Container Corporation of India Ltd
NSE:CONCOR
Container Corporation of India Ltd
NSE:CONCOR
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Ladies and gentlemen, good day and welcome to the Container Corporation of India Limited Q2 FY '23 Earnings Conference Call hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms. Bhoomika Nair from DAM Capital Advisors Limited. Thank you, and over to you, ma'am.
Thanks. Good morning, everyone. Welcome to the Q2 FY '23 Earnings Call of Container Corporation. I have with us today the management, Mr. V. Kalyana Rama, Chairman and Managing Director. I'll hand over the floor to him for his opening remarks, and post which we can open up the floor for Q&A. Over to you, sir.
Thank you, Bhoomika, and good morning, everyone. So we are happy to come out with again a good financial results. I am now today having with the my Director, Operations, Mr. Sanjay Swarup; and Director, Finance, Mr. Manoj Dubey with me.
Overall the growth is good. Domestic, we're doing very well. In fact, the domestic growth of 30% plus, we are able to maintain and that is because of the new products what we launched. They are giving us good headway, and also the earlier system improvements what we have taken of introducing high capacity rates and high capacity containers is really giving us good business from the West Coast to East Coast and to the South side and also we're able to pick up now volumes on outside as well. So that's a good scenario.
The empty running is coming down and good circuits are getting build up in domestic. And on EXIM side, we had good handling volumes, but overall EXIM scenario little subdued, because of the existing conditions in the world markets and the talks about recession in Western countries and U.S., but now the global choose what we are hearing that the inflation is easing up in U.S. and the things are looking up, and there is also -- there may be a better scenario on the Ukrainian -- Russian-Ukrainian conflict front. So these things maybe good in the going forward, the stakeholders, whom we are having discussions are also hopeful to have a better next 5 months. So we are keeping up in this task particularly on the EXIMs side because it's totally dependent on the export/import scenarios. Otherwise the guidance given on the revenue side, as 10% to 12% growth on on both top line and bottom line, we are confident of achieving that.
So the first half yearly results are in line with that, achieving the top line and bottom line growth. And we are able to declare good dividend for both the quarters as well. Already, we declared 100% dividend on the share, combined for the Q1 and Q2.
We have come up with good schemes during the quarter. There is a new VDS scheme announced, new round trip scheme announced for DPD containers and recently we've come up with an additional scheme wherein empty container movement free with the loaded container on the increased volumes and all these schemes, we are hopeful that they will give us good volumes as our scheme of empty rebate what we announced here that gave us very good volumes last year and continuously giving as volumes this year as well.
Land license fees front that will be one question every analyst would like to ask us. So let me clarify that. Now, it is very, very clarified. The new lease policies announced and as per the new lease policy, the land license fee for the 26 terminals, which we are operating on Indian Railways land is 6% of the market value of the land and market value is the industrial price announced by the revenue authorities at the respective place. So there is absolutely no doubt in this.
So for this year, we are paying at present at the rate of INR 380 crores to INR 390 crores. In the first half year, we made a payment of around INR 190 crores as the land license fee. Even though we have given estimate for the total year the land license fee will be INR 450 crores, that additional INR 60 crores, INR 70 crores is towards the adjustments, which we may have had done, because the land rates are adjusted by revenue authorities once in 6 months.
So to cater to these exigencies, we have given -- we have taken the estimate as INR 450 crores. So now we are very clear and confident that the land license fee payment for the railway land will be not more than INR 450 crores and our double-stack running is very good and Kathuwas is doing very well, our major hub, and the other hub also started operating as I mentioned to you in the last quarter itself, and it is also doing very well. The total number of double-stack trains has gone up in the last quarter, but the transit times have come down with the operations of DFC even though we are doing double hubbing, the transit times have come down substantially.
Almost half between the Delhi Capital region and the NCR and Western Uttar Pradesh, Punjab regions to Mundra and Pipavav. That helps -- that's helping us in getting good volumes [indiscernible] and also the margins, as I mentioned the operating margins on the originating basis in this quarter in EXIM has gone up, they are better than the last quarter.
