Delivering Trust
The fast-growing logistics, transportation and delivery sector performed well in 2023-24, showing positive intent and promise of a better next fiscal
The rising tide of economic growth is slowly but surely lifting all sectors of the economy. Thanks to the surge in ecommerce and technological advancements, logistics companies in India are growing and expanding operations.
Fiscal year (FY) 2023-24 brought further growth to several logistics-transportation companies like including Delhivery, ECom Express, TCI, Blue Dart, and Mahindra Logistics, among dozen other players.
Delhivery and ECom Express leveraged tech innovations to enhance delivery speed and efficiency, catering to the ecommerce boom.
TCI and Blue Dart have expanded their network and services, ensuring robust supply chains. Mahindra Logistics has focused on integrated solutions, supporting various sectors from manufacturing to retail.
These logistics firms are crucial for India's economic growth, enabling seamless connectivity and fostering trade across regions.
Ecom Growth Strategy
Talking to BW Businessworld, Ajay Chitkara, the recently appointed CEO & and managing director of Ecom Express says the company is eyeing rapid growth over the next five years.
As it is, the logistics industry has been experiencing 15-20 per cent CAGR post-Covid, marketplaces have been growing at 8-10 per cent and the D2C segment at 30 per cent.
“The company is focusing on continuous innovation to meet the evolving demands of the digital commerce ecosystem, leveraging its extensive network, speedy deliveries, and reliability,” says Chitkara.
Recognising that 60-70 per cent of online customers prioritise and are willing to pay for faster deliveries, Ecom Express has launched Same Day Delivery (SDD) services in the top 30 cities. The company is also enhancing its reverse logistics to handle the 15-20 per cent return rate of online orders efficiently.
Hearty Performance
For FY24, leading logistics firm Transport Corporation of India (TCI) posted nearly 11 per cent YoY growth in consolidated net profit at Rs 3,545 crore. For the full fiscal, TCI revenues were higher by 6 per cent YoY at Rs 40,242 crore.
Vineet Agarwal, MD, TCI described Q4 as the 'best quarter' for the company. For FY25, TCI plans to infuse Rs 375 crore as capex, with Rs 100 crore each going to trucks and railway rakes, offices, containers and warehousing assets while Rs 75 crore would be kept handy for placing orders for two ships.
Blue Dart, another major player in the logistics market and a market leader in India’s air express market with a 54 per cent plus share, generated a revenue of Rs 5,268 crore in FY24 and a profit after tax (PAT) of Rs 289 crore.
Balfour Manuel, Managing Director, Blue Dart Express, says, "In FY24, our profit margin levels have been sustained amidst network expansion and infrastructure investments in the recent quarters.
These initiatives included the establishment of crucial air routes through the acquisition of two 737 freighters and the inauguration of state-of-the-art facilities."
Even the state-owned Container Corporation of India (CONCOR) did well in FY24. On full-year basis, the company recorded 7.4 per cent increase in consolidated net profit to Rs 1,260.59 crore on around 6 per cent increase in net sales to Rs 8,653.41 crore in FY24 over FY23.
CONCOR operates 59 terminals across the country along with two strategic tie-ups. The company's primary operation is to provide inland transportation of containers from ports using rail wagons. The company also manages cold storage chains and warehouses.
However, Mahindra Logistics (MLL), on full-year basis, reported a consolidated net loss of Rs 52.07 crore in FY24 as against a net profit of Rs 27.42 crore recorded in FY23.
Revenue from operations rose 7.36 per cent YoY to Rs 5,505.97 crore in FY24. Commenting on the performance, Rampraveen Swaminathan, Managing Director and CEO of Mahindra Logistics says: "Overall, in FY24, excluding the one-time charges, earnings across our core 3PL and other businesses were stable and improving.
Completion of the second tranche of investment in Zip Zap Logistics will help us further consolidate and provide an expanded range of services from last mile delivery to micro-fulfilment." MLL is an integrated third-party logistics (3PL) service provider, specialising in supply chain management and enterprise mobility.
For transportation-logistics company Delhivery, FY24 was a mixed bag with a lot of positives. For example, its revenue from services in reached Rs 8,142 crore, up 13 per cent from Rs 7,224 crore in FY23.
EBITDA also improved significantly by Rs 578 crore, achieving Rs 127 crore in FY24 from a loss of Rs 452 crore in FY23. And its loss after tax decreased sharply by Rs 759 crore to Rs 249 crore in FY24 from Rs 1,008 crore in FY23. The Express Parcel shipments for Delhivery grew 11 per cent to 740 million in FY24 from 663 million in FY23, with revenue increasing 12 per cent to Rs 5,077 crore from Rs 4,552 crore.
Sahil Barua, MD & CEO, said, “FY24 has been a crucial year for us where we delivered consistent service levels, significantly improved profitability, completed a large portion of our planned long-term capital investments and achieved material working capital improvement."
With cheap and fast data, ever penetrating ecommerce business, better and faster network of expressways and highways and steady modernisation of railway network, the logistics sector is only going to do better each year.
