WCIL - Western Carriers (India) Limited Share Price

Management's outlook for Western Carriers (India) Limited is cautiously optimistic moving into FY26. Despite external challenges, such as geopolitical tensions and economic headwinds, the company anticipates a sustained recovery in demand, particularly in the domestic logistics sector. Domestic volumes rose by 31% to 79,840 TEUs from 60,863 TEUs in FY24, driven by robust demand for specialized containers. In contrast, EXIM volumes declined by 12% to 133,635 TEUs due to ongoing disruptions.

Looking ahead, management highlights a strong order book with significant long-term contracts, including a noteworthy INR 1,089 crore contract with Vedanta Limited. This positions Western Carriers well for future growth, particularly as India's GDP shows signs of recovery, expanding 6.2% in Q3 of FY25 after a low of 5.4% in Q2. The decline in retail inflation to 3.3% and increased government spending in infrastructure further bolster the positive outlook.

Management also points out an expected recovery in EXIM business as global shipping disruptions ease. Notable developments include the commissioning of the Northern Dedicated Freight Corridor (DFC) by the end of 2025, anticipated to enhance logistics efficiency. Additionally, they express intentions for a notable capex increase to about INR 100 crores, promoting asset readiness to meet demand.

Revenue from operations grew to INR 1,726 crores, up 2.4% from INR 1,686 crores in FY24, with EBITDA at INR 120 crores and PAT at INR 65 crores. EBITDA margins are expected to stabilize and improve gradually as operational efficiencies are enhanced.

In summary, Western Carriers remains focused on leveraging long-term contracts, improving operational efficiencies, and adapting to market changes amidst a positive domestic outlook for logistics in FY26.

1. Question: What is the progress on the rollout of your transport management system? What benefits have you seen so far? Answer: We are continuously updating our software to enhance flexibility and visibility for operational excellence, which also aids in improving financials and billing cycles. We've completed two or three data launches and plan to go live with updates by Q3. These enhancements will expedite payrolls and billing cycles while creating a comprehensive data bank for visibility for us and our customers.

2. Question: How many B2B clients are currently active on your platform and how has engagement trended? Answer: Our software integrates with our clients' existing systems, allowing us to generate reports based on their requirements. We customize reports"”daily, weekly, or monthly"”as per client needs to build trust. Each account manager ensures that customers receive data formatted to meet their requirements. Our motto is "Delivering Trust," which reflects in our flexible reporting approach.

3. Question: Are you piloting any AI-based tools for capacity planning or ETA forecasting? When can we expect these to go live? Answer: We've been developing AI modules for predictive models in warehousing and supply chain management. While we've not yet succeeded in full implementation, we're hopeful for future prospects. I cannot provide an exact timeline for pilot launches, but our internal teams are actively working on these initiatives.

4. Question: Could you provide insights into trends in network utilization over the last two quarters? Answer: It's been mixed; Vizag Port congestion poses a challenge, while other routes like the Eastern Freight Corridor show some improvements. The Northern Dedicated Freight Corridor is about 75-80% complete, expected to enhance transit for North Indian customers by late 2025, significantly benefiting our EXIM business.

5. Question: What specific steps are being taken to reduce empty mile running and improve backhaul efficiency overall? Answer: To minimize empty haulage, we implement triangulation strategies, ensuring efficient routing. We use internal tracking systems to optimize container and rake positioning, continuously reducing cycle times. The goal is to enhance asset utilization and cut costs, thus improving our operational efficiency.

6. Question: Can you provide your guidance or outlook in terms of revenue growth and EBITDA margins for FY26? Answer: Given current geopolitical uncertainties, it's challenging to provide firm guidance. However, we anticipate a strong year due to robust domestic demand and emerging recovery in our EXIM business. Margins are expected to stabilize and improve gradually, aligning with improved operational efficiency.

7. Question: What is the reason for CARE Ratings issuing a non-cooperating rating? Answer: We have withdrawn from CARE Ratings. While CARE has ceased cooperation, CRISIL continues to maintain our strong A-minus rating. We are actively resolving the matter with CRISIL to ensure continuous ratings oversight.

8. Question: What contributed to the significant increase in other income in FY25? Answer: The rise in other income to INR4.8 crores stems mainly from interest on deposits of unutilized IPO funds. We currently hold INR156 crores from our IPO, which is contributing to our interest earnings as these funds are in fixed deposits.

9. Question: What major drivers contributed to the domestic business growth in FY25? Answer: Key drivers included the utilization of specialized containers, particularly for the steel industry, where we procured 300 FEUs. Additionally, increased demand in other sectors like aluminum and successful new rail services contributed to robust growth, particularly in the second half of FY25.

10. Question: What are your procurement plans for specialized containers and capital expenditures for FY26? Answer: We plan to increase our capex to approximately INR100 crores in FY26, driven by strong demand and long-term commitments from major customers. This will facilitate the procurement of specialized containers and enhance our operational capacities, marking our largest capex in the company's history.