So this is the overall brief. So now I will open up the conference for the question-and-answer session. Thank you.
[Operator Instructions] The first question is from the line of Atul Tiwari from Citigroup.
Sir, just a couple of follow-up questions on land license fee policy. Just wanted to get some more information. So is there a provision of escalating this at a certain rate, like, say 6% or 7%, this amount of INR 450 crores or INR 390 crores or every year depending on what is the price of the land 6% of that will be recalculated and you will have to pay.
No. It is like this. This escalation is a mandatory clause of the policy. So what CMD spoke about what is the value of the land is to be taken on industrial rate as on 1/4/2020. And based on that, every year 7% escalation is taking place in the existing policy, which we are following right and what you mentioned is that even if the notification from the land revenue [indiscernible] the base rate of the land even if that [Technical Difficulty] complete. The total payout will not be crossing INR 450 crores, this is what company feels and this is what we told you right.
Okay, sir. So I mean I got that point that the total will not be more than INR 450 crore, but say, like thinking it slightly longer in terms. If I take a period of 5 years, we should be building in 7% escalation on whatever amount you actually pay this...
Absolutely. In the existing policy that we are following right now.
In the existing policy. Okay. And sir, the LLF policy, which has been approved by the government, there is a provision that existing players can move to say paying 1.5% of price of land from 6%. So is there any plan on the part of CONCOR to take advantage of that or you will continue to pay 6% as you are paying right now?
So the first clarification is, 1.5% is not the right substitution. 1.5% is only the fixed part of what they have been [indiscernible] in that policy. There is another part that is the variable part, that is TAC charges, traffic access charges. So the total will come out of that 1.5% fixed, plus the TAC charges, which railway fixes, and owners rely on railways to revise it as and then they wish to. So that's a very catchy situation. Right now, the policy details has to come up and the company is looking into it and we will take a considered call at a later date.
Okay. But is this understanding right that if you want to move to this 1.5% plus TAC, then you will have to go through a competitive bidding process or you can move to this 1.5% without any...
You're right. You're right. The only clause is that, the company has the right of first right of refusal.
Okay. So essentially, you will have to decide terminal by terminal, whether you want to move to...
Absolutely. Absolutely. You are right.
Okay, sir. And sir, just one bookkeeping question. If you could share the originating volumes on EXIM and domestic front.
Yes, EXIM it was for half year, it was [ 968,478 ] TEU and domestic 207,393 TEUs. Total 1,175,871 TEUs.
The next question is from the line of Siddharth Shah from SBI Mutual Fund.
This is Siddharth, I'm from SBI Pension fund. Sir, I just wanted to ask one question regarding November -- sorry September update on 9th of September that you have gotten some ratings for raising of close to INR 9,000 crores from ICRA. So if you could share your insights as to, are there any plans to raise debt on the books and you have any further CapEx plans or something. So if you could just throw some light on that.
We could not get you. Where from you got? You've got the information that we are raising that?
No, no. So there is a Bombay Stock Exchange filing that you have gotten our AA+ plus rating for...
Yes, yes. We do take ratings from these agencies because that's only -- that's a regular process yearly process. We do the rating and keep them ready and we have no plans of raising any debt as of now.
The next question is from the line of Achal Lohade from JM Financial.
Sir, if you could help us understand in terms of the realization, if you see on a handling basis, the realizations are down 15% in the EXIM segment compared to first quarter. So if you could help us understand what is driving this?
As CMD has already explained that for doing last mile first mile logistics, the volumes that -- this service we have started a few months back, and these volumes have been added, which are not very -- giving very high margins to us, but they're a service to our customer that help us to bring more volumes to us. So because of this, the 4Q margin is subdued. But otherwise EXIM has -- Originating is fine. Yes, originating is fine and per TEU has been originating in fact has -- is quite high, which is 27,980 per TEU, which is more than the first quarter.
Okay. So if I see the realization on the originating basis, it's showing an increase of 7%.
Yes, yes. If you see the realization actually, you should see on originating basis only, then it is showing an increase.
