all of them have kind of grown revenue strongly, whereas over the last 5 years, we are practically flat. So what is the reason for that?
So this is a very good question, Naysar. Basically, if you see, these are the all players on a different mode like if you talk about Delhivery, they are in completely in B2C segment. And that's a different one. And they're also like doing FTL. So that's why they are growing very fast, and they also added the new company acquisition there. So talk about like another company you talk about, Blue Dart. So if you see the like the last 1 decade their number, their number was earlier, there was in a hugely in the negative and then they bounced back gradually. So that's the thing is happening. About the third company, you name it. So I think they're more into in focusing on third-party logistic and full truck load, not in like majorly in express cargo. So these are the like -- within the industry, there are different products, they are heavy. So express industry, if you compare us, that is vis-a-vis like we are there and then Gati is also there. And then Spot On was there, so Spot On was like now merged with that.
So these numbers, if you see, there's the same kind of number you will find there. So it is very important to see whether which product we are comparing. So that's the I think I can say.
Sorry, say, over the last 5 years, the market is only higher by 25%. The market that you are in -- so that is less than 5% CAGR, a 4% CAGR.
Sorry, what you said?
I'm saying you grew from INR 1,000 crores to INR 1,250 crores, right? From pre-COVID to right now. So my question is that's less than 5% growth. So what are -- are you saying that the market that you operate in grows at less than 5%? In the last 5 years?
So during COVID, we had minus 20% growth. Please factor that in.
No, no. But I'm comparing pre-COVID to now. So you're saying pre-COVID to now, if we look at CAGR, the market CAGR should be less than 5%?
No. So these 2 years, you can't compare with that, like '20 is also hit by that. And FY '21 is also badly hit by that. And then we grew in '22 and '23, both year, we grew. So we can't see like put the same because these 2 years were just like wastage on that due to that COVID. So that's the only 1 reason you can say, you can't take it like CAGR. If you CAGR -- see like before that, we've grown like 15%, 16% CAGR. So that will be, again, volume industry, this is a very temporary phenomenon. Once volume will be back, we will be still -- we will grow again.
And Mr. Parikh, you compared unorganized segment with the organized segment in Express. So that's not really an apple-to-apple comparison. If you look at our direct competition, which is [ Lucid ] you'll see the results are available. You're talking about new age delivery companies. They have their own way of working, where they'll take on any business and every business that's possible. But if you look at the B2B business that they are in compared with ours, there's far -- big difference. So I think getting into detail -- minute details is very critical in this industry.
Okay. Got it. And second question which I had is from a volume perspective, I think this question was asked earlier, but can you give us split by sectors for yourself? How much is pharma, how much is textiles, et cetera?
Yes. So volume is 55% from these major 5 sectors, which are pharma, electronics, engineering, lifestyle products and auto. Remaining are with other sectors.
Okay. And for this pure -- can you mention like which was the top 2, 3 sectors that did like top 2 sectors in growth and bottom 2 sectors in growth?
So basically, growth was in this year is in auto, obviously, and lowest growth in lifestyle products.
We take the next question from Priyank Chheda.
Again, coming back to the aspirations to grow 2x of GDP. And if you see our nominal GDP is still growing at double digit. There is overall a buoyancy in the macro environment, except for commodity sectors. Most of the sectors which you mentioned, which contribute a large chunk of the revenue have grown SME credit. Growth itself is double digit. So what I really want to ask is what is the introspection that is required from a TCI Express side? Now what actually is required on the strategic level to change or so that we've been such a smaller company in the whole of the large logistics sector -- can grow despite all the macro headwinds. So just on a strategic thoughts, Chander, if you can help us, it would be great.
So we have tried lowering the prices earlier to gain market share. And that, I think, is the worst strategy to take on. We can also take on -- we can do what other companies are doing and just take on every kind of business and not worry about the value. The question is then what we had expected from the anvil of GST from 2016 that how the economy will change, how the economy will prosper took a little bit of shuffling because of GST being coming in, in 2016 and then elections happening and then COVID happening and then elections happening again. So within the 5 years, we have seen that whatever we have created, whatever we are running on it's geared to withstand all those challenges and still continue with profitability.
