U.S. Markets close in 1 hr 17 mins

Edited Transcript of CONCOR.NSE earnings conference call or presentation 10-Feb-20 5:30am GMT

Q3 2020 Container Corporation of India Ltd Earnings Call

New Delhi Feb 15, 2020 (Thomson StreetEvents) -- Edited Transcript of Container Corporation of India Ltd earnings conference call or presentation Monday, February 10, 2020 at 5:30:00am GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Vennelakanti Kalyana Rama

Container Corporation of India Limited - Chairman & MD

================================================================================

Conference Call Participants

================================================================================

* Achal Lohade

JM Financial Institutional Securities Limited, Research Division - VP

* Akshay Bhor;Premji Invest;Analyst

* Aman Madrecha;Concept Investwell Pvt. Ltd.;Analyst

* Ankit Panchmatia

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

* Ankita Bora Shah

Elara Capital, Inc. - Associate VP of Institutional Research

* Ankur Periwal

Axis Capital Limited, Research Division - VP of Media and Logistics

* Atul Tiwari

Citigroup Inc, Research Division - VP and Analyst

* Bharat Sheth

Quest Investment Advisors Pvt Ltd. - Head of Equities

* Bhavin Gandhi

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

* Bhoomika Nair

IDFC Securities Limited, Research Division - Security Analyst

* Deepak Krishnan

Goldman Sachs Group Inc., Research Division - Research Analyst

* Deepika Mundra

JP Morgan Chase & Co, Research Division - Research Analyst

* Krupashankar NJ

Spark Capital Advisors (India) Private Limited, Research Division - Analyst

* Prateek Kumar

Antique Stockbroking Ltd., Research Division - Analyst

* Priyankar Biswas

Nomura Securities Co. Ltd., Research Division - VP

* Shrinidhi Karlekar

HSBC, Research Division - Analyst

* Vikram Suryavanshi

PhillipCapital (India) Pvt. Ltd., Research Division - Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Ladies and gentlemen, good day, and welcome to the Container Corporation of India Limited Q3 FY '20 Conference Call hosted by IDFC Securities Limited (Operator Instructions) Please note that this conference is being recorded.

I now hand the conference over to Ms. Bhoomika Nair from IDFC Securities. Thank you, and over to you, ma'am.

--------------------------------------------------------------------------------

Bhoomika Nair, IDFC Securities Limited, Research Division - Security Analyst [2]

--------------------------------------------------------------------------------

Thanks, [Naisha]. On behalf of IDFC Securities, I would like to welcome you to the Q3 FY '20 earnings call of Container Corporation of India. The management is being represented by Mr. Kalyana Rama, our Managing Director. I now hand over to the floor to Mr. Rama for his initial remarks, post which we'll open up the floor for Q&A. Over to you, sir.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [3]

--------------------------------------------------------------------------------

So thank you, Bhoomika. So this quarter, maybe the -- one of the bad quarters of CONCOR for a long time because of the economic situation; both imports, exports down; the economy has not picked up.

The positive thing is that our margins, we could able to maintain. Our operating margin has -- is in -- in fact, we improve upon our operating margin.

So as I mentioned last time, we are not participating in some of the trade wars, and we are now going for a enabled margin business. So that's consideration, and that's giving us a result as far as bottom line is concerned.

And overall volumes are down. So the top line has come down, the profit in absolute numbers has come down compared to last quarter. So we are also keeping up with the [stats], when the economy will start looking up. Many external factors also affecting us, such as the virus in China. And so that, again, reduced volumes. So things are really not very good at this [time].

But otherwise, the lead increased and the volumes-wise overall in 9 months, if I look at -- whether it's minus by some 1.5% on the admin side and somewhere around 3.8% on the lending side. And 9 months, when we look at cumulatively, we are positive on operating income and positive on profit side. So hopefully, we will be able to maintain, as we were discussing, that -- the same levels as for the last financial year.

Otherwise, our new businesses that we are now looking at, they are taking some traction. The movement of bulk commodities in bulking containers. We already did some commercial runs in the frontlines and the customers are happy with the results. And also that, along with the container warehouse concept is picking up. In the next financial year, that will be definitely a positive outlook for us. So this quarter also, we are expecting to do some volumes in this segment.

Now cement, also this quarter, we are trying to start moving in bulk, so that will be an additional stream in the domestic sector, which we are going to pick up in this particular third -- fourth quarter.

So these are the -- some positive things we are working on. We -- various other things will depend on the general economic scenario of India.

Thank you.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) The first question is from the line of Akshay Bhor from Premji Invest.

--------------------------------------------------------------------------------

Akshay Bhor;Premji Invest;Analyst, [2]

--------------------------------------------------------------------------------

The first question is on DFC. And what kind of traction are you seeing in terms of customers wanting to move to the [post ACR]?

Are there any conversations that have already started that customers are showing an inclination that they want to move to, in 3, 6 months above the line?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [3]

--------------------------------------------------------------------------------

I believe this is also our customers showing inclination.

--------------------------------------------------------------------------------

Akshay Bhor;Premji Invest;Analyst, [4]

--------------------------------------------------------------------------------

Are customers showing inclination to move to rail? And are they already having a conversation with you with respect to moving to rail maybe 6 months down the line?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [5]

--------------------------------------------------------------------------------

Yes. We'll see once the DFC starts operating, definitely, the customers who are interested to come by and move on rail because of the traffic guarantee which will be available post-DFC operations.

Where there we can now talk of better expected profits in the beginning. Maybe overall [railroad is a] mature thing. It will be a guaranteed transit thing on the DFC. Regarding [maturity], that will be a change when the overall -- the rail transport mode post DFC.

--------------------------------------------------------------------------------

Akshay Bhor;Premji Invest;Analyst, [6]

--------------------------------------------------------------------------------

All right, sir. But would you want to highlight any sectors that have already shown any inclination or are they in conversation with you to see what the (inaudible) post DFC could be?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [7]

--------------------------------------------------------------------------------

See, last time, we did around 2 years back. We did some timetable trains running between Delhi and Mundra on the India Railways Network. And we could see a lot of traction coming in, most particularly the retail segment exports. The American retail chain stores, they were very much interested in using railcar business. They are normally use 100% by railroad, they don't move much of their cargo and then because of the transit guarantees which they will be looking at.

And when we ran this timetable trend, a lot of them switched onto rail. But we have -- because of these same problems, which maintaining these schedules are (inaudible) mainly a part of the problem because of the conditions. You could not really reduce. So they again allowed us to grow. So these people are ready to switch to railroad as soon as the DFC comes and there's a lot of -- a minimum guarantees at great returns. So there is interest.