Understood. And if you could help us understand the volume growth of 12% on originating basis or 18% on handling basis, any particular port sector which is driving this volume growth and outlook on the same?
Actually the originating growth is not 18%, the 18% what we reported to the stock exchange is the handling volume growth in EXIM. In originating as I said, the subdued margin rate is going on in export and import front. As of now, it's originating volumes growth is very less, in fact I think there is little contraction in the originating volumes similarly in this quarter.
Understood. In terms of the employee cost, if you could clarify QoQ, it is down, how do we look at the employee cost going forward, is this a run rate, which...
It's not the same. I think there is not any increase -- little bit increase...
Decrease, decrease.
Decrease is because of attrition.
Yes, sir.
Our employee strength is coming down, because we are digitized now completely, 98% employee those who [indiscernible] we are not recruiting fresh faces to that fill up those vacancies. So the employee cost is slightly has come down, or otherwise it is at the same level last year.
Understood. And sir, if I may ask just the contribution of the Northwest in the entire EXIM cargo...
We don't give that breakup for this conference call.
The next question is from the line of Mukesh Saraf from Spark Capital.
Sir, in your opening remarks, you had mentioned that the turnaround times have come off significantly in some cases by half. So in your experience, have you seen any shift of market share from rope to rail because of this and have you started offering more and more timetable trains, scheduled train now helping that market share growth.
As CMD has mentioned in his opening remarks, the response of timetable trains has been very good for us and we have been able to shift sizable road traffic to rail traffic. In fact, we have started a train called retail express from Dadri to Mundra via Kathuwas, which is run by CONCOR institution with [indiscernible], which is a very big hit for the customers and all live cargo what used to go by road has come to rail. So this is -- really has been very, very beneficial for our company and we have been able to ship sizable amount of traffic from the roads today.
And now that we have already seen this kind of improvement. Is there more scope of this market share to move from road to rail, are there things that we have already kind of got a substantial portion of say what was possible?
Already, a lot of market -- we have seen lot of movement from road to rail. Now next big shift will come, when Dadri also comes on DFC and DFC goes to Nhava Sheva. Nhava Sheva comes on DFC, then we will get a sizable shift from road to rail.
So when is Dadri expected to come on DFC, sir. Any time...
We ask that the dedicated swipe card or management.
Sure, sir. Sure. And just one last thing, I think last year you had also mentioned there was a possibility of paying this land license fees upfront, say, for 30-year period or for a longer term. Is that still there on the cards or that's no longer the possibility?
Now that is still we are waiting, as mentioned by my colleague in the earlier answer. They're working for the policy guidelines to come out on Ministry of Railways. Still that the things are waiting for that. So as of now, there is no clarity on that and we are seeing every quarter at 6% of the market values.
[Operator Instructions] The next question is from the line of Amit Dixit from ICICI Securities.
[Technical Difficulty]
Mr. Dixit, the audio is not clear from your line. Please use the handset mode.
Is it better now?
Yes.
Yes, okay. I have a couple of questions. The first one is on essentially you have mentioned that [indiscernible] have been announced. And there is like double-stack trains are going up, et cetera. So what kind of margin...
You are not audible. You have to say clearly into your phone. Otherwise we are not able to hear you.
Am I audible now?
Yes, when you are doing the check, you are audible, but when you are asking question, you're not audible.
No problem. So the first question is on basically the steps that you taken that are quite commendable new schemes announced, the double stacking going up. So what kind of margin improvement can we expect going forward the next, let us say, 1 or 2 years as a result of...
This question I was answering for last, I think, 4, 5 conference calls. See the margin where we are operating in the logistics sector is a very good margin. So now we have ramped up our volumes and take more share in a market rather than increasing further and further margin, operating at 32% EBITDA margin is very high margin business in the logistics sector, that you people understand because you analyze lot of logistic companies, this part of margins are not really sustainable [indiscernible]. I don't see any further quantum jump in the margins. What our endeavor is to maintain the margins at this level or little bit here and there, that to increase the volumes and win more traffic on to rail.
Okay. The second question is essentially on your market share in Delhi NCR region. If you can let us know how it has moved and are you seeing...
