The Management of Shree Vasu Logistics Limited (SVLL) Presenting
"Management Discussion and Analysis Report" covering the operational and
financial performance of the company for the year 2022-2023.
OVERVIEW
Shree Vasu Logistics Limited is a publicly held logistics company that
offers customized and end-to-end logistics solutions and services.The company operates in
several states in India, including Chhattisgarh, Orissa, West Bengal, Assam, and parts of
Madhya Pradesh. Its core business lines revolve around providing ird-Party Logistics (3PL)
solutions.
The company specializes in providing comprehensive services such as
transportation and distribution, warehousing and value-added services. ese services are
designed to meet the specific needs of its clients, offering integrated logistics,
warehousing, and transportation solutions.
Shree Vasu Logistics Limited has strategically located warehouses and
an extensive pan-India network. is allows the company to efficiently handle the storage,
transportation, and distribution of goods across various regions. By leveraging its
network and infrastructure, the company aims to provide reliable and efficient logistics
services to its customers.
Currently, we have over 60 clients to whom we are providing our
services from more than 10 cities within our PAN-India network.
Migration to the Main Board of National Stock Exchange of India Limited
(NSE)
The Company has recently migrated from SME-EMERGE platform to the Main
Board of National Stock Exchange of India Limited (NSE) w.e.f. 21st April, 2023. is
signifies a significant step in the growth and development of the company. By moving to
the Main Board, the company aims to enhance its corporate governance practices and provide
greater transparency in its business activities. is transition demonstrates the companys
commitment to adhering to higher regulatory standards and aligning itself with established
market norms.
The Main Board of the NSE is generally considered a more prestigious
and regulated market segment, attracting a larger investor base, including institutional
investors. As a result, the company can potentially gain access to a wider pool of
capital, which can be utilized for expansion plans, research and development, and other
strategic initiatives.
Moreover, being listed on the Main Board can also improve the companys
visibility and credibility in the market. It signals to investors, stakeholders, and the
general public that the company has achieved a certain level of maturity and stability. is
can contribute to building investor confidence and attracting more interest from potential
investors.
Moving to the Main Board also subjects the company to more stringent
reporting and disclosure requirements. is can further enhance transparency in the
companys operations, financial performance, and decision-making processes.The company
will need to comply with the regulations and guidelines set by the NSE, including regular
financial reporting, board meetings, and disclosure of material events or information.
Expansion of Business:
In addition to the core business line, Shree Vasu Logistics has
recently ventured into retail business by setting up Exclusive Brand Outlets (EBOs) for
the renowned brand "Jockey" (Page Industries Limited).
Setting up EBOs for Jockey allows Shree Vasu Logistics to establish a
direct connection with consumers and offer a dedicated retail space for Jockey products.
is move enables the company to create a distinct shopping experience for customers and
potentially increase brand loyalty.
Establishing Exclusive Brand Outlets (EBOs) for Jockey is a strategic
move that can bring several advantages. Here are some key benefits of this expansion:
_ Diversification of revenue streams: By entering the retail sector,
Shree Vasu Logistics can diversify its revenue streams beyond its core logistics
operations. is diversification helps the company reduce dependence on a single business
line and mitigate risks associated with fluctuations in the logistics industry.
_ Synergy with existing operations: Since Shree Vasu Logistics already
has expertise in logistics and supply chain management, expanding into retail with Jockey
EBOs allows the company to leverage its existing capabilities.The company can utilize its
logistics infrastructure to efficiently manage the supply chain and ensure timely delivery
of Jockey products to its retail outlets.
_ Brand association and recognition: Partnering with Page Industries
Limited and offering Jockey products through EBOs helps Shree Vasu Logistics establish a
strong brand association. Jockey is a renowned brand with a loyal customer base, and this
association can enhance Shree Vasu Logistics reputation and credibility in the retail
industry.
