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Edited Transcript of CONCOR.NSE earnings conference call or presentation 1-Aug-19 5:30am GMT

Q1 2020 Container Corporation of India Ltd Earnings Call

New Delhi Oct 4, 2019 (Thomson StreetEvents) -- Edited Transcript of Container Corporation of India Ltd earnings conference call or presentation Thursday, August 1, 2019 at 5:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Manoj Kumar Dubey

Container Corporation of India Limited - Director of Finance, CFO & Director

* Sanjay Swarup

Container Corporation of India Limited - Director of International Marketing & Operations and Whole Time Director

* Vennelakanti Kalyana Rama

Container Corporation of India Limited - Chairman & MD

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Conference Call Participants

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* Abhilasha Satale

Dalal & Broacha Stock Broking Pvt Ltd., Research Division - Research Analyst

* Achal Lohade

JM Financial Institutional Securities Limited, Research Division - VP

* Aditya S. Makharia

HDFC Securities Limited, Research Division - 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

* Bhavin Gandhi

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

* Bhoomika Nair

IDFC Securities Limited, Research Division - Security Analyst

* Chandrasekhar Sridhar;Fidelity International;Investment Analyst

* Deepika Mundra

JP Morgan Chase & Co, Research Division - Research Analyst

* Dheeresh Pathak

Goldman Sachs Asset Management (India) Private Limited - Executive Director

* Girish Raj Sankunny

Quest Investment Advisors Pvt Ltd. - Research Analyst

* Krupashankar NJ

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

* Prateek Kumar

Antique Stockbroking Ltd., Research Division - Analyst

* Rakesh Vyas

HDFC Asset Management Company Limited - Dedicated Fund Manager for Overseas Investments

* Shivangi Agarwal;ICICI Prudential AMC;Equity Research Analyst

* Shrinidhi Karlekar

HSBC, Research Division - Analyst

* Vikram Suryavanshi

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

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Presentation

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Operator [1]

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Good morning, ladies and gentlemen. Welcome to the Container Corporation of India Limited Q1 FY 2019-'20 Earnings 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.

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

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Thank you, Susan. Good morning, everyone. On behalf of IDFC Securities, I would like to welcome you to the Q1 FY '20 Earnings Call of Container Corporation. The management today is being represented by Mr. Kalyana Rama, Managing Director. I now hand over the call to Mr. Rama for his initial remarks, post which we'll open up the floor for Q&A. Over to you, sir.

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

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Yes. Thank you. Good morning to all of you. So here I am with all my Directors: Sanjay Swarup, P.K. Agrawal, Rahul Mithal and Manoj Dubey. So the quarter numbers, financial numbers, I think we have come out with good numbers. Even though the volumes are a little subdued because of the import-export scenario, which is not very good, our volume growth is not there. We are, compared to the Q1 of the last financial year, 1% less in our handling figures, and alternating we are around 5.6% less. But -- and when I look at the financial numbers, comparing apples with apples, without taking the SEIS impact, the operating income has gone up by 9.14% and the EBITDA has gone up by 18%. And coming down to PAT, it is 10% more.

The operating margin has gone up by around 300-odd basis points because the other income what we started last year some of the measures -- revenue measures are giving good results for us. Even though there is a strain on rail freight margin, we could maintain because a lot of empty repositioning happening in this -- happened in this quarter. Because of the less exports demand, the empty started moving to our stores. So our rail freight margins showed a slight decline compared to the last Q1 to 28.16% from 28.27%. Overall, things are not that bad because we have strained -- because of the economy strain, we also felt the strain on our operations. But financially, I think we could come out with encouraging numbers.

Thank you. So now, Bhoomika, we can start our question-and-answer session.

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Questions and Answers

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Operator [1]

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(Operator Instructions)

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

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Atul Tiwari, Citigroup Inc, Research Division - VP and Analyst [2]

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Sir, can I get the originating volume numbers, EXIM and domestic? And the lead distances, EXIM, domestic and total for the quarter?

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

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Yes. Sanjay?

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Sanjay Swarup, Container Corporation of India Limited - Director of International Marketing & Operations and Whole Time Director [4]

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Our exiting volume for EXIM was 491,944 TEU and domestic was 66,998 TEU and total was 558,942 TEU.

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Atul Tiwari, Citigroup Inc, Research Division - VP and Analyst [5]

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Okay, sir. Lead distances?

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Sanjay Swarup, Container Corporation of India Limited - Director of International Marketing & Operations and Whole Time Director [6]

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And with lead distances -- yes, lead in EXIM was 712 kilometers; domestic, it is 1,366 kilometers; and overall is 777 kilometers.

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Atul Tiwari, Citigroup Inc, Research Division - VP and Analyst [7]

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Okay. And sir, what was the gross debt and the cash and cash equivalents on the balance sheet at the end of first quarter?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [8]

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See we cleared our debt in 2 months' time. So end of the quarter, there is no debt and remaining figures, our DF will give you. Manoj?

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [9]

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So this working capital of INR 700 crores that we raised, we cleared on 31st of May, 1 month ahead of our normal schedule that was planned. So as on date, there is no debt on the company of any kind. And in fact, we have added INR 300 crores more as FD in this first quarter.

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Atul Tiwari, Citigroup Inc, Research Division - VP and Analyst [10]

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Okay. So sir, the cash and cash equivalent amount, how much would be there on the balance sheet? The cash and current investments, and FDs, roughly?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [11]

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INR 1,000 crores plus.

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

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INR 1,000 crores?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [13]

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Yes. INR 1,065 crores something.