As I said, we don't do that sector wise, region wise, market shares.
Okay, no problem. I was just asking some of your competitors, some of the private players are setting up ICDs in the areas in your catchment, particularly near Moradabad and all so how do you see this competition affecting your share over there.
See competition we are not worried about competition, see and the main issue is maintaining margins. That's what I explained to you in my earlier answer. Other people are trying to work on very marginal principal, because for them it is [indiscernible] venturing their business and sort of do a direct situation they are offering. Whereas CONCOR offers with a healthy margin with the quality of service. So we are not worried about the competition coming up, and definitely the competition every day will keep coming up and our main competition has maintained always is from road, not from other operators. Road improvement in roads, adds new vehicles, and in vehicles, the class of vehicles, which are coming with more efficiencies. So that is going to give a real bump, but best thing happened is the opening the dedicated freight corridor, wherein the traffic trends have come down and rail sector is looking down and also the lot of investment is going into Indian railway network system that is also helping and easing out the constraints on Indian [indiscernible].
The next question is from the line of Deepika Mundra from JPMorgan.
Sir, on the market share front versus road, there have been significant schemes that all have launched. Could you tell us how the rail coefficient has improved in the past 6 months versus what it used to be last year?
Now Deepika actually we are not maintaining the ICD-wise rail coefficient, but we are able to see the market growth in rail by various other parameters we are monitoring like empty running coming down, increase in double stacking. If we have more volumes, then we can have more double stacking as CMD has already mentioned in his opening remarks. There have been 32% growth in double stacking and all, more than 2,000 trains already we have handled in first half. And we are likely to cross 4,000 double-stack trains in this year, which will be all-time record for the company. So all these things clearly point out that more traffic is coming on rail.
Got it, sir. And if you could think about these first mile, last mile service that you have started, is this, if I'm not mistaken, this is going to be via road right, which is why it is not really adding much to revenue or to margin?
Yes, actually this is kind of vertical integration that as a logistics company we have to give to our customers. We have to give service that is called end logistics up to their premises from our terminals. So this, we don't look at very high margins on this segment. And our aim is to give service to our customers, so that they become bind to us and they don't go anywhere else. They bring all the cargo to us and which in turn, we earn in terms of rail freight, warehousing, other services to our customers. This is the kind of service that we are giving to them.
Understood, sir. And sir, last question on the LLF, the new terminals, which will be competitively bid for, what is going to be the criteria for the bidding?
What kind of criteria, Deepika?
Sir, for the new terminals, which will be competitively bid for if the...
You're meaning greenfield terminals?
Under the new railway land policy, so 1.5% plus TAC, the competitive bidding is going to be on the TAC charge or the TAC charges, if it's provided by railways, then what is going to be the criteria for winning the bid?
No, as we understand [Technical Difficulty] court on -- I mean fixed costs is fixed costs of 1.5%. So the bidding [Technical Difficulty] perhaps on the TAC only portion, but the rider that I mentioned that this TAC portion is not having a clarity of the future. Today say it is INR 1.6 lakh per rig, tomorrow what rate will be there on the railway side, nobody knows. So the parameter will be in terms of percentage of the railway rate or INR 1.6 lakh earlier of fixed cost, nobody is aware right now. That is what CMD mentioned, let that details come out from the railways side on the policy how to bid as you rightly asking the question. We are also asking this question or waiting for answers.
If it comes, then we'll also be participating for greenfield project.
The next question is from the line of [ Harsh Shah ] from Elara Capital.
Couple of bookkeeping questions. So can you give us the EXIM lead and the domestic lead for this quarter?
EXIM lead for this half year is 675 kilometers, domestic it is 1,344 kilometers, total is 779 kilometers.
Okay. And can you give us the port wise market share for Container Corp?
Yes, JNPT is 36%, Mundra 36.4%, Pipavav, 11.2% Vizag, 4.3%, Chennai, 5%, Tuticorin, 1.6%, Cochin, 2.3%. These are the main ports.
Okay and rail coefficient at ports?
Rail coefficient at JNPT is 18.2%, Mundra is 26%, Pipavav is 70%.
