VRL Logistics Ltd Management Discussions.


The logistics cost in India stands at 14 percent of GDF compared to the global average of approximately 8 percent. India has the second-largest road network globally, which totals 5.5 million kilometers, yet national highways account for less than 2.7 percent of the total network. This puts a severe strain on the national highway network, which carries about 40 percent of the road traffic. The Indian road transport sector carries goods worth $150 billion a year.

Trucks offer various benefits over railroads. For example, rather than rail transport, trucks can acknowledge items in smaller amounts, they can likewise arrive at provincial and sloping districts, and require less time than the rail for the stacking and emptying of the items. Last mile delivery is only possible through trucks.

The road transportation sector is highly fragmented with the presence of a large number of unorganised small truck operators. It is estimated that over 70% of truck owners in India have a fleet size of between one and five trucks. Truck operators are heavily dependent on intermediaries such as brokers and booking agents. The handlers hold a dominant position in pricing freight rates, shrinking margins of truck operators. Consequently, pure road transportation or trucking lacks pricing power and has low ability to pass on rising fuel and other costs. Larger fleet owners are obviously much better placed due to alarge client base which they use to optimizeutilization and achieve better margins. On per kg basis, LTL has relatively highermargin compared to FTL as the customer has relatively low bargaining power. Established players who have large fleets ofabout 1,000 plus trucks are able to venture into the high margin LTL business.

The trucking industry considered to be the backbone of Indias economy- has been battered by the imposed lockdowns at the onset of the second wave of the pandemic in India especially after seeing steady recovery over the last couple of months from the first wave. The fresh wave of Covid-19 cases sweeping the country and the resultant lockdown measures implemented by several states have already started hurting transporters. The truck fleet utilisation had peaked to 85% in March, which was better than the pre-Covid levels, but has now dropped to 70%. Truckers are hard-pressed to pay back their EMIs. Transportation of goods through roadways slowed during April. The average number of daily e-way bills generated in April 2021 so far was around 2 million as compared to 2.3 million in March 2021. These bills are necessary for moving goods from one state to the other via road. Besides goods, peoples movement has also reduced.

The Indian logistics sector has witnessed a significant sequential recovery after experiencing severe disruption in Q1 FY2021, on account of the nation-wide lockdown. This had created demand-side and supply-side challenges which eased in subsequent months as economic activity recovered. As lockdown-related restrictions eased and economic activity revived, the freight availability for logistics players also improved. Accordingly, many of the logistics companies reverted to pre-pandemic levels by end of Q2 FY2021 and started reporting Y-o-Y growth from Q3 FY2021, the same has continued into Q4 FY2021 as well. Freight rates also remained firm during this period.

The recovery was visible across the various modes of logistics activity. Both Full Truck Load, Less than Truck Load and Supply Chain Management businesses benefited from the pickup in manufacturing activity and consumer demand.

In terms of profitability, logistics companies have also been able to arrest the earnings contraction to a significant extent despite lower revenues and higher fuel prices, supported by aggressive rationalisation of fixed overheads and cost-control initiatives. However, as the impact of several cost-control initiatives like salary reduction, rental waivers etc. were temporary in nature; these levels of margins are not expected to be sustainable and could see a marginal decline in the near term.

In the current year, while profitability had come under significant pressure in the first quarter due to subdued asset utilization and high fixed costs, the same has revived subsequently to a large extent. With cost-control measures undertaken and focus on working-capital management, the sector has been able to alleviate concerns on profitability to a large extent. Growth over the medium-term is expected to gain momentum with anticipated increase in demand from segments like e-commerce, FMCG, retail, chemicals, pharmaceuticals and industrial goods coupled with industry paradigm shift towards organised logistics players post GST and E-way bill implementation. Additionally, the sector is likely to witness some consolidation trends, given the rising pressure on viability of small fleet operators.

The Companys management opines that the industry hit its trough during the raging pandemic in the last year and has already seen its worst days. Industries as also service providers are today better prepared to handle such crisis and ensure the continuity of business operations. The planned infrastructure push sounded by the Government in its earlier budgets awaits its imminent implantation and economic revival seems the only possibility ahead,with the Logistics industry sure to benefit from the growth in manufacturing and allied industries.