Now the top line growth, what I think you all are concerned about is something which I keep saying is temporary. It's a temporary halt. It's not something which is like taken back. The problem would have been if we did not achieve the 15% EBITDA or 16% EBITDA, that would be the concern. There is nothing that we will change. There is nothing that needs to be changed. We have aligned our manpower, our infrastructure in the proper way that can withstand and can go up and down as the economy is going. So what we need to, as investors, as promoters, we are very patient. And we have to understand and if we take that in stride, we will definitely keep achieving our targets.
So if I have to, again, circle back the strategy and the placement of whole of the business construct that is there is rightly placed and we have to wait for a macro to change in our favor or customers within the cohort where we are -- should change in our favor, right? And that -- I mean, nothing on the strategic level changes that are required at TCI Express and that are required?
Nothing at all.
Very clear. Thank you.
Thanks. We take the next question from Akash Vora. Akash, please go ahead.
Two details are required. One was what was the capacity utilization in this quarter?
This quarter, capacity utilization was around 83.5%. And for the full year, it is around 84%.
Okay. And how do you expect it going forward?
So once like volume -- once volume will be increased, then certainly, we want to be -- go in the range of 85% to 86% in near term. And in longer term, we want to be in a range of 88% to 89%. Beyond that going...
What could be your peak?
Yes. So that's why I'm saying. So we would be -- we may not be go beyond 90% obviously, then we will be compromised on our service level, which we can't. So that's why we, hopefully, in longer term, we want to be 89% to 90% max.
Okay. And sir, could you explain the increase in other expenses this quarter, especially?
So basically, CSR among -- CSR and a few other items basically.
So we do make a quarterly provision for CSR?
Not really because this is -- as and when this is incurring, that's why we are putting the money on accordingly.
Okay. And what would be the amount for CSR this quarter?
For whole year is around INR 3.5 crores.
INR 3.5 crores. And just last question from me, sir, was on the price side, I think, in one of the earlier questions, you said that you had not taken any price hikes this year. I think a quarter or 2 back, I think you all had mentioned that in con call itself that you had taken a 0.5% to 1% kind of a price hike.
In last year, yes, we did -- initially, we taken the price hikes in quarter first. Subsequently, we are not like taken the price hike intentionally because continuously flattish volume was there. In this year, we again -- we will be surely to take the price hikes in the range of 1.5% to 2%.
Okay. So in FY '24, there's only 1 price hike? And how much was that for?
Sorry?
In FY '24, we took only 1 price hike that was in quarter 1 by how much?
It's around 0.5% to 0.75% overall impact.
Friends, anyone wishing to ask a question, please raise your hand, we'll unmute you and take your question. While some questions lined up, can we take a few questions that have come on the Q&A board? Okay.
Yes, please, please, sir. Why not.
[ Kunal Bhatia ] is asking, please give CapEx breakup of INR 46 crores towards branch, machinery, technology and others?
Yes. So basically, it is like going around INR 25 crore like in machineries, which is machineries and other related construction. And remaining around, I think, INR 15 crore in expansion of branch and other related construction and INR 5 crores in technology.
Kunal, I hope your question is answered. Okay. [ Samaya Jain ] wanted to understand the correlation of our pricing to customers? Is it directly linked to fuel prices or we go by market rates? Or do we have a pricing advantage for delivering the shipments quicker? Secondly, what is our revenue segmentation in terms of B2B clients versus B2C clients?
Yes. Very good questions. So basically, pricing environment here is usually, it's not like market driven. It is because these are premium products. So we -- and it is a differentiate on terms of like which customer we're serving like big customers slightly giving less prices, small customer giving slightly higher prices. Different products even have the like -- different segments have the different prices, like pharma have different, auto have the different prices. So that is also varying.