--------------------------------------------------------------------------------

Akshay Bhor;Premji Invest;Analyst, [8]

--------------------------------------------------------------------------------

Got it, sir. Got it. Just second question in terms of your domestic margins for the quarter. Is there a reason why 3Q margins should be lower than 2Q? Or is there even any -- because if I go back in 3 years, FY '18 and '17 particular as well, the margins tend to be significantly lower than 1Q and 2Q.

So any reason why 3Q margins are lower? How should we read into these numbers?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [9]

--------------------------------------------------------------------------------

Our director, (inaudible), will answer your question.

--------------------------------------------------------------------------------

Unidentified Company Representative, [10]

--------------------------------------------------------------------------------

See, there is an impact of the economy while that traffic offering [is there]. So we have to pick up the traffic to retain, it adds to the existing traffic also to boost certain margins on certain segments, one. It makes sense.

And second thing is that overall of our margin has had some impact of -- because [postal] movement. Again there is a (inaudible) on the postal side. But we are not able to rely yet fully on post for costs. And that is some (inaudible) that has impacted demand.

--------------------------------------------------------------------------------

Operator [11]

--------------------------------------------------------------------------------

The next question is from the line of Atul Tiwari from Citigroup.

--------------------------------------------------------------------------------

Atul Tiwari, Citigroup Inc, Research Division - VP and Analyst [12]

--------------------------------------------------------------------------------

5

Yes. So my first question is more of a housekeeping question. So could you share (inaudible) domestic and total opportunity volumes and lead distances?

--------------------------------------------------------------------------------

Unidentified Company Representative, [13]

--------------------------------------------------------------------------------

Yes. Originating for (inaudible) for this Q3, and for (inaudible) 8 months, 16 and domestic is 7 0 5 6 2 BU and total is 5 5 5 3 7 8 BUs. And what else do you want?

--------------------------------------------------------------------------------

Atul Tiwari, Citigroup Inc, Research Division - VP and Analyst [14]

--------------------------------------------------------------------------------

Sir, the lead distances.

--------------------------------------------------------------------------------

Unidentified Company Representative, [15]

--------------------------------------------------------------------------------

The lead figures I have for the 9 months, for exhibitors, 721 kilometers; for domestic, it is 1,352 kilometers; and total is 785 kilometers.

--------------------------------------------------------------------------------

Atul Tiwari, Citigroup Inc, Research Division - VP and Analyst [16]

--------------------------------------------------------------------------------

Okay, sir. And for my second question. It is -- could you shed some light on how many of your current terminals are on the land leased from Indian Railways?

And what is the (inaudible) day exactly [connecting] the Indian Railways as of now?

And how is it likely to change given the government's divestment move? And how long it will take to change those [agreements]?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [17]

--------------------------------------------------------------------------------

See, these are 41 terminals are well aligned. Okay?

--------------------------------------------------------------------------------

Atul Tiwari, Citigroup Inc, Research Division - VP and Analyst [18]

--------------------------------------------------------------------------------

Okay, sir.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [19]

--------------------------------------------------------------------------------

And the agreement is that we pay a land license fee based on the containers active in our terminals.

[And – but] (inaudible) [No, no, no.] Divestment is not right for this conference call. It is beyond the scope of this conference. So let's not -- there is absolutely no clarity. Whatever clarity you want, you want -- it's already there in the media. So beyond that, we can't discuss any further on divestments.

--------------------------------------------------------------------------------

Atul Tiwari, Citigroup Inc, Research Division - VP and Analyst [20]

--------------------------------------------------------------------------------

Okay. But sir, this part of base pricing is likely to continue for FY '21 also or is it likely to change?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [21]

--------------------------------------------------------------------------------

As our of now it stands, [ARPU] basis, so if there is any change, we will definitely let you now.

--------------------------------------------------------------------------------

Operator [22]

--------------------------------------------------------------------------------

The next question is from the line of Deepika Mundra from JPMorgan.

--------------------------------------------------------------------------------

Deepika Mundra, JP Morgan Chase & Co, Research Division - Research Analyst [23]

--------------------------------------------------------------------------------

4

Sir, firstly, I just wanted to understand on the market share. You mentioned about the short lead distance getting fairly competitive.

What is the situation on the slightly longer lead distance segments?

And also, could we look at this now as a sustainable market share for the company?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [24]

--------------------------------------------------------------------------------

Yes. On the lead distance, share is more or less intact. We are not last there.

So there is some increase in the shorter lead movement on rail. There, we are not participating even though we got our own share there but our share is very less. So we are not participating with our negative margin size.

So now at this moment, our market share is around 68%, which used to be around 73% last year. So we lost around 5%to 6% market share because of these happenings.

But in the last 3 quarters, we are maintaining the same market share around 16 -- 17, 16. We are continuing that.

--------------------------------------------------------------------------------

Deepika Mundra, JP Morgan Chase & Co, Research Division - Research Analyst [25]

--------------------------------------------------------------------------------

Okay. And sir, regarding your diversification efforts. Could you guide us as to -- you used to maintain other types of cargo that you have been mentioning? When does that become a sizable portion that it starts reflecting in numbers?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [26]

--------------------------------------------------------------------------------

We are now -- we made a beginning in our moment of (inaudible). So we did already some commercial runs last quarter. And going forward, there is interest from the customers to do that. So this requires a lot of changes in the -- not only in our [first], but also infrastructure available with the customers at both ends. So this is already a slower evaluation process. It [can go] overnight, it will not be changed.

In Cement, also this quarter, we will be starting this moment. It will take, as next year, we could see some movement happening and some revenues coming out of it. I don't want to make a guess when it will have a significant figure, but next 5 years, it will be definitely in interesting journey in this particular thing. And from 5 years and sort of from now onwards, it can be one of the very important market segments of CONCOR.

--------------------------------------------------------------------------------

Operator [27]

--------------------------------------------------------------------------------

The next question is from the line of Achal Lohade from JM Financial.

--------------------------------------------------------------------------------

Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [28]

--------------------------------------------------------------------------------

Yes. My first question was on -- if I look at the operating expenses number, in the second quarter FY '20, it was about INR 225 crore, which has declined INR 260 crores. Is there any one-off item here you have written back or anything of that sort, sir?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [29]

--------------------------------------------------------------------------------

See, there is some adjustment in the (inaudible) because we paid something extraordinary second quarter. So we adjusted that in the third quarter.

--------------------------------------------------------------------------------

Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [30]

--------------------------------------------------------------------------------

Will you be able to quantify, sir, how much would that be?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [31]

--------------------------------------------------------------------------------

Around INR 45 crores.

--------------------------------------------------------------------------------

Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [32]

--------------------------------------------------------------------------------

Okay, And so then the second question was with respect to the new business what you talked about, cement, food, [trains].

I was under the impression that this was kind of on a restricted list by Indian Railways. So is there any change or it being moved in the form of containers, so there is no issue for us?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [33]

--------------------------------------------------------------------------------

There is -- I think your information is wrong. These things are not on the restricted list of Indian Railways [movement by] containers. Okay?

