OneClick Logistics India Ltd Management Discussions

Indian Economic Review

In the financial year 2023-24, surpassing projections, India sustained its status as one of the fastest-growing economies worldwide, a testament to its strategic focus on structural reforms aimed at fortifying macroeconomic fundamentals.

Indias emergence as the fastest-growing economy among G20 nations underscores the effectiveness of these reforms. The adept management of the COVID-19 pandemic and navigation of geopolitical challenges further strengthened Indias position, ensuring sustained outperformance on the global stage. Notably, Indias contribution of over 16% to global growth in 2023 highlights its pivotal role in shaping the world economy.

Indian Logistics Industry Overview

The Indian freight and logistics market is estimated to grow at 8.8 percent annually to USD 484.43 billion by 2029 from around USD 317.26 billion in 2024 due to technological advancement. The integration of cutting-edge technologies and advancements in intralogistics automation, warehousing, and transportation management heralds a transformative era for the logistics sector in India. The Indian freight and logistics market is poised for remarkable growth.¹

The Indian logistics industry has undergone significant transformation over the years, driven by advancements in digital technologies, government reforms, changing consumer preferences, and the growth of the eCommerce sector. Indias GDP has continued to expand, reaching Rs. 3.45 trillion in 2023, contributing about 4.2% to the global GDP. Government reforms, infrastructure development, and the thriving transportation and retail sectors are the primary drivers of growth in the Indian logistics industry. Indias logistics sector would expand at a Compound Annual Growth Rate (CAGR) of more than 10 percent, from $200 billion in early 2020 to at least $320 billion in 2025. With the grant of infrastructure status to logistics, the industry has witnessed increased investment. This growth trajectory was propelled by technological advancements and policy reforms, signifying a notable moment for Indias logistics landscape.

Digitalization has reshaped various aspects of logistics management in India. Technologies like the Internet of Things (IoT), artificial intelligence (AI), and blockchain are revolutionizing freight management, port operations, and warehouse management. The adoption of these technologies has led to increased efficiency and reduced costs. Furthermore, warehouse Automation optimizes operations, enhancing efficiency, and driving cost-effectiveness across the industry. Road freight remains the predominant mode of transportation in India, reinforced by improvements in last-mile connectivity and significant investments in road infrastructure. Indian Railways is poised to enhance its freight traffic by 2030, offering a sustainable and cost-effective transportation option. Additionally, sea freight plays a crucial role in international trade, with Indian ports expected to accommodate significant capacity growth.

The cold chain logistics sector in India is rapidly evolving to overcome challenges related to food and pharmaceutical product losses. Investments in infrastructure and technology adoption are driving growth in this critical segment. Factors such as Indias immense agricultural potential, rising demand for the pharma cold chain, and

1 Logi MAT India Report 2024 government support are contributing to the sectors expansion. Furthermore, increasing investment opportunities and emphasis on professional expertise are fuelling growth in this segment.

Government initiatives and policies have played a significant role in shaping the logistics landscape in India. Initiatives such as the Goods and Services Tax (GST) and the E-Way Bill have streamlined logistics processes and enhanced efficiency. The granting of infrastructure status to logistics has attracted increased investment inflows, further boosting industry growth. Additionally, infrastructure development projects, including dedicated freight corridors and logistics parks, have bolstered the logistics ecosystem in India.

Infrastructure projects such as the Eastern and Western Dedicated Freight Corridors and multimodal logistics parks are poised to enhance industrial development and efficiency. These projects aim to reduce transit times, enhance efficiency, and generate cost savings. Additionally, the creation of these logistics hubs will foster efficiency and cost-effectiveness in the movement of goods across the country².

India made significant strides in improving its Logistics Performance Index (LPI) rankings. This improvement can be attributed to factors such as technology adoption, infrastructure development, and policy initiatives. Enhanced logistics performance enhances trade competitiveness, reduces trade expenses, and boosts supply chain efficiency, contributing to overall economic growth.³

Indias logistics industry is poised for unprecedented growth and transformation, driven by technological innovation, policy support, and industry collaboration. As the country marches towards ambitious economic milestones, the logistics sector will continue to play a crucial role in enabling efficient and seamless movement of goods across the country. With ongoing investments in infrastructure, adoption of digital technologies, and supportive government policies, Indias logistics industry is well-positioned to achieve new heights of success in the years to come.