VRL is a well established brand in the country when it comes to surface transportation and the industry leader in the parcel transportation space. With a track record of over four decades, VRL has large size and scale of operations and operates on a pan India basis having one of the largest distribution networks in India. We are the only "Owned Asset" organised player in Less than Truck load logistics business in India. As on 31st March 2021, the Company operated with the total of 4,575 vehicles with a carrying capacity of 68,107 tons, and several owned premises, including branches, offices and transhipment

hubs. We maintain our stand that your Company also occupies the leadership position in the country for Less than Truck Load (LTL) movement of goods and it is only the absence of validated industry data that prevents us from acclaiming this fact.

The two major advantages that your Company enjoys over its competition are its well established wide network of branches and franchisees and its owned fleet of commercial vehicles with dedicated in-house vehicle body designing and vehicle maintenance facilities to cater to the parcel transportation. The Company presently operates across 22 States and 4 Union Territories in India and its reach is unmatched for the offering of LTL goods transportation services. Your Company is also one of the largest fleet owner of commercial vehicles in the Country and the same enables the Company to set unparalleled standards in the movement of LTL cargo in India in terms of service levels and safety of consignments.

The above figure depicts the ‘Hub and Spoke consignment delivery model followed by the Company. The policy at VRL is to own its vehicles for offering LTL services as also own significant infrastructure facilities comprising of warehouses and maintenance facilities. We also have a dedicated in-house IT setup which is a significant strength of your Company and the same has rendered a lot of control, cost savings and business flexibility over the years. The entire IT infrastructure of the Company is operated internally and the in-house developed ERP enables the Company to seamlessly operate on an online real time basis across all its business verticals as also integration with franchisees and select customers. Your Company also has built up capability to maintain its owned vehicle fleet internally and the cost savings arising out of economies of scale by way of tie-ups with fuel suppliers, vehicle manufacturers for supply of spare parts, tyres etc., as well as ongoing in-house R&D in this domain have enabled the Company to utilize its vehicles for a significantly longer term vis-a-vis the industry as also at significantly lesser maintenance costs.

Given below is the fleet break-up as owned by the Company -

As of 0.5 tons to 2.5 tons (a) 2.5 tons to 7.5 tons 7.5 tons and above Car Carrier (1) Available Capacity (tons) Tanker (2) Cranes (3) Total Vehicles Owned Buses TOTAL FLEET
31-Mar-17 117 969 2723 102 52099 17 13 3941 419 4360
31-Mar-18 150 960 2765 102 52954 17 13 4007 396 4403
31-Mar-19 257 1009 3004 102 64776 13 13 4398 381 4779
31-Mar-20 312 981 3428 0 70012 20 13 4754 337 5091
31-Mar-21 311 942 3289 0 68107 20 13 4575 291 4866

Note: (a) - this category consists of electric vehicles.

(1) Used for transportation of automobiles, converted to HGVs from 2020.

(2) Used for transportation of liquid

(3) Cranes are predominantly used for internal operations.

Your Company benefits from in-house research and development with a capability to implement its findings and experiment with newer products and technologies on its owned vehicles. Several of its key findings have today been accepted and implemented even by vehicle manufacturers. In combination with own vehicle body designing facility and also with combination of multiple types of commodities handling such as heavy and bulk consignments inside goods carriages, the goods carriages can be utilized at higher capacity as compared to the earlier periods.

Overall, the in-house maintenance facility helps the Company to better utilize its fleet than competition as the vehicles owned by the Company can be used for longer period of time vis-a-vis outside vehicles. Also ~55% of the Goods transportation vehicles are fully depreciated ensuring vehicle fleet availability with no additional depreciation costs. Also ~93% of the Goods

Transportation fleet is debt free with no associated finance costs.

Your Company also has a very well diversified customer base. During FY 2020-21, the Companys largest customer and the top 10 customers put together contributed only 1% and 3% of the revenues of the Goods Transport business respectively and the lowest Trade Receivables in the industry. This has ensured that the Company has no dependencies on any customers or product categories. Similarly, there are no geographical or product related dependencies for the business which better insulates your Company vis-a-vis competition.