--------------------------------------------------------------------------------

Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [34]

--------------------------------------------------------------------------------

Okay. Sure, sure. And if you could help us with the market share at the ports -- different ports, sir?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [35]

--------------------------------------------------------------------------------

Yes, (inaudible), director will answer.

--------------------------------------------------------------------------------

Unidentified Company Representative, [36]

--------------------------------------------------------------------------------

Okay, (inaudible) 32.64%; Mundra, 31.26%; (inaudible) 15.16%; Chennai, 5.71%; (inaudible) 6.86%; Kolkata, 2.19%.

This makes approximately 94%. The rest all add up (inaudible).

--------------------------------------------------------------------------------

Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [37]

--------------------------------------------------------------------------------

And the market share at the 4 key ports, sir?

--------------------------------------------------------------------------------

Unidentified Company Representative, [38]

--------------------------------------------------------------------------------

Market share, yes at (inaudible) ratio is 17.32%. Out of that, we are adding 67% share.

And Mundra port, the rail share is 26.2% we are in 45% of that share.

And if (inaudible) rail coefficient is 68.73%. Out of that, we are running almost 51%.

--------------------------------------------------------------------------------

Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [39]

--------------------------------------------------------------------------------

And this is for third quarter or 9 months, sir? Just a clarification.

--------------------------------------------------------------------------------

Unidentified Company Representative, [40]

--------------------------------------------------------------------------------

This is 9 months.

--------------------------------------------------------------------------------

Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [41]

--------------------------------------------------------------------------------

9 months, got it.

--------------------------------------------------------------------------------

Operator [42]

--------------------------------------------------------------------------------

The next question is from the line of Prateek Kumar from Antique Stockbroking.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [43]

--------------------------------------------------------------------------------

Yes. [Just wanted to sales based on empty running] charges during the quarter.

--------------------------------------------------------------------------------

Unidentified Company Representative, [44]

--------------------------------------------------------------------------------

You want the (inaudible) charges and (inaudible) the...

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [45]

--------------------------------------------------------------------------------

For 9 months and the fixed segment

--------------------------------------------------------------------------------

Unidentified Company Representative, [46]

--------------------------------------------------------------------------------

For 9 months, for [EXIM], it was INR 83.28 crores; on domestic, INR 59.35 crores; total is INR 152.63 crores.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [47]

--------------------------------------------------------------------------------

On a quarter-on-quarter basis, there is a sharp decline in realizations on a reported basis. So anything to date there? So have you taken -- in domestic, as you mentioned...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [48]

--------------------------------------------------------------------------------

There's a sharp decline, my dear friend, there is no [real] sharp decline. But the sharp decline (inaudible)

--------------------------------------------------------------------------------

Unidentified Company Representative, [49]

--------------------------------------------------------------------------------

The (inaudible) is only 2.54% decline (inaudible)

--------------------------------------------------------------------------------

Unidentified Company Representative, [50]

--------------------------------------------------------------------------------

He is talking about [EXIM].

--------------------------------------------------------------------------------

Unidentified Company Representative, [51]

--------------------------------------------------------------------------------

You are talking about the SEIS?

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [52]

--------------------------------------------------------------------------------

No, I'm talking excluding SEIS, quarter-to-quarter decline not year-on-year. So quarter-to-quarter?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [53]

--------------------------------------------------------------------------------

There is no sharp decline. There is a [2.54%] decline quarter-on-quarter compared to last quarter. Because (inaudible) [there is] less volume, so there is a little increase in (inaudible) will be there. And the lower volumes have come down, empty volumes are gone. And very low margin viability.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [54]

--------------------------------------------------------------------------------

Right. And sir, regarding the terminals. What is -- I mean, how are we progressing for current year and next year?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [55]

--------------------------------------------------------------------------------

We've seen around 7 to 9 new terminals this year. So -- and that may be -- we are thinking -- driving down from terminal fee income from whatever that thing we are now working on. So we'll let you know once we finalize the things. But there will be new [-- there will be new -- 7 to 9 new terminals this year].

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [56]

--------------------------------------------------------------------------------

And maybe [clocking] like close to 90 terminals then? Or..

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [57]

--------------------------------------------------------------------------------

Yes, yes.

--------------------------------------------------------------------------------

Unidentified Company Representative, [58]

--------------------------------------------------------------------------------

We will be touching 90, maybe but then we will -- we are thinking of now closing down some more terminals and start new business. (inaudible) hundred is there, but it will be reoriented now (inaudible) that. We're working on that in some (inaudible) scenarios and then further improvement on our business.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [59]

--------------------------------------------------------------------------------

Right. Just last question on Capex. For the full year, we maintained INR 1,000 crore CapEx guidance?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [60]

--------------------------------------------------------------------------------

Yes, yes, yes. We completed capital INR 260 crores till now, but will be completed INR 1,000 crores by the end of the year. The things are [normally] in our pipeline.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [61]

--------------------------------------------------------------------------------

You have completed INR 260 crores till now?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [62]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Operator [63]

--------------------------------------------------------------------------------

The next question is from the line of Deepak Krishnan from Goldman Sachs.

--------------------------------------------------------------------------------

Deepak Krishnan, Goldman Sachs Group Inc., Research Division - Research Analyst [64]

--------------------------------------------------------------------------------

So this is Deepak from Goldman. So 2 questions. Firstly, sir, if you look at the Indian budget, what the government has budgeted for freight container revenue from Ex-Im is a 19% decline year-on-year.

Can you please explain if this is any reflection of what their expectations from CONCOR is? Because that number seem to be a pretty big decline. And it has been tough for us to comprehend why that is the case. Would you be able to throw some light on that number, please?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [65]

--------------------------------------------------------------------------------

Yes, there are answers we are (inaudible) so it's better if you do the analysis then maybe send me an e-mail.

--------------------------------------------------------------------------------

Deepak Krishnan, Goldman Sachs Group Inc., Research Division - Research Analyst [66]

--------------------------------------------------------------------------------

No sir, I need to understand it to do the analysis. Anyway. So my second question is...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [67]

--------------------------------------------------------------------------------

That decline is not -- 19% is now that -- I already mentioned in the 9 months over 9 months. Our handling volumes have come down there on (inaudible) per person.

--------------------------------------------------------------------------------

Deepak Krishnan, Goldman Sachs Group Inc., Research Division - Research Analyst [68]

--------------------------------------------------------------------------------

No, sir. This is for year FY '21. The government has budgeted INR 47 billion as (inaudible). Okay, anyways, I'll go to this next question.

