OVERVIEW
From its modest beginnings in 1976, Shreeji Translogistics Limited, has today risen to
become a large integrated national logistical solution provider in India. With more than
four decades on the road, our Company is clearly at the forefront in the road transport
industry. The Company has turned into a brand with strong and well networked
infrastructure across the country. The Company caters to a wide range of logistical
requirements from Over Dimensional Cargo (ODC) movement to Bonded trucking movement.
The Company offers a broad array of completely integrated services like Full Truck Load
Transport Services (FTL), Parcel and Part Truck Load Services/ less than Truck Load (LTL),
Import-Export Services, Over Dimensional Cargo (ODC) and Bonded Trucking Services,
Warehousing and 3PL services. Our Company caters to all types of segment leaders; serving
a broad range of industries, including the e-commerce, fast-moving consumer goods (FMCG),
white goods, food, textiles and apparel, furniture and fixture, pharmaceutical, plastics
and metal industries.
With a growing network of offices and warehouses across the country and a strong fleet
of around 300 owned trucks and more than 4500 outsourced trucks, the Company is a trusted
name in the transport and supply chain management industry. Our Company is an ISO
9001: 2015 certified and an Indian Bank Association (IBA) approved Company. During the
year under consideration, the Company also received the Authorized Economic Operator -
Logistics (AEO-LO) Certificate (Custodian) the Central Board of Indirect Taxes and
Customs, which recognizes that the Company is in compliance with highly stringent World
Custom Organizations (WCOs) SAFE
Framework.
The Company has recorded its highest ever revenue during the financial year 2023, which
was mainly driven by increasing geographical footprints and addition of new clients. The
Company have achieved remarkable success by on boarding new highly reputed clients and
receiving prestigious awards like "Premier Bonded Trucking Operator" Award at
India Cargo Awards 2022, "Company of the Year - South" Award at TV9 Leaders of
Road Transport Awards 2022, "Customs Bonded Trucking Operator of the Year" Award
at South East Air Cargo Conclave & Awards 2022 and "Large Fleet Operator of the
Year" Award by Apollo (CV). During the year under consideration, the Company expanded
its geographical presence by establishing operations in four new locations: Bhopal,
Mundra, Kandla, and Gandhidham.
The Companys focus on providing project logistics and higher value added services has
enabled it to contribute meaningfully to government initiatives like Make in India and PM
Gati Shakti.
INDUSTRY STRUCTURE, DEVELOPMENT AND OPPORTUNITIES
The Indian logistics sector is primarily categorized into four segments comprising:
1. Transportation (Road, Rail, Air, Water-ways)
2. Warehousing (Container Freight Stations and Inland Container Depots)
3. Freight Forwarding
4. Value Added Services
The logistics industry is considered a crucial sector to boost National as well as
International Trade. The logistics and freight industry is evolving rapidly and regarded
as the backbone of the economy as it ensures quick, efficient and economical transport of
goods across the country or even globally and many commercial sectors rely on it.
The logistics sector in India has today become an area of priority. One prime reason
for the same stems from the reason that years of high growth in the Indian economy have
resulted in a significant rise in the volume of freight traffic moved. The large volume of
traffic has for growth opportunities in all facets of logistics including transportation,
warehousing, freight forwarding, express cargo delivery, container services, shipping
services etc.
The logistics theme revolves around formalisation of the Indian economy, with GST being
a big driver. Traditional logistics chain involved customers approaching transporters who
would coordinate with truckers through brokers to transport goods and services. Brokerage
charges tend to be 3-8% of rates booked for the cargo. Organised players have eliminated
the broker and they are directly reaching out to truckers, leading to improved margins.
The overall direct logistics cost should see the organised share rise to 19%, from 10%,
implying a 20% CAGR, similar to the past five-year trend.
Logistics costs is 7-9% of GDP in developed countries like US and Germany. Good
infrastructure and efficient paperwork keep indirect logistics costs like inventory
carrying, pilferage and wastages at a low. Minister of Commerce and Industry Piyush Goyal
stated India targets dropping logistics costs to less than 10% of GDP from the current
14-15% in the next five years. The warehousing, industrial, and logistics (WIL) sectors
are projected to be crucial for attaining Indias vision of being a US$ 5 trillion economy
by FY25.