_ Increased customer reach and engagement: Setting up EBOs allows Shree
Vasu Logistics to directly engage with customers. is direct interaction enables the
company to understand customer preferences, gather feedback, and build long-term
relationships. It also provides an opportunity to upsell and cross-sell related products,
thereby increasing the average transaction value and customer loyalty.
_ Potential for business expansion: Successful operation of Jockey EBOs
can open doors to future expansion opportunities. Shree Vasu Logistics can explore
collaborations with other renowned brands or consider establishing additional retail
outlets in different locations. is expansion can contribute to the companys overall
growth and market presence.
INDUSTRY OVERVIEW AND TRENDS
Industry Overview:
Logistics is widely known as the process of coordinating and moving
resources, such as equipment, food, liquids, inventory, materials, and people, from one
location to the storage of the desired destination. It is the management of the flow of
goods from one point of origin to the point of consumption, to meet the requirement of
customers. Logistics management focuses on the efficiency and effective management of
daily activities concerning the production of the companys finished goods and
services. is type of management forms a part of the supply chain management; and plans,
implements, & controls the efficient, effective forward, reverse flow, and storage of
goods. Logistics mainly comprises various services such as ird-Party Logistics (3PL),
Fourth-Party Logistics (4PL), inbound logistics, outbound logistics, reverse logistics,
green logistics, construction logistics, digital logistics, military logistics, and others
logistics services.
Overview of Indias Logistics Sector:
Indias logistics sector plays a crucial role in the countrys economic
development by facilitating the efficient movement of goods and services across the vast
geographical expanse of the nation.The sector encompasses various activities such as
transportation, warehousing, inventory management, packaging, and freight forwarding.
Heres an overview of Indias logistics sector:
_ Size and Growth:The logistics sector in India has witnessed
significant growth over the years, driven by factors like increasing consumption, rising
international trade, expanding e-commerce industry, and government initiatives such as
"Make in India" and "Digital India."The sector contributes around 14%
to Indias GDP and is estimated to reach a market size of $215 billion by 2022.
_ Infrastructure: Indias logistics infrastructure consists of
roadways, railways, airways, and waterways. However, the sector faces infrastructure
challenges like inadequate road and rail networks, congested ports, and limited cold chain
facilities. E_orts are being made to improve infrastructure through initiatives like the
Bharatmala Project (roadways), Sagarmala Project (port development), and Dedicated Freight
Corridors (railways).
_ Road Transportation: Roadways dominate Indias logistics sector,
accounting for over 60% of freight movement.The road network, although extensive, su_ers
from issues such as poor road conditions, traffic congestion, and last-mile connectivity
challenges.The government has taken steps to address these issues by promoting the
construction of highways, expressways, and improving connectivity through initiatives like
the National Highways Authority of India (NHAI).
_ Rail Transportation: Railways play a significant role in
long-distance freight movement, particularly for bulk commodities.The Dedicated Freight
Corridor (DFC) project is underway to create exclusive rail corridors for freight, which
will enhance capacity, reduce transit time, and improve efficiency. is project aims to
transform rail logistics in the country.
_ Air Transportation: Air cargo is essential for time-sensitive and
high-value goods. India has seen a steady growth in air cargo volumes, with major airports
developing dedicated cargo terminals. Air cargo infrastructure is being expanded to handle
the increasing demand, and efforts are being made to improve customs clearance processes
to enhance efficiency.
_ Water Transportation: India has an extensive coastline and a network
of inland waterways. Water transportation, particularly for bulk goods, has the potential
to provide cost-e_ective and eco-friendly logistics solutions.The government has been
developing National Waterways and promoting multimodal transport to harness the potential
of water transportation.
_ Warehousing and Storage:The warehousing sector in India has been
evolving rapidly due to the growth of e-commerce, organized retail, and the implementation
of the Goods and Services Tax (GST). Modern warehousing facilities, including automated
and temperature-controlled warehouses, are in demand to meet the requirements of different
industries.
_ Technology and Digitization: Technology is playing a crucial role in
transforming the logistics sector in India. Digitization, adoption of advanced analytics,
Internet of ings (IoT), and blockchain are being used to enhance supply chain visibility,
improve operational efficiency, and streamline processes. E-commerce platforms have also
contributed to the digitization of logistics operations.