The year gone by was the year of pandemic and the financial performance in the first quarter of the fiscal witnessed massive operational cash losses and a lot of uncertainty existed with regard to recovering from it. The gradual recovery and eventual stunning volume growth recorded in the latter portion of the fiscal aptly demonstrated the inherent business model strength of the Company as operationally, the company was ever ready to handle the business coming its way. Its excellent financial standing ensured that the company was able to bear the brunt and recover very fast in the face of adversity.


The major concern businesses are facing now is pandemic related which has forced industries to step back and review their strategies, operations and processes. Organizations have realized that they need to build networks and/or channels that will allow them to adapt quickly and easily in a changing environment. Organizations will have to build systems that can optimize costs, accelerate reaction times and diversify channels. For networks to adapt quickly and function smoothly, it is also important to build agile teams willing to change and adapt rapidly to the external environment. Swift reaction to disruptions can hasten change and minimize damage. Given the same as also the very nature of LTL freight being transacted, we believe that your Company would easily adapt to any given change being witnessed across markets as owing assets and operating offices across the country provides it with the requisite flexibility and option to moderate or reorganize any changes to freight movements.

Our Bus operations were severely affected during the year. The same scenario also holds good for the first quarter of the current day fiscal. The operations of the Bus Division, though inherently seasonal, get further impacted by general public sentiment. Operations were fully shut during the initial few months of the financial year owing to lock down and the subsequent resumption also saw lower occupancy rates as also lower demand where the fleet could not be meaningfully deployed. Occupancy levels are abysmal and normalization of these is imminent soon as gradually the general public is coming out of their Covid-19 instilled travel concern. There is however a bright time ahead for this segment given the recent decision by the Government to allow the much awaited All India Permit for buses in line with that for Goods Vehicles. This segment would thereby see lower costs and encourage operators to look beyond their existing route limitations to access newer markets.

The surface transport industry suffers from an acute driver shortage issue and the said problem also affects your Company. The management opines that this is the single most important factor that affects all the transporters across the country. Your Company is however relatively better placed in this regard. VRL offers best in class salaries and emoluments including incentives to its drivers which help retention of this cadre. The Company also has enlisted its drivers on its payrolls and extends all statutory benefits such as PF, ESI, etc. to its drivers. The Company offers a good work environment as well and also takes care of their skill development by conducting routine training programs as well as awareness camps for its drivers. Your Company also conducts frequent health checkup and health camps for the drivers so as to make them more health conscious. Shortages however still remain and your Company is striving to further encourage more and more individuals to take up driving profession by visiting potential villages and towns and trying to remove the stigma being associated with the driving profession. The management also propagates at several forums the necessity of a joint industry effort to overcome this problem which is only expected to become more challenging in the days to come.

Lack of owned infrastructure at key centers is another present day weakness in the managements opinion. The Company has established owned transshipment hubs at key locations like Hubballi, Mumbai, Mangalore, Mysore, Bhilwara, Gangavati, Surat and Davangere. Long term leases have also been entered into at key locations such as Chennai, Delhi, Hyderabad, Bengaluru, Pune, Kolkata, etc. Owned infrastructure enables the company to set up good quality maintenance facilities as also better infrastructure for goods movement and material handling. The ownership of premises at such key business locations provides the Company with a lot of flexibility in conducting business operations and the same lead to considerable cost savings and also enables the Company to scale up its service levels. Setting up such owned infrastructure would however entail significant investments which in turn affect the return ratios and the management would need to balance the two so as to optimize stakeholder value as well as to cater to business growth for future. Your Company would consider gradually expanding its owned infrastructure at such key locations in the years to come.


Financial year 2021-22 is also expected to present disruptions on the business volume front. Lockdowns imposed in various states has affected the brick and mortar industries, leading to lower demand, conservative consumer behaviour as also restrictions in the movement of men and materials which has adversely impacted everyone in the surface logistics industry, especially on a B2B front. Freight volumes are however increasing and are bound to surpass pre-Covid-19 days in the near short term. This is so because being organized enables your Company to better handle the ongoing scenario as also many of the unorganized smaller operators have already shut shop as they were unable to cope up with the financial stress the pandemic presented. Given that the industry is dominated by these unorganized players and they are bearing the financial brunt of the pandemic, organized players like your Company stands to benefit. We in fact remain quite optimistic of the possibility of relatively higher volumes coming your Companys fold in the days to come.