Sir, somebody asked this question on cement transportation. And you mentioned that there was no restriction. Any reason why we've not been transporting cement because it's a pretty huge volume. Because we were also under the impression that there was some restriction of cement being moved in containers. So...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [69]

--------------------------------------------------------------------------------

So now let me first explain this. See, I'm talking about Cement movement in bulking containers now, okay? Cement movement in bulking containers is allowed. Cement movement in vats is also allowed but that is at a higher rate, where (inaudible) a viable proposition for cement companies to move it by containers and [that would be an advantage].

(inaudible) We can move in these variance which gives us very good solution to move it by containers. Cement is not restricted commodity for movement by containers.

I request all the friends to know this. It is not a restricted commodity. It is in a container class rate commodity, which is not viable if we do it in bad condition. But in bulk cement, it is a different rating and it is a viable proposition.

--------------------------------------------------------------------------------

Operator [70]

--------------------------------------------------------------------------------

The next question is from the line of Ankita Shah from Elara Capital.

--------------------------------------------------------------------------------

Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [71]

--------------------------------------------------------------------------------

Sir, my question was on the CapEx. I mean, given that there is a Y-o-Y decline in volumes and overall, the cargo growth is any (inaudible), it looks muted. So is there a need for INR 1,000 crores CapEx dividend? And what is...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [72]

--------------------------------------------------------------------------------

Quarter-on-quarter, CapEx is for the future. And the future, we are working on certain things which are definitely looking bright. As (inaudible) mentioned, the transportation of commodity in bulk using containers as warehouse, which will eliminate group transports and fire handling.

So these things are going to get traction next year and in the next 5 years. So the Capex what we are putting on, this for the future and the DFC also will be needing some high-capacity variance. So they are getting rolled now.

So these are the elements which actually the INR 1,000 crores is comparison of in this particular year. And going forward, in the future, CapEx will be based on these ideas.

--------------------------------------------------------------------------------

Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [73]

--------------------------------------------------------------------------------

Okay. And yes, so we are considering CapEx of nearly INR 1,000 crores by end of this year?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [74]

--------------------------------------------------------------------------------

Yes, yes.

--------------------------------------------------------------------------------

Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [75]

--------------------------------------------------------------------------------

Okay, and sir, any advance freight payments are we making during [this range of time] again for the next year?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [76]

--------------------------------------------------------------------------------

No, no. As of now, no. If anything happens we'll let you know.

--------------------------------------------------------------------------------

Operator [77]

--------------------------------------------------------------------------------

The next question is from the line of Vikram Suryavanshi from PhillipCapital.

--------------------------------------------------------------------------------

Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [78]

--------------------------------------------------------------------------------

Yes. Sir, can you share the number of (inaudible) train In this quarter?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [79]

--------------------------------------------------------------------------------

Yes (inaudible)

--------------------------------------------------------------------------------

Unidentified Company Representative, [80]

--------------------------------------------------------------------------------

Yes. So in this quarter, we have around 600 [double set] in trains.

--------------------------------------------------------------------------------

Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [81]

--------------------------------------------------------------------------------

And what was the [rail set] margin during this quarter and 9 months, if you can share?

--------------------------------------------------------------------------------

Unidentified Company Representative, [82]

--------------------------------------------------------------------------------

Yes, [rail set] margin in this quarter, it was 27.46%. And for 9 months, it has been 28.19%.

--------------------------------------------------------------------------------

Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [83]

--------------------------------------------------------------------------------

And sir, last question, about this cost of shipping.

How is the experience? Because looking at the domestic shipping number, we see some pressure on the profitability. So how is the outlook and we're also looking to expand it on East Coast. So how is that plan going on?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [84]

--------------------------------------------------------------------------------

(inaudible) because we are (inaudible) we are also now working on that. Yes, we are facing competition there, but we are participating in the competition trying to get our market share.

Our model is to come back to the [interland]. So we are working on those things.

And the East Coast, yes, we'll be starting very soon on East Coast also.

--------------------------------------------------------------------------------

Operator [85]

--------------------------------------------------------------------------------

The next question is from the line of Shrinidhi Karlekar from HSBC. .

--------------------------------------------------------------------------------

Shrinidhi Karlekar, HSBC, Research Division - Analyst [86]

--------------------------------------------------------------------------------

Sir, I just wanted to know on the pricing side. So if you remember last year, we had come up with the constant trade policy for entire FY '20. Just wanted to know is that pricing policy likely to continue? And are there any price increases that has already communicated to the market for entire FY '21?

--------------------------------------------------------------------------------

Unidentified Company Representative, [87]

--------------------------------------------------------------------------------

Yes, we have (inaudible) in FY '19/'20. This is only the third quarter we are doing now, isn't it?

So our policy continues to March 31. Before another financial year, we will be definitely coming out with our strategy for the next financial year.

--------------------------------------------------------------------------------

Operator [88]

--------------------------------------------------------------------------------

The next question is from the line of Aman Madrecha from Concept Investment.

--------------------------------------------------------------------------------

Aman Madrecha;Concept Investwell Pvt. Ltd.;Analyst, [89]

--------------------------------------------------------------------------------

Do you give you a number of Ex-Im domestic originating volumes or total volume?

And I want to understand, like how is that double stacking...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [90]

--------------------------------------------------------------------------------

(inaudible) You [are on] notice.

--------------------------------------------------------------------------------

Aman Madrecha;Concept Investwell Pvt. Ltd.;Analyst, [91]

--------------------------------------------------------------------------------

[Sir, I wanted to know the standing volume.]

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [92]

--------------------------------------------------------------------------------

Can I hear your next question?

--------------------------------------------------------------------------------

Aman Madrecha;Concept Investwell Pvt. Ltd.;Analyst, [93]

--------------------------------------------------------------------------------

My next question -- I will repeat again the question. I wanted to understand how double stacking helps you on the basis of (inaudible) I would like to really understand that.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [94]

--------------------------------------------------------------------------------

Yes, I think, in many times I explained this when we do double stack. So we can address the imbalance on any -- from one side.

So there will be a balanced traffic on one side. Like in import/export, India imports are more and exports are less. So we are well exporting. We do think we'll stack while importing will bring double stack. That will reduce empty running.

--------------------------------------------------------------------------------

Operator [95]

--------------------------------------------------------------------------------

Thank next question is from the line of Bharat Sheth from Quest Investments.

--------------------------------------------------------------------------------

Bharat Sheth, Quest Investment Advisors Pvt Ltd. - Head of Equities [96]

--------------------------------------------------------------------------------

Sir, on this -- again, I'm sorry, but this well cement. Now these will come, we are evaluating and who we already started. So we are moving these in container and that need a special kind of a container. Is that correct understanding?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [97]

--------------------------------------------------------------------------------

No, no, no. It is -- see, the pallet movement, what we are planning in containers regular general purpose containers. That is USP. We are not putting any special type of containers. So here we go for special type of stocks, there will be empty running involved in it, inherent empty running.