Okay. And last question, sir. Could you just give us throw some light on the agri, the bulk commodity side, so how are we gaining traction on the agri side and the cement side, if you could just provide some color on it.
Agri side?
Yes, the agri commodities that you were planning to launch in the food grain. And the cement, these were the main 2 that we were going focus on the bulk commodity.
You are asking about bulk movement?
Yes, bulk movement.
Bulk actually, food grain we have loaded, and now we are in touch with ITC and FCI, we'll be getting more orders. Meanwhile, in South that is at near Vijayawada there is a place called Jaggaiahpet where we have conducted trial for bulk cement. KCP cement is one of the customer in this plant, we are loading bulk cement in our normal containers using the liner at factory near Jaggaiahpet, from there, we are taking it to the place called Arakkonam near Chennai and where KCP cement has got its slight and we have installed unique new equipment and which is useful to destuff the container.
It is taking 35, 40 minutes to destuff the container, which is very, very remarkable innovation, I should say. And customer is also very satisfied, and customer will -- is giving us continuous cargo, almost -- already we have 5 rates we have handled at Arakkonam, sixth rate is on pipeline. So this is a good progress and we are getting more queries and more demand for carrying of bulk commodities in normal containers.
Okay. And any volume guidance or any that you want for this year, FY '23 on the buy side?
Volume guidance, CMD whatever he told in the initial at the beginning of financial year, already he had maintained the same guidance and he has told in the interviews also today morning same guidance we will maintain.
The next question is from the line of Aditya Mongia from Kotak Securities.
The first question was that I had was more on the land license policy that recently came out. The question was that if CONCOR was to go for long-term lease arrangements have more than, let's say that 30, 35 years for its existing terminals will these get rebid or by virtue of CONCOR holding them today, they pay 6%, they pay whatever rate gets decided for 35 years without any competition coming inside.
That's right. So that also is there. If we choose to go ahead on the same old conditions, we are going to have it for next 35 years without competition. In the new policy also we can set, that's why it's also given once the detail comes out. The only thing the bidding will take place, and we will have first right of refusal in case, we are not the highest one. So in either case, one thing is clear that either case this land of the railway parcel which CONCOR is having right now, CONCOR, which is going to continue for next 35 years. There is no hindrance in that.
That clarifies. The second thing I wanted to clarify was that this INR 450 crores land license fee that you are suggesting for FY '23, for next year we should be building 7% growth on this number or on the [indiscernible] number that you expect?
This was very clearly told by CMD, understand this thing. What he told is that the maximum that we are increasing for this new also is INR 450 crores, A. B, he has mentioned it, right, in the morning in the TV interviews also that we are, this year we are paying on actual switches for H1 is around INR 185 crore, INR 190 crores. So we are paying the actual, will keep some provisions if required for any kind of [indiscernible] being announced by the land revenue offices in various areas. But in any case, what we are emphasizing is, it is not to going to cross INR 450 crores for this year, A. B, as you rightly mentioned, whatever base price that we're paying this year, it is supposed to escalate at 7% if we remain in old policies that is settle practice.
Sure. The last question that I had was if you could share with us the quantum of first and last mile contribution that has driven EXIM revenues for us to better assess the per originating volume number in terms of realizations.
We can't give realization on the first mile, last mile to you.
The aim was to understand for it for the main business because have you rectified...
We will not be able to give you, that's not a question, that is not a parameter for any analysis. We have explained you that these are the handling volumes not the originating volumes and originating volumes already we have given you what are the originating ones.
The next question is from the line of Ashish Shah from Centrum Broking.
Sir can you help us with the empty running costs for both EXIM and domestic?
Empty running cost for the half year for EXIM was INR 52.7 crores, domestic INR 133.8 crores, total INR 186.5 crores.
Sure. And sir, just one situation if you can please think over it, since now we are saying that originating is something that we have to be looking at and that is important to look at. So if you can share the originating along with the handling when we disclose the volume [indiscernible] if you can please consider that finish.
When should we share it?
Sir, when you disclose the volume on the exchanges for the quarter, if along with the handling you can also share originating, it will be really helpful.