The present day stabilization of the GST regime has necessitated several documentation requirements to which organized players are better suited. Be it e-waybill compliance and providing necessary information to the customers for their compliances etc.

Your Company also has successfully obtained the requisite approvals from the respective RTOs and is now well poised to reap the benefits under the recent revision in Safe Axle Weights for Goods Transport vehicles by the Transport Division of Ministry of Road Transport and Highways which permits the carrying of higher weight on a Goods Transport vehicle. As of date, majority of the high capacity tonnage vehicles have been approved thereunder and these vehicles will be effectively used to carry the additional load as compared to the earlier periods. The same is expected to benefit your Company in the coming days. Though this was implemented more than a year ago, the company could not fully encash the advantages presented to it owing to the restricted movement of vehicles during the pandemic.

The vehicle scrappage policy is a government initiated program to replace old vehicles from Indian roads. According to the new policy, commercial vehicles greater than 15 years and passenger vehicles of greater than 20 years will have to be mandatorily scrapped if they do not pass the fitness and emission tests from April 01,2022.

The imminent implementation of scrappage policy is being tentatively viewed by the road transport industry as there would be a very significant reduction in the number of vehicles plying on the roads. This however would be a blessing in disguise. The eventual situation of higher demand for vehicles would work favourably and coupled with the inevitable freight rate hike caused by such policy implementation would lead to a higher margins for the Company. Also, given the internal expertise the company has on the vehicle maintenance front all the useful spare parts from the vehicles getting scrapped would be available for usage apart from the one-time salvage income expected. It is pertinent to take note that any such scrappage would also not entail any hit to the Companys profitability as the vehicles are fully depreciated.

Though around 800+ vehicles from the existing fleet would be required to be scrapped, in terms of capacity these vehicles account for hardly 12% of its fleet capacity.


Fluctuations in fuel prices resulting from diesel de-regulation, lorry hire charges payable to third party vehicles and input costs especially those related to tolls as also others like rent, salary etc. have a significant bearing on the Companys profitability margins. These represent a significant portion of the operating costs and any inability to pass on the same in entirety affects profit margins adversely. In particular, the cost of fuel has increased in the recent years regularly and fluctuates significantly due to various factors which are beyond our control. Historically, due to low customer dependencies, the Company has been in a position to pass on predominantly or at times even completely such increases to customers through periodic increase in freight rates or bus ticket prices. However, the ever present volatility represents a considerable threat to our result of operations.

The Companys operations could also be affected owing to development of newer policies by the different State Governments of the country. To quote an example, several states/cities have prohibited the entry of commercial diesel operated vehicles that are beyond a certain age. This necessitates the shifting of older vehicles and deploying these over other permitted routes which entails a cost. Also, one can never be certain as to when similar decisions would be implemented across other States and major cities which could affect us adversely.

The Companys business operations are totally dependent on the road network in India. There are various factors that affect the road network such as political unrest, bad weather conditions, natural calamities, regional disturbances or even third party negligence that can affect the condition of vehicles and cargo/passengers. Even though the Company undertakes various measures to avoid or mitigate such factors to the extent possible, some of these have the potential of causing extensive impact on operations and assets.

There is an expectation of a third wave of Covid-19. If the same happens, the business operations would again see a disruption over such time that the central govt./state govt. resorts to lockdown. However your Company has demonstrated resilience to such temporary blips and your management remains confident of overcoming any such situation.


The pandemic has affected the operations in H1FY21 and this in turn affected the overall financial performance of the Company inspite of the turnaround in the second half of the fiscal.

The Overall revenues of the Company decreased by 16.58% during the current year in comparison with the earlier year. On a year-to-year basis, goods transportation volume decreased by 14.14%. However revenues decreased only by 7.61% due to higher realization per ton during the year.

The revenues of Bus Operations division decreased by 62.08% due to non- operation of buses during the pandemic as also reduced occupancy and realization per passenger during the limited operational period.