At present, the logistics market is dominated by road transportation sector and the
trend is expected to continue in future. The road transportation sector in India is
expected to grow at a compounded annual growth rate of 8% in the next five years, to reach
USD 330 billion by 2025. This growth will be fuelled by factors such as the rapidly
growing e-commerce sector and a growing retail sales market, infrastructure improvements,
among others. The logistics sector in India has today become an area of priority. Because
of the growing shift from discretionary to essential internet buying during the COVID-19
pandemic, the e-commerce industry became more appealing and attractive. As a result of
growth in the e-commerce industry, the warehousing and logistics sectors have benefitted.
The expansion of this industry is likely to be aided by a robust economy, government
efforts to improve infrastructure, and a favourable business environment. The Government
of India has taken many initiatives to strengthen the sectors infrastructure, including
the establishment of dedicated freight corridors and the extension of road and rail
networks, to improve connectivity and decrease travel times. Between FY16 and FY21,
highway development in India expanded at a 17.00% CAGR. The Ministry of Road Transport and
Highways had received funding from the Indian government of Rs. 199,107.71 crore (US$
26.04 billion) as part of the Union Budget 2022–23. The Ministry of Road Transport
and Highways built 5,835 km of national highways in FY22 (until December). Under the
National Infrastructure Pipeline, the Indian government has allotted Rs. 111 lakh crore
(US$ 1.4 trillion) for the fiscal years 2019 25. Throughout the fiscal
2019–25, the roads sector is anticipated to account for 18% of capital
expenditures.
Another critical governmental intervention has been the sectors digital
transformation, projects such as Digital India, Bharat Net, and the National Logistics
Portal would aid in the industrys digitization. Furthermore, the government has announced
the establishment of logistics parks and warehouses across the country to provide
appropriate storage facilities for enterprises. The warehouse sector has grown rapidly in
recent years, fuelled by the expansion of e-commerce, solid infrastructure, the adoption
of GST, and the advent of organized retail. The recently implemented National Logistics
Policy intends to reduce Indias logistics costs from the double digits of GDP to the
single digits by 2030.
SEGMENT-WISE PERFORMANCE
Full Truck Load Transport service is the Companys core business and in this space, the
Company has been a trusted name for Time-Bound Deliveries. Clients can rent or lease out
the entire vehicle to transport goods across India as per their requirements. The fleet
size ranges from 5 ft to 70 ft. The Company ensures that clients receive the best, most
cost-effective service options. Company is operating in over 650 routes across India.
Companys Parcel & Part Load or the Less than Truck Load (LTL) Transport option
helps medium and small businesses and individuals to use the services. Through this
service, Company provides Door-to-Door Delivery of Parcels. Companys parcel and part load
service works as per the "Hub & Spoke" arrangement where the entire load is
transported to the central warehouse (HUB) and then further distributed to specific
locations which enables faster freight movement.
Bonded Trucking Service, which was a new concept introduced in India in the year 2000,
was initially started by the Company in the year 2002 and now the Companys Bonded
Trucking Division has grown to another level. The Company has been providing Custom Bonded
Trucking services for over two decades and its services have been greatly appreciated by
the Airline Industry. Recently, the Company was honored with "Premier Bonded Trucking
Operator" Award at the India Cargo Awards 2022 and "Customs Bonded Trucking
Operator of the Year" Award at South East Air Cargo Conclave & Awards 2022.
During the year, the Company forayed into the Over Dimensional Cargo (ODC) Services.
ODC is a cargo that extends beyond the normal loading deck of a cargo in order to deliver
oversized goods and it is a specialized service having good yields.
The Company provides 3PL and Warehousing services in and around Mumbai, Bangalore &
Chennai. These services can be provided at other locations based on client requirement and
project feasibility.
The Company also provides vehicles to connect the ‘Linehaul Ocean and Rail
segments of Containerized Freight Movement. The Company has services for both types of
container loads catering to Import and Export segments. These are specialized trucks
running between ocean ports, rail terminals, ICDs & CFS. Containers are normally 20
feet and 40 feet in length. This is majorly serviced by hired fleets.
The Company owns and operates a strong fleet of commercial vehicles consisting of
around 300 owned trucks and more than 4500 outsourced trucks. The Company operates
different types of trucks on the basis of design and size along with varying capacities.