But overall, if you see, which I mentioned, sometimes what freight we are charging in comparison to the product value is less than 1% or in hovering around 1% and 1.5% max. So that is the case is there. Second part, prices is also linked with the diesel prices wherever diesel is increasing, we're increasing the prices to the customer. Yes. I think I hope -- I mentioned that.
Okay. There was one -- second part, what is our revenue segmentation in terms of B2B and B2C clients?
Almost we have 97% volume from the B2B segment and only 2.5% to 3% from B2C segment only because B2C we are not focusing intentionally. There is no margin since other companies, you've seen [ bleeding ] since last 1 decade. That's why we -- whatever business we have as a B2C is really profitable one. And we're doing on a very limited way with the smaller customer, not these big 2 guys.
[ Dhanan Bagrodia ] He asked, what are the total tonnes for the quarter?
Total tonnes for quarter is 2,58,000 tonnes.
I think you answered that, you've spoken about this.
Yes, yes.
Okay. [ Krupa Shankar ] asked the KMPs have been appointed recently -- have been appointed recently. Notably, there is a new head for e-commerce. Is there any added focus on increased e-commerce to TCI Express's portfolio?
So basically, on e-commerce side, we want to be grab the more market on B2B side, where so many people sending the goods to these e-commerce players. So we're doing a reverse of that. Like we are not doing B2C, but we're doing B2B for that. So many people sending the goods from like there to these marketplaces. So we're focusing -- so we should not be like left out with that market. So we're focusing on that from like picking from the small, small vendors and then delivering to these guys. So that's a market we are focusing on.
[ Manjeet Buaria ] Can you please tell how we compare with key organized players on cost per tonne transported? Are we the lowest cost operator?
So if you see -- if you compare like 2, 3 players, so I think we are in a midway. And we still have the slightly low prices in comparison to our other 2 competition. New guys is like Delhivery maybe has slightly less realization than in comparison to us.
Utkarsh Maheshwari. What can be the lead indicator for a pickup, as last year has been a flat year? And another one is also, how does DFCC impact express cargo as a sector? So, I'll just repeat the first question. What can be the lead indicator for a pickup, as last year was a flat year?
Yes. So Chander sir, you would like to answer on that?
Yes. So the DFCC is not really a threat because DFCC is built for the commodities and export cargo. So the whole idea was that from North India to JNPT, it takes about 2 weeks on the road. And on the rail, they want the exports to -- they want the rail network to take it in a week's time. So that's the whole idea. And commodities also, when they move on trucks is very -- it's not possible, like to have that efficiency.
So I mean, the -- the benefit would be if, for example, I know it's a far-sighted thought, but imagine in the high-speed rail, whenever that starts in India, we can actually use that, that could be of a benefit. But I highly doubt that that will ever happen. It will only be for passengers.
Thanks, Chander. Friends, there are a lot of you who are posting questions on the Q&A board. We've kept the webinar, please go ahead and raise your hand, and we'll take it up. Because if you have a 2-way interaction, that will be better, I think. But nevertheless, Anshul Agarwal once again, what would be differential -- what would be the differential margins on new services versus existing Express business?
Yes. So basically, margin in rail and air is slightly higher than surface express always.
[ Krupa Shankar ] asked, is there any assessment of what is B2B portion of B2C?
No. So you can separately ask for that. I will provide the answer wherever you -- more closely.
Krupa Shankar, please feel free to write to us. We'll take it up with the management and get back to you. Next question is from [ Vinod ] Can you indicate the level of customer stickiness in our business? Does the price hike ensure that the customer would stick with us or have a propensity to switch between the suppliers?