The Wind Power division of the Company recorded revenues of 1757.44 lakhs, a decrease of 5.75% due to decrease in net power units generated - 5,48,67,390 units in FY-20 to 5,17,12,219 units in FY-21.

The Transport of Passengers by Air division recorded revenues of 1182.37 lakhs as against corresponding revenues of 1982.34 lakhs for the previous year due to lower commercial flying as also maintenance related idle time with respect to one of the aircrafts.


In the aftermath of the pandemic, financially strong and organized players stand to benefit at the expense of smaller and marginal players who dominate the industry. This was seen last year as well. Also, we now expect better utilization and revenue realization per vehicle for our Goods Transport Vehicles in view of the recent revision in Safe Axle Weights for Goods Transport vehicles which permits the carrying of higher weight on a Goods Transport vehicle thereby increasing its payload.

On the passenger bus operations front, we expect to benefit from the recently introduced ‘All India Permit for private buses which would lead to a significant reduction in the operational cost for that segment.

Given the nearly non-existent revenues of the bus operation segments as also limited operations of the goods transportation segment, your management opines that the financial performance of the initial quarter of the ensuing fiscal would be discouraging. Also if the third wave of the pandemic were to turn out to be a reality, the financial performance of the company would similarly suffer in the wake of lockdowns that may be imposed from state to state. However your management remains confident on the subsequent financial recovery and also the companys preparedness to capture higher freight volumes that would be available in the markets based on past experience.

The inherent strength in our business model ensures that the Company is not dependent on any particular customer or industry for its revenues. In these difficult times, the available drivers and vehicles are being selectively deployed for Full Truck Loads and Parcels depending on return load and other ground level position as the situation warrants. We are transacting freight business coming our way and our entire team has existing customers as also potential customers for getting business. We are doing an internal review and are conducting focused state-region level meeting to increase the freight density in the local pockets for growth and we are encouraged by the response to such initiative.


The Company has an Internal Control System, commensurate with the size, scale and the nature of its operations. The Internal Control function emanates at the Board level and its scope and authority of the Internal Audit function is well defined. To maintain objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the executive Chairman and the Managing Director. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies across the Company. Based on the report of internal audit function, process owners undertake remedial action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

As regards the operation of internal controls, majority of these have been inbuilt in the internal procedures established by the organization which are also documented internally. These include in details the methodology to be adopted right from transacting bookings, effecting consignment deliveries, etc. and also describes the practices to be followed for the smooth operation of business. Inspection teams are formed at the head office level as well as at the transshipment level and cover the entire branch network of the Company periodically for exhaustive inspection for adherence to the set procedure. Deviation from the laid down procedure is escalated to the Functional heads as also directly to the Executive Directors.

The Company had laid down guidelines, policies, procedures and structure to enable implementation of appropriate internal financial controls across the company. These control processes enable and ensure the orderly and efficient conduct of companys business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation & disclosure of financial statements. There are control processes both on manual and IT applications including ERP applications, wherein the transactions were approved and recorded. Review and control mechanisms are built in to ensure that such control systems are adequate and operating effectively.

Other control processes are IT driven and the in-house information technology capabilities ensure that due flexibility is available in the system to further strengthen controls as the case may be. Your management appreciates the need to remain efficient in their workings and recognized their responsibility in establishing controls as also effectively implementing them and monitoring their effectiveness on a periodic basis.

Other control processes are IT driven and the in-house information technology capabilities ensure that due flexibility is available in the system to further strengthen controls as the case may be. Your management appreciates the need to remain efficient in their workings and recognizes its responsibility in establishing controls as also effectively implementing them and monitoring their effectiveness on a periodic basis


( in lakhs)
Particulars Year Ended 31st March, 2021 Year Ended 31st March, 2020
Total Income 1,77,578.73 2,12,885.65
Profit Before Finance Costs and Depreciation 26,035.04 30,858.48
Finance Costs 3,681.96 3,673.37
Depreciation and Amortisation of expenses 15,979.01 16,753.43
Profit Before Tax 6,374.07 10,431.68
Tax Expense 1,867.28 1,420.19
Profit for the Year(excluding other comprehensive income) 4,506.79 9,011.49

The revenue from operations decreased by 16.79% from Rs 2,11,853.97 lakhs to Rs 176292.24 lakhs. Including other income the growth rate decreased by 16.58% from Rs 2,12,885.65 lakhs to Rs 177578.73 lakhs. EBITDA of the company for FY 2020-21 was Rs.26035.04 lakhs.