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Operator [14]

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

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Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [15]

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Sir, given the overall slowdown in the economy, are we confident of maintaining 10% to 12% of growth that we had envisaged earlier?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [16]

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So it all depends on, Ankita, the economic growth which we are going to get in this year. So if there is economic growth around 6.5% to 7%, what the government is projecting after the budget, so I'm sure we will be able to maintain our guidance figures.

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Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [17]

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Okay. Okay. And sir, update on the coastal and distribution business from the earlier quarter?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [18]

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Yes. So you want numbers or you want the general scenario?

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Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [19]

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Sir, general scenario as well as if you...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [20]

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General scenario is, at Coastal, we are doing -- those 2 services on West Coast have picked up very well. Over last -- I think in the Q1 also, 2, 3 voyages. The last 2, 3 voyages, we did full. 700 TEU vessel is going with complete DWT loading of 700 TEUs. So it's very encouraging. And in the Distribution Logistics business, the center has opened up. Now the procedures are being set. That -- there we are working on trying to bring even FTWZ also. So the efforts are going on. So this quarter, it will start functioning. And we will be doing in this year 4 more vendors. So the process is on. So the tenders will be out. And by the end of this year, there will be 5 distribution logistic centers.

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Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [21]

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5 by end of -- so how much do -- in our estimate, both these business could contribute this year and next year?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [22]

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In Coastal, there will be -- in the top line, there will be a contribution of maybe around INR 150 crores because we will be starting East Coast as well, very soon, which will be connecting Bangladesh, the Chittagong Port. And distribution wise, since we are not making an estimate as of now, let us first -- because we want to set the procedures and then the model. So the model has to roll out. So it will be the first year where we are not really concentrating on those numbers. So it is more of experimentation for this year and the numbers will start rolling in from next year.

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Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [23]

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Okay. And INR 150 crores is FY '20 numbers, right? Estimate?

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

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For coastal, yes.

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Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [25]

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For coastal. And margins in this particular segment?

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

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That I will discuss with you after the Q2 or Q3.

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Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [27]

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Okay. And sir, last 2 things. CapEx incurred in 1Q and number of double-stack trains running?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [28]

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CapEx Q1 is not the correct quarter to look at CapEx, but double-stack numbers, I will tell you.

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Ankita Bora Shah, Elara Capital, Inc. - Associate VP of Institutional Research [29]

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Is it in line with what we have planned with the...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [30]

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Yes, it is in line with whatever the forecast we gave. If you see last few years, we completed our CapEx program by the end of the year. So it is always like that. The Q1 is a planning quarter. The execution quarter really starts from Q3 and Q4. So Q1 -- if you look at numbers and try to make some forecasting, it is not a correct forecasting. And double-stack numbers, I will give you.

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [31]

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758.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [32]

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758 trains we ran this quarter.

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Operator [33]

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

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

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First, in terms of the price adjustment fee, in the last conference call, we had indicated that we're looking at a price adjustment from 1st of April. So what was the price adjustment in terms of percentage for our EXIM and domestic, respectively?

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

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No. Price adjustments, we've already done that. We discussed in the, I think, last conference call. After that what we announced for this year is that we will have a price stability for the whole financial year. So we are not changing any of our prices in this financial year. So that is the comfort we are giving to our customers.

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [36]

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Got it. You had increased the price on 31st March, if I understand correctly, and you said, incremental revenue of about 74% of FY '19 revenue. So I was just curious, has that sustained the price increase?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [37]

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Yes, 4%.

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [38]

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4%, that is...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [39]

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You can do that in a -- see look, Lohade, when we look at Q1 numbers, as I just mentioned in my initial remarks, with the volume going down by 1% in the handling volume, and 5.46% in the alternating volume, our finances -- financial numbers, operating income has gone up by 9.14%. The operating margin has gone up from 29.38% to 32.67%.

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [40]

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Got it. Sir, second question was with respect to market share. Can you help us with the market share for the first quarter for EXIM and domestic?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [41]

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Yes. Our DMO will give you those details.

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [42]

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Rail base market share for the first quarter, in EXIM, it is now 68% and domestic 64.8%.

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [43]

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Sorry, I didn't get that number. Domestic?

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [44]

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EXIM it is 68%.

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [45]

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Right. Domestic?

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [46]

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Domestic 64.8%.

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [47]

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And would you help us with the fourth quarter number as well, sir, if you have, or last year same quarter?

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [48]

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I don't have with me right now.

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [49]

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Okay. I was just curious to see if gained or lost market share in the EXIM segment, sir?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [50]

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We have -- a little bit of our market share has reduced because we are not trying to pick up the low-margin volumes, whereas certain sectors are being operated at very low margins. So we are not getting into the price wars. As I mentioned this earlier also, we never go into a price war. So we are only maintaining our service level. So there is maybe a dip of 3% market share compared to the corresponding quarter in the EXIM. In domestic, we maintained our market share, in fact, slightly increased.

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [51]

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Got it. Just last clarification, if you can, sir. In terms of the other income, it's at INR 58 crores. Given the reduced cash balance at the beginning of the quarter, I was just curious if there is any one-off income? Any interest on refund? Or anything of that sort in this quarter booked?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [52]

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In this quarter?

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [53]

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Yes.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [54]

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In this quarter, one is we have given some revenue changes during the last year that they are giving us other income, and there is some one-off income. We got some income tax interest refund. That is around INR 28 crores.

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Operator [55]

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(Operator Instructions)

The next question is from the line of Girish Raj from Quest Investment.

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Girish Raj Sankunny, Quest Investment Advisors Pvt Ltd. - Research Analyst [56]

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I request you to share more insights on the distribution logistic at Ennore based on the interaction over the last 4 months as in what kind of customers have approached us? Or we have approached? What kind of conversation we had? How we are engaged with our prospective customers? Any potential customers that we have signed?

