Allcargo Logistics Q4 FY25 earnings call

The numbers management led with

• Net debt reduction in H2 FY25: INR142 crores (gross debt -INR66 cr, cash +INR76 cr) over 6 months
• Gross debt / Net debt at year end: Gross debt INR1,167 crores; Net debt INR472 crores
• ISC gross debt and split: ISC gross debt ~INR500 crores (~INR470-480 cr working capital, ~INR80-90 cr long-term); India side ~INR200 cr long-term + ~INR300 cr working capital/short-term
• ISC FCL volume growth vs market: FCL volumes +7% YoY vs global containerized trade +5-6%

The industry, as management sees it

Management sees global trade rebounding sharply after the 90-day US tariff pause but warns of another ~3 months of supply chain disruption from capacity rebalancing between trade lanes, port congestion and empty container repositioning. Higher uncertainty typically benefits logistics yields and air freight demand, but the outcome is highly sensitive to whether US tariffs are removed, re-imposed, or merely extended to the EU.

Risks management named

• US tariff pause is 90 days; renegotiation or re-imposition could disrupt trade again
• FX revaluation losses (INR33 cr in Q4) from USD/EUR/INR movements on ISC balance sheet
• Contract logistics white space from a specific chemical contract ending in FY26; margin dilution from quick commerce mix
• Supply chain disruption expected to last another 3 months as capacity shifts between trade lanes
• FY25 PAT of INR49 cr lower YoY due to exceptional items from sale of HORCL stake

Every question, with its answer

1. 1. NCLT and entity relisting

   Rishabh, Individual Investor

   Question. When can we expect the relisting of the newly formed entities after the NCLT approval?

   Answer, Ravi Jakhar, Director, Strategy and Group CFO. Management expects the next, potentially final, NCLT hearing in the first week of July 2025. From that point, the relisting process is typically 2 to 4 months.

2. 2. Contract Logistics margins

   Rishabh, Individual Investor

   Question. In the Contract Logistics business we have seen significant reduction in margins — what is the reason and outlook?

   Answer, Ravi Jakhar, Director, Strategy and Group CFO. Two components: (1) quick commerce growth has a different margin profile than the legacy chemical contract logistics business; (2) elevated white space driven by a specific contract coming to an end in coming quarters. The reversal of white space should improve margins but they will remain below historical averages; the 48% revenue growth should still add incremental profits.

3. 3. Debt structure

   Vikram Suryavanshi, PhillipCapital India

   Question. What would be the gross debt on the international supply chain business now? And can you give the working capital / long-term split for ISC and India?

   Answer, Ravi Jakhar, Director, Strategy and Group CFO. ISC gross debt ~INR500 cr, of which ~INR470-480 cr is working capital and ~INR80-90 cr is long-term. India side: ~INR200 cr long-term borrowing (further reduced post March 31) and ~INR300 cr working capital/short-term. In total ~INR800-900 cr is working-capital or short-term in nature.

4. 4. Working capital and treasury

   Vikram Suryavanshi, PhillipCapital India

   Question. How is the working capital situation in terms of business requirement — is it getting tighter or is there not much pressure?

   Answer, Ravi Jakhar, Director, Strategy and Group CFO. Working capital has reduced — partly from slightly lower average freight rates on a like-for-like basis but mainly from improved collections, lower DSO and better payables management. Interest impact comes from both lower working capital and central cash pooling. Steve Dunn added that ECU is expanding usage of global pooling (physical and notional) with the primary bank to extract funds into a central bank and offset interest, and is also evaluating supplier trade credit programs and factoring to release cash from harder-to-repatriate countries.

5. 5. Trade and supply chain outlook

   Vikram Suryavanshi, PhillipCapital India

   Question. Post the COVID experience, after the 90-day tariff pause, will trade normalization take additional time because of supply chain disruption, blank sailings and empty container repositioning?

   Answer, Jan Kleine-Lasthues, Chief Operating Officer, ECU Worldwide. Jan said capacity is already shifting from intra-Asia into the US trade lane and this will cause US port congestion and inland transport issues. The EU-US tariff pause will also create a demand rush. Normalization expected to take another ~3 months beyond the 90-day window, depending on whether tariffs are removed, return, or just extended. Higher rates from disruption are positive for logistics yields. Ravi added that short-term capacity realignment could disproportionately impact Asia-Europe lanes and cause freight rate surges.

6. 6. Capex plan

   Vikram Suryavanshi, PhillipCapital India

   Question. What was total capex in FY25 and what is planned for FY26? Can you break it down between international supply chain and contract logistics?

   Answer, Ravi Jakhar, Director, Strategy and Group CFO. ISC capex ~INR30-60 cr in FY25 covering IT (Topaz to iTopaz upgrade) and CFS investment in Korea (mix of equity and debt). On the domestic side, only a small GEMS 2.0 IT capex. For FY26, no significant non-IT capex anywhere; the Contract Logistics business has moved to an operating-lease model for new warehouses — accounting depreciation but no cash outlay. Overall asset-light stance maintained.

Topic by topic, in the order it was spoken

In their words