A big day for you, your IPO opens and you are the second third-party logistics company to go public in successive months after Mahindra Logistics. While there are common strengths like asset light model as well as strong parentage, what according to you distinguishes you from some of your peers?
Yes, it is interesting times and different people, different companies within this third party logistics have probably different business models. Ours is focussed predominantly on the consumption sector firstly and what we have done over a decade or so is that we have created domain expertise around the consumption sector. We have believed in deploying the best-in-class technologies to manage scale and bring in efficiencies.
So, by and large, what really distinguishes us is how we are able to provide value to our customers and in terms of business model, largely we are into contract logistics, third party logistics which is where some of these efficiency models come into play.
Your business is coming from third party. How would you define that business? Is that an asset light business or do you also have to create capacities in order to serve some of your third party vendors?
Our third party business or the external business actually spans across the whole consumption sector. We have fairly reputed customers across FMCG, food, fashion, furniture, electronics etc. and the whole business model which we have whether it is for external or for the anchor is largely asset light and we do not believe in owning the warehouses or owning the trucks unless and until required. So, the model is asset light.
However, capacities do need to be created but that is more in the form of warehousing space which you end up creating. The warehousing space is where we operate from. They are not really off-the-shelf warehouses. They are custom built. They are world class warehouses which are built according to the specifications we give to the local developers.
Last three years, when industry growth rate was 12-13%, your revenue grew at 17% compounded annual growth rate and on the PAT front, about 36%. How would you see your growth trajectory going forward here and also the trend on margins?
I am bound by RHP and I really cannot give futuristic projections but if you look at the last few years, the growth has been good. The first half of this month again has been quite aggressive.
If you look at whatever has been happening around us, it may be put into two buckets; one within the consumption domain with a lot of our customers, lot of product companies, mid-sized, large-sized enterprises are going through this change in philosophy at their end slowly but surely. There is this whole concept around core competencies and what they should be managing internally.
Some of this evolution has been on the IT side for instance, and we believe that is a change which is happening slowly but very surely wherein people are realising that supply chain is a strategic aspect of their business.
That is one. The other is a more important change which is around the GST. It has been one of the game changers, an extremely important catalyst for the growth of the organised third party logistics.
GST probably for the first time in the history of the country, allows people to build their supply chain design purely from the first principles of the supply chain and not really from taxation point of view. What you will probably see going forward is large scale high efficiency models which will come into play. Both these things put together, we can expect some very interesting times ahead for the industry as a whole and probably s ..