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

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Yes. See, there's a lot of customer interest. In fact, that is an operate facility which is already operational, and the warehouse space up to around 80% is already occupied. Now what we are now trying to do is to establish the procedures. And as I mentioned, we are now working on whether we can go FTWZ there. So this process is going on because that's a port town. There's a lot of demand for the FTWZ as well. So now the procedure and the various other things are almost finalized. Once they are announced and they are put into practice, the operations will start there.

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Girish Raj Sankunny, Quest Investment Advisors Pvt Ltd. - Research Analyst [58]

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Okay. I was coming from more color as to what kind of business that we would generate in this facility, so free trade just to...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [59]

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This is -- as I have mentioned in the conferences which you attended, the distribution logistics is about starting from receiving the goods, warehousing them, inventory management and delivery, invoicing, all those. So those -- see because this is a new business, these practices have to be now first defined and now the whole system has to be properly advocated and then only we can do that. So warehousing is going on, but the other things to add on, we are now setting the procedures. Because this is the -- the procedure what sets in here will be replicated over all other places.

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Girish Raj Sankunny, Quest Investment Advisors Pvt Ltd. - Research Analyst [60]

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Okay. Second question and last question. Coastal revenue in first quarter? And if you can quantify the benefits of Ind AS 116 on the EBITDA?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [61]

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Revenues on -- coastal revenues are readily available?

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [62]

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Last quarter, we have revenues from coastal is INR 37.45 crores.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [63]

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We had INR 38 crores revenue in the first quarter from coastal. As I mentioned, coastal in the first quarter, we could do full services towards the end of it. That means, it took around 5, 6 months to make our services completely occupied.

Regarding Ind AS, our Director of Finance will give you.

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [64]

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So on the Ind AS 116, our depreciation has gone up because of taking all our operating leases in the finance lease mode by nearly INR 15 crores. But there is negligible impact on the PAT. Because those expenses in depreciation has come out of our expenditure -- expenses. So revenues expenses -- operating expenses. So on PAT, there is not much of impact. But if you can see that my depreciation has gone up by sizable numbers, that is around INR 15 crores plus because of this impact of Ind AS 116.

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Girish Raj Sankunny, Quest Investment Advisors Pvt Ltd. - Research Analyst [65]

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Sir, note also mentioned -- so INR 15 crores is depreciation note, also mentioned interest. Is there any 116 impact on the interest also?

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [66]

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No, interest, there is not much of interest right now. This is the first quarter that we have started doing with this new practice and the main impact is on methodology of taking this operating lease that we have in abundance on our equipments and quite a lot set of our rigs also that we have taken on operating lease.

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Operator [67]

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

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Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [68]

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Sir, just on the follow-up of previous question. So the increase in depreciation, so is this taken out from which line item from like operating cost is like rail freight expense, which is cost of revenue?

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

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It has come out of rail freight expenses also because the rigs around -- 8, 9 rigs that we have hired we have taken on operating rate from a leasing company. Now that earlier was -- used to be calculated in our expenses -- operating expenses, mainly in freight. So now that has come up to depreciation because of treatment as financial lease. But what I emphasize on is in calculation of PAT, it has got negligible impact.

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Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [70]

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So EBIT would be like-to-like for us like versus previous period. Anyway I mean if you see EBIT numbers, they will be like-to-like what we were reporting earlier anyway?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [71]

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Yes.

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Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [72]

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Okay. And just regarding the logistic parks, we had like 83 parks. So what's the visibility? Any further parks we have added to portfolio? Or...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [73]

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In Q1, we have not added. But this year, we are adding 8 to 10 parks depending on -- why I'm telling 8 to 10 because some -- certain approvals sometimes may get stuck. Otherwise, we are targeting 10, but 8 to 10, 8 minimum, 10 maximum, we will be adding this year.

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Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [74]

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Okay. And just bookkeeping question on...

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Operator [75]

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Sorry to interrupt Mr. Kumar.

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Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [76]

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Sure. I'll get back to the queue.

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Operator [77]

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

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Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [78]

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Sir, just 2 things. One, can you share the volumes in million tonnes please? Both EXIM and domestic separately.

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [79]

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EXIM volumes are 8.52 million tonnes. Domestic 1.81 million tonnes. Total 10.33 million tonnes.

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Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [80]

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Okay. And sir, port-wise market share and breakup of volumes port-wise?

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [81]

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Port-wise, JNPT has contributed 32.7%, Mundra Port also same 32.7%, Pipavav 15.83%, Chennai 5.35%, Vizag 5.82%. This is almost more than 90% contribution.

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Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [82]

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And sir, just port-wise market share in terms of key ports?

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [83]

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JNPT, our market share is 71%, Mundra Port 46%, Pipavav 53%.

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Operator [84]

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The next question is from the line of Ankur Periwal from Axis Capital.

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [85]

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Sir, 2 questions. First, on the realization front, now we took some hike with effect from April in lieu of the railway haulage and a surety of no further increase in the haulage charges. Post that, has there been any rejig in terms of either a volume discount or some extension of services that we had offered to our customers?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [86]

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No, there are no changes.

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [87]

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Because on the realization front, there is hardly any change on a Q-on-Q basis. So I was wondering if there was a price hike? Ideally there should be some increase in realization.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [88]

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There is a lot of realization when there is increase, no? The financial numbers increased, even volume has come down. So -- see otherwise...

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [89]

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On a Q-on-Q basis?

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

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You are looking at the EXIM per TEU realization?

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [91]

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Yes, sir. Sir, EXIM per TEU on a Q-on-Q.

