Gujarat Pipavav Port Ltd

NSE:GPPL

Q4-2025 Earnings Call

[Manish Agnihotri, executive]

Good morning, everyone, and welcome to the Q4 FY '25 Earnings Call of Gujarat Pipavav Port Limited. This is Manish Agnihotri, Company Secretary. And I'm joined with Mr. Girish Aggarwal, Managing Director; and Mr. Santosh Breed, CFO.

I'll hand over to Girish for his opening remarks, and then we will open the floor for Q&A. Meanwhile, [Operator Instructions] -- over to you, Girish.

[Girish Aggarwal, executive]

Thank you, Manish. Good morning, good afternoon, everyone. A quick update on the quarter. Our quarter-on-quarter performance remains strong. We delivered a net profit of INR 1,090 million, which is higher by 57% over the same quarter last year, but that was also more due to a one-off provision of the previous year. Our EBITDA, EBITDA margins and EBIT for the quarter were at par with the previous year.

Revenue was marginally higher at 1%. In terms of volumes, our RORO business continued to deliver strong performance with a volume of 49,000 cars and a growth of 42%. Liquid business delivered a volume growth of 4% with 402,000 metric tonnes. Both of these businesses delivered their highest ever quarter volumes in Q4 '25. Overall, container volumes continued to be muted, were lower by 9% due to various geopolitical situations, which I guess most of you are aware of. Bulk remained -- bulk was lower by about 8%, largely due to lower minerals imports, partially offset by increased fertilizer volumes. In terms of the full year financials, RORO -- in terms of volumes, again, RORO and Liquid business continued their strong performance.

RORO increased by 70% and liquid business increased by 14% year-on-year. Overall, container volumes was lower by 14%, again, largely due to various geopolitical situations, also due to lower transhipment volume, which we have spoken about in our previous calls. In terms of revenue, the overall revenue for the year was at par with the previous year. EBITDA and EBIT were higher by 1% and EBITDA margins were maintained or slightly higher at 58.5%.

Overall, again, net profit was higher by 13% at INR 3,984 million, but also largely due to one-off provision in the legal case in the previous year. In terms of outlook, -- we believe liquid volumes will continue its strong performance and expect a growth of 5% to 7%. RORO volumes are expected to continue its strong growth performance. We expect to grow by about 40%. Dry bulk will be flat. In terms of container, it's very difficult to, at this stage, really predict or predict an outlook, but we believe on the container market, we still look at a 3% to 5% growth, but we'll provide more detailed updates in the coming quarter.

A tariff increase was taken of 5% was implemented effective January, considering various commercial contracts with our customers. We expect this to have an overall revenue increase of 2% to 3%. Apart from this, the Board of Directors has proposed a dividend of INR 4.2 per share for shareholders' approval in the AGM. This is over and above the interim dividend that was announced in November of INR 4.

I'll pause here, and we will now take questions.

[Manish Agnihotri, executive]

Thank you, Girish. Nidhi Shah, you can unmute yourself please.

[Nidhi Shah, analyst]

So my first question would be on the progress of the LPG of the terminal by AVTL. How is [indiscernible]

On that and what [indiscernible] in terms of volumes for FY '26.

[Girish Aggarwal, executive]

Sorry, I think there's some -- can you repeat your question again, please?

[Nidhi Shah, analyst]

I wanted to ask you on the progress on the AVTL terminal. How is that going and what are the volumes that we can for FY '26.

[Girish Aggarwal, executive]

So I guess let me answer this in 2 parts. One part is the new liquid jetty that we are building. We are progressing well in terms of various regulatory approvals. We expect to start work sometimes in Q2 this year and expect go live of the new liquid jetty in Q3 next financial year. That's the current expectation. The second part that I want to answer is AVTL has also in the process of commissioning 2 large cryogenic tanks, which is under progress. We expect those to be completed in the coming quarter.

[Nidhi Shah, analyst]

All right. And what kind of volume can we expect from this expansion?

[Girish Aggarwal, executive]

So our overall new liquid jetty, which we spoke about earlier, has a capacity of 3.2 million metric tonnes. So as it gets commissioned, we don't expect it to have any impact this financial year. In terms of growth, as I was saying, we do expect a 5% to 7% incremental growth on the liquid volumes. But the full force of this expansion will only happen once the new liquid jetty is available.