Growth Drivers for Organized Logistics players

A. Evolving B2C demand and consumption trends:

The rise in e-commerce was fuelled by growth in internet penetration and digital payments infrastructure across the country. Initially, the e-commerce activity was mainly related to major metro cities and urban centres, however over the past couple of years, e-commerce activity in the tier-2 and tier-3 cities as well as various towns spread across the country, has become the major driver in growth of the industry. The consumer expectations of shorter delivery time, smooth return policy and cheaper pricing has also resulted in increasing competition not only amongst various e-commerce firms but also across various industries. This has resulted in increasing pricing competition amongst different express industry players as companies focus on finding diverse means of reducing their logistics cost.

B. Value-Added Services:

With the rise in competition, value-added services have become a necessity as against a luxury service provided by clients to their customers. The value-added services include picking, packaging, MIS reports, analytics service, mobile updates and online GPS enabled tracking, e-mail alerts among others. As the competition in the express industry increases, value added services are expected to play an ever increasing and important role in future growth of various companies.

C. Evolving B2B demand and consumption patterns

Evolving business models: The emergence of new digital native segments, new distribution channels and go-to market strategies such as direct-to-retail (D2R) and directto- consumer (D2C) are driving the need for innovation in the traditional B2B supply chain, with greater demand for supplychain visibility, precision and value-added services.

Changing production trends: Manufacturing accounts for 17% of Indias GDP and has emerged as a high-growth sector on the back of strong push by the Indian Government through initiatives like Make in India, production linked incentives (PLI), Government tenders for domestically manufactured goods etc. As a result, Indian manufacturing has been transitioning from bulk commodities to non-commodity consumption focused products which need faster go-to-market and more reliable and efficient logistics operations.

Emergence of new m arkets: Economic growth of Tier-2+ towns is increasing demand for reliable turn-around times and efficiency comparable to larger urban centres, further driving the need for integrated, national logistics players.

D. Technology-driven supply chain transformation

Sub-scale and predominantly manual operations have led to under investment in technology and data capabilities by most traditional Indian logistics players. This has prevented companies from responding to changing customer needs, optimizing networks, efficiently utilising capacity and improving customer service.

E. Hardware and software automation

Warehouse and Transportation Management Systems (WMS/ TMS) are automating business workflows, reducing paperwork and improving operational visibility and precision. Further, 148 investments in automation and robotics are improving operational throughput and precision, thereby lowering human errors and operating costs.

Opportunities and Future Outlook:

Opportunities

In FY 2023-24, the global economy changed a lot, bringing both challenges and chances to adapt. Despite difficulties in trade, innovative responses strengthened international business. This led to a rethink of supply chains, urging countries and companies to invest in flexible systems. Industries responded by diversifying supply chains, moving production closer to home, and focusing more on sustainability. They also embraced advanced technologies like automation, AI, blockchain, IoT, and virtual reality to work better, save money, and meet changing consumer needs.

Complete digitalization is inevitable, which might make some logistics jobs outdated. But smart innovation and timely digital upgrades can keep these businesses relevant. AI and blockchain could leave behind companies slow to modernize. In 2024, the shipping industry is likely to invest heavily in cybersecurity to protect data and goods from theft and cyberattacks. The pandemic boosted e-commerce, and people now prefer online shopping. Technology keeps evolving, helping manage supply chains better, automate warehouses, and offer on-demand storage, benefiting businesses of all sizes.

Indias logistics sector is set for significant growth. With incomes rising and the economy growing, there is a strong base for expansion. With per capita income more than doubling to Rs. 1.97 lakh within approximately nine years, and the Indian economy ascending from the 10^th to the 5^th largest globally in the same timeframe, there exists a robust foundation for logistical expansion. Government initiatives like the Aspirational Blocks Programme and investment in infrastructure pave the way for logistics to reach every part of the country. The infusion of 75,000 crores, with a significant portion originating from private sources, into pivotal transport infrastructure projects further fortifies the logistical backbone, particularly in sectors like ports, coal, steel, fertilizer, and food grains. The government is investing heavily in transport projects and encouraging private investment, which will strengthen logistics, especially in crucial sectors like ports and food grains. The focus on AI and setting up centers of excellence will streamline operations and make logistics more efficient. With these favourable conditions and government support, Indias logistics industry has vast opportunities for growth, modernization, and global competitiveness⁴

Future Outlook

In an era of heightened global uncertainties, mitigating risk has become paramount, driving the adoption of advanced technologies like big data analytics to anticipate disruptions and ensure operational resilience. The logistics landscape in India is poised for significant transformation, driven by a confluence of technological advancements and a growing emphasis on sustainability. As we delve into future outlook of the industry, it becomes apparent that several key trends will shape the trajectory of logistics operations across the country.