Our Container Trucks are used for transportation of parcels, white goods, FMCG, etc. while
our Platform Trucks are mainly used for import export containers and also for
transportation of heavy duty goods like automotive parts and machineries. With more than 4
decades of experience in freight management, logistics solutions & warehousing
services, the Company has made a stalwart progress along the highways of India. The
following diagrams depict the breakup of revenue, percentage-wise for the years ended 31st
March, 2023 and 31st March, 2022 on the basis of different types of services:
RISKS, CONCERNS, THREATS AND STRENGHTS
The logistics industry in India is undergoing a transformative phase, with several key
trends driving its growth and development. From advancements in technology to shifting
consumer behavior to significant improvements infrastructure, some key trends are set to
shape the future of logistics in India for years to come.
As we exit the pandemic and prepare ourselves for a recessionary environment globally,
we can also anticipate changes in consumer demand. Businesses will need to be more
efficient, provide better customer experience and value to support them in their battle in
an increasingly challenging economic climate.
The road transport sector faces a slew of challenges related to cost, infrastructure,
and manpower. One of the most significant issues is the regular increase in fuel costs.
Fuel price volatility is the most important concern in the transportation industry.
There are also other fees such as tolls, insurance, and road tax. It will be much easier
for us to quote rates to consumers while keeping all of these expenses in mind if the
government can fix all of these rates once a year in the budget. Furthermore, cargo
handling fees at some airports are greater than sector-bonded trucking fees. Furthermore,
a few airports impose dual fees for transhipment cargo in the form of handling fees and
royalty taxes. Our Company has been in a position to pass on predominantly or at times
even completely such increases to customers through periodic increase in service rates.
On an average 10 to 12% of Indian fleet remain idle due to driver scarcity. Our Company
was faced with similar issue. In order to overcome this, the Company started an incentive
program under the name and style of "Paiya Ghumao Paisa Kamao". Our Company was
able to successfully implement the program owing to which our idle fleet has become zero/
negligible. The incentive is provided on per KM basis, so more the KMs driven by drivers,
more they are benefited and thereby increasing overall fleet utilisation. In order to
minimize risks of dissatisfied customer, the
Company is providing extensive training to even its frontline workers who have limited
literacy to address any last minute customer requirements.
Inorder to prevent in-transit risks, the Company provides containerized trucks which
reduces spoilage, pilferage and damages while goods are in transit.
The Company competes against the competitors by effectively ensuring consistent service
quality and timely services at competitive prices, thereby strengthening its brand over
the years. The Company believes that its large network and comprehensive service offering
as well as its established reputation will enable it to compete effectively in the market.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate internal audit and control system commensurate with its
size and nature of business to ensure operational efficiency, accuracy and promptness in
financial reporting and compliance of various laws and regulations. The Audit Committee of
the Board of Directors reviews the Internal Audit Report and the adequacy and
effectiveness of internal controls periodically.
FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The consolidated performance of the Company for the financial year ended 31 st
March, 2023 is as follows:
The Consolidated Revenue from Operations of the Company was Rs. 2,008.81 Lac during the
year under consideration as compared to 1,665.99 Lac during the previous year,
representing increase of about 20.58%.
The depreciation and amortisation expense was Rs. 336.04 Lac as against Rs. 385.60 Lac
during the previous year.
The finance cost was Rs. 365.10 Lac as against Rs. 408.35 Lac during the previous year.
The consolidated net profit after tax for the year is Rs. 1096.24 Lac whereas the
consolidated net profit after tax was Rs. 917.23 Lac for the previous year.
KEY FINANCIAL RATIOS
| Ratio |
2022-23 |
2021-22 |
% Change |
Explanation for Significant Change (i.e. change of 25% or more) |
| Interest Coverage Ratio |
5.22 |
4.06 |
28.57 |
The increase in Operating Profit and lower interest expense in current year compared
to preceding year has resulted in improvement in the ratio. |
| Return on Net Worth |
25.77 |
28.17 |
-8.51 |
There is variance in Return on Net Worth as there is more increase in shareholders
equity from the preceding year as compared to increase in profit. However, the Return on
Net Worth is good as per Industry Standards. |
| Debtors Turnover (in days) |
106 |
99 |
7.32 |
N.A. |
| Current Ratio |
1.54 |
1.70 |
-9.53 |
N.A. |
| Debt Equity Ratio |
1.08 |
1.38 |
-21.54 |
N.A. |
| Operating Profit Margin (%) |
8.62 |
7.95 |
8.43 |
N.A. |
| Net Profit Margin (%) |
7.52 |
7.35 |
2.30 |
N.A. |
Note Profit before/ after tax ratios are considered after exceptional items.