_ Challenges:The logistics sector in India faces several challenges,
including complex regulatory procedures, fragmented nature of the industry, high logistics
costs, lack of skilled manpower, and ine_cient intermodal connectivity. However, the
government is taking initiatives to address these challenges through policy reforms,
infrastructure development, and ease of doing business measures.
Overall, while the logistics sector in India has witnessed significant
growth and transformation, there are still opportunities for further development and
improvement. With ongoing infrastructure projects, policy reforms, and technology-driven
solutions, India aims to enhance its logistics capabilities and create a more efficient
and competitive logistics ecosystem.
Salient trends in the Indian logistics industry
The logistics industry in India is benefitting from technological
advancements, policy initiatives, and infrastructure capex in 2023. Logistics is integral
to economic growth and any improvements in the countrys logistics ecosystem has
business positive outcomes – ranging from operational efficiency to expanding
supplier networks to boosting last-mile-reach to meet market demand. Further, applied tech
innovation and data-driven insights can allow companies to optimize their supply chains,
allocate resources more effectively, and deliver exceptional customer experiences.
Indias logistics industry has achieved remarkable progress,
highlighted by countries rise of six spots in the world banks logistic performance India
(LPI) is improvement is credited to various factor, such as technolgy innovation,
data-driven decision making, and policy initiatives aimed at facilitating world class
infrastructure.
Earlier in the year, the government increased the Union Budget
allocation for capital investment by 33 percent, amounting to INR 10 trillion, for
2023-24. is development has been warmly welcomed by the logistics industry as it is
expected to bolster Indias position in the global supply chain by prioritizing
infrastructure development.The National Logistics Policy (NLP) and the PM Gati Shakti
initiative are important overarching policy steps taken in this direction by the central
government to deliver results by 2024-25.
Currently, Indias freight movement is heavily dependent on road
transportation, accounting for 66 percent of cargo in ton-kilometers. Rail transportation
follows closely behind, with a share of 31 percent, while shipping and air transportation
contribute three percent and one percent, respectively. However, freight transportation is
unevenly distributed across different modes.
Key trends steering Indias logistics performance in 2023
Technological innovation
The integration of advanced solutions is revolutionizing logistics
operations, enhancing efficiency, and unlocking new opportunities. Key technologies
shaping the future of logistics include:
_ Artificial intelligence (AI) and machine learning: AI-powered
algorithms and machine learning models enable predictive analytics, demand forecasting,
route optimization, and real-time decision-making. ese tools empower businesses to
optimize their supply chains, improve resource allocation, and deliver enhanced customer
experiences.
_ Internet of things (IoT): With the proliferation of IoT
devices, logistics companies gain greater visibility and control over their assets and
inventory. IoT sensors and connectivity facilitate real-time tracking, remote monitoring,
and predictive maintenance, enabling proactive and efficient logistics operations.
_ Robotics and automation: Automation technologies, such as
robotic process automation (RPA) and autonomous vehicles, are reshaping warehouse
operations and last-mile delivery. Robotics streamlines repetitive tasks, reduces errors,
enhances speed, and improves safety, leading to cost savings and increased productivity.
Data-driven decision making for operational superiority
In times where data reigns supreme, logistics companies must harness
the power of data to drive informed decision-making. By adopting robust data analytics
capabilities, businesses can gain actionable insights and optimize various aspects of
their operations. We discuss some ways how:
_ Predictive analytics: Leveraging historical and real-time
data, predictive analytics enables businesses to anticipate demand fluctuations, optimize
inventory levels, and enhance supply chain resilience. Accurate forecasting minimizes
stockouts, reduces inventory holding costs, and improves overall operational efficiency.
_ Supply chain visibility: Comprehensive data integration and
visibility across the supply chain enable end-to-end traceability, proactive issue
identification, and prompt problem resolution. Real-time data sharing fosters
collaboration, enhances communication, and builds trust among supply chain partners.
