Allcargo Logistics Ltd (ALLCARGO) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Allcargo Logistics Limited Q2 and H1 FY '27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an
Moderator: by pressing star then zero on your touch-tone phone. I now hand the conference over to Mr. Shahrukh Garg from Stellar IR Advisors. Thank you, and over to you, sir.
Shahrukh Garg (Stellar IR Advisors): Thank you. Good afternoon, everyone, and thank you for joining us today. We have with us the senior management team of Allcargo Logistics Limited, Mr. Ketan Kulkarni, Managing Director and Chief Executive Officer; Mr. Deepal Pareek, Chief Financial Officer; and Mr. Sanjay Punjabi from Investor Relations. The management will be sharing operating and financial highlights for the quarter ended 30th September 2026, followed by a question-and-answers session. Please note that this call may contain some of the forward-looking statements, which are completely based upon the company's beliefs, opinion, and expectations as of today. These statements are not a guarantee of the company's future performance and involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statements to reflect the developments that occur after the statement is made. With that, I would like, now like to hand over the conference to Mr. Ketan Kulkarni. Thank you, and over to you, sir.
Ketan Kulkarni (Allcargo Logistics Ltd): Thank you. Thank you, dear. Good afternoon, everyone, and thank you for joining us today. Our results presentation and press release have been uploaded to the stock exchanges and our website, and I trust you have had an opportunity to review them. When we spoke at the start of this fiscal during our Q1 call, we outlined our foundational philosophy of scaling Allcargo Logistics. That sustainable growth rests on disciplined execution, customer-centricity, and the clear principle of deliver value and command value. That framework has guided the organization to a second consecutive quarter of profitability. Looking at the quarter gone by, Q2 FY '27 was essentially a tale of two distinct phases. During July and August, we witnessed general market softness and sluggish demand across several trade corridors. However, September marked a visible inflection, with market activity and demand sentiment improving meaningfully. What is particularly encouraging is not just the market recovery in September, but the speed and responsiveness of our organization. Because of agile business teams and operating systems that we have institutionalized, we were able to quickly adapt to our network capacity, pivot resources, and capture volume momentum as soon as demand rebounded. As we shared during our last call, we remain firmly focused on continuous service excellence. Over the past quarter, our targeted interventions to improve transit reliability and reduce turnaround time have yielded strong tangible results on the ground. Superior service delivery has reinforced our ability to demand the right price in the marketplace. Backed by this improved service equation, we have witnessed healthier realizations across our core offerings. Let me reiterate that we will continue to maintain this strict, service-led pricing discipline going forward. We will not compromise on yields for indiscriminate growth. On the cost front, we have maintained rigorous discipline across both our direct operating expenses and general and admin overhead costs. This tight operational control has protected our unit economics and enabled continuous sustainable profit. Turning to our Consultative Logistics vertical, we remain steadfast in our guiding philosophy of delivering more from less for our enterprise clients like engineering, customized asset-light solutions and efficient supply chain systems. I'm pleased to report that this approach continues to gain traction, with the business clocking a healthy 5.8% revenue growth year-on-year for the quarter, reflecting deepening client wallet share and strong reference ability in the market. Finally, on our digital and technology roadmap, a key highlight of this quarter has been the rollout of our new booking application. By embedding artificial intelligence directly into the booking journey, the platform simplifies complex workflows, significantly cuts down manual intervention and
Ketan Kulkarni (Allcargo Logistics Ltd): its order processing times. More importantly, it delivers an intuitive, seamless experience for our customers while structurally lowering cost to serve. To sum up, H1 FY27 has demonstrated the resilience of our operating model with service-led pricing intact, disciplined cost structures, and an agile commercial engine. We enter the second half of the year confident of driving our volume expansion and creating sustainable shareholder value. The macros. India's GDP growth for Q1 stood at 7.8% and is expected to continue growing in the similar range for the full year of FY27. This signifies stable underlying industrial and retail demand, underpinning domestic surface movements. For Q2 FY27, the macro backdrop was represented by the sluggish industrial activity during the monsoon months of July and August, followed as I recently mentioned, an uptick in September. This is represented by high-frequency indicators like e-way bill generation, which crossed 141 million run rate, and GST collections, which maintained a 14.7 YoY in the month of September. Coming to Allcargo Logistics, we have started FY27 on a strong footing and have continued the performance momentum in Q2 FY27 too with another quarter of profitable growth. Our strategy of focus on service and customer centricity along with operational discipline while driving structural cost efficiencies is providing us the desired results. We will continue to walk down this path. Our goal is not just to maintain profitability but to build on these platforms. I would also like to take this opportunity to introduce all of you all to our Chief Transformation Officer and Managing Director designate, Mr. Vijay Nehra. Starting 1st of Jan 2027, Vijay will take over as the company's Managing Director and Chief Executive Officer. I will be moving to a new role at the Allcargo Group. Vijay brings experience across financial services, pharmaceuticals, FMCG, e-commerce, and tech-led businesses. Starting his career in supply chain at Hindustan Lever and then moving into senior sales and customer management roles, also then subsequently senior leadership at Indiabulls Real Estate, Indiabulls Housing Finance, and Indiabulls Asset Reconstruction Company. Before joining Allcargo, where he was CEO of Ozone Pharmaceuticals. Let us all welcome Vijay. Thank you. With that, I hand the call over to our CFO, Mr. Deepak Pareek. Over to you Deepak.
