Tariff/Gangavaram noise faded by Q4FY26.

In the Logistics business, ROCE has shot up from 6% to 10%. In your guidance of FY '31, your revenue in Logistics is growing by 34% and EBITDA by 27%. Would the margins be slightly higher than the current levels or there will be some consolidation?

The result of 10% is not by luck. We have a strategy of a combination of addressing this business by asset heavy, asset light and asset zero. The mix of asset zero and asset light has increased as compared to asset heavy because we are doing really well on our freight forwarding business, on our trucking business. EBITDA which we earn is not in direct proportion with the revenue. Having said that, our objective is to give you 20% return on capital employed as APSEZ level. Our commitment, our promise is to deliver twice the growth in 5 years with a 20% return on capital at consolidated level.

On the capacity addition of 1 billion tons by 2030 versus 850 million tons of cargo volume - is it really possible to handle 850 million tons given utilization stands at around 80% and entire capacity might not be fully functional during this period?

When we do the theoretical capacity planning, we always consider 20%. Always capacity planning is done at 80%. So if I'm saying that I have 1 billion, it is at 80% of the total capacity. We are investing in technology to improve the efficiency. So you may be wondering why in 1 month, Mundra is doing 770,000, you will hit 94% utilization. So 1 billion is a theoretical capacity in that 80%. So you can go up to 1.1 billion, 1.2 billion with the same percent. This volume does not include the merger and acquisition. So any headwind which may come like it came last year with Operation Sindoor and West Asia crisis, definitely, we have a buffer, which we will do in next 5 to 6 years, the acquisitions to cover up.

Since we were talking about your long-term plans pertaining to fiscal '31, maybe if you can talk about some of the important milestones over the next 12 months that we should keep track of?

I think the quarter 1 is very important, because in quarter 1, we expect to get the business mix change. All the free storages and business mix change between the containers may be improved in the next 3 months. The second biggest change which you should track is the coal. Indian government has given the direction to all the power plants to run at the peak, including the imported coal. Anticipation is heat is high. The third trend, after UAE is out of OPEC, the pipeline which bypasses the Strait of Hormuz, there should be a free flow of the crude. We kept our guidance conservative considering that if the oil prices do not come down, India may not see that much of optimistic growth. We will maximize the opportunity and minimize the risk.

On international ports - very strong margin performance. How should we think about sustainable margin for international ports going out?

Since 2 or 3 or 4 quarters, the governance of all the international ports are now in Ahmedabad, which means we control it from Ahmedabad. The CEO and the CFO, we have put it with Adani's DNA. Moving forward, our focus will be more on the market share. For example, Colombo, in phase 1, we focus on transshipment terminal - our mix is 100% transshipment whereas the whole country mix is 85% transshipment and 15% EXIM. Now when we are building up the Phase 2 capacity, we are getting into the EXIM trade. Obviously, they cannot match the margins which we make in India. But definitely over there, they will be definitely best-in-class as compared to their competitors in those regions.

Capex was a bit higher than guidance. Maybe if you can elaborate on that?

We have accelerated the capex. We have estimated our capex in Mundra because we are full and now we have CT5 which is coming up. We have accelerated future expansion. We have accelerated our capex in Dhamra, because of the shoot volume coming up especially because of the RSR, Rail-Sea-Rail, Postal Cargo Movement. We have accelerated our capex in Hazira because of the liquid. Vizhinjam already we are at 100% capacity. And in the West Asia crisis, we had many vessels waiting outside. We are not waiting for the Phase 2, and we have kicked off already the Phase 2. Phase 2, we are ahead doing it with automated terminal. To answer your question, we have accelerated the capex because we want to have more than 1 billion capacity investment by 2030.

In a complicated multidimensional business, managing it so well requires depth of management. I just have to congratulate on transparency of disclosures and the granular details. Logistics has reached double-digit ROCE remarkably quickly.

Thank you very much for your appreciation. Last 2 years, the quality of questions you all have asked has really helped us in redrafting our disclosures. We put ourselves in your shoes, that you are in front of investor. On Logistics, nothing has changed. The strategy which we talked about 1.5 years before, we are just fine-tuning it. We have reduced the capex in Logistics because we believe we can give more profitable growth with less capex. We can give better than peers because we know how to maximize the utilization of the assets and that can be only done by talent and technology. We use the same truck which can do 1 trip and now we are getting 3 trips with the same truck. The margins are getting tripled.

You guided for about 11% to 16% kind of revenue growth for FY27. What are the assumptions built in here? How is the current scenario on the ground?