We'll look at it because there is a specific format there. If you'll see, will discuss if that can be shared or not.
The next question is from the line of Deepak Krishnan from Macquarie.
I just wanted one follow-up question on the originating versus handling. We've seen that handling is now 2x of originating versus say 1.6x, which is a normal rate. Now we understand that originating is more reflecting port volumes and handling is all these new function that you're kind of introducing, so will this ratio continue to remain in just 2x range because of the new first mile, last mile logistics that you are undertaking.
Yes, more or less, it will be like this, it will likely to remain like this only.
So there is a substantial -- there will be a substantial increase in handling ratio right going ahead?
Yes, that's right.
The next question is from the line of Pulkit Patni from Goldman Sachs Asset Management.
Sir it's not asset management, it's in the research side, and thanks for taking my question. Sir when I'm looking at our originating volumes in this quarter, and I look at the last 26 quarter average, we've been doing about 5 lakh containers on the EXIM side every quarter and we're in that range even right now whereas when I look at domestic, we were at about 55,000 to 70,000 and now we are doing almost 1 lakh right. Now since everybody asked you about dedicated freight corridor, its benefits et cetera, is it fair to say that whatever we have done so far, the benefits are really being only felt in the domestic volumes. On the EXIM side, this has no real share gain that we have done versus the road sector. Is that a right understanding or am I saying it differently, because the data seems to be suggesting so.
I don't think your conclusion is very correct because domestic we are able to develop new streams. So it is clearly reflected in the volumes, which is quite robust, but in EXIM we are able to divert a lot of traffic from road to rail. But as CMD also mentioned in the interview in the morning, we supported that many questions due the geopolitical reasons and recession in Europe and U.S., which is slowly receding down now. So the negative gross debt we witnessed due to those reason has been more than compensated by the shift in traffic from road to rail. That is the reason of you're seeing the volumes that we're seeing.
Sir like even if you have suffered on that count, instead of 471 we would have been at 550, I understand your point, but that still doesn't show that because of DFC there has been any gain in EXIM volumes for us on the originating side. I mean I'm happy to take it offline, but on the basis of data that doesn't show, whereas on the domestic side absolutely as you rightly said, I think there is a clear doubling of volume almost that we've seen over the last 26 quarters.
Mr. Pulkit I cannot explain in detail in this conference. If you want, we can have separate investor meeting that I can answer all your questions in detail.
The next question is from the line of Vikram Suryavanshi from PhillipCapital.
Sir, can you share what is the rail freight margin this quarter and outlook on that?
Restaurant margin for this half year is 26.48% and a figure that you should look at is overall operating margin, which is 32% as CMD also mentioned in his opening remarks is quite good for a logistics company, 32% operating margin is quite high.
Got it. And if you look at, there has been sharp rise in empty running cost, particularly for [ hedging credit ] if you compared to first quarter and year. So what was the reason or any, if you can explain something on that I think that will be helpful.
Empty running has slightly increased because there is lot of imbalance in imports exports. So that is the basic reason for increase in empty running.
Okay. And are we seeing that trend to continue currently, because I think still -- I think we are facing the issue regarding the slowdown and all that.
I feel that it will not be like this, we will be able to arrest this increase and bring it down.
[Operator Instructions] The next question is from the line of Nimish Shah from Bank of America.
My question is on domestic volume growth. It seems that we are focusing on cement, Ro-Ro and food grains, is it fair to say that cement will be the bulk of the doubling of volumes or revenues that we're talking about over 3 years?
See first of all, we are not doing any Ro-Ro, okay. So Ro-Ro volumes are not there. And cement is a new product, and we present volume, it's smart with cement, cement just started as it was expanded into the earlier analyst in one of the questions they -- my colleagues, Sanjay Swarup. We did some now around 5, 6 grades of cement moment in bulk. But there is an expected very high growth area. In the present volumes, it is not much a big contributor, it is a very small contributor.
Got it. So when we had once said that we will try to double our domestic revenues within that, is cement a big part?
Who said that, you are telling that or have I mentioned anytime, anywhere?
