- Cumulative growth in the IIP index for the period April to June 2017 and 30% over the corresponding period last year.
- GST law came into effect on July 1st 2017.
- Gati made a zero downtime transition to GST across all their operation subsidiaries.
- E-Way bill rules are anticipated shortly.
- Consolidated revenue for Q1 FY18 stands at INR 4,267 million or 426.7 crores.
- Consolidated net profit rose by 258% to 18.3 Cr for Q1 FY18 from 5.1 Cr for Q1 FY17.
- Core express business volumes grew by 5.6% year-on-year and reverse historical seasonality with 4.6% quarter-on-quarter growth.
- The standalone revenue for Gati is 119 Crores in Q1FY18 , 122 Crores in Q4FY17 and 127 Crores in Q1FY17
- Standalone EBITDA is 27 Million this quarter against 26 Million last quarter, and YOY it was 108 Million.
- On the EBITA side, the Firm is flat versus the last quarter and the firm is having a bit of a dip. The reasons for this are as follows
- e-commerce business has been a bit slow relatively,
- Cold chain business which is in the building up stage where the firm is building up fleet in their house has given the firm a bit of an EBITDA drag.
- PBT has grown versus last year 324% and versus last quarter 116%.
- Overall debt position has come down versus last year in March we were at 493 crores and in June we have finished at 4,271 million.
- Foreign currency loans are completely out.
- The Firm had about $22 million of FCCB that was outstanding and one-third of that has been repaid and two-third have been converted into equity.
- The other income is somewhere between 25 odd crores whereas consolidated is 26 odd crores.
- CAPEX plan in the range of 30 to 50 Crores.
- The firm owns 4 fuel stations.
- The firm has regrouped FCCB reversals and interest related items
- Loan given to subsidiaries : 19 Crores
- In august the firm will convert FCCB loan into equity shares, with 10.8 Million shares.
- Expects e-commerce business in terms of topline and profitability to change track almost immediately going forward
- Last quarter the parcels with weight more than 5kg were about 20% and this quarter this increased to about 26%.
- 6% increase in large packages
- 70:30 ratio of less than 3 kg and more than 3kg for last quarter, and for this quarter this ratio is 65:35 (65% less than 3 kg, 35% more than 3 kg).
- Larger packages are strength for the firm and provide more profit.
- The margins have reduced due to Kausar Business and E-Commerce business
- Volumes have grown by 5.6% year-on-year and 4.6% quarter-on-quarter despite historically the business actually having a seasonal dip in this quarter.
- Contributes to about 70%-75% of the total business.
- A business vertical of retail which caters to many SMEs, has grown by 20% in Q1FY18. It has actually grown quarter-on-quarter by mere 7%.
- The GKE business had an EBITDA of 15 Crores and for Q1 FY17, it was 17 Crores.
- As per the management this segment is extremely healthy
- Grew 279 Crores in Q1 FY18 against 265 Crores in Q4 FY17.
- Earning for Q1 FY17 was 282 Crores.
- EBITDA around 15 Crores for this quarter and 7 Crores for the previous quarter
- Still in Initial Stages.
- Earnings were 11.1 crores in Q1FY18 versus 10.3 crores 16.18 in Q4FY17 and 11.8 in Q1 FY17.
- Delivering a marginal negative EBITDA because it is still building on.
- The firm is planning to expand their network in the coming time.
- Marginally negative EBITDA
E.) E-commerce Business
• Earnings were 42.4 crores in Q1 versus 49.9 crores in Q4 versus 58 crores last year’s
- Q1 has seasonality in the e-com industry given typically the lowest quarter of the four quarters.
- Through the last 3-4 quarters, a lot of the e-commerce industry had moved towards the smaller weight segments.
- The firm expects to see change from Q3 onwards when the season hits.
- Second consecutive quarter where company experienced negative growth in e-commerce.
- In the year before, the firm has seen 70%-100% growth year-on-year.
- FY17-18 e-commerce business expected to be around 30%-35% growth.
- COD share is around 60%.
- Q1 sale is typically little low but expects Q2 and Q3 to be better as the major players in E-commerce business have got funding
- The GIETL is a trading solutions arm or subsidiary of Gati.
- Offers end-to-end supply chain solution to our customers through this subsidiary
- This segment grew by 60 per cent.
- In the GST context, this segment is highly relevant
- Three company is highly bullish for this segment.
Gati Fulfilment Services
- Planned to start the full-fledged service in this quarter
- But due to the launch of GST , this launch was delayed
- Due to GST , lot of sellers were very hesitant to move into a new mode
- The launch has been delayed by around a quarter
Supply Chain Enhancement
- Launch of a new product for value-added transportation to complement its existing portfolio of express distribution and warehousing.
- This helps the company provide an integrated end-to-end supply chain condition which is most relevant in the new GST era.
- The company is engaged with several marquee customers across industry sectors to bring efficiencies to their supply chain.