We don't have the crystal ball, but our business has continued. Resilience is at the core business and agility is driving it. More than 93% of the vessels are coming out of the window. We have to choose the crisis before the crisis chooses us. The minimum range is if we grow exactly as India is growing in optimistic way. If India growth goes down, we do 1.5x of India growth. That's our minimum. If India is optimistic, with news of crude, news of imported coal and many other tailwinds, then we can go up to 1.7x, 1.8x without any acquisition. What we have considered in our guidance is the flat. For us, flat is 1.5x India growth.

On Ambition 2031 / 850 million ton 2030 - implied on the domestic port side, volume growth rate is closer to 14% CAGR. In comparison, FY21 to '26 you had benefits of acquisitions like Krishnapatnam Port and Gopalpur. How do you intend to achieve 14% CAGR?

I think you will agree that we can grow 1.5x without inorganic. So if India is growing at 7%, we can easily do 10% or 11%. Then let's not forget the fact that we have 5 years where we have the merger and acquisitions. You also know that many of the concessions are for renewal at the other ports before 2031. So we will not disappoint you.

Can you help us tie up domestic growth with the ROCE growth part? Maybe if you can put numbers like current gross block to capacity and incremental capex per gross block?

As we have highlighted in our Ambition deck, essentially, we are looking at almost about 1 percentage point or 100 basis point increase in our ROCE every year all through the next 5-year time frame. We do anticipate a significant chunk of that coming from domestic ports. A bulk of it will happen through organic, where the capex intensity is actually likely to be in our favour given these are expansion of existing ports. You should ideally see a continuous increase in domestic ports ROCE going forward. We expect to maintain the same trend going forward as well.

On domestic volumes - on containers, why has growth been a bit more modest even in Mundra? Is it largely Middle East? What are the reasons for that?

First of all, Morbi is all gone is zero because of LPG. So the scrap is zero from Middle East. The paper is zero. The impact of Middle East is not zero. 85% or 90% of the Morbi closed. So the export from India - look at the freight cost. One is the Middle East impact, which is not much. But it is definitely the impact which is scrap and the paper and limestone and other windows. The more impact is the indirect impact. Like Morbi, there is also indirect impact on the exporters delaying their decision to export because of the high freight cost. Look at the inventories of the manufacturers. They are running at the minimum inventory. They have been pushing their decisions forward because they are waiting for the freight cost to be back to normal.

With respect to Marine margins - is there any one-off out here? Are these new normal margins we should work with?

This is a business which is driven by the customer contracts. We should not conclude this business depending on just one quarter. It is just a combination of renewal of the contracts and getting the new vessels in the fleet and the dry docking, which is the maintenance. With this situation in West Asia, we have absolutely no force majeure. Refineries are working, our vessels are there. It's just a question of maybe February or March seasonality.

On the SEZ port development income, INR891 crores - what is this? How sustainable is this, and does the Mundra port number include this INR890 crores?

If you look at our investor deck, Page number 19, where we have given the port-wise breakdown - Typically, SEZ is clubbed under that Mundra line. And we have carved it out this time around. So you can see the separate margin profile of the Mundra Port. The SEZ income, as you have seen in the past also, there is no set pattern to the SEZ income. It tends to be volatile. It really is a function of the underlying transaction activity that we have at our SEZ parcels. It does not necessarily mean that the same Q4 volume will drop in the next quarter. It has historically been episodic and historically been transactional for us, and it will continue to be the same going forward.

Net debt to EBITDA is down to 1.8 or 1.9. Are you looking to optimize it further? What do you think is an optimal structure right now of debt now that you bought back a bit?

Slide number 36 - first objective for us is to invest in the organic capex, which is between 60% to 70% of our annual operating cash. The second priority is the strategic M&A which brings the top line growth and the bottom line growth. To keep net debt to EBITDA is our first objective before we start talking about growth step because we want to use net debt to EBITDA ratio to push our profitable growth. Reducing the gross debt, we have been doing it systematically, but this is after we go through the allocation for the profitable growth. We did the dollar buyback because the exchange rate impact is on one side positive for the revenue but not positive for the gross debt. We want to keep a balance between mid to long term and slowly, we will of course optimizing the mix of our debt.

Is the 2.5x target a ceiling? Or something you aspire to optimally? Over the next 5 years, will buyback be one of the tools you use to lever your balance sheet? With currency depreciation, how do you see by the end of this decade, your debt mix in terms of currency exposure?