The utilization of big data analytics in the supply chain industry will be quite prevalent. With the increasing availability of data and sophisticated analytics tools, Indian logistics firms can harness insights to anticipate disruptions and optimize supply chains.

In parallel, the adoption of Internet of Things (IoT) technology promises to enhance supply chain visibility in India. By leveraging sensor technology and cloud applications, logistics companies can achieve unprecedented connectivity across their operations, leading to greater transparency, efficiency, and responsiveness. This interconnectedness will undoubtedly pave the way for a smarter logistics landscape in the country.

Artificial intelligence (AI) is another game-changer that is poised to transform the Indian logistics industry. With AIs ability to analyse vast amounts of data, learn from past experiences, and predict future outcomes, logistics firms can optimize route planning, demand forecasting, and asset management. Moreover, advancements in AI-driven technologies such as computer vision are expected to become standard tools within the Indian logistics sector, further enhancing operational efficiency.

Looking ahead, it is evident that technology and sustainability will become increasingly intertwined in the Indian logistics landscape. The synergy between AI-driven efficiencies and sustainable practices will enable companies to achieve both operational excellence and environmental stewardship, paving the way for a more sustainable and efficient logistics industry in India.

About Oneclick Logistics:

Having Commenced on December 14, 2022, Oneclick Logistics is Leading Freight Forwarder & Logistics Company, renowned for its proficiency in the fastest and safest cargo delivery. The Company is listed on listed on EMERGE Platform of National Stock Exchange of India Limited (“NSE EMERGE”), with effect from October 11, 2023. The organisation has been providing seamless, end-to-end logistics solutions to its customers, since its incorporation.

Oneclick Logistics aims to deliver highly qualified services that are flexible enough to change with the altering market conditions.

Go beyond logistics, make the world go round and revolutionize business. Logistics through innovation, dedication, and technology. ready, set, done. We take pride in serving our customers safely. together with passion. Imagination what we can easily see is only a small percentage. Quality never goes out of style. safety, quality, professionalism. The quality shows in every move we make where business lives.

Financial Performance:

Given the challenges and volatility of markets that continued to unfold, Onclick Logistics performed well throughout FY 2023-24, thus enabling us to be the investment of choice. For the year ended March 31, 2024, Onclick Logistics on a standalone basis reported Income from operations of Rs. 2872.55 Lakhs (Previous year Rs. 388.85 Lakhs) and posted net profit after tax, on a standalone basis of Rs.65.50 (previous year Rs.19.35 Lakhs).

Financial Ratios:

Particulars	FY 2023-24	FY 2022-23
Debtors Turnover	0.22	1.38
Interest Coverage Ratio	14.18	93.34
Current Ratio	3.07	1.39
Debt Equity ratio	0.19	9.43
Net profit Ratio	0.02	0.05

Post its listing in 2023, Onclick logistics embarked on a road to transformation where the company restructured its balance sheet, improved its governance structure, and moved on to the next phase of transformational growth the company laid down four pillars of growth that are a) sales acceleration, b) infrastructure, c) streamlining operations and d) talent pool.

The company has carved out a path to profitable growth based on these pillars and is well on its way to achieving the same.

Human Resources:

The company focuses on creating an enriched environment for its employees where it lays the opportunities for growth. There is a complete focus on providing employees with a platform where they can continuously upgrade themselves and also stay up to date with the recent happenings in the logistics sector.

There are various learning and development programs that are carried on through the year where employees can up-skill themselves. There are other engagement programs through which the organization supports physical and mental well-being of all its employees.

Risks & Concerns:

The financial and related risks have been comprehensively covered in the Annual Accounts of the company together with the mitigation strategy of the same. The present and anticipated future risks are reviewed by the management of the company at regular intervals.

The management takes suitable preventive steps and measures to adequately safeguard the companys resources of tangible and intangible assets. For more detailed information regarding Financial Performance of the company you may refer Directors Report forming part of this Annual Report.

Cautionary Statement:

Statements in the Management Discussion and Analysis Report describing the companys objectives, projections, estimates, expectations or projections may be ‘forward looking statements within the meaning of the applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the companys operations include economic and political conditions in which the company operates, interest rate fluctuations, changes in Government/RBI regulations, tax laws, other statues and incidental factors.