The Company has adopted Ind AS 116, Leases, effective 1 April 2019, using modified retrospective approach, which affects the amount of finance cost and depreciation accounted in the books. The impact of the same can be seen in the below table:

(Rs. in lakhs)
Amounts recognized in statement of profit and loss For the year ended 31 March 2021 For the year ended 31 March 2020
Depreciation charge on Right-of-use assets-Buildings 6,542.61 6,441.05
Interest expense included in finance cost 2,353.77 2,521.24
Expense relating to short-term leases 2,915.39 3,843.23
Total cash outflow for leases during current financial year (excluding short term leases) 8,778.65 7,739.71
Additions to the right of use assets during the current financial year 12,197.92 5,181.03

Despite recording a loss before tax of over Rs.8,380.77 lakhs in Q1, the Company closed the financial year with a profit of Rs.4,506.79 lakhs. Considering the net loss of Rs.6271.49 lakhs recorded in Q1, the latter three quarters recorded net profit to the tune of Rs.10778.28 lakhs, which was more than the full years profit of the preceding financial year.

The net cash flow from operation increased from Rs.25,728.46 lakhs to Rs. 27,111.23 lakhs during this year. The highlight further was that only the Goods Transportation segment, the core business of the Company, recorded profits during the current year. To achieve this, the management of the company took various initiative, especially involving the top management of the company travelling across the country, interacting regularly with the ground level staff, empowering and encouraging the people on the ground to take timely decisions, focus on their local markets to increase the business volumes by adding more number of customers.

Periodic review of freight rates based on the ever changing ground realities was continuously undertaken along with effective cost control measures relating to certain fixed costs such as employee cost, rent expenses, vehicle taxes, etc.

We keenly monitored the continuous increase in the fuel rates which is the highest cost for our business. The diesel rate during the year increased by around Rs.21 per liter and we have taken various steps to control the fuel cost by increasing the quantity of biodiesel (23.3% of total quantity in FY21) which is much cost effective compared to the normal fuel and increasing the diesel purchase quantity directly from refineries.

We reviewed the statutory provisions of the Motor Vehicle Act during the year and categorized certain vehicles as "nonuse" vehicles during the year to save on associated vehicle taxes. This helped reduce the vehicle taxes on vehicles which were not in use during the lockdown period.

A conscious branch profitability study was initiated and measures were taken to open 21 new branches in FY21 and closing 52 non performing branches. This not only helped in our saving costs, but also resulted in consolidation of operations without affecting Goods Transport business turnover.

The latter portion of the financial year (H2 FY21) of the financial year was a great one for the Company in terms of operational volumes in the goods transportation segment. We focused more on increasing kilometers operated by our own goods vehicles by doing optimal driver-vehicle allocation resulting in higher kilometers being covered by owned vehicles. H2 FY21 saw operations normalizing, and the company witnessed a 19% growth in Revenue and 79% growth in EBITDA, in comparison to the second half of the previous year (H2 FY20). The comparison is provided in the below chart-


In absolute terms, the EBITDA of the company decreased by 15.63% from Rs.30,858.48 lakhs to Rs.26,035.04 lakhs. However, when expressed as a percentage to the total income for the year, the EBIDTA margin increased by 0.17% from 14.50% for the last year to 14.66% for FY 21. Total operating cost, in absolute terms, decreased by 16.75% from Rs.1,82,027.17 lakhs to Rs.1,51,543.69 lakhs for the year.

The EBIT of the company decreased by 28.71% from Rs 14,105.05 lakhs to Rs.10,056.02 lakhs in absolute terms. When expressed as a percentage of total income, the same decreased by 0.96% from 6.63% to 5.66% for the year.

The PBT of the company has decreased by 38.90% from Rs 10431.68 lakhs to Rs 6374.07 lakhs in absolute terms. In terms of percent of total income, the same decreased by 1.31% from 4.90% to 3.59% for the year.