Our priority will not change. Our priority number 1 is to invest in the capacity expansion and creating new capacities. Our priority for strategic M&A. And last, but not the least, we do believe in creation of wealth in mid to long term for our shareholders. Return on capital employed is much more important than a short-term benefit. Buyback would be the last option, but I don't think we will talk about it, because we do see a lot of opportunities in front of us. Krishna Menon: 2.5x is just the ceiling which we have put. For example, if tomorrow I get a $9 billion merger and acquisition I will go for it, because it will change the game of APSEZ. But then the net debt to EBITDA like it go to 3.2, 3.3 for 2, 3 days it's fine as far as I have means to fund it. We finished with 1.9, but if you see the next year, if we don't visit capex, we will go 1.3. So with the gap between 2.5 and 1.3 is 1.2 -- so I can go easily for a billion dollar of how many acquisitions.

How should we think about underlying operating leverage in your businesses? Logistics business will grow much faster, so on a headline number, the operating leverage is not very visible. How should we think about yield given currency depreciation?

Cost per ton for us is almost flat. And revenue for that is increasing, you can include the rupee depreciation in it and the difference you will see that it our pricing power and the services we are providing. There are three factors in revenue per ton increasing - number one they're adding services, number two the exchange rate and the number three is pricing. Cost per ton is almost flat. When I say almost flat, I'm talking about absolute inflation. This is all offset by productivity. Our target is to keep exactly flat for the next 5 to 6 years. By investing in the automation. If Vizhinjam is doing 40 the automated trains is doing 30 moves per hour, Mundra is doing 26 to 27 per hour. We are very comfortable even with the inflation that we will keep 70% and above the EBITDA margin and the end goal is to give better return on capital.

It's been over 3 weeks since the cease fire announcement, but the vessel crossovers in the Strait of Hormuz are still constrained. What would happen if the situation remains for another month or two? What has been your experience in April?

I am on Twitter, so I look at Twitter to know what will happen in next 1 hour. So I can't say what will happen. What we are doing at our end is to make sure that we have adaptability and flexibility. What India has seen is absolutely no impact on the crude. There is a coastal shipment, which is coming on the crude, there is now this new route which is open so crude will continue to grow. LPG is something which is a question, LPG will soon slowly will be replaced by PNG and the electricity. Electricity is again coal. So imported coal or coastal coal everything will be replacing in terms of cargo drop in LPG. The impact on commodities like scrap which comes to Nhava Sheva so that's why you would have seen in the month of March, we had a drop in Tumb. We have to adjust to the new normal and let's not keep waiting that situation will be better tomorrow.

On cash flow from operations - what is the EBITDA to CFO conversion?

If you see almost 85%, 90% of our cash flow comes through from EBITDA. So that won't change. That profile remains the same and it will continue. Ashwani Gupta: We have INR20,300 crores, Sumit, this year.

Trial runs have happened at JNPT for both upstream and downstream for the DFC. What is holding back the final commissioning?

I'm not the spokesperson. But only thing I know that it has not started. And even if it starts, as CONCOR MD Mr. Sanjay Swarup has said officially last time, in the Analyst call, that still they have two choking points. So let's see that when and how it will be effective. Or even if it is effective the catchment area of JNPT and catchment area of ours are totally different. Second, we still have the advantage of two slabs on the rail cost. So definitely, I think JNPT connected with DFT will improve the delivery to their customers, but we will have no impact on all of this, that's what we said last time.

Are our ports in Mundra and Vizhinjam benefitting from realignment from shipping line services due to the West Asia conflict - and if yes, then by how much?

It's difficult to quantify it but for sure they are getting benefitted. At least Mundra is getting benefited but Mundra is also getting impacted. Vizhinjam is getting benefited in terms of volume that's why we are accelerating the Vizhinjam space too. Soon we will also start working on the exit cargo from Vizhinjam because there's a huge potential in the catchment area for Vizhinjam for exit. You already have approval for the main connection and the highway connection. So there's a huge potential, so we are accelerating the investment in Vizhinjam for phase II and Colombo. So these two will really be great. Mundra is benefiting but Mundra is also impacted.

Mundra continues to grow at around 4% and JNPT at 12% - so the primary reason is because of Mormugao?

I will give you - it's important to understand how the JNPT works. They have the capacity the capacity more than they require. We have the capacity what we require. After this disturbance, more than 90% of the vessels are coming out of the window. I will try to be flexible, I will try to be adaptable, but they have an empty playground - and with the warm welcome they are accepting every vessel. So definitely, they will have a better advantage in terms of that. Now the question is growing at what cost and what profit? We are waiting for our CT5 to be open. But again, we will do only the meaningful cargo, which is bringing high realization. In addition to the percentage growth of volume, it's also important to see what is the realization, what is the margin each port is creating.

In international volume of around 22 million tons, how much is NQXT contributed in this? Can you also split between Colombo, Haifa and Tanzania?