Inventory Turnover Ratio is not applicable to the Company, as the Company is primarily
engaged in the business of Transportation Service. There are no significant changes (i.e.
change of 25% or more as compared to the immediately previous financial year) in other key
financial ratios Operating Profit Margin, Net Profit Margin, Debtors Ratio, Current Ratio
and Debt Equity Ratio, therefore, explanation for the same have not been given.
HUMAN RESOURCE DEVELOPMENT
As on 31st March, 2023, the Company has employed 295 employees based in
different locations across the country, majority of which are located at our registered
office regional offices. Additionally, the Company casual labourers and temporary
labourers on daily wages for loading / unloading of the goods according to its
requirements. Administrative employees play an important role in our centralized support
services such as load planning, accounting, information technology, business development
and human resource functions. The Company has developed a decentralized senior management
structure in order to ensure timely decision making which is key to our operations.
Despite the large number of employees as also considering the widespread geographical
operation of the Company, your management feels proud to state that the employer –
employee relations remained extremely cordial throughout the year. There were no instances
of strikes, lockouts or any other action on part of the employees that affected the
functioning of the Company. It is noteworthy that there is no Employee Union / Trade Union
/ Union within the organization.
The recruitment, training and retention of qualified drivers are essential to the
Companys growth and to meet the service requirements of the customers. In order to keep
the drivers motivated, the incentive schemes are provided on a monthly basis and
include incentives based on distance travelled, fuel efficiencies and meeting delivery and
/ or route schedules.
The Company recently started an incentive program under the name and style of
"Paiya Ghumao Paisa Kamao". Through this program, the incentive is provided on
per KM basis to the drivers, i.e. the more KMs driven by drivers, the more they are
rewarded. This incentive encourages more drivers to join and also helps increasing overall
fleet utilisation.
FUTURE BUSINESS OUTLOOK
The Indian Governments unwavering focus on the development of the logistics sector
through initiatives like Make in India, Atmanirbhar Bharat, Vocal for Local, Digital
India, National Logistics Policy, and Bharat Mala Road Network opens up vast opportunities
for investments, business growth, and development. As Indias logistics market continues
to expand at a rapid pace, with a projected value of USD 330 billion by 2025 compared to
USD ~250 billion in 2022, we find ourselves well-positioned to capitalize on this growth.
Factors such as the flourishing e-commerce industry, imminent technological advancements,
and the expanding retail sales market will be crucial drivers of our success.
Indias logistics industry has achieved remarkable progress, highlighted by the
countrys rise of six spots in the World Banks Logistics Performance Index (LPI). This
improvement is credited to various factors, such as technology innovation, data-driven
decision-making, and policy initiatives aimed at facilitating world-class infrastructure.
The logistics and supply chain industries in India are currently experiencing a
significant transformation, driven by several government initiatives aimed at boosting the
sector. Notably, the implementation of the GST and the recognition of logistics as
infrastructure status are two critical moves that have been instrumental in driving this
change.
Recently, there has been an unprecedented push towards infrastructure development in
the country. Roads, warehouses, ports and dedicated transport hubs are being planned and
built. With greater export volumes and connectivity between manufacturing centres and
markets, the logistics volumes are on the way up.
The future outlook for the express logistics industry specifically, is positive owing
to several government initiatives that are actively being executed. In an attempt to
propel the growth of the logistics sector even further, the Government has also actively
invested in Logistics Parks and included several initiatives in the Government Budget.
CAUTIONARY STATEMENT
Statements in the Management Discussion & Analysis describing the Companys
objectives, projections, estimates and expectations may constitute "forward looking
statements within the meaning of applicable laws and regulations. Actual results might
differ materially from those either expressed or implied.
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