Deepak Pareek (Allcargo Logistics Ltd): Thank you, Ketan. I'm pleased to present the financial results for the second quarter and half year ended September 30, 2026. As outlined, this quarter was characterized by operational agility, firm service-led pricing, and disciplined cost governance. The cumulative impact of these actions is clearly visible in our numbers. We have delivered resilient top-line expansion along with substantial operating leverage, tight cost stability, and strong bottom-line growth on both year-on-year and quarter-on-quarter basis. For Q2 FY27, our revenue from operations stood at ₹555 crores, registering a growth of 3.4% YoY compared to ₹537 crore in Q2 FY26 and an increase of 1.6% quarter-on-quarter from ₹546 crore to in Q1 FY27. For the first half of the year, H1 FY27, revenue reached ₹1,101 crore, up 7.1% year-on-year from ₹1,028 crore recorded in H1 FY26. A defining highlight of our operating performance this quarter has been the rigorous control across all our cost lines, which remained either flat or trended downwards despite the scale of business expanding. On the back of this direct cost discipline, gross profit for Q2 FY27 expanded by 13% YoY
Deepak Pareek (Allcargo Logistics Ltd): and 6.7% quarter-on-quarter to ₹174 crores. Our gross margin improved significantly to 31.4%, representing a substantial 270 270 basis points expansion year-on-year, vis-a-vis 28.7% in Q2 FY '26. and a 150 basis points expansion quarter-on-quarter, vis-a-vis 29.9% in Q1 FY '27. EBITDA for Q2 FY '27 grew by 24.2% YoY and 8.5% quarter-on-quarter to ₹77 crore compared to ₹62 crores in Q2 FY '26 and ₹71 crores in Q1 FY '27. EBITDA margin expanded by 240 basis points year-on-year to 13.9%, vis-a-vis 11.5% in Q2 FY '26 and up 90 basis points sequentially from 13. 13% in Q1 FY '27. PBT for Q2 FY '27 stood at ₹24 crore, more than doubling with a 166.7% YoY growth compared to ₹9 crore in Q2 FY '26 and a sur- and surging 26.3% sequentially from ₹19 crore in Q1 FY '27. And thank you. With that, I complete the overview on the financial summary. And now, I would like to open the floor to the operator for your questions. Thank you.
Moderator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. Participants who wish to ask questions may press star and one. The first question is from the line of Prateeti Khara from Param Capital. Please go ahead.
Prateeti Khara (Param Capital): Hi, thanks for the opportunity. I just wanted to understand on the volume degrowth that we see in Express as well as in Consolidated [inaudible] 5.5% year-on-year, because the other industry players in the industry have grown in terms of volume and has been very strong for everyone else. What is the reason for our degrowth and if you could also highlight a little bit on our growth plans in terms of expansion although I do understand our focus is on profitability.
Ketan Kulkarni (Allcargo Logistics Ltd): Yeah, thank you for your question, though the line was a little weak. I This is Ketan here. I understood the question as being on the volume front. So, I will answer that now. We are in the process of deliberately kind of upgrading our portfolio mix. In the Express logistics segment our revenue has grown 7.7% YoY and volume has stabilized now. And with that, we have also improved our realization per ton, indexed to about 107.5. So, our core operating philosophy is delivering service and deserving the volume thereafter. During this period, a lot of shifting across cost structure that happened, chasing unviable, low margin tonnage, you know, destroys long-term value. Instead, we focused extensively on improving our net service levels, which is operating quality, which scaled to about 110.2 indexed on Q2 FY '27. So, ensuring superior, reliable service quality for sticky, high-value growth customers, further, festive demand is expected in Q3. We just concluded the first month of Q3, which is October.
Ketan Kulkarni (Allcargo Logistics Ltd): looks very, very strong, with good green shoots across all verticals and geographies. All this will naturally augment our volumes, and our focus going ahead will remain firmly rooted on high yield and service-led execution. Does that answer you, ma'am? Thank you.
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