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

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Yes, EXIM per TEU realization haven't gone up because there are empty running going on nowadays because it's not loaded run. All shipping lines are -- they are repositioning back their empties to ports.

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [93]

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39% growth (foreign language) per TEU.

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

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Per TEU (foreign language)

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [95]

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39%.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [96]

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39% growth (foreign language)

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [97]

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Q1-to-Q1 was 39%.

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [98]

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No, sir. Sir, Q-on-Q? So Q4-to-Q1 was...

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

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(foreign language) Definitely, that's what I'm telling. Empty is going on. So there is only 0.86%. See in Q4, there is full loaded runs going on. Now this empties repositioning is going on. Empty repositioning, we don’t get margins, as we did with loaded volumes.

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [100]

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Fair enough. Sir, second question, if you can share the numbers on the empty loss both for -- sorry, empty cost, both for EXIM and domestic?

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

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Empty running cost?

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [102]

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Yes.

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

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Empty running cost in this quarter, it is total INR 48.9 crores. In EXIM, it is INR 28.2 crores. In domestic, INR 20.7 crores. This is a decrease, if you look at, quarter-on-quarter. Corresponding quarter, it is 15.8% reduction. Corresponding quarter, it was INR 58.09 crores and now it has come to INR 48.9 crores.

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Operator [104]

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

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Deepika Mundra, JP Morgan Chase & Co, Research Division - Research Analyst [105]

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Congrats on the good set of results. Sir, I just wanted an update on the double-stack trains. We have seen the volumes becoming a little flattish over the last 2, 3 quarters, and actually, the number of trains is down on a year-on-year basis. Could you throw some light on that?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [106]

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Thank you, Deepika, for your complimentary. The volumes are not there, but still we are able to do double stack. Double stack is 758 this quarter comparing with 829 we did last year.

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Deepika Mundra, JP Morgan Chase & Co, Research Division - Research Analyst [107]

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Got it. So sir, it's just a overall demand issue? It is not into anything...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [108]

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It's overall demand issue, but we have actually added on our high capacity wagons now. Complete double-stack movement is possible on high capacity wagons of 68 tonnes carrying capacity. With that only we could even come out with these figures. Otherwise, the demand is very low. As of now, the economy is under strain, I already mentioned though. The import-export figures are not encouraging.

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Deepika Mundra, JP Morgan Chase & Co, Research Division - Research Analyst [109]

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Understood. And sir, just on DFC. The DFC has put a target of March 2020 for Gujarat ports to be connected. Just wanted to understand what would be the time lag for CONCOR to start seeing the volume increase?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [110]

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So I will first answer that in -- what will be the time lag for operations?

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Deepika Mundra, JP Morgan Chase & Co, Research Division - Research Analyst [111]

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Correct.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [112]

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Okay. So for time lag for operations will be minus 1 month. So if they are starting March, I can start in February. I think you have not got it. So we are fully ready.

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Deepika Mundra, JP Morgan Chase & Co, Research Division - Research Analyst [113]

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Yes, sir. Understood, sir.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [114]

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We're fully ready. We can just start. So we are just waiting the DFC to say that now start running your train on this.

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Operator [115]

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The next question is from the line of Shivangi Agarwal from ICICI Prudential Life Insurance Mutual Fund.

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Shivangi Agarwal;ICICI Prudential AMC;Equity Research Analyst, [116]

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Sir, one thing I cannot understand is the staff cost. So what I understood, sir, previously when there wouldn't be lots of fluctuation in staff cost, but as we see Q-on-Q, there is decline in staff cost. So how come it is less?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [117]

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Staff cost?

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Shivangi Agarwal;ICICI Prudential AMC;Equity Research Analyst, [118]

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Yes, sir.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [119]

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Right now, I'm not having that with me. So you can send a mail, then we will answer. So second question?

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Shivangi Agarwal;ICICI Prudential AMC;Equity Research Analyst, [120]

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Okay. Sure, sir. No issues, sir. And second question is, sir, on coastal shipping, how -- sir, when we talked earlier, you have mentioned that there is a problem of reverse cargo, is the problem still exist? Or we are able to get the reverse cargo?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [121]

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No. As of now, we have not yet got the reverse cargo. We are now able to get the full demand for our services from Gujarat to Tuticorin. So we are working on reverse logistics (foreign language) reverse (foreign language) back half (foreign language).

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Shivangi Agarwal;ICICI Prudential AMC;Equity Research Analyst, [122]

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Okay. Okay. No issues, sir. And sir, is there any update on inland waterways? So are we working towards it?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [123]

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Yes. We will be -- soon, we will be giving announcement let us hope. We are working on that with the government.

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Shivangi Agarwal;ICICI Prudential AMC;Equity Research Analyst, [124]

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Sir, what are the problems we are facing in that scenario, inland waterways, I couldn't understand. So like, every time, Mr. Piyush Goyal comes on TV or on channels to say that we are doing a lot of things in this field, but still we can't see development. And they're talking for this last -- from the last...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [125]

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I'm not answering this question. You would have asked me straight, I would have answered. You have taken minister's name, now I can't answer.

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Shivangi Agarwal;ICICI Prudential AMC;Equity Research Analyst, [126]

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No. I am extremely sorry. I am extremely sorry, sir. No, no, just asking that what's the problem as at CONCOR we are facing in this...

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

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I told that it should be coming with someone outside. We are working with government. Okay?

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Operator [128]

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The next question is from the line of Chandrasekhar Sridhar from Fidelity Investments.