But actually, you said that overall conference call, I guess in the past.
Oh, I did not say that. I said, our volume growth will continue to be at this level of 30% in domestic, okay? And the earlier guidance what I given, the present top line of our company, which used to be 80-20 2 years back 70-30, 70% from EXIM and 30% from domestic. We are looking to make it 60-40 in the coming years. We've managed 1 or 2 years. So that's not doubling of domestic revenues.
Okay. And my second question is rail infrastructure is actually coming up all over India, not just DFC. So are we seeing similar road to rail kind of market share shift outside of the North West belt?
See, rail infrastructure is getting better. The bottlenecks are getting -- are being addressed. So no new rail infrastructure like dedicated freight corridor is not yet started anywhere except the Bombay-Delhi and Delhi-Calcutta. Okay. Let's be clear on this. So because the constraints are going away from rail system, we expect the transit times to be more predictable. With the predictability of transit time in a much better way, definitely the volumes start increasing on rail mode. And the other factor is many of the MNCs, now they are looking at ESG as one of the main factors. So for ESG purpose, rail transport is the best transport and CONCOR, we are now declaring our ESG parameters from last year, that will also help us in getting more volume who are more conscious about the environment.
Makes sense. So is there any examples that you can highlight to us where outside of the North West belt where there is no DFC we are giving rail volumes over road?
For your benefit of understanding and trying to calculate the share prices, I can't give you -- as I already told you what is the scenario, isn't it?
The next question is from the line of Aditya Mongia from Kotak Securities.
You've shared data points on share of different ports and rail coefficient. Could you also give data for the market share that you have at JNPT, Mundra and Pipavav?
Which market share you are hitting?
The market share that CONCOR has at JNPT, Mundra and Pipavav, the ones that you would typically give here.
Yes. JNPT actually, if we take out the short lead movement, then we have market share of 79%. Mundra, we have 40%. Pipavav we have 48%.
48%. And what will be the numbers, let's say, a year ago just for comparison, since you're giving ex of short lead in JNPT, if you could share that number?
Number, I don't have with me at the moment. I can tell you afterwards.
The next question is from the line of Ashish Shah from Centrum Broking.
I just wanted to discuss a bit on the CapEx outlook. So for the first half, we have spent probably close to INR 140 crores is what we see from the cash flow statement. So what is the outlook for this year, because I think we had guided for something in the order of maybe INR 700 crores for this year?
So second half will be obviously quite better than what we had spent in first half. As you know, there is a lot of rolling stock procurement in pipeline including containers and wagon wheel. So apart from many depots also under completion, so will be the same range of last year what we spent and maybe more than that also in the second half this FY.
The next question is from the line of Achal Lohade from JM Financial.
What I wanted to check on this rail operating margins, you mentioned 32% operating margin. Can you help us understand how you calculate that in terms of is it rail freight revenue minus the real estate expense?
I told you this partly correctly. Real estate margin is 26.48% and overall operating margin is 32%.
Okay. I will take it offline. Second clarification I just wanted, sir, pardon me if I'm asking the same question again, but given our 26 terminals, they will be up for renewal over a period of time and that is when we have the opportunity to extend it for 35 years or we can straight away to lock in the current industrial line rate we can renew it in between?
When there is one very good saying too much analysis leads to paralysis. We already told you what we wanted to do. As of now, we are waiting for the guidelines to be given by the railway. So we have given you a clear position what business we are doing now and what LLF we are seeing. And the provision in that is when it comes for renewal, it can be done either way. Even otherwise also, immediately it can be done either way. But before that the guidelines let them come and then we do our analysis and whatever we decide will definitely share with you. If you do too much of analysis, company is doing very well, and I think stock exchanges are welcoming CONCOR share with open hands.
Okay. Just a clarification on this empties cost, what is the empty cost in EXIM, you said INR 52.7 crore for the first half?
Yes, that's what. Yes.
So that is a substantial drop in terms of empties cost Q-o Q for EXIM segment because last quarter it was INR 50 crores in first quarter.
So last year first half was INR 49.4 crores, so it is a rise of 6%.