[Nidhi Shah, analyst]

And my last question would be that -- so, in -- for the containers in the base quarter, we would have the [ merge ] service, right?

[Girish Aggarwal, executive]

No. You mean the [ Jade ] service? Are you referring to the Jade service?

[Nidhi Shah, analyst]

Yes.

[Girish Aggarwal, executive]

No.

[Manish Agnihotri, executive]

No, it was in the same quarter last year, it was not there.

[Girish Aggarwal, executive]

Thank you. Mr. Deepak Maurya please go ahead.

[Deepak Maurya, analyst]

The first question was for -- if you could give us some color on the realization as you do every quarter by the cargo categories, that will be helpful. And the second question which I had was on the container outlook. We are now seeing a renewed push for front loading on the transpacific and carriers pulling capacity from every route possible. So does this mean that we could still see the kind of disruptions which we saw during the Red Sea diversions which hurt your demand? -- if any color is possible on that maybe?

[Girish Aggarwal, executive]

Maybe I'll take the geopolitical question. And you're right, what we have seen first in April, May period where both on the Asia West Coast and Asia East Coast, there was considerable decline in the capacity by over 25% to 30% by multiple blank sailings that the various carriers did. But after the tariff pause announced recently, I think there's a significant uptake now we are seeing at least on the transpacific. We haven't completely seen that on the East Coast, but it's only a matter of time that we see it.

I think I would say it is possible I think the pause today, my expectation is that the pause is around mid-August, which means the sailings from China should happen between now and mid-July at best, unless there is a further pause announced by the U.S. But at least at this point, that's what we are seeing. But there's also the other problem because of the blank sailings and capacity drop in the April, May period, the empty repositioning is also a bit of a challenge. So it's not as simple as this. But we'll see how that develops, and that's why we are also a little bit cautious in terms of any outlook that we want to give on the container volume. We are watching the situation. As of now, on an immediate basis, we haven't seen any immediate impact in the month of April, May, also with the filings that we have for June. But we'll see how that progresses. I think it will be better answered as we talk the next quarter.

[Deepak Maurya, analyst]

Okay. Maybe if I can follow up on the same. We were seeing that the -- after the exit of the Jade service, right now we've had full 4 quarters of ex Jade quarters, right? So the volumes are around 175, 180 on an average quarter. So all else equal, should this be the new base from which growth should have rebounded if nothing else on the geopolitical or on the service rejigging had to happen?

[Girish Aggarwal, executive]

Agreed. You're right.

[Deepak Maurya, analyst]

Okay. Okay. And on the same point, there have been some news as well about the Red Sea resumption, particularly by CMA CGM, right? And there is little interest, of course, that there might be a few more carriers who might go that path. Now I know that this is a war-torn area, and it's very difficult to pinpoint when these services would resume. But just wanted to understand when and as and when the services resume via the Red Sea, how does that impact capacity going through Gujarat Pipavav?

[Girish Aggarwal, executive]

So I think if that happens, capacity clearly gets unlocked, which could be put in the other trades. Currently, because of the Red Sea issue, there is a capacity outflow into that trade, which gets unlocked. Some of that capacity unlocking will help Gujarat Pipavav, especially on some of the COSCO OOCL vessels.

[Deepak Maurya, analyst]

Okay. Okay. That helps.

[Girish Aggarwal, executive]

But again I mean we have to look at the timing, right? There is this whole -- as you all rightly called out, the capacity increase on the transpacific. We haven't seen any on the East side, at least, but I'm very sure on the East Coast also the same thing will happen.

[Deepak Maurya, analyst]

Okay. And on the realisation front?

[Santosh Breed, executive]

Yes. So on the realisation for container, the realisation is in the range of around INR 9,000 to INR 9,500 per TEU. For dry bulk, it is in the range of INR 550 to INR 650 per metric tonne. And for liquid, it is in the range of INR 600 to INR 650 per metric tonne.

[Deepak Maurya, analyst]

And any possible guidance or color on how -- what kind of margin level you should be expecting for the upcoming year?

[Girish Aggarwal, executive]

So essentially, this full year was 58.5%, but there were a few one-offs. I think our underlying margins are more around 59%, 59.5%. I would still argue that our margin numbers for this year should be in the range of 59% to 60% EBITDA margins.

[Manish Agnihotri, executive]

Thank you Deepak. Mr. [ Bhavesh Patel ] please go ahead with you question.