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Chandrasekhar Sridhar;Fidelity International;Investment Analyst, [129]

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Sir, the first question is just on the SEIS income on the most of the accounts. It said that DGFT has not given the notification for FY '19-'20. Does it mean, I mean, as per my understanding, that the SEIS should have come this year? Is it that it's just not meant for this quarter or you are now saying that you're not going to get any SEIS in terms of the whole year?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [130]

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I don’t know. I think you are not fully aware how SEIS comes. Let me explain that first. SEIS comes out of the import-export policy announced for 5 years. So 2015, when the import-export policy announced, in that they announced that SEIS will be given incentive and it is monetizable. So this is a change from the earlier import-export policy. Earlier, it was SFIS. Okay? Now this -- after this every year, government gives a notification for that financial year. Only once that notification is given for that financial year, you can take it that you will get the SEIS. So this financial year, government has not yet given notification. If you look back, then you understand this. In '18-'19, the notification came in the first quarter so we started accruing from the first quarter. In '17-'18, the notification came in the third quarter. So if you see our figures, first 2 quarters we have not taken SEIS, third quarter we have taken for 3 quarters. I hope I answered your question now.

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Chandrasekhar Sridhar;Fidelity International;Investment Analyst, [131]

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Sure. So that means you are expecting it may come sometime during this year?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [132]

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That I can't give a forecast of what government is going to do. I told you the procedure. Once they give notification, the accrual comes. And regarding your doubt what you expressed and you are trying to come to a conclusion, and I'd say I'm sorry that conclusion is wrong. We are not having any doubt of getting our SEIS income, which we accrued in the last 4 years. The process is going on. This is a question of budget allocations in the government.

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Chandrasekhar Sridhar;Fidelity International;Investment Analyst, [133]

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Right. And second question is, just if I look at your realizations over time have been moving up. I'm trying to understand just over a long run our competition here is not with other CTIs as much as they're taking the road. And I'm trying to understand the focus on trying to get realization at the cost of volumes. Here, I mean, from the data which is available, port container volumes have actually grown and your volumes have declined. What is the point of picking up prices and focusing on pricing when the focus should be on driving volumes in the long run because, I mean, we are fighting...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [134]

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I think you are doing the short-sized analysis, Chandrasekhar. See port volumes contain the transhipment containers, empty containers, short-lead containers, okay? So what is the sector where we are operating? We are operating in a sector of long-lead containers. We are not operating on the short-lead containers. That is embedded into land whereas the CFS operations takes place. There are some operators operating at JN Port trying to do the operations in the 60 kilometers range. So that we are not concentrating on the sector because that sector is without margins. And one of the analysis done by somebody, I don't want to name them, they said that some people are operating at zero-margin businesses. I'm not interested in doing that because there is no point in operating at zero-margin. Even if I take out these 2 things, where we are focusing? We are focusing at reasonable margins. So that is where we would try to operate. So it is not that we are sticking on to the prices and not digging into that, losing the volumes. That is not the correct analysis because we keep doing this analysis ourselves where we are not picking up volumes. Why our volumes in the ports have come down is because we are not picking up these low-margin, low-lead -- less -- very small lead volumes. We are not concentrating on that. They are not for rail operations. Yes, and your first observation is correct. Yes, our competition is with the road. Now road has become very competitive because of the increase in the carrying load which are announced by the government. So now the good remedy for that is the commissioning of the DFC, which is, I think, now is more or less certain. So once DFC comes the transit guarantee which comes into picture, a lot of traffic will start flowing into the railways.

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Operator [135]

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

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Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [136]

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Most of the questions answered. Sir, just update on station Haldi. Are we going to have more investment in this venture and how is outlook on that?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [137]

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Station Haldi, we started getting revenues out of it. Business reengineering plan is going on as planned. We got good demand also. We made some contracts. Now we will be definitely making some investments, that is in the interest of some of the investors. We can share that once we complete the transaction. Now things are going on, so we are not giving any announcement on that. But in the first year it is definitely looking up. And there is further investment we planned into, that is around INR 30 crores. Total INR 43 crores fresh capital infusion we are doing into that because the coal train demand has gone up. So this is in a very good location which can solve the entire NCR region. There is a lot of demand for this location.

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Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [138]

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Okay. Got it. And last question, sir, how much is the revenue share from Kolkata port?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [139]

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Kolkata port, revenue share or you're asking about the volume share?

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Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [140]

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Whatever is possible because 32% is from the JNPT and Mundra 32.7%.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [141]

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32% Kolkata. You are from Bengal?

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Vikram Suryavanshi, PhillipCapital (India) Pvt. Ltd., Research Division - Analyst [142]

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No, sir.

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Operator [143]

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

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Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [144]

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My first question is again on the SEIS income. There was a notification, I think, last week about the rate...

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Operator [145]

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Sorry to interrupt, Mr. Shankar. Sir, can you speak a bit louder. We are not able to hear you.

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Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [146]

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Yes. I hope I'm audible now. So on the SEIS, just -- there was a notification that the rate has been reduced from 7% to 5% with effect from 1st August. So for a 5-month period it will be 5%. So is that what it is and that is how our SEIS income will also kind of be calculated for this year?

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

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For which period you are taking of?

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Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [148]

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For this year, sir, FY '20. So from this 1st August.

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

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'19-'20, the notification has not yet come.

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Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [150]

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Okay. So the -- no, the notification might not have come, but there was announcement that NEIS and SEIS both there will be a change in the way it will get calculated.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [151]

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Let's not go by media report, Shankar. Let the notification come. I can't discuss on speculations isn't it.

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Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [152]

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Okay. So there is no change as such right now in that?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [153]

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There is no notification for this year.

So unless notification comes, I can't make any comment.

