Share with us the company's expansion plans. When do you expect to become a pan-India player?
The Company places high importance to this theme of having a pan-India presence. We have terminal presence in five strategic locations in North and Eastern part of the sub-continent, as of now. In as far as rail services are concerned, the Company operates streams connecting the western, northern and eastern geographies. Going forward, the Company is, organically, coming up with two new terminals, including one on the Western DFC to bolster its footprint in the North and East. The acquisition of SICAL, in its last stages in process terms, is the Companyâ€™s attempt to become a genuine pan-India operator. With the execution of these organic and inorganic efforts, the Company shall be operating, a mix of domestic and EXIM rail services that shall include linkages to the southern parts also in its repertoire.
What are the key macro-opportunities enabling growth of the company?
The rapid growth of the Indian economy has a direct and positive impact on demand side for Logistics sector. The trends are very encouraging and we, as LSPs essentially in the B2B space, are very optimistic and motivated to enhance capacity and capabilities to match the ever-increasing demand.
Apart from the positivity in â€œdemandâ€, Pristine is very sanguine with respect to the frenetic developments on the regulatory front unleashed by the Government almost all of which focus on enabling growth, expansion, and action in its core area of interest, viz., rail-linked logistics terminals and rail-borne transportation with special treatment singled out for enhancement in containerization. The PM GatiShakti Mission Plan along with follow-up Policies in the form of the National Logistics Policy and the earlier National Monetization Pipeline have completely revolutionized Pristineâ€™s business landscape.
The fact that the Indian Railways is also seeking to create traction from these Policies is also very encouraging. It is looking to increase its market share from 26% to 45% in the current decade itself. To meet these aggressive targets, it seeks to add 100 terminals in the next 2 years with the help of its own GatiShakti Scheme. In a recent vision document, called â€œMissions 3000 Million MTâ€ they see container as a major driver for their growth, projecting its contribution to increase to 20% of IRâ€™s throughput from the present contribution of 5%. Of course, they have liberalized and economized cost of land in their brand new and completely revamped LLF Policy, as part of their strategy to achieve their targets. Overall, the current times seem to be tailor made for the business that Pristine operates and all major macro-indicators appear extremely propitious.
What are the key strengths of the company?
Pristine strongly believe that its key strength is its strong customer focus and the ability to respect the unique requirement of each cargo-type. Of course, Pristineâ€™s rapid and best-in-Sector growth and, indeed, the strong customer connect itself would not have been possible without an extremely strong and passionate team. We like to believe that we have created a great work environment for the team to grow and blossom into leaders which is why we perhaps have the lowest employee turnover in the Sector. In terms of cultural aspects, Pristine center-stages innovation as a key strategy component.
What are the key margin drivers for the company?
Pristine has demonstrated healthy margins of above 20 % in EBITDA terms. We believe we are set to improve our margins considerably to best-in-Sector levels. A few things are in place to make this happen such as in increase in utilization of capacities that have been recently added such as the 13 rakes recently bought from another CTO or the PFT at Siliguri. We see encouraging traction in the legacy streams in the CTO side of the business as well which shall positively impact margins. Our upcoming terminal on the DFC shall have a significant impact on unit cost of CTO business and are looking forward to its early operationalization.
Help us understand the dividend distribution policy of the company.
Pristine has a great track record in ensuring healthy returns to its investors. So far, the company has been highly respectful to its private equity investors and we believe the culture of rewarding stakeholders is deeply entrenched.
Pristine is on a beautiful growth trajectory and, therefore, believe that surpluses should best be used for growth opportunities. This approach, according to us, will be most prudent to ensure best-in-Sector growth in intrinsic value of its Equity. Having said this, we are mindful of the imperative to follow a balanced approach and share liquidity with its stakeholders as per Industry norms.
What are the key challenges facing the company? How is the company mitigating the same?
The revolution in the Policy eco-system has mitigated most of the external challenges in Pristine business landscape. The challenges that we face today are very different to what they were even 2 years ago. Today, our internal deliberations mostly cover the challenges that we have as a Company to keep pace with the growth in opportunities. If we had targets of â€œxâ€ number of terminals yesterday it is now â€œ2xâ€, at the very least. This makes our workplace very exciting but challenging as well. We are looking at increasing our bench-strength with quality and a passion to match as part of our strategy to keep pace with the opportunities.