Interest Expense increased from Rs.3,673.37 lakhs to Rs.3,681.96 lakhs for the year.

Profit after tax decreased by 49.99% from Rs 9011.49 lakhs to Rs 4506.79 lakhs in absolute terms. When expressed as a percentage to total income, the same decreased by 1.70% from 4.23% to 2.54%.

The Company rewarded the shareholders with a Buyback and has also recommended a healthy dividend for the year in light of the excellent cash accruals recorded during the year.

Buyback - During the year the Company initiated an Open Market Buyback through the Stock Exchange mechanism. A total of 20,00,000 equity shares were purchased by the Company at a weighted average price of Rs.253.36 per share. Including taxes thereon, a total sum of Rs.6321.33 lakhs was spent on the said Buy-back. The said amount was adjusted to the Securities Premium account in the financial statements.

Dividend - The Board of Directors at their meeting held on June 12, 2021 have recommended a dividend of Rs.4/- per equity share out of the current years profits. Once approved at the ensuing Annual General Meeting, the same would result in a total outflow of Rs.3533.73 lakhs.

Goods Transport (GT)

GT revenue decreased by 7.61% from Rs.1,72,392.91 lakhs to Rs.1,59,275 lakhs. Tonnage decreased by14.14%. The decrease in tonnage was impacted by the lockdown imposed in various parts of the country in H1 FY21.

GT EBITDA of the company has increased by 6.49% from Rs.22,929.72 lakhs to Rs.24,417.02 lakhs in absolute terms while margins increased by 2.03% from 13.30% to 15.33% inspite of rising fuel prices. The EBITDA margins were impacted by the fixed costs that the company incurred during lockdown, such as Rent, Salary, Vehicle taxes, enroute expenses and

Compensation charges paid to drivers and labour. All these expenses were incurred in spite of vehicles being stationery. Apart from this, procurement of fuel also increased, as company operated its own vehicles and cut down on dependence on hired vehicles. Fuel expenses as a percent to total GT income increased by 2.44% from 25.95% to 28.38%.

Inspite of the rising fuel prices , the company was able to compensate by controlling there operating expenses which helped in reducing Lorry hire expenses by 1.14%, Maintenance costs by 0.81%, Tyre costs by 0.26%, Rent by 0.48%, Agency commission by 0.18% and Hamali costs by 0.18% as a percent of total GT income.

This clearly indicates that the Company was able to fully pass on the incremental costs to the customers in this segment despite a difficult economic situation which is an encouraging sign.

Passenger Travel (PT)

PT revenue decreased by 62.08% from Rs 34371.06 lakhs to Rs 13033.56 lakhs. Overall, it was very bad year for this segment owing to the following:

• decrease in number of buses from 337 to 291

• decrease in the number of passengers travelled by 58.45% in comparison with the earlier year

• decrease in number of trips by 56.35% owing to pandemic restrictions

• decrease in realisation per passenger by 8.98% in comparison with the earlier year .

• increased fuel price during the year

• incurring fixed costs despite not having any operations during the lock down.

EBITDA of the segment decreased from Rs.4,863.98 lakhs in FY20 to (Rs.703.15) lakhs in FY21. EBITDA Margins decreased by 19.55% from 14.15% in FY20 to (5.39%) in FY21.

Significant changes to key financial Ratios:

Barring Debt Equity ratio, Current Ratio and Interest Coverage ratio there was no significant change to the other key financial ratios, i.e. Debtors turnover, Inventory Turnover, Operating Profit margin and the Net profit margin. All profitability and turnover related ratios may not be comparable on a year on year basis as these numbers were adversely affected owing to the pandemic and may not be representative of a normal business scenario.

The Debt Equity ratio was 0.28 as of 31 March, 2020 and the same decreased to 0.17 as of 31 March, 2021.

The Current ratio of the Company increased from 0.69 as of 31 March, 2020 to 0.72 as of 31 March, 2021.

Return on Net Worth

The Return on net worth decreased from 14.28% for the financial year 2019-20 to 7.28% for the financial year 2020-21.


The total employee strength of the Company as of 31.03.2021 was 19763. Given the nature of operations, a significant portion of the said employee strength comprises of drivers, cleaners, garage mechanics and other unskilled employees.

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.