Snowman Logistics and its parent company Gateway Distriparks Limited (GDL) have reported mixed results for the second quarter, with rail operations showing growth while facing challenges in the Container Freight Station (CFS) and cold chain segments.

Rail Operations Show Resilience

GDL reported an EBITDA per TEU of INR 9,300.00 for its rail operations in Q2. The company has seen an increase in its double-stack percentage from 39% in the previous quarter to 41% in the current quarter, indicating improved operational efficiency.

Samvid Gupta, Joint Managing Director of GDL, expressed optimism about future growth: "We're expecting double-digit growth closer to maybe 10% to 15% from our existing locations over the next 2 to 3 years, not counting Ankleshwar and domestic volumes or any other new location."

Market Share and Expansion

GDL has maintained its strong position in key markets:

The company has also commenced domestic services from Ankleshwar, targeting 1,000+ TEUs monthly within two years. This move into the domestic market is part of GDL's strategy to diversify its operations and mitigate risks associated with international trade fluctuations.

CFS Segment Faces Temporary Setback

The CFS segment experienced a dip in performance, with EBITDA per TEU dropping to INR 1,000.00. Samvid Gupta attributed this to "some one-offs, which included legal costs and repair and maintenance. There was also a dip in exports because of the US tariff situation." However, he expressed confidence that this would improve in the coming quarters, with a target range of INR 1,300.00 to INR 1,400.00 per TEU.

Snowman Logistics: Challenges and Strategies

Snowman Logistics, GDL's cold chain subsidiary, faced challenges in both its transportation and warehousing segments:

Transportation Segment:

• PBT margins dropped to breakeven levels
• The company is realigning its business model and removing low-margin operations
• Management expects to restore margins to high single-digit PBT levels

Warehousing Segment:

• Revenue maintained at INR 60.00 crores
• PBT margins declined from 12% to 3% due to:
  1. Reduced capacity utilization
  2. Weather-related power cuts increasing diesel consumption
  3. Stress in seafood warehouses

Padamdeep Singh Handa, CEO of Snowman Logistics, stated, "We are seeing positive traction from December onwards till the year-end, we are expecting good volumes."

Future Outlook and Strategies

1. Expansion Plans: Snowman Logistics plans to invest INR 100.00-150.00 crores annually, primarily for developing two to three owned warehouses.

2. Fleet Optimization: The company is moving out aging fleet and replacing it with new vehicles, with a focus on leasing and some capex on EVs and CNG vehicles.

3. 5PL Segment Growth: Snowman is working on securing 2-3 major accounts in the 5PL space, with at least one expected to close.

4. Trade Agreements: GDL expects positive impacts from potential trade deals with the UK, EU, US, and other countries, which could boost container volumes.

5. Domestic Market Entry: GDL's move into domestic services from Ankleshwar represents a strategic shift to balance its portfolio and reduce dependence on international trade.

As both companies navigate through temporary challenges, they remain focused on long-term growth strategies and market expansion. The management's outlook suggests a cautious optimism for the coming quarters, with expectations of improved performance across various segments.

Snowman Logistics , a leading cold chain logistics provider, has reported a net loss in the second quarter, despite an increase in revenue. The company's financial performance reflects the challenges faced in the cold chain logistics sector.

Financial Highlights

Snowman Logistics experienced a year-on-year revenue growth of 11.43% in Q2, with total revenue reaching 1,560.00 million rupees compared to 1,400.00 million rupees in the same quarter last year. However, this top-line growth did not translate into profitability.

Profitability Challenges

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) declined to 200.00 million rupees from 220.00 million rupees in the corresponding quarter of the previous year. This resulted in a contraction of the EBITDA margin from 15.36% to 12.84%, indicating increased operational costs or pricing pressures.

Most notably, Snowman Logistics reported a net loss of 29.00 million rupees in Q2, a significant downturn from the 6.00 million rupees profit recorded in the same period last year. This swing to a loss position suggests that the company faced substantial challenges in managing its costs and maintaining profitability despite the revenue growth.

Segment Performance

The company's financial results reveal performance across three key segments:

1. Warehousing Services: This segment remains the largest contributor to revenue.
2. Transportation Services: The second-largest revenue generator for the company.
3. Trading and Distribution: A growing segment that has shown increased contribution to the overall revenue.

Market Implications

The mixed financial results from Snowman Logistics may raise concerns among investors about the company's ability to translate revenue growth into profitability. The decline in EBITDA and the net loss position could potentially impact investor sentiment in the short term.

However, the continued revenue growth suggests that demand for cold chain logistics services remains strong. The company's ability to address operational inefficiencies and improve its cost structure will be crucial for returning to profitability in the coming quarters.

Investors and market analysts will likely be watching closely for any strategic initiatives or operational improvements that Snowman Logistics might implement to reverse the profitability trend while maintaining its revenue growth momentum.

As the cold chain logistics sector continues to evolve, Snowman Logistics' performance in the coming quarters will be indicative of both company-specific factors and broader industry trends affecting this crucial segment of the supply chain industry.