OUTLOOK
The Company has recently expanded its Logistics Business by expanding
its reach across various states in India such as West Bengal, Maharashtra, Telangana,
Gujrat, Delhi, Karnataka, Tamil Nadu, Assam. It is a strategic move that allows your
company to tap into new markets and take advantage of the growing opportunities in those
regions. By expanding our reach, we can cater to a larger customer base and potentially
increase our market share.
is expansion has evidently resulted in a significant increase in the
companys turnover. With a wider presence, we can generate more revenue by serving a
larger number of customers and meeting their logistics needs efficiently. is growth is a
positive sign for your companys financial performance and overall business development.
Furthermore, venturing into the retail business by setting up Exclusive
Brand Outlets for Jockey, which is a renowned brand owned by Page Industries Limited, is
another strategic move. By partnering with a well-established and recognized brand, your
company can leverage Jockeys reputation and customer base to drive sales and expand its
retail presence. is diversification into retail allows your company to explore new revenue
streams and capitalize on the demand for Jockey products.
Overall, these expansions and ventures demonstrate your companys
proactive approach to growth and seizing opportunities in different sectors. It positions
your company to benefit from the potential of new markets and capitalize on the strengths
of established brands like Jockey.
FINANCIAL PERFORMANCE
The summarized financial performance of the Company as compared to last
year is shown as under:
|
|
|
(Amount in Lakhs) |
| Particulars |
March 31, 2022 |
March 31, 2023 |
% Change |
| Net Sales/Income from Business operations |
8,481.77 |
10,050.90 |
18.50 |
| Other Income |
31.90 |
133.01 |
316.95 |
| Total income |
8,513.67 |
10,183.91 |
19.62 |
| Profit before Tax |
253.56 |
313.36 |
23.58 |
| Net Profit/ |
217.29 |
204.73 |
5.78 |
| (Loss) after Tax |
|
|
|
The Company has only one segment of business operations i.e. Logistics.
erefore, segment wise reporting is not applicable.
The significant changes in the financial ratios of the Company which
are more than 25% as compared to the previous year are summarized below:
| Sr. No. Particulars of Key Financial Ratio |
2021-2022 |
2022-2023 |
% Change |
| 1 Net Capital Turnover Ratio |
-34.67 |
-17.50 |
-49.53 |
| 2 Return on Capital Emploured |
0.12 |
0.16 |
32.31 |
1. Net Capital Turnover Ratio ratio has increased due to increase in
total sales.
2. Return on Capital employed has improved in current year on account
of better earnings.
OPPORTUNITIES
In the current scenario, building more warehouses to cater to the
demands of e-commerce, consumer, and retail sectors is a strategic move, especially
considering the industry-specific requirements. With the strategic location of our
warehouses and the high occupancy rate, it seems like we have successfully attracted
various e-commerce companies to avail your services. is is a positive sign for our
business.
Expanding our transportation network by opening branches across Central
India and implementing reverse logistics will not only improve our overall service
offerings but also provide us with an opportunity for backward integration.
The COVID-19 pandemic has indeed emphasized the importance of localized
approaches in supply chain management. By focusing on local storage and distribution, you
can enable expedited and hassle-free deliveries to the local market. is localized approach
aligns well with the current trends in the e-commerce industry, as businesses increasingly
seek to optimize their last-mile delivery operations.
By conceptualizing and implementing a plan that caters to these
industry trends, you position your business for more opportunities in the near future and
the long run. Its crucial to continue monitoring the evolving needs of the market and
adapting your strategies accordingly to stay competitive in the dynamic logistics sector.
Our services will improve agility, credential stability, transparency,
and speed, adding to the overall development in Indias logistics space.