So we will be -- we are doing in (inaudible) containers. So that is our USP, so we can use these (inaudible) in normal [course].

--------------------------------------------------------------------------------

Bharat Sheth, Quest Investment Advisors Pvt Ltd. - Head of Equities [98]

--------------------------------------------------------------------------------

Okay. But earlier, there was a thought process that it may -- we will require a special kind of a container handling.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [99]

--------------------------------------------------------------------------------

We are -- we -- that was the normal idea. So we have -- now we'll work on that. So we are always working on this idea, and now we are successful. Even cement also, we completed our trades. Only thing is we have to start our commercial runs in that. Commercial trades, let me say that. So once we start, we are sure that we will be successful even in great demand movement also in bulk in containers, but in GP containers.

--------------------------------------------------------------------------------

Bharat Sheth, Quest Investment Advisors Pvt Ltd. - Head of Equities [100]

--------------------------------------------------------------------------------

. Okay. Okay. That's fine. Good. And sir, second thing, how that will improve our domestics [conduit] that we wanted to build? And, well, there is, I mean, freight coming from domestic market, I mean, with cement and food grain, so how that will really, I mean, empty running and in domestic side will reuse?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [101]

--------------------------------------------------------------------------------

No. This will be an additional business in domestic.

--------------------------------------------------------------------------------

Bharat Sheth, Quest Investment Advisors Pvt Ltd. - Head of Equities [102]

--------------------------------------------------------------------------------

All right.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [103]

--------------------------------------------------------------------------------

And also here, it will reduce the train. The commodity will reduce to intermediate warehousing and fire handlings. So there will be saving for the customer. So it's a win-win situation for the customer as well as for containers and the container and the warehouse we are offering.

--------------------------------------------------------------------------------

Bharat Sheth, Quest Investment Advisors Pvt Ltd. - Head of Equities [104]

--------------------------------------------------------------------------------

Okay. And sir, my last question on this MMLP that we were looking to start with the value-added service as well as last-mile connectivity and develop the -- we have developed. So what is the status on that? And where do we see -- I mean...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [105]

--------------------------------------------------------------------------------

The distribution logistic has not yet gotten traction. Still, things are under that execution stage, let me say, planning and execution stage. Last-mile thing, we are working on that maybe, but we will be trying to do -- our app is already implemented, and we are working on that. So these things will take time -- some time. Distribution logistics also, maybe next year, although we could see some traction in that. So the minorities, we are continuing with our commissioning, and this year, we'll be commissioning, I mean, our new 7, 8 and [Level 79] in MMLP.

--------------------------------------------------------------------------------

Bharat Sheth, Quest Investment Advisors Pvt Ltd. - Head of Equities [106]

--------------------------------------------------------------------------------

Okay. And sir, on DFC side that we were expecting that when (inaudible) to Palanpur, when Phase 2 start, I mean, so what is the status? Or do we expect any -- really that happens, how it will qualitatively improve our business?

--------------------------------------------------------------------------------

Unidentified Company Representative, [107]

--------------------------------------------------------------------------------

Yes. Actually, this DFC for Mundra, Pipavav, it will be ready by June of this year.

--------------------------------------------------------------------------------

Bharat Sheth, Quest Investment Advisors Pvt Ltd. - Head of Equities [108]

--------------------------------------------------------------------------------

Okay.

--------------------------------------------------------------------------------

Unidentified Company Representative, [109]

--------------------------------------------------------------------------------

So we are -- I'm hoping to have a full commissioning of DFC 9 of Mundra/Pipavav ports.

--------------------------------------------------------------------------------

Bharat Sheth, Quest Investment Advisors Pvt Ltd. - Head of Equities [110]

--------------------------------------------------------------------------------

Okay.

--------------------------------------------------------------------------------

Unidentified Company Representative, [111]

--------------------------------------------------------------------------------

And so now (inaudible) will be taking some more times.

--------------------------------------------------------------------------------

Bharat Sheth, Quest Investment Advisors Pvt Ltd. - Head of Equities [112]

--------------------------------------------------------------------------------

Okay. So once, I mean, that Pipavav and Mundra will start, so how that will change? I mean, now the -- are we -- the way we were saying, I mean, scheduling -- the right time scheduling so that we can...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [113]

--------------------------------------------------------------------------------

That's what we expect (inaudible), then let us see. The -- once it starts, there's a price corridor, so there will be no differential space on that. So there is every possibility of transit time assurances which we can offer because railways will be offering that. That will change the way the rail logistics are looked at.

--------------------------------------------------------------------------------

Bharat Sheth, Quest Investment Advisors Pvt Ltd. - Head of Equities [114]

--------------------------------------------------------------------------------

Okay. And any thought process on haulage rate side from the railway that...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [115]

--------------------------------------------------------------------------------

Already, that has been clarified. It is fair. There will be no change in the haulage policy within IR and DFCCIL.

--------------------------------------------------------------------------------

Operator [116]

--------------------------------------------------------------------------------

The next question is from the line of Bhavin Gandhi from B&K Securities.

--------------------------------------------------------------------------------

Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [117]

--------------------------------------------------------------------------------

Sir, firstly, on this double-stacking train, I think from a peak number that we had reported sometime last year of 800 trains, they had come off quite significantly to 600. So could you explain what is happening, okay?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [118]

--------------------------------------------------------------------------------

While imports are coming down, the volumes are coming down.

--------------------------------------------------------------------------------

Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [119]

--------------------------------------------------------------------------------

So is this volume led and there is nothing else that's changed?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [120]

--------------------------------------------------------------------------------

All double stack is volume led, let's say, because when there is imbalance, then we can pick up, okay? Now the exports decline is around 2%. Imports decline is around 9%. So when the imbalance is less, so obviously double stack will come down.

--------------------------------------------------------------------------------

Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [121]

--------------------------------------------------------------------------------

Sure. Very good. Then also, could you share the tonnage number separately for EXIM and domestic, the tons handled?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [122]

--------------------------------------------------------------------------------

[The EXIM].

--------------------------------------------------------------------------------

Unidentified Company Representative, [123]

--------------------------------------------------------------------------------

For domestic in the financial year, so this is for 9 months, 5.61 million tonnes. And for EXIM, it is 25.27 million tonnes. Total is 30.88 million tonnes.

--------------------------------------------------------------------------------

Operator [124]

--------------------------------------------------------------------------------

The next question is from the line of Aditya Mongia from Kotak Securities. (Operator Instructions). The next question is from the line of Prateek Kumar from Antique Stockbroking.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [125]

--------------------------------------------------------------------------------

Firstly, on -- is there any update from DGFT on SEIS income?

