Indian road express delivery company Gati has unveiled a strong rise in Q2 profits coveringOctober – December 2012 thanks to new customers for its express JV ‘Gati-KWE’, rapid e-commerce
growth and lower shipping losses.The listed company increased total turnover by 12% to Rs 3,380 million (€46.5 million) and had anet profit of Rs 77 million (€1.06 million), up from Rs 10 million one year earlier and aturnaround from a loss of Rs 52 million in the first quarter of 2012-13. Gati has annual revenuesof more than Rs 12 billion (€165 million) and made a net profit of Rs 415 million (€5.7 million) inthe year ending June 30, 2012.
Mahendra Agarwal, founder & CEO, Gati Limited, said: “India is growing at 5% and thegovernment is hopeful to take it to 8% in the next two to three years. Future growth projection isa good sign for our business sector as our industry is directly impacted with the GDP expansion. Weare confident that we will grow above industry growth in the coming quarters.”
The express business, transferred into a 70-30 joint venture with Japanese forwarder Kintetsulast June in order to gain external investment, also grew well. Gati-KWE increased Q2 revenues by8% to Rs 2,250 million (€31 million) compared to the previous quarter and slightly improvedoperating profits to Rs 230 million (€3.2 million).
“The synergies from our joint partners have just started to flow. We have already signed up fivemajor customers like Emerson, Idemitsu, Toshiba, Pioneer, Fuji Electric etc. and more are in thepipeline. KWE is working with their global teams to increase their India lane business and alsopromoting the GATI-KWE JV to its clients in global markets,” Gati commented.
Gati-KWE increased its fleet size by 140 to 4,400 vehicles in total, added an additionaldistribution space of 50,000 sq ft in Chennai and introduced CCTV 24/7 monitoring to ensureadherence to proper shipment handling and stacking procedures. The Hyderabad-based firm set up acentral network monitoring centre to monitor vehicle movements across the country through a vehicletracking device installed in all long haul vehicles and now gives customers access to an onlineintegrated service performance report with information on delivery performance, proof of deliveryimages and invoices.
Meanwhile, Gati E-commerce, the e-commerce delivery unit, grew fast in the last quarter with 64%quarter-on-quarter growth and is currently delivering 8,000 packages per day. Gati said it wants tobuild capability to deliver 20,000 packages per day this year.
“We have established our presence in the residential areas to cater to this segment independentof the express distribution centers across the country. Gati E-commerce offers an unmatched reachacross India,” the company claimed. “The division is already catering to some of the top notchlarge online retailers, Home Shopping Channels and providing franchisee solutions to multinationalbrands. A dedicated 24/7 call center for e-commerce customers has been set up.”
Internationally, Gati is trying to focus on ‘India-centric’ distribution solutions mainly tomarkets in China, Singapore and Thailand along with more focus on trade lanes in the surroundregion.
In other business areas, Gati Kausar, the Cold Chain Solutions division, grew by 17%quarter-on-quarter, is expanding its fleet and will focus on secondary distribution to organisedretail chains, including food chains, pharmaceuticals, dairy products and FMCG. The loss-makingsmall shipping business Gati Ship is starting to show a turnaround with much lower losses thanks toreduced operating costs.