[Unknown Analyst]

I wanted to know about the progress on strategic CapEx plans that we are having in addition to the cryogenic storage you talked about. And the second question is, do we see any competitive landscape change with the Vadhavan port 2030 time line? Anything that if at all, we are considering? Though it's a long-term shot, but again, from our strategic planning perspective.

[Girish Aggarwal, executive]

In terms of investments, I just want to be clear, the cryogenic tanks is an investment by Aegis Vopak and not by us. So just so that, that is clear, our investment is more on the water front, which is the jetty that we are building. So as of now, that's the stated expansion plans that we have. Apart from that, there are minor CapEx that continue within the port for a variety of reasons.

So apart from that, there is no further announced CapEx. In terms of Vadhavan, as you also said that this is a little bit of a long shot. But I would still argue that there is enough and more local cargo in the port of Pipavav. And hence, we stand on our own and that cargo cannot go anywhere. Also, as I think probably in other discussions, North India is landlocked. And between us and Mundra, we continue to be the cheapest interland connected ports vis-a-vis a Vadhavan or a Nhava Sheva.

[Manish Agnihotri, executive]

Thank you Mr. Patel. Mr. Parimal Mithani please go ahead with you question.

[Parimal Mithani, analyst]

If you can give an update on your liquid jetty. Are we on track for the -- as for the timeline? And secondly, in terms of Red Sea, do we see the worst is over?

[Girish Aggarwal, executive]

So on the first question, our go-live is expected Q3 next financial year for the liquid jetty. I couldn't hear your second question, Kunal.

[Parimal Mithani, analyst]

Sir, in terms of the Red Sea crisis, is it fair to assume that the worst is over in terms of the Red Sea or we still have an impact on them.

[Girish Aggarwal, executive]

No, no. So I mean the vessels are still not going through the Red Sea. Most of them are still doing the routing -- the through Africa under Africa, right.

[Manish Agnihotri, executive]

Okay. Thank you, Mr. Mithani. Mr. you Mr. Kunal Tokus please go ahead.

[Unknown Analyst]

Just one quick question. If you can talk about the models [indiscernible] for the port and if there has been any good initiatives from the regulatory side or if there has been any good situations or any hurdles encountered in the past year.

[Girish Aggarwal, executive]

Sorry, which update model. I Deepak?

[Unknown Analyst]

Rail and road.

[Manish Agnihotri, executive]

Sorry, can you repeat your question Kunal.

[Unknown Analyst]

My question was on the modal share of rail and road.

[Girish Aggarwal, executive]

Yes it's broadly similar. I mean we continue to have anywhere between 62% and 65% of our movement of cargo by rail, which is broadly stable. There is, in general, a 2% or 3% variation, but nothing fundamentally has changed.

[Manish Agnihotri, executive]

Thank you Kunal. Deepak please go ahead with you question.

[Deepak Maurya, analyst]

Sorry, I had a follow-up. You mentioned about some one-offs. I recall that in third quarter, you did mention something in the range of INR 117 million towards repairs and maintenance and onetime IT and employee benefits, I think, if I recall. Were there any one-offs during this quarter, the fourth quarter?

[Santosh Breed, executive]

No, there are no major one-offs in this quarter.

[Deepak Maurya, analyst]

Okay. Understood. And if you could also remind us if there are any one-off kind of events such as the dredging expenses, et cetera, which are due in the next financial year, that is in the fiscal year '26?

[Girish Aggarwal, executive]

No plans as of now, but we still continue to evaluate at least at this point in time. Post the monsoons, we will do the evaluation and then we'll come to a conclusion on maintenance. But we'll have to do that post monsoons.

[Manish Agnihotri, executive]

Thank you Deepak. Mr. Bhavesh Patel you have a question.

[Unknown Analyst]

Yes. So again, just checking on the Gujarat Maritime Board approval for our license renewal. I'm aware it's 2028 is the time frame. And you've been saying everything on track, but at the latest, when do we expect? And the second question is around the CapEx for liquid birth. Will we be doing any debt raising or if at all, it will be like internal accrual itself?

[Girish Aggarwal, executive]

So on liquid is all internal accruals. There is no debt raising that we are going to do. In terms of GMB, again I can again say the same thing. Everything is all okay. There are no red flags, but the final call time lines are decided by GMB. We will are in no position to give a time line.