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Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [154]

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Right, right. Okay. And sir, secondly on the distribution logistics business, with respect to the one that we opened at Chennai very recently, just -- so wanted to understand how the business model there works because it's in partnership with a landowner or with a 3PL company? And we are also doing our own -- planning to do our own...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [155]

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Listen, listen, see business model is everything. It is a CONCOR facility. It is -- and so all the operations and the investment and the facility will be owned by our business partner. There is a gross revenue share agreement which is we already signed with this partner. So out of every INR 100 we collect, we take our share and then we pass it on rest to him and he has to operate the facility as per the procedures and the processes defined by CONCOR.

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Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [156]

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Right. Right. Sir, I was also wondering why we are following 2 different approaches because we also have our own MMLPs where we can do the distribution logistics.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [157]

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In MMLP, our focus is on Container logistics and Container related value-addition services. The distribution logistics it will be completely a different aspect where it starts with warehousing, inventory management and distribution. In MMLP, it is container handling, container stuffing, destuffing, cargo storing and dispatch. So there is a difference between these 2 models. It is not the same. So from a layman's perspective, yes, I can understand it looks same, but when you come to the morality it is a completely different business. So it is like if I say MMLP is a wholesale business, then the distribution also will become a retail business.

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Krupashankar NJ, Spark Capital Advisors (India) Private Limited, Research Division - Analyst [158]

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Okay. So in MMLPs also we were planning to kind of do some kind of warehousing and...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [159]

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My friend, MMLP will also do distribution logistics. So that will be -- but the focus area (foreign language)

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

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Okay. Okay. That will largely be ICD plus CFT with some additional services is what you say?

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

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Yes, yes, yes.

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Operator [162]

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The next question is from the line of Aditya Makharia from HDFC Securities.

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Aditya S. Makharia, HDFC Securities Limited, Research Division - Analyst [163]

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Sir, just on the DFCs, we also have the Eastern DFC coming up, will that benefit us in any way?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [164]

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On Eastern DFC, container traffic is not much. It will be very, very less because there is not much movement of containers from Kolkata port into NCR hinterland. We have not planned for container trades. Eastern DFC is planned for coal and bulk movement and Western DFC is planned for container movement, so many technical features are also planned accordingly.

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Aditya S. Makharia, HDFC Securities Limited, Research Division - Analyst [165]

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Okay. And secondly, in the Mundra, you said our market share is 46%. I think this used be much higher earlier, right?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [166]

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It used to be around 49%. Now it is 46%.

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Aditya S. Makharia, HDFC Securities Limited, Research Division - Analyst [167]

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So any reason, we are seeing a decline here?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [168]

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I told. I already mentioned, we are not picking up the low-margin volumes. Some low-margin volume game is going on, so we are not getting into that price war. We are not increasing our prices, but we are not going for giving any deep discounts to pick up only the volume.

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Aditya S. Makharia, HDFC Securities Limited, Research Division - Analyst [169]

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Okay. And who would be gaining the share? So would there be any particular player who is aggressive now because you're saying there is zero or a low-margin business?

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

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I don't comment on other players in my conference call. I know the facts, okay?

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Operator [171]

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The next question is from the line of Abhilasha Satale from Dalal & Broacha.

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Abhilasha Satale, Dalal & Broacha Stock Broking Pvt Ltd., Research Division - Research Analyst [172]

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Sir, just to dig out more on the guidance, volume growth guidance, this quarter volume has been -- we have posted a decline in volume -- marginal decline in volume. Going forward, you're saying if the economy picks up, we will be able to achieve our guidance of 10% to 12% volume growth. So for that achievement, we will have to -- I mean, for the next 3 quarters if economy picks up, then the overall volume growth should be in the range of 14% to 16%. So like in this quarter we have lost market share maybe because of short-lead distance increasing or whatever, but what is giving us confidence that once economy picks up, we will gain market share against road players? What will change, which will lead us to improvement in volume?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [173]

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See, I think you want to clear all your doubts whether to invest in the stock or not. So the conference call is not meant for that, but anyway I would like to answer it in briefly. See when the market picks up, economy picks up, the serious players who have to have logistics service, they come to the service providers who are giving a better quality service. So even today, with all that, maybe very low-margin game somebody wants to question why we are getting our volumes and why we are able to maintain is because the serious players who are looking for logistics service they will come to us only. So we know that once the economy picks up, then the things have to move very fast, brisk. Otherwise, the people will lose, the business will lose the opportunity. They will not look for this low-margin games, they will come to quality services. So that is giving us the confidence, and many other things. This entire conference call I have devoted to explain to you how it can come. So that is how we are aiming at and we are ready for that challenge.

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Abhilasha Satale, Dalal & Broacha Stock Broking Pvt Ltd., Research Division - Research Analyst [174]

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No, I just wanted to really like how are we competing with road players like the competition-wise because of the large...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [175]

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See road cannot cater to certain volumes. Yes, road is a competition and road picks up some items which are voluminous cargo and lightweight cargo. So for that we are giving answer by running a time table service from TKD and Dadri into Khatuwas and then making a double-stack and running into Mundra Port. So these are our solutions ready for these things. But today, the volume is not picking up because the economy is not. Economy once it grows at 7%. So my growth in that particular quarter will be 12%. So you are in doubt of how I can pick up the volume which I already lost in the first 3 months. So that -- we will be introducing some additional features into it. So we are -- that's where we are confident of picking up that 10% to 12% growth.

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Abhilasha Satale, Dalal & Broacha Stock Broking Pvt Ltd., Research Division - Research Analyst [176]

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Sir..

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Operator [177]

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Sorry, to interrupt. Ma'am, may we request that you return to the question queue. There are participants waiting.

The next question is from the line of (inaudible) from Quantum Mutual Fund.