Roughly about 11 million tons. Tanzania roughly about 1.1 MMT a month. Israel is running a number of about between 0.7 to 0.9 a month. And Colombo does about 120,000 to 125,000 TEUs a month. 11 nowadays your NQXT you will have a little over your 3 million coming from Tanzania, approximately 2.5 to 2.6 coming from Israel and the balance is Colombo. Ashwani Gupta: Maximum growth is coming from Tanzania - from Colombo.

Over the next 5 years, we are estimating about $1.2 billion, $1.3 billion of capex in marine. What is the medium-term plan there? Are we looking at doing more in other countries globally?

Rahul Agarwal: Our marine business or our marine vertical does not include the captive ports. The ports, the trucks that work in our own ports for customers are consolidated under domestic ports. Marine is entirely a third-party business for us. Ashwani Gupta: We finished roughly 8% of our business which is marine now in terms of revenue. We have 77% market share on the near terms - then we acquired Astro with more than 20 vessels at that time. Those vessels are offshore tugs, offshore vessels used as anchor handlers, barges, but mainly the work boats. Work boats have an advantage of having mid- to long-term customer contracts, but also not as much cyclic to the trade as compared to the shipping business. Now when we brought Astro, we have more than 20 vessels we have more than 50 vessels. We have Middle East, we have North Africa, we have West Africa, and now we are getting into Europe. So very soon you will hear that our vessels are deployed in Europe which means learning from West Asia crisis. We are redefining our offshore marine strategy to also include the Mediterranean sea in our offshore vessel deployment. And this is part of corporate risk management.

On capex for others - INR6,000 crores to INR8,000 crores in technology decarbonization. What exactly are we looking at?

It's a combination of multiple items. We have a public commitment for net zero 2040 and we recently signed up for TNF as a biodiversity reporting framework. These initiatives typically entail capex in the nature of higher renewable and electricity. It could be in the nature of higher sequestration activity, more plantation roads. It will also typically entail active reduction of our emission footprint, which means substantially higher volume of battery-operated trucks within our premises. We will have a very large part of our equipment running on electricity as opposed to diesel. Technology is an ongoing initiative - strategic command centre. There are multiple internal initiatives that are being taken from a technology standpoint to be able to step up efficiency level. It's a healthy mix between tech upgrades, new technology adoption, AI adoption and the fairly extensive decarbonization plans. Ashwani Gupta: Sustainability is at our core. Sustainability for us is not cost plus. It's not regulation, it's not compliance. If you look at Slide number 31 of our Ambition 2031, you will see all the investments which we are doing in sustainability. If I am investing in the electrical trucks in Mundra that is not only for environment that is not only for ESG. It is bringing me economical benefit.

There was news flow around the group possibly looking at shipbuilding opportunity. If anything happens on Mundra, is it fair to assume it will happen under Adani Ports?

I don't think that's our competency. Our competency is to build the infrastructure ecosystem and to run it efficiently and effectively. Our competency is not shipbuilding. If a company comes and wants to build a ship at our Mundra port we have the easy approval, we will give it. We are helpful because it is good for country. But do we really want to ourselves get into the shipbuilding I don't think so, that's not our competency.

In the Annexure, coal in Mundra is lower than Q4 FY '25. And coal volumes across all ports in Q4 FY '26 have been lower than the base year. Do we expect coal volumes will come up in Q1?

I think Rahul will make a separate call with you because I don't think we should look at coal as a coal. You have 3 kinds of coal. You have coking coal where we have increased more than 7.5% then we have the coastal coal where we have increased 5.1%. Obviously, there is imported coal, which is reduced, but that is in line with the country's strategic direction. At the end, coal is increasing. The coal which is increasing is in the strategic direction of the country, which is more coastal coal and coking coal because to support the steel production.

Logistics volumes are not up significantly, but EBITDA and revenue per ton are growing significantly. What is the strategy behind that?

That strategy is very simple. We wanted to demonstrate that we can give you double-digit return on capital employed. So we adjusted our business mix to give you maximum return and build the confidence in you and now we will push the volume.

If I see your India port EBITDA performance, that's a good growth of about 10%, whereas volumes have been kind of flat on India port volumes. So is that because a part of your revenue is in dollars and you are getting a currency benefit?

You're right in that the realization is ahead of the revenue growth is ahead of the volume growth emulation is correct. It's not just currency. There's a combination of factors. It includes currency. There is also the component of the pricing changes that we take when permits gets revised and it is also a function of product mix. Container being the fastest growing commodity and marine growing alongside it because these are dollar-linked cargoes naturally benefit us, as the rupee depreciates vis-a-vis the dollar. Rahul Agarwal: If you look at our cargo, roughly about 40%, 45% of our cargo is containers. So that's dollar-linked and our harbour income is dollar linked. Adani harbour income is dollar-linked.