[Manish Agnihotri, executive]

Thank you Mr. Patel. Mr. [ Rayaan Bhushan ] can you please go ahead with your question. Mr. Rayaan Bhushan.

[Unknown Analyst]

Sorry, am I audible?

[Manish Agnihotri, executive]

Yes, you are. Please go ahead.

[Unknown Analyst]

Okay. Perfect. I apologize if this question has already been asked before. I'm just looking for some data points. What are the realisations for containers, dry bulk, liquid and RORO for the full year of FY '24.

[Santosh Breed, executive]

The current realisations are INR 9,000 to INR 9,500 per TEU. For bulk -- dry bulk it is INR 550 to INR 650 per metric tonne. And for liquid, it is INR 600 to INR 650 per metric tone. For RORO, of course, we don't give any realization as of now. These are only 3 business streams that we share.

[Manish Agnihotri, executive]

Sorry, you are not audible if you're speaking, Mr. Bhushan.

[Unknown Analyst]

Can u hear me?

[Manish Agnihotri, executive]

Yes, now we can hear you.

[Unknown Analyst]

Okay that's it that's all I want to know. Thank you.

[Manish Agnihotri, executive]

Mr. Dheeraj Kriplani.

[Unknown Analyst]

So sir, what was our market share in FY '24 or FY '25, sorry?

[Girish Aggarwal, executive]

Overall, India market share is in the region of 4%.

[Unknown Analyst]

Okay. And sir in containers, if you could give only.

[Girish Aggarwal, executive]

Containers only I'm talking.

[Unknown Analyst]

Okay. And sir, last quarter, you were talking about concession extension. So any update on that?

[Girish Aggarwal, executive]

No further update, Mr. Kriplani. Essentially, we continue to be engaged with the GMB, and we await their decision. But as I said before, there's no red flags at least that I know of at this point in time.

[Manish Agnihotri, executive]

Okay. Anybody has any other follow-up questions? It doesn't seem to be the case. So thank you very much Yes, Mr. Kunal Tokus please go ahead.

[Unknown Analyst]

Just one question. Can I know what your dividend policy is? Is it to maintain a consistent absolute number? Or does it follow your profits?

[Girish Aggarwal, executive]

It follow our profits.

[Unknown Analyst]

And in case of, say, a heavy CapEx investment, is it possible your dividends will go down?

[Girish Aggarwal, executive]

It is possible.

[Manish Agnihotri, executive]

Thank you. Mr. [ Vipul Kumar Shah ]. Okay we may get Mr. Parimal Mithani.

[Parimal Mithani, analyst]

Sir, recently in one of the business dailies, the pink paper it was mentioned that Maersk plans to invest close to $5 billion in India. And it mentioned the [indiscernible] as well obtaining the approval from the maritime Board. Any further update on terms of what is the parents position on that sir if you can highlight?

[Girish Aggarwal, executive]

Yes. No, I won't be able to articulate on the overall $5 billion number that you've talked about. I think that's more for the parent to clarify. But from a GPPL perspective, there is an overall plan that you already have seen is a vision document of about $2 billion, subject to concession approval. We can only talk about details as we move forward post the concession extension.

[Manish Agnihotri, executive]

Thank you. Mr. Vipul Kumar Shah. I think we've lost connection with him. Mr. Rayaan Bhushan, please go ahead.

[Unknown Analyst]

Sorry, once again, just looking for some data points. Previously, I asked for the fiscal year of '24. Could you give me the realisations for the same categories, containers, dry bulk, liquid for Q4 FY '25 and full year FY '25?

[Santosh Breed, executive]

So sorry, the realization, which I mentioned to you was for Q4 FY '25. This is our current realisation, which was shared with you. As far as the full year is concerned, it was in the range of around INR 8,500 to INR 8,800 for container and dry bulk and liquid continue to be more or less in the same range.

[Unknown Analyst]

Okay. And do you have the same metrics for the fiscal year '24.

[Santosh Breed, executive]

Fiscal year '24, it was in the range of around INR 8,000 to INR 8,500 for container. And for liquid and dry bulk in the range of around INR 450 to INR 600.

[Manish Agnihotri, executive]

You have your hand raised. Mr. Shah, are you still connected? Mr. Shah's question is what type of revenue we will be getting from Aegis Vopak.

