Summary
Snowman Logistics Ltd. - Q3 FY 2026 Earnings Call Summary Friday, February 06, 2026 04:30 P.M. IST
Event Participants
Executives 8 Ishaan Gupta (JMD & Director), Kartik Sundaram Aiyer (CFO - Gateway Distriparks), Manoj Singh (CSO - Gateway Distriparks), Padamdeep Singh Handa (CEO & Director), Prem Kishan Dass Gupta (Chairman & MD), Raghav Garg (CFO), Rajguru Behgal (CBO - Gateway Distriparks), Samvid Gupta (JMD & Director)
Analysts 5 Kunal (Fair Value Capital), Muralidhara Reddy (Individual Investor), Prashant Kale (Star Capital), Rusmik Oza (9 Rays), Vipulkumar Shah (Individual Investor)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Warehousing Revenue Growth | +19% YoY | Growth driven by capacity additions in Krishnapatnam and Kolkata; +5% QoQ growth. |
| Total Capacity | 155,000 pallets | Management aims to expand this to 200,000 pallets over the next 2-3 years. |
| Group Cash Balance | ₹140 crores | Net of Indore land acquisition; Group reached net-debt free status (ex-Snowman) in Jan 2026. |
| Group Gross Debt | ~₹200 crores | Excluding Snowman debt; target remains 75-80% debt-funding for future capex. |
| Effective Tax Rate | 34.9% | Increased from previous 25% levels due to shift to the 30% slab plus surcharges. |
| 5PL Inventory Value | ₹14 crores | Represents 15-20 days of trading inventory held on the balance sheet for the 5PL segment. |
Geographic & Segment Commentary
- Warehousing (Frozen/Chilled/Dry): Segment EBIT margins have declined (sub-3% this quarter) due to a shift in the mix toward chilled and dry warehousing. Management noted dry pallets now yield ₹850–₹1,000 (up from ₹600–₹700) and are essential for “stickiness” with QSR and coffee chain clients who require multi-temperature storage.
- 5PL (Fifth Party Logistics): This segment involves high-value inventory trading where Snowman manages the entire supply chain. Revenue includes the total traded value of goods; financing terms for working capital are client-specific and charged for when provided by Snowman.
- Transportation/Rakes (Group): The group currently operates 34 rakes and has ordered 3 high-capacity, high-speed wagons. By June 2026, the fleet will reach 37 rakes after swapping 3 older units for high-capacity versions.
Company-Specific & Strategic Commentary
- Asset-Light Expansion: Snowman is pursuing a “build-to-suit” model where landlords develop facilities to Snowman’s specifications, allowing for capacity growth without heavy upfront capex or debt.
- Indore Project (ICD): A new rail-connected terminal at Pithampur (Indore) is planned with a ₹150 crore investment and 120,000 TEU capacity. It will connect to the new Indore-Dahod rail corridor reaching JNPT, with a 2-year operational timeline.
- Margin Strategy: Management is prioritizing absolute EBITDA expansion over percentage margins in the short term, reinvesting cash flows to drive the 200,000-pallet capacity target.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Capacity Target | 200,000 pallets (2-3 years) | Driven by upcoming facilities in Pune and other strategic locations. |
| Annual Capex | ₹100 - ₹150 crores | To be funded via 75-80% debt and internal accruals for Snowman specific expansion. |
| Payback Period | 7-8 years | Standard target for new cold storage warehouses, which have a 25-30 year asset life. |
| Double Stacking | +2% to 3% increase | Expected improvement in rail operations efficiency following DFC connectivity. |
Risks & Constraints
| Risk | Context |
|---|---|
| Asset Quality/Land Dispute | The Krishnapatnam land title is contested by the government; Snowman continues operations while the matter is in High Court. |
| Project Delays (Jaipur) | An ₹8-9 crore Benami dispute involving an aggregator has halted the Jaipur ICD project, which requires that specific land for a 1km rail siding. |
| Margin Compression | Shift from high-margin frozen storage to lower-margin dry storage for QSR clients has diluted overall warehousing EBIT. |
Q&A Highlights
Warehousing Margins
- Question: Why have warehousing EBIT margins dropped from 15-20% to below 3%? (Kunal)
- Answer: The mix has changed from predominantly frozen to include chilled/dry storage and the “Park & Pay” model, which are lower margin but add to absolute EBITDA. Dry storage is necessary to service QSR/coffee chain clients (Handa/Gupta).
Land & Governance
- Question: What is the status of the Benami issue and land disputes? (Muralidhara Reddy/Vipulkumar Shah)
- Answer: The Jaipur issue involves ₹8-9 crores with an aggregator; the company is contesting this based on top legal advice. For Indore, the company did “direct registry” with landowners to avoid aggregator-related risks (Samvid Gupta).
5PL Business Model
- Question: Why is inventory low if you are doing 5PL trading? (Kunal)
- Answer: The company only maintains 15-20 days of inventory (₹14 crores) to keep the model efficient. Revenue reflects the full traded value (Raghav Garg).
DFC & Trade Deals
- Question: How will the US/EU trade deals and DFC connectivity impact volumes? (Rusmik Oza)
- Answer: US-bound exports (textiles, handicrafts) are 25% of current volumes and should grow. DFC connection to JNPT by March 2026 will likely shift road volumes to rail (Behgal/Gupta).
Key Takeaway
Snowman Logistics reported a 19% YoY growth in warehousing revenue for Q3 FY26, though segment margins faced pressure due to a strategic shift toward a multi-temperature mix (Frozen/Chilled/Dry) to support QSR and Quick-Commerce clients. The company is aggressively pursuing a capacity target of 200,000 pallets within three years, funded by a mix of debt and asset-light “build-to-suit” leases. While the group has achieved a near net-debt-free status (excluding Snowman’s specific debt), management remains focused on reinvesting cash flows into expansion projects like the Indore ICD and Pune warehouses. Key watch-points include the resolution of land title disputes in Jaipur and Krishnapatnam and the expected volume uptick from the Western Dedicated Freight Corridor (DFC) completion in March 2026. The company remains committed to high-capacity rake additions to capitalize on shifting EXIM trade flows.
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