Key Highlights

Introduction of GST and infrastructure status to logistics sector will significantly benefit the logistics sector.

As on H1 ended Sep 17, Supply chain management (SCM) segment account for 90% of total sales while People transport solutions (PTS) constitute the remaining 10%. SCM includes customised end to end logistics services including freight forwarding, transportation, logistics etc. PTS includes technology enabled services, application based interaction to ensure optimise use of resources and vehicle utilisation of clients

The company manages around 10 Million warehousing space as on Sep 17.

Of the total SCM revenues of around Rs 1515 crore for H1 ended Sep 17; Non Mahindra client's revenues stood at Rs 605 crore and have grown by 49% YoY.

Has clearly indicated that the focus going forward will be to acquire more and more Non Mahindra group business.

Within non Mahindra business, 63% business is from Auto and rest is from non auto players, both have grown by higher than 30% YoY.

40 new customers added in non Mahindra SCM segment in past 12 months.

Margins affected due to some restructuring activities in PTS business, bit of adverse product mix in warehousing segment and creating of additional warehousing facilities

Scope for margin improvement going forward as operational leverage kicks in and more business from Non Mahindra group repeat customers comes in.

The infrastructure status to logistics segment will particularly benefit the cold chain segment which requires overall less investment. The company so far is not present in cold chain business, but is looking for cold chain service offering to pharma segment.

On warehousing side, India will see a revolution in this segment. Small state local warehousing will be replaced by large regional warehousing due to infrastructure status. As per the management, India does not have such large warehouses with sufficient facilities.

Working capital will be better in H2 FY 18 as compared to H1 FY 18, which was affected due to GST.

All the business that the company has is long term contractual business with customers. There is no spot business with any of the customer.