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Unidentified Analyst, [178]

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Very quickly, my question is (inaudible). Last year, you spoke you had a market share of 73.59% or whatsoever number was trending close. But now we have a market share of 68% and 64%, respectively, for domestic and EXIM. So is it -- what would you lead to this drop in market share to just understand please?

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

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I already explained. Market shares at low lead volumes -- less lead volumes and low-margin volumes. Volumes are moving -- started moving on the rail. So that actually in JNPT that is a new traffic. So there, we are not going for low-margin and we are now trying to give package deals. Otherwise, when we the slots we are operating it, and we are able to maintain our this thing. So if we look at quarter-on-quarter, I told you that we are only 1% less.

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Unidentified Analyst, [180]

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No, I am not talking about the year, I am talking about year-on-year. In fact 1.5 years back, we were around 74%, now we are around 68% or 63%.

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

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For the quarter, we are talking?

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Unidentified Analyst, [182]

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Yes.

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

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You are talking about the year, no?

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Unidentified Analyst, [184]

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No, I am talking about Q4 FY '18.

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

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I understand. That's what I'm telling, you are talking about the full year there, the EXIM margin, the EXIM market share of 73.59% and domestic of 66%. Now we are 68% and 64.8%. That's what I'm telling in this quarter less lead low-margin volumes are going on at JNPT and at the Mundra Port which we are not touching.

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Unidentified Analyst, [186]

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And sir but on the longer leads which is like not the short leads, what kind of market share would we have there?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [187]

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That analysis -- that is we are more or less at the same place.

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Unidentified Analyst, [188]

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Okay. We will be more than 70%, 70-plus?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [189]

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Yes. Yes.

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Operator [190]

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The next question is from the line of Dheeresh Pathak from Goldman Sachs.

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Dheeresh Pathak, Goldman Sachs Asset Management (India) Private Limited - Executive Director [191]

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Sir, in the distribution logistics business, the client relationship and billing is done by the business partner or is done by CONCOR?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [192]

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CONCOR. Top line is with CONCOR.

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Dheeresh Pathak, Goldman Sachs Asset Management (India) Private Limited - Executive Director [193]

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Okay. The collection also from the client and handling...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [194]

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Everything. Everything will be CONCOR. That's what I'm telling, we'll receive the revenue, we take our revenue share and pass on the rest to the business partner.

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Dheeresh Pathak, Goldman Sachs Asset Management (India) Private Limited - Executive Director [195]

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And sir, the land that you're providing, this is you're carving out from your MLP thing...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [196]

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No, no. All the distribution logistics center, we don't own anything. It is owned, built, operated by business partner.

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Dheeresh Pathak, Goldman Sachs Asset Management (India) Private Limited - Executive Director [197]

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Okay. So what percentage, can you like -- can you give some idea, is that low single-digit share of revenue?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [198]

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That is confidential. I can't share that with you.

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Dheeresh Pathak, Goldman Sachs Asset Management (India) Private Limited - Executive Director [199]

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Okay. Sir, in Q1, what -- how much revenue have you got from distribution logistics?

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

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Q1, it is not started. I explained that now we are setting the processes. This is the first center. So we have to define the process, we have to advocate them and then we have to market them. So now the process is going on.

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Dheeresh Pathak, Goldman Sachs Asset Management (India) Private Limited - Executive Director [201]

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So Chennai is one, and how many other centers are there?

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

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We will be starting another 4 centers in this financial year. All the planning work is done. Now we are going for tenders.

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Operator [203]

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

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Atul Tiwari, Citigroup Inc, Research Division - VP and Analyst [204]

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My question has been answered.

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Operator [205]

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

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [206]

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Just wanted to check; A, in terms of the top 5 ICDs, what kind of contribution do we have from those 5 ICD terminals? And number two...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [207]

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I don't have that as of right now.

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [208]

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Sure. And just one clarification, in terms of the total EXIM cargo, how much would be for the Northwest corridor where the DFC would...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [209]

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It is around 40%.

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Achal Lohade, JM Financial Institutional Securities Limited, Research Division - VP [210]

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So 40% of our total EXIM volume is on the Northwest corridor?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [211]

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Yes, yes.

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Operator [212]

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The next question is from the line Shrinidhi Karlekar from HSBC Asset Management.

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Shrinidhi Karlekar, HSBC, Research Division - Analyst [213]

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This is HSBC Securities. Congratulations on good set of numbers. Sir, I have couple of questions. First one, sir, on EXIM, you talked about scenario hasn't been great. But sir, are there any green shoots? Are you seeing some sort of recovery or it continues to be done? So some comments on what's your observation that would be helpful.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [214]

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As of now, the economy is under strain that we are seeing in everyday newspapers that exports are not there, imports also few. But after this budget, the government is talking of getting a GDP growth of around 6.5% to 7%. So if that happens, then I'm sure we will be able to provide the same numbers what we talked off in the guidance figures.

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Shrinidhi Karlekar, HSBC, Research Division - Analyst [215]

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And sir second one is, sir, are you significantly optimistic on the domestic volume on the Northwest corridor coming to railways after this partial DFC completion or bulk of the growth will come only in the EXIM-mode only? So I want to understand that.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [216]

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Yes. Okay. Now you asked a very good question. Let me share some of the thoughts here for the benefit of all. In domestic, whatever we are doing, there, we are seeing -- we are able to maintain our figures. We are able to maintain our volumes. So even in this economy also we are not that bad in domestic sector. And with the DFC, definitely more volumes will get added on the Northwest corridor, but the major movements are not limited to Northwest corridor. Having said that, what we are working on, we are working on some new things in the domestic, so which we are now finding the solutions and now marketing those solutions. Once these solutions are implemented, now they're going on, trials are going on that. Somewhere we got experimental order, the trial orders. And in some other places, we are working on trials with the customers. Once they come in, there is a lot of volume in those sectors. That is where we are very optimistic on domestic. We are trying to tell you we are like movement of bulk commodity and containers. The movement of the commodity and bulk in containers, if I restate my statement. It is movement of a commodity in bulk conditioned containers not doing the bagging that saves a lot of cost, but the bagging and for logistics. So that's where we are working on and we are finding solutions. And we are working together with the customers.