--------------------------------------------------------------------------------

Unidentified Company Representative, [126]

--------------------------------------------------------------------------------

Yes. One moment.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [127]

--------------------------------------------------------------------------------

Yes. So it's INR 182 crores that was allowed by them out of our total claim of nearly INR 1,000 crores. That money will be coming within, we'll just have to see there, as has been indicated by them. And once they officially refuse our claims for rail (inaudible), then we will go in for our -- our solution with them. At first we will make an appeal, and this appeal goes up to whatever minister. It will then -- then we will see how it comes out. And so that is around what, INR 853 crores that we have kept as (inaudible) liability. So INR 182 crores, we are going to [make] very soon.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [128]

--------------------------------------------------------------------------------

Right. And sir, any specific reason for the cut in dividend versus previous year's? Last year, we didn't give an interim dividend. But this year, the interim dividend is slightly higher than the...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [129]

--------------------------------------------------------------------------------

Last year -- interim dividend last year, we gave one time. But otherwise, last few years, we do one interim dividend. So this time also, we again declared interim dividend.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [130]

--------------------------------------------------------------------------------

So sir...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [131]

--------------------------------------------------------------------------------

In fact, 1 year back, there was interim dividend declared on this.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [132]

--------------------------------------------------------------------------------

But the run rate is expected to be similar like the way, INR 0.75? Or it would have been...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [133]

--------------------------------------------------------------------------------

That question is (inaudible). The profit has been [dented] because of SEIS. We accounted for SEIS. So that's why the dividend is less this quarter, the interim dividend, whatever you have. Let's see. Once we complete our fourth quarter, then we will come out [with also that].

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [134]

--------------------------------------------------------------------------------

Right. And just one question on locomotive ordering. So we had large CapEx related to -- on new orders. Sir, when is that...

--------------------------------------------------------------------------------

Unidentified Company Representative, [135]

--------------------------------------------------------------------------------

(inaudible)?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [136]

--------------------------------------------------------------------------------

Locomotives?

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [137]

--------------------------------------------------------------------------------

Not locomotives. Trains, rigs, I mean.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [138]

--------------------------------------------------------------------------------

Rigs? Yes. We are ordering. We -- the -- or India is going up. This quarter, we added one new rig. So now our rigs are 311 of DFC and the (inaudible) rig count, 311.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [139]

--------------------------------------------------------------------------------

The ones which are suited for DFC and the advanced ones, so are they expected to hit before June when the DFC starts?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [140]

--------------------------------------------------------------------------------

Yes. Yes. definitely I think they'll be coming up in this month.

--------------------------------------------------------------------------------

Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [141]

--------------------------------------------------------------------------------

And that's part of the INR 1,000 crore CapEx which you are doing this year and the pending CapEx which you have to do?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [142]

--------------------------------------------------------------------------------

Yes. It will be a part of the INR 1,000 crore CapEx.

--------------------------------------------------------------------------------

Operator [143]

--------------------------------------------------------------------------------

The next question is from the line of Achal Lohade from JM Financial.

--------------------------------------------------------------------------------

Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [144]

--------------------------------------------------------------------------------

I just wanted to check with respect to DFC. In terms of the benefit, would you be able to give some idea as to -- or would we see a substantial improvement in terms of profitability or cost reduction? And if possible, if you could quantify?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [145]

--------------------------------------------------------------------------------

I don't want to do that work right now. The DFC will bring in a transit assurance they do not bring to rail logistics. So that will be a game changer as well as the transportation by railway is concerned. So it will be a big boost for this sector. So the remaining things will be a consequential thing, so let's start there. Then we will give you -- once we develop that, we will let you know what will be the financial side of it.

--------------------------------------------------------------------------------

Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [146]

--------------------------------------------------------------------------------

Sure. And just a clarification. Last time, you had mentioned about 45 -- 40%, 45% of volume actually originates or is actually for this particular route corridor. Is that right, sir?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [147]

--------------------------------------------------------------------------------

Yes. Yes.

--------------------------------------------------------------------------------

Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [148]

--------------------------------------------------------------------------------

And just if you could indicate with respect to the Western Coast what has been the growth at the aggregate level for the industry for the container train operator.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [149]

--------------------------------------------------------------------------------

I don't have those figures right now.

--------------------------------------------------------------------------------

Operator [150]

--------------------------------------------------------------------------------

The next question is from the line of Priyankar Biswas from Nomura.

--------------------------------------------------------------------------------

Priyankar Biswas, Nomura Securities Co. Ltd., Research Division - VP [151]

--------------------------------------------------------------------------------

Sir, my question is regarding a news report that we had recently read as well as on CONCOR Twitter handle regarding the development of an Integrated Logistics Manufacturing Zone in Machilipatnam Port in AP. So can you shed some color on that? Like what can be the capital commitments and some timelines on that?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [152]

--------------------------------------------------------------------------------

There's a [MoU volume] we signed with AP government. And recently again, we had some meetings with AP government and this has been reiterated. So we are waiting for the Machilipatnam Port to be developed. Without the port, the ILMZ will not be a real beneficial thing there. So it will be concurrent development along with Machilipatnam Port. Machilipatnam Port is supposed to go with development, I think, last year, but then something happened and it [just] start. So we are waiting for that. ILMZ contract is an industrial park with 3 dimensions.

--------------------------------------------------------------------------------

Priyankar Biswas, Nomura Securities Co. Ltd., Research Division - VP [153]

--------------------------------------------------------------------------------

Sir essentially, anything on our side will only start once the port comes under development? So nothing before that?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [154]

--------------------------------------------------------------------------------

Absolutely. Absolutely. We will do concurrent development with the port.

--------------------------------------------------------------------------------

Priyankar Biswas, Nomura Securities Co. Ltd., Research Division - VP [155]

--------------------------------------------------------------------------------

And sir, one more question on the domestic volumes. Is like -- as you had mentioned, that, of course, there you were not able to recover the full cost from the coastal. But other than that, was there any -- maybe some big incentives or rebates of past quarters that would have been accounted in this quarter because of which your margin has come down?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [156]

--------------------------------------------------------------------------------

No. There was a margin. We maintained our margin. Actually, coastal has slightly dipped our margins because coastal, intense price war is going on as of now because the going is tough. The people are trying to give a lot of discounts. So in one center where we are competing with the market and trying to establish our presence there is coastal because recently, we started a year back. We want to establish ourselves. We are now there. We have been waiting for some discounts. And then in the rail business, we are very clear about our -- the market, what we choose and the sectors where we want out.

--------------------------------------------------------------------------------

Priyankar Biswas, Nomura Securities Co. Ltd., Research Division - VP [157]

--------------------------------------------------------------------------------

Okay. So excluding the coastal, maybe the profitability would be a slightly...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [158]

--------------------------------------------------------------------------------

In coastal, we have maintained our margins, okay?

--------------------------------------------------------------------------------

Operator [159]

--------------------------------------------------------------------------------

The next question is from the line of Krupashankar from Spark Capital.