Sorry, what was it in first quarter FY '23?
First quarter, it was INR 20.4 crores. This quarter it is INR 32.3 crores.
[Operator Instructions] The next question is from the line of Deepika Mundra from JPMorgan.
Just on the CapEx plan sometime back, you had highlighted a pickup in CapEx to conform more to DFC over time. Can you give us some update on those procurement plans?
Our procurement plans are intact. We are adding up new rates. Now because of certain constraints in real search, rig addition has slowed down. The program is to add 270 rigs, out of that we added till now 34 rigs. So 270 minus 34, the mathematic you can know how many number of rigs we are going to add in the next 3,4 years. And containers, I already mentioned that we are trying to take the inventory of our own containers to roughly 1.5 lakhs to 2 lakhs in the next 3, 4 years. For that we already started the development of -- developing manufacturing container manufacturers in India that's going to the results. We are expecting the containers manufacturing in India to come to us, maybe this month or next month starting and they will be coming every month. So the CapEx plan for these rolling stock and containers and handling equipment is in that and that we believe is pending.
The next question is from the line of Priyankar Biswas from Nomura Securities.
Just one question from my side. Regarding this terminal concession period of 35 years, so for your terminals, when does it start from, because is it from April 2020 like from when they [indiscernible]?
People are too much -- again, I'm repeating my don't do too much as analysis. We are operating on these terminals right from the year 1990, '89 onwards. It turns out one of another -- they were constructed in 2006 on railway land because till then this was the only company in this sector. After 2006, with the change in the policy, companies started acquiring it over. Now those terminals which have been in operation from 1989, they will be progressively come in after completing the 30 years or 35 years. It depends on what ever has been written in the first instance. The clause is very clear. The net 35 years is available for this company. There is no doubt in that. At what rate? At present it is 6% of the market value to be risen by 7% every year. I hope everyone is listening to this. So this will continue.
And if the guidelines come out, then the company will do an analysis terminal by terminal whether to continue with this or to go for the new bidding parameter of 1.5% plus percentage of the CAC charges to be shared with the railway. As it was explained, the CAC is undefined variable as of now by the railways. So there's a lot of analysis is to be done. Without that, there is no point in answering any of these questions at this moment. So this, whenever we decide on, we will definitely come back and notify the exchanges, notify all you people, what we are going to do with each and every terminal which is online.
So maybe I guess once the complete policy is out, maybe than it would be a better time to ask the question I guess.
Don't ask the question. We will come out when we decide.
The next question is from the line of Bhoomika Nair from DAM Capital Advisors.
So Bhoomika, I think this is the last question we have.
Yes, sir.
Okay.
On the double handling rigs for this quarter, if we can just get the number?
Double stack in this quarter is 963 trains and total for the half year is 2,108.
The other question was in terms of the EXIM, the first mile, last mile connectivity that we're doing, which has resulted in the handling volumes going up. Now this service that we are offering, what percentage of our EXIM volumes is already covered or EXIM services would be covered and how much more is there scope to scale this up further?
At present, we are doing around 20%, 25% of the volume, which we are handling. And our aim is to take it to minimum 50% of the volumes, which go through over 10 months.
Okay. So we will actually see the handling volumes actually rise far ahead of the originating volumes over the next couple of quarters for some time?
Yes, you are right. But don't do analysis on handling volumes, we never do on handling volumes.
Sure. Understood. That's fair point. So since there are no more further questions and 1 hour is up, really wanted to thank you for giving us an opportunity to host this call again and thanking all the participants. Any closing remarks from your side, sir?
No. I think we discussed almost all the things. The logistics business is good in India and in India is expected that the logistics sector will do well for next 10, 15 years and a lot of emphasis on logistics by the government, the new logistics policy has also been announced. So we are working in a raising sunrise sector as of now so this raising sector will definitely do good and give good results, and your company expected to do well in the coming quarters and coming years. Thank you.
Thank you. Ladies and gentlemen, on behalf of DAM Capital Advisors Limited, that concludes this conference call. Thank you for joining us. And you may now disconnect.