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Shrinidhi Karlekar, HSBC, Research Division - Analyst [217]

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So we are recommended more of the cement I think there?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [218]

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Cement, grains, industrials, there are so many things.

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Operator [219]

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The next question is from the line of Rakesh Vyas from HDFC Mutual Fund.

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Rakesh Vyas, HDFC Asset Management Company Limited - Dedicated Fund Manager for Overseas Investments [220]

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Congratulations on good set of numbers in this challenging environment. I have a couple of questions. Sir, first of all, if I look at year-on-year double-stack trains they have actually declined, but we have been able to manage the lower empty running cost. So if you can just highlight as to what is changing, is the EXIM...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [221]

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There are 2 answers for this. Yes. I'll tell you, Rakesh, there are 2 factors. One is that empty movement has happened. Empty containers have gone back to ports. And second, railway also has given some discount on the empty tariff. These 2 things helped us in controlling our empty running cost.

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Rakesh Vyas, HDFC Asset Management Company Limited - Dedicated Fund Manager for Overseas Investments [222]

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So effectively, we'll be able to get empty container movement away from road to rail? So this 25% or so that railways provided on haulage?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [223]

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Yes, yes, yes. You are right. We will get more empty container movement.

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Rakesh Vyas, HDFC Asset Management Company Limited - Dedicated Fund Manager for Overseas Investments [224]

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And sir, second is just bookkeeping question. Can you just give the breakup of originating volume between export and import for this quarter and last quarter?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [225]

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Separate, we are not having right now.

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Operator [226]

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

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Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [227]

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Sir, my first question is, what is the rail coefficient now at the different ports? Also basically, you have, generally railways have also lost market share or is that intact?

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [228]

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At JNPT, it is 16%. At Mundra, it is 26.5%. And Pipavav, it is 68%.

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Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [229]

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So it looks like it's sort of intact versus previous numbers?

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Manoj Kumar Dubey, Container Corporation of India Limited - Director of Finance, CFO & Director [230]

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It has increased by some percentage points.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [231]

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The revenue share slightly increased at ports.

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Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [232]

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Okay. Sir, my second question is, so have we added any rakes during this quarter? Last year, we added around 19 rakes.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [233]

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Yes, this quarter, we added 3 rakes.

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Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [234]

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Okay. And sir, regarding coastal shipping revenue which you mentioned INR 38 crores, so is that including domestic segment revenues or -- and are we looking to give a third line item of new businesses in the future for revenue and (inaudible)...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [235]

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As of now, it is in the domestic segment only.

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Prateek Kumar, Antique Stockbroking Ltd., Research Division - Analyst [236]

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Domestic segment. So -- but in general, we are looking to give a separate line item in future or it will always be included there?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [237]

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As of now, we are decided. If it is inland waterways also, we start, and coastal, also we expand more. We are looking at other opportunities in coastal. We are in discussion, still to materialize. Once they all will come up, then we will think about it. But right now, the management the thinking is to go in 2 segments only, EXIM and domestic.

So we'll take the last question now.

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Operator [238]

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Sure, sir. The next question is from the line of Dheeresh Pathak from Goldman Sachs.

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Dheeresh Pathak, Goldman Sachs Asset Management (India) Private Limited - Executive Director [239]

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Sir, the coastal shipping revenue, you mentioned some INR 30-plus cores. So the volumes that you mentioned, does it also include the containers that you'd be carrying on coastal shipping or...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [240]

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Yes, yes, yes. Domestic, the revenue is in domestic and volume also in domestic.

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Dheeresh Pathak, Goldman Sachs Asset Management (India) Private Limited - Executive Director [241]

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Okay. And sir, to the last question, you mentioned that rail coefficient has increased at ports as well as the train data that we get from Indian Railways that shows 7% growth in volumes. And we have grown with 1% -- we have declined 1%. So you're saying that the low-volume and low-margin and low-lead containers. Is the growth that we are seeing from the train data as well as the rail coefficient increase, is the growth mainly coming from those buckets?

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [242]

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Yes. Yes.

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Dheeresh Pathak, Goldman Sachs Asset Management (India) Private Limited - Executive Director [243]

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Okay. But it seems like a very large number to that entire growth is being driven by those 2.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [244]

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That is your feeling here. I can't explain that, so many things in the conference call, but the growth is from there, and some empty movements. So these are all the things which happen. This is a low margin, low lead.

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Dheeresh Pathak, Goldman Sachs Asset Management (India) Private Limited - Executive Director [245]

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In the long-lead distance also, has the margin become...

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [246]

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I've already answered this question. You people have doubts, how many times we keep on clarifying?

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Operator [247]

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Ladies and gentlemen, that was the last question. I now hand the conference over to Ms. Bhoomika Nair for her closing comments.

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Bhoomika Nair, IDFC Securities Limited, Research Division - Security Analyst [248]

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Sir, thank you very much for taking time out and wishing you all the very best and all the participants for being on the call. Thank you very much.

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Vennelakanti Kalyana Rama, Container Corporation of India Limited - Chairman & MD [249]

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Thank you, Bhoomika. Thank you.

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Operator [250]

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Ladies and gentlemen, on behalf of IDFC Securities Limited, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines. Thank you.