RISKS, THREATS AND CONCERNS
Our business is significantly influenced by the performance of the
automotive industry and also by demand and supply ratio in market. We operate in a highly
competitive industry, with many different and unorganized players. Many segments within
the logistics industry are highly commoditized and have low barriers to entry, leading to
a market with a very high degree of fragmentation. In the recent past, start-ups and
international logistics companies have entered the Indian market. Competition from these
segments is likely to increase. Digital marketplace platforms and data analysis provided
by these start-ups to serve customers directly by removing middlemen from logistics
operations are able to reduce the total costs of transportation and improve reliability
and operational efficiencies. We will need to stay ahead of our competition through
consistent investments in modern technology and focus on service quality and value-added
services.
The Company is committed to recognizing and managing the risks it is
exposed to, both internal and external, and has put in place mechanisms to handle the same
proactively and efficiently.The Company also recognizes that these risks could adversely
affect its ability to create value for all stakeholders, and has taken steps to mitigate
the same.
INTERNAL CONTROL SYSTEM AND ADEQUACY
The Company has a well-established and comprehensive internal control
system. Documents, policies and authorization guidelines comply with the level of
responsibility and standard operating procedures specific to the respective businesses.
Observation made in internal audit reports on business processes, systems, procedures and
internal control and implementation status of recommended remedial measures by Internal
Auditors are regularly presented to and reviewed by the Audit Committee of the Board.
The system of internal control is being improved to ensure that all
assets are safe and protected against loss from unauthorized use or disposition, and that
all transactions are authorized, recorded and reported correctly.The Company regularly
conducts internal check, using external and internal resources to monitor the
effectiveness of internal controlling the organization. It strictly adheres to corporate
policy with respect to financial reporting and budgeting functions.The Audit Committee of
the Board of Directors deals with significant control issues and instructs further areas
to be covered.
HUMAN RESOURCE DEVELOPMENT
Your Company focuses on creating an enriched environment for its
employees, where it lays the opportunities for growth.There is 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 industry.There are various Learning and
Development programs that are carried on throughout 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 ese initiatives help enhance the
skills and experiences of employees, ultimately enabling the Company to achieve its
business objectives.
By promoting these standards, your company creates an inclusive and
supportive environment for all sections of society. Ensuring equal opportunities at all
levels, providing safe and healthy workplaces, and protecting human health and the
environment are important commitments that contribute to a positive work culture and
sustainable practices. Your Company believes that the employees are the most valuable
assets and key drivers of business success and sustained growth.The total number of
employees employed by the Company as on March 31, 2022 were 590.
Moreover, by offering opportunities for employees to improve their
skills and capabilities, your company demonstrates a dedication to personal and
professional growth. is commitment to employee development can lead to increased job
satisfaction, motivation, and productivity among your workforce. Additionally, maintaining
cordial industrial relations with various clients, vendors, financial lenders, and
employees is crucial for a harmonious and productive work environment. Positive
relationships with these stakeholders can foster collaboration, trust, and mutual success.
Overall, your companys focus on creating a congenial atmosphere,
respecting human rights, providing equal opportunities, prioritizing safety and health,
promoting employee development, and maintaining strong industrial relations reflects a
commitment to ethical and responsible business practices.
Your Company is an equal opportunity employer and does not discriminate
on the grounds of race, religion, nationality, ethnic origin, color, gender, age,
citizenship, sexual orientation, marital status or any disability not affecting the
functional requirements of the position held
CAUTIONARY STATEMENT
Statements in this "Management Discussion and Analysis"
describing the Companys objectives, projections, estimates, expectations, plans or
predictions or industry conditions or events are "forward-looking statements"
within the meaning of applicable securities laws and regulations. Actual results,
performance or achievements could differ materially from those expressed or implied.
Several factors could make a significant difference to the Companys operations. ese
include economic conditions affecting demand and supply, government regulations and
taxation, natural calamities and so on over which Company does not have any direct
control.
| SD/- |
SD/- |
| ATUL GARG |
PREETI GARG |
| Managing Director |
Non-Executive Director |
| DIN: 01349747 |
DIN 07048745 |
| Place: Raipur |
|
| Date: August 14, 2023 |
|
+91-9892691696