[Santosh Breed, executive]

So the revenue from Aegis Vopak is more toward our mining services what we provide them. So that's the revenue that we get.

[Manish Agnihotri, executive]

Do you have any other question, Mr. Shah? Mr. Mithani please go ahead.

[Parimal Mithani, analyst]

Yes, I just wanted to have a follow-up. Any other further hikes in services in current year, sir, as last quarter, I think we had increase of 2% to 3%. Any further hike this year, sir?

[Girish Aggarwal, executive]

Currently, there's no hike planned, but we will see how we move forward. But currently, there's no hike planned.

[Manish Agnihotri, executive]

Mr. Shah is asking, can you quantify the revenue from?

[Girish Aggarwal, executive]

That is not possible. That's more commercial information, Mr. Shah.

[Manish Agnihotri, executive]

Mr. Bharat Gupta please go ahead.

[Unknown Analyst]

Just a quick question. Sir, how much client addition we were able to do during the quarter? And also with respect to the maritime service, so was there any addition to our client book.

[Santosh Breed, executive]

In terms of maritime service, sorry, Mr. Gupta..

[Unknown Analyst]

Like ex of APM, like I think APM, we are dependent near about 30-odd percent. So other than APM, were we be able to onboard other clients as well?

[Girish Aggarwal, executive]

For this quarter, in the container business, all clients remain the same that were there in the previous quarter.

[Unknown Analyst]

And for the next year fiscal year, are you expecting something like in terms of addition or like in terms of approaching to the clients?

[Girish Aggarwal, executive]

Of course, I mean, there's an ongoing exercise, Mr. Gupta that we continue engaging with various customers at various levels. So if there is anything that fructifies, we will get to know.

[Unknown Analyst]

And sir, secondly, with respect to the Gorakhpur Kandla pipeline, so I think we will be commissioning with respect to Q3 FY '27. So is it Q3 FY '27 with respect to liquid jetty you referred for the addition one -- with respect to the pipeline, so the incremental value addition, which will happen will be primarily coming out from the new liquid jetty edition only.

[Girish Aggarwal, executive]

Again, our current liquid jetty has a capacity, which we've spoken about, right? So we can do anywhere between -- depending on what commodities we handle between 1.4 million to 1.6 million. And we are thereabouts, right? So yes, there is a clear Kandla Gorakh pipeline that is coming up, which will potentially have the incremental capacity expansion for us. But in this specific liquid jetty, our capacity is constrained to about 1.6 million at most. So that's what we can handle. So any new volume coming in can happen in 2 ways: one, new jetty, which is work in process or b, increase of throughput.

On the jetty and that can happen either through different commodities or types of liquids that we handle, b, for example, cryogenic tanks that have now been put up. So there's potential that the cryogenic tanks increases the throughput. But it is also important for you to understand that our current jetty cannot handle a fully loaded VLGC. So we only can handle partially loaded VLGCs. So that's also another constraint, which gets rectified as a new jetty comes in. So from our perspective, we only estimate an incremental improvement of 5% to 7% in our liquid volumes this financial year.

[Unknown Analyst]

Right, sir. And sir, last question, like we were reading about some news article related to the [indiscernible] of getting connected to the expressway that has been decided by Gujarat government. So do you foresee a substantial amount because currently, we are heavy on the rail side. Going forward, do you think the road side to pick up and particularly like we have a JV with the railways also. So do we see a drop with respect to the freight rates going forward as a move for loading the containers out through rail like how do you see it playing out?

[Girish Aggarwal, executive]

No, we don't see a drop in overall rail volume. I think rail will continue to be the absolute best connected connectivity to the interland, especially in the Northern India. With this new expressway that you talked about, which I'm unsure then it's getting started, but not within this fiscal year, will help us get more rail road cargo to us, which currently doesn't come to us and goes to competing ports because they are closer.

[Manish Agnihotri, executive]

We have a question from Mr. Bhavesh Patel.

[Girish Aggarwal, executive]

Yes, that is correct, Bhavesh ji, December 2026.

[Manish Agnihotri, executive]

Mr. Shah, you have your hand raised. Do you have any further questions? No. Anybody else has any follow-up questions? It doesn't seem to be the case. So thank you very much, everyone, for joining, and have a great day and a good weekend. Thank you.

[Girish Aggarwal, executive]

Thank you, everyone.

[Santosh Breed, executive]

Thank you.