Allcargo Logistics Ltd., a part of the Avvashya Group, is a leading Indian multinational company providing integrated logistics solutions worldwide. The company offers specialized logistics services across global Multimodal Transport Operations (NVOCC, LCL and FCL), Pan India Container Freight Stations (CFS), Inland Container Depots (ICD), Project & Engineering Solutions (P&E), Ship Owning & Chartering and 3PL & Warehousing services. Its benchmarked quality standards, standardized processes and operational excellence across all its service verticals and facilities have enabled the company to emerge a leading player across these segments.
Allcargo has its strong global footprint through its multinational Multimodal Transport Operation Arms-Ecu Line, headquartered in Belgium, the world’s largest Less than Container Load (LCL) service provider, Econocaribe Consolidators based in Miami, NVOCC leader and Rotterdam-based Marine Agencies specializing in FCL services. The company currently operates out of 200 plus offices in over 90 countries and is supported by an even larger network of franchisee offices across the globe. It has a 784-strong fleet comprising 143 cranes, 584 trailers, 36 reach stackers and 21 forklifts.
The logistics provider has achieved a major milestone in its mission plan of being a $1 billion company during the year under review. The year 2014-15 was good for the company as the micro and macro-economic situation improved considerably, thus boosting its performance.
The company’s project and engineering business has enhanced asset utilization and higher movement of project cargo along with increase in coastal shipping business. It has a strong order book and has added new customers by offering innovative and integrated logistics solutions.
Allcargo’s business strategy of a diversified global presence and as an integrated logistics service provider in India has not only avoided dependence on only a particular segment or geography of logistics but also makes it the ‘partner of choice’ for the customers in terms of service offerings.
“Our global scale with operations across 90 countries, covering over 4,000 port pairs and focus on LCL consolidation, has made us more or less resilient to global trade volatility”, says Mr. Shashi Kiran Shetty, Founder & Chairman.
Globally every economy depends on core industries to support their growth rate. Industries such as urban infrastructure, power, steel, cement, petrochemicals, mining, refineries and others. They provide the necessary fillip to the economic variables such as manufacturing units, factories, exports, imports, etc., to survive in a competitive manner. The backbone of these core industries is project logistics, i.e., movement of ODC and over-sized cargo from origin to destination, which makes these heavy industries get operational within the demography.
With infrastructure driving the economic growth of India, and the country’s growing trade with China, Japan and ASEAN countries and its existing trade partners the US, Europe and the Middle East, the opportunities for project logistics are enormous.
Business performance
The company’s consolidated revenue from operations stood at Rs. 562,880 lakhs for the year ended March 31, 2015 as against Rs. 485,123 lakhs for the corresponding previous period, an increase of 16 per cent, mainly on account of increase in volumes and revenues across all the businesses. EBIDTA at Rs. 52,798 lakhs for the year as against Rs. 42,781 lakhs in 2013-14, represented an increase of 23 per cent, while EBIT of Rs. 37,061 lakhs (Rs. 25,235 lakhs), marked an increase of 47 per cent.
Net profit after taxes and minority interest increased by 61 per cent and stood at Rs. 23,989 lakhs as at March 31, 2015, as compared to Rs. 14,933 lakhs the previous year.
During FY14-15, Allcargo’s standalone performance indicated total revenue of Rs. 117,921 lakhs as compared to Rs. 102,204 lakhs in 2013-14, representing a y-o-y growth of 15 per cent. The growth is mainly attributable to increase in revenue across all lines of business. EBITDA stood at Rs. 27,434 lakhs (Rs. 23,371 lakhs), representing a growth of 17 per cent. Net profit after tax increased by 74 per cent during the year and stood at Rs. 9,749 lakhs compared to Rs. 5,612 lakhs in 2013-14.
The company’s P&E business registered a total revenue of Rs. 530 crores as against Rs. 423 crores in FY14, an increase of 25 per cent.
Future plans
Allcargo has been focussing on consolidating its network, increasing its reach, enhancing service offering and, more importantly, creating value for its customers through innovative logistics solutions. This has given the logistics-provider the impetus to retain momentum in these challenging times as well as to position itself as a partner-of-choice to its customers.
“Our endeavor would be to reach key prospects, offering a complete bouquet of services, as an integrated logistics partner. 2015-16 is being marked as “the Year of Sales”, which would lead to growth across all our businesses, in terms of volumes, revenues and profits, garnering new customers, increasing our wallet share with existing customers, along with enhanced customer satisfaction. Going forward, we will continue to focus on creating value for our customers. We will leverage our global network to consolidate leadership. In India, we will continue our focus on increasing our market share in CFS, ICD and P&E businesses and also look at scaling up our contract logistics and shipping businesses and entering the new segment of logistics, including e-commerce logistics and chemical warehousing”, adds Mr. Shetty.
Outlook
The economy is likely to expand by more than seven per cent in FY2015 and likely to maintain this pace in FY2016. The Economic Survey put India’s growth at 7.4 per cent for FY2015 and the new fiscal is expected to see the highest economic growth in recent years.
The optimism of achieving higher growth rate in the next financial year stems from a range of factors, including lower oil prices, monetary policy easing, lower inflationary expectations, forecast of a normal monsoon and fiscal, monetary and regulatory reforms.
Concurrently the Indian logistics industry is also poised for accelerated growth, led by GDP revival, infrastructure ramp-up, volume growth in containerization, new terminals at ports leading to incremental growth in volumes, dedicated freight corridor (DFC), proposed GST implementation, new initiatives like “Make in India” and growing business segments like coastal shipping, 3PL, cold chain and e-commerce.