--------------------------------------------------------------------------------

Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [160]

--------------------------------------------------------------------------------

My first question was on the first season of DFC. So given that the tender is expected from June '20, can CONCOR provide its first (inaudible) since -- post the commissioning of Rajasthan? Or is it expected to be after the full completion of it?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [161]

--------------------------------------------------------------------------------

Yes. Krupashankar, I think I mentioned this in my earlier comments also. We are ready even today. So if first phase (inaudible) Kandla, then the first (inaudible) will go to (inaudible). We're absolutely ready with all our systems to run our clients and DFC and as intended to run on DFC.

--------------------------------------------------------------------------------

Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [162]

--------------------------------------------------------------------------------

I understand that. Sir -- but on the scheduled timetable train services, because it's assumed that -- I mean, something that -- volumes would come in from Rewari and Dadri, and it has to get tranches at Rewari. And given that they will be conditioned on these specific sectors, is there a timeline provided on, first, timetable service to...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [163]

--------------------------------------------------------------------------------

Actually, this is timetable services in October 2017 to January 2018. So we've got our experience of running and they would run from Dadri and (inaudible) into Khatuwas and from Khatuwas (inaudible). So what is your question?

--------------------------------------------------------------------------------

Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [164]

--------------------------------------------------------------------------------

So if DFC is going to be -- Phase 1 is going to be commissioned on June '20. Do we already have a timetable service, let's say, to [Mundra and Pipavav]?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [165]

--------------------------------------------------------------------------------

That doesn't require real preparation for establishing [a trend. They will trend. Well, that's what I'm trying to impose on you]. As we already did this, and we know what part we have to choose, it is readily available. We did this thing, and yes we will again restart those services, what we did in October 2017.

--------------------------------------------------------------------------------

Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [166]

--------------------------------------------------------------------------------

I understand. My second question was on the EXIM mix in the northern hinterland markets. So what would be the current proportion of export-import ratio, especially in the northern hinterland side?

--------------------------------------------------------------------------------

Unidentified Company Representative, [167]

--------------------------------------------------------------------------------

We don't have with us at present. We'll get that to you.

--------------------------------------------------------------------------------

Unidentified Company Representative, [168]

--------------------------------------------------------------------------------

What is that?

--------------------------------------------------------------------------------

Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [169]

--------------------------------------------------------------------------------

The broad numbers in EXIM, sir.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [170]

--------------------------------------------------------------------------------

No. No, we don't have those figures right now. But imports are more than exports.

--------------------------------------------------------------------------------

Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [171]

--------------------------------------------------------------------------------

All right, sir. Okay. So the (inaudible) seen is what I was coming to. Or -- anyway -- as imports have to actually be higher than exports in the hinterland market. So over the last 1 or 2 quarters, have you seen a further widening of gap?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [172]

--------------------------------------------------------------------------------

Well, now in the Indian market, imports have come down compared to exports. The economics -- because again, it's because of India. Import is down by around 9% compared to exports, down by 2% in the corresponding figures in the last financial year.

--------------------------------------------------------------------------------

Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [173]

--------------------------------------------------------------------------------

Got it, sir. So technically, the -- and fueling costs have come down because of this, right?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [174]

--------------------------------------------------------------------------------

Fueling costs have come down a little bit.

--------------------------------------------------------------------------------

Operator [175]

--------------------------------------------------------------------------------

The next question is from the line of Ankit Panchmatia from B&K Securities.

--------------------------------------------------------------------------------

Ankit Panchmatia, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [176]

--------------------------------------------------------------------------------

Sir, I wanted to know your view on how [big] businesses would be related to warehousing. We have been seeing some increase on that business. I wanted to...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [177]

--------------------------------------------------------------------------------

Oh, what's that? Warehousing?

--------------------------------------------------------------------------------

Ankit Panchmatia, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [178]

--------------------------------------------------------------------------------

Sir, I wanted to know how big business could be? Or what potentially it has coming FY '22 maybe. So what is your view on this business?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [179]

--------------------------------------------------------------------------------

Which business? Which business?

--------------------------------------------------------------------------------

Ankit Panchmatia, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [180]

--------------------------------------------------------------------------------

Warehousing business.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [181]

--------------------------------------------------------------------------------

Warehousing?

--------------------------------------------------------------------------------

Ankit Panchmatia, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [182]

--------------------------------------------------------------------------------

Yes, sir.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [183]

--------------------------------------------------------------------------------

Yes, warehousing business. We -- okay, what -- we already said that we are looking at developing 20 distribution [nodes]. The warehousing capacity is (technical difficulty) square feet there. That program is on. And in addition to that, we are now trying to promote container warehouse for these commodities, which will be transported in bulk containers. So these 2 things put together, there's a good potential in warehousing [business].

--------------------------------------------------------------------------------

Ankit Panchmatia, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [184]

--------------------------------------------------------------------------------

Okay. Okay. And then any update on the arbitration case [Gary]? How are we approaching that? Any timings to that?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [185]

--------------------------------------------------------------------------------

Well, which one? Arbitration with the?

--------------------------------------------------------------------------------

Ankit Panchmatia, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [186]

--------------------------------------------------------------------------------

(inaudible).

--------------------------------------------------------------------------------

Unidentified Company Representative, [187]

--------------------------------------------------------------------------------

(inaudible).

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [188]

--------------------------------------------------------------------------------

Yes. This is a one-off case. So this is beyond the conference call. So this -- once they -- anything comes, we will let you know.

--------------------------------------------------------------------------------

Operator [189]

--------------------------------------------------------------------------------

(Operator Instructions) The next question is from the line of Vikram Suryavanshi from PhillipCapital.

--------------------------------------------------------------------------------

Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [190]

--------------------------------------------------------------------------------

I just want a clarification on deferred tax for this quarter. Provisioning seems to be much higher, particularly the deferred tax on (inaudible) side. So can you give a specific reason for this quarter tax. Second, for full year (inaudible) tax rate.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [191]

--------------------------------------------------------------------------------

Our director's around you; you're with the right question. So yes, there was a CapEx benefit that we're getting under 35AD, right? So we have chosen to be in a new regime, where our effective tax rate comes out to be 25-point something compared to our 34-point something that (inaudible). So since September, we had performed by our old system of taxation. So as you can see in this quarter, there is effectively INR 53 crores of -- more deferred tax liability, which has impacted my tax also. But this is one-off. In the Q4, we will have a regular benefit of a low tax regime and things will be at a normal size. And so if I'm ready and if you want, I mean you want [IA], [FCIA], the benefits that we were earlier getting, we have decided to forego it and go to the new regime, which is going to be profitable for us.

--------------------------------------------------------------------------------

Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [192]

--------------------------------------------------------------------------------

Okay. So this will get to -- you'll be around like 25%, in that range?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [193]

--------------------------------------------------------------------------------

Absolutely actually. Therefore, from Q4 onwards, there will not be any adjustment for deferred tax which we have enjoyed in the last quarter.