So there is 2 type of customers we have like SME customers and big customers. So we always wherever we ask for the price hikes to ensure they should be stick with us. And as I mentioned, they are not really concerned about the like costs because it is hardly 1%, 1.5% to their product cost. So SMEs, there is no challenge. And I said like we are able always to -- able to take the price hikes in the case of like 85% overall basis, 85% to 90%. So a few customers, yes, they are rigid, they will not be given any condition. They maybe have like more pricing power or more muscle power to be negotiated or they can be threat on us to be like switch the business. So that is always there. But yes, we're ensuring wherever we ask for the price hikes, it has to be compensated with good service level or like higher volumes or -- so that's what is happening. So we're always ensuring they should not be like away from us. So I think -- sorry, Navin, we have to we keep -- we finish in like 5 minutes, we have other meeting.
Sure. Friends, we have another 3 or 4 questions on the Q&A more, and that's all the time that we have for this evening. What I'll do is I'll share my coordinates on the tab. And if there are any unanswered or follow-up questions, please feel free to write to me. We'll take it up with the management and get back to you. .
So Mukti, we'll just take the last few questions on the Q&A. CSR, INR 3.5 crores versus last year. Any one-off in other expenses? 20% margins can be achieved at what volumes? And how has been the volume growth till May?
So many multiple questions asked.
Okay. Any one-off in other expenses?
Sorry?
Were there any one-offs in other expenses?
So if you see Navin, there is a -- if you see our other expenditures are almost same to last year. Quarter is not important. There's some vary from quarter-to-quarter, that's not a big issue. So overall, here, if you see, that has been in the same level like last year, we did INR 72.5 crores, this year, we did around INR 74 crores. So that's almost same.
Okay. The second part was -- what is the sort of volume that we need to achieve 20% margins?
So it's very important to we know like earlier, we reached to almost on 70% level. And for 20%, so each year because this can't be achieved in a single year. So once we try and supposing we grow in a volume of 15% in the next 3 years, we certainly reach touch to like 19% to 20%.
How has been the volume growth till May?
I think it is very early to say. As I mentioned, there is an election year, so many release are going on, policies going coming. So this is disrupting the all logistics. So it will be, I think, flattish or what we have in quarter 4 same way. Even we told in last after in Q3 con call, we said that same way. And this is the same way, is running. This is election time, so we can't comment anything.
The Board of Directors has approved investment of additional equity for an amount not exceeding SGD 1.5 million in the wholly owned subsidy, FTCI Express Pte. Request to please share more information on the investment into this subsidiary.
So I think we will be -- then can separately answer for that, is long answer basically.
[ Saurabh ], you can send us a request, we will try to connect you with the management or you can drop me a mail, and we'll get back. Jainam Shah, the last question. As management has been commenting about stocking and not much deliveries, are we planning to expand into warehousing? Isn't it a big opportunity for us?
Really, we will not be going into that sector. We're very clear about that, and we will not be going that sector at all. We will keep -- stick with our express industry only.
Okay. The final one. [ Manjeet Buaria ] actually is a follow-up. I was checking cost per tonne for us, not realization per tonne. We charge our plans. So it's basically asking what is the cost per tonne for us.
What's the cost for us?
Yes.
So basically, if you see my gross margin is like 32%. So you can imagine 68% is cost. So you can be like divide on that. So simply, it is like 6.80 kg because it's a 1 million -- sorry. So I need to see that, it's around I think INR 8, INR 8.5 is 68% of our revenue. So you can directly divide on that.
Friends, we'll have to wind up out here. Thank you very much for all those questions. I have shared my e-mail ID, so please feel free to write to me. I'd like to hand over the webinar now to Chander for his closing remarks. Chander, please.
Thank you, everyone, for joining us today. We have tried to address all your questions. And if you have further inquiries, please connect with our Investor Relations team and we will be happy to address the same. We look forward to meeting you in the next quarter. Please stay safe and healthy. Thank you once again, and thank you, Navin.
On behalf of all of us at SKP Securities, I'd like to thank Mr. Agarwal, Mr. Mukti Lal and Mr. Srivastava for joining us and taking all the questions from the investors, and we look forward to hosting you again for the next quarterly results. Thank you, and have a wonderful evening. Bye-bye.
Thank you.
Thanks a lot, please.