--------------------------------------------------------------------------------

Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [194]

--------------------------------------------------------------------------------

Okay. Yes, that was helpful. Just on this [indiscernible empty running cost [MP running cost for EXIM growth]? Can you repeat if possible?

--------------------------------------------------------------------------------

Unidentified Company Representative, [195]

--------------------------------------------------------------------------------

MP running cost for 9 months for EXIM has been [INR 83.28] crores.

--------------------------------------------------------------------------------

Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [196]

--------------------------------------------------------------------------------

[INR 83.28 crores. And domestic was] 59.3%.

--------------------------------------------------------------------------------

Unidentified Company Representative, [197]

--------------------------------------------------------------------------------

59.35%.

--------------------------------------------------------------------------------

Operator [198]

--------------------------------------------------------------------------------

The next question is from the line of [Harri Katura] from [Uni Mutual Fund].

--------------------------------------------------------------------------------

Unidentified Analyst, [199]

--------------------------------------------------------------------------------

I wanted net cash position as of 31st December 2019, please.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [200]

--------------------------------------------------------------------------------

Net cash position?

--------------------------------------------------------------------------------

Unidentified Analyst, [201]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [202]

--------------------------------------------------------------------------------

It is around INR 2,800 crores that we had.

--------------------------------------------------------------------------------

Operator [203]

--------------------------------------------------------------------------------

(Operator Instructions) The next question is from the line of Ankur Periwal from Axis Capital.

--------------------------------------------------------------------------------

Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [204]

--------------------------------------------------------------------------------

I'm sorry I joined the call a bit late, so pardon me if I'm repeating any of the questions. First question, you had mentioned that the lead distances overall have been stable on a quarter-on-quarter basis. But if I look at the realization, there has been a dip. While probably we should not compare quarter-on-quarter, but there has been a significant decline Q-on-Q. So if you can put some light on that.

--------------------------------------------------------------------------------

Unidentified Company Representative, [205]

--------------------------------------------------------------------------------

You are comparing Q3 to Q2?

--------------------------------------------------------------------------------

Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [206]

--------------------------------------------------------------------------------

I'm comparing -- exactly, Q3 of this year versus Q2 of this year. So 15,400-odd, declining to 15,300 roughly because you did not take the...

--------------------------------------------------------------------------------

Unidentified Company Representative, [207]

--------------------------------------------------------------------------------

You must be seeing that the volume has also come down. There is a basic reason that would be. Because volume, you must be seeing, is coming down from Q2 to Q3. That is the basic reason of net realization.

--------------------------------------------------------------------------------

Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [208]

--------------------------------------------------------------------------------

Sir, but my sense was that even when volume is coming down, your lead distance would have determined the realization, higher lead...

--------------------------------------------------------------------------------

Unidentified Company Representative, [209]

--------------------------------------------------------------------------------

We discussed it's also come down from overall lead of [795] kilometers in Q2. In Q3, It's [784] kilometers.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [210]

--------------------------------------------------------------------------------

Our lead times have gone up (inaudible).

--------------------------------------------------------------------------------

Unidentified Company Representative, [211]

--------------------------------------------------------------------------------

Yes. And so they...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [212]

--------------------------------------------------------------------------------

Even volume is coming down, there is a little more empty container running we'll pick up. It will not -- it will reflect in your empty running results. But whatever we mentioned as empty running is empty flat running. But there will be some -- empty container running will be going up. So the empty container running is definitely not of the same margins as low running.

--------------------------------------------------------------------------------

Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [213]

--------------------------------------------------------------------------------

Sure, sure. Due to, well, the realization as well as the margins, although we are still on a -- the margin appetite is...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [214]

--------------------------------------------------------------------------------

Actually we maintained because of various things. But overall, realization per container will keep coming down because of empty running, empty container running.

--------------------------------------------------------------------------------

Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [215]

--------------------------------------------------------------------------------

Sure. That's helpful. And the -- so adjusted for this because of the higher proportion of empty running, there is no change in the absolute realization that we have been charging, and this number is expected to continue the same maybe for the next year as well. Is that right?

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [216]

--------------------------------------------------------------------------------

Absolutely. We are not changing any of our rates. We already declared price stability, and we are maintaining that. So we are in the same financial year, and our policy is still continuing. So we are not changing any of our prices, and we are reducing (inaudible).

--------------------------------------------------------------------------------

Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [217]

--------------------------------------------------------------------------------

Fair enough, sir. And any export-specific divergence or volume traction you are seeing, maybe Gujarat Port performing better or JNPT losing some bit of market share there? Or the decline in volumes is a fair bit sort of similar across all the...

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [218]

--------------------------------------------------------------------------------

Yes. Port volumes have picked up a little bit compared to the last year because of maybe some transshipment handling, they're doing some other things. But in rail share, our margin -- our share in the long-lead transport is fair, more or less. But in short leads, we are not participating in price wars. There's some short-lead traffic moving on rail where there are no margins. There's no margin, we are not doing.

--------------------------------------------------------------------------------

Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [219]

--------------------------------------------------------------------------------

Sure. And sir, lastly if you can help with the tonnage volumes for the 9 months versus [my] numbers.

--------------------------------------------------------------------------------

Unidentified Company Representative, [220]

--------------------------------------------------------------------------------

The major EXIM tonnage for 9 months is 25.27 million tonnes; domestic, 5.61 million tonnes; total is 30.88 million tonnes.

--------------------------------------------------------------------------------

Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [221]

--------------------------------------------------------------------------------

Sure. And sir, if you can help with the Y-on-Y comparable number as well.

--------------------------------------------------------------------------------

Unidentified Company Representative, [222]

--------------------------------------------------------------------------------

EXIM last year was at 26.77 million; domestic, 5.76 million; total, 32.53 million.

--------------------------------------------------------------------------------

Operator [223]

--------------------------------------------------------------------------------

Sir, we don't have anyone in the queue.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [224]

--------------------------------------------------------------------------------

Okay. Then we'll close the conference call.

--------------------------------------------------------------------------------

Operator [225]

--------------------------------------------------------------------------------

As there are no further questions, I would now like to hand the conference over to Ms. Bhoomika Nair for closing comments.

--------------------------------------------------------------------------------

Bhoomika Nair, IDFC Securities Limited, Research Division - Security Analyst [226]

--------------------------------------------------------------------------------

Yes. On behalf of IDFC Securities, I would like to thank all the participants for being on the call and for the management for giving us an opportunity to host the call. Thank you very much, sir, for answering all the queries.

--------------------------------------------------------------------------------

Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [227]

--------------------------------------------------------------------------------

Thank you, [everyone].

--------------------------------------------------------------------------------

Operator [228]

--------------------------------------------------------------------------------

Thank you. On behalf of IDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.