vrl logistics ltd Management discussions


The logistics industry in India, considered to be the lifeline of the country, holds unprecedented importance as it connects various markets, suppliers and customers dotted across the country, and has now been firmly embedded as an integral part of the national GDP value chain. The Indian logistics sector provides livelihood to more than 22 million people. The logistics industry is highly fragmented and consists of multiple active players which include large scale domestic players, leading global players and emerging start-ups specializing in e-commerce deliveries.

Infrastructure readiness and technology are expected to be the key drivers of growth for the Indian logistics industry. The growth in logistics sector is expected to be driven by increasing penetration of products into more cities and towns, as well as the growth of economic activity and manufacturing moving to these towns. In addition, the demand for value-added services from consumers provides opportunities for the Industry players to elevate themselves from an operational role to a more strategic one.

The logistics sector has witnessed robust growth with the highest share in the freight forwarding market, followed by the warehousing, courier parcel, and express and value-added services markets. The Indian freight and logistics market is evolving, keeping in line with the technological and infrastructural developments and various policy reforms taken by the government, including the introduction of e-way bills, fast-tag, e-invoicing, and GPS-based toll collection. The National Logistics Policy (NLP) is aimed at streamlining and strengthening Indias logistics sector, promoting the seamless movement of goods across the country, and increase the ease of doing business for players in the sector.

The traditional logistics industry in India is witnessing a significant shift toward digitization and the COVID-19 pandemic. The robust growth in manufacturing envisioned through the "Make in India" initiative will demand high levels of logistical efficiency, which means that goods must be produced and efficiently transported to markets at reasonable prices.

The deeper penetration into Bharat (Tier II, III & IV towns), economy enhancing initiatives, GST implementation and other initiatives such as Make in India, Digital India and the National Logistics Policy, all hold a promise for an efficient logistics industry in the days ahead.

The Multi-Modal Logistics Parks (MMLPs) policy is a key policy initiative of the Government of India to improve the countrys logistics sector. This initiative will lower freight costs, reduce vehicular pollution and congestion, and cut warehouse costs to promote domestic and global trade. The government is also focusing on strengthening the market in terms of competition, reduced freight rates and barriers, and technological developments. The agricultural, retail, and manufacturing sectors are boosting the countrys freight and logistics industry With the aforementioned efforts it is hoped that in the next 5 years the targets set by the National Logistics policy to improve Indias ranking in Logistics Performance Index to 25 will ensure that the Logistics sector serves as an engine of growth and a key driver for transforming India to a 5 trillion dollar economy Road transportation is highly fragmented: The approximately $ 110 billion market in India can be divided into full truck load

(FTL) and less than a truck load (LTL-which is 35 percent of the road transportation market). Owners of fewer than five trucks provide more than half of all goods vehicles on the road. Platformization provides the optimal means to aggregate such a fragmented market and better utilize trucks.

Significant issues plague the transportation value chain: The market depends heavily on regional brokers and struggles with financing issues. Shippers face issues such as low-price power, low efficiency and transparency, and the limited visibility of vehicles and shipment in the value chain. Carriers lack skilled drivers, technology, struggle with unpredictable backhaul availability and face long detention times. Middlemen (one or many) bridge the distance between the shipper (load provider) and truck/fleet owner resulting in additional costs in the system. A network and greater scale highly fragmented market, streamline costs for customers/shipment providers, convert large LTL to FTL by combining load and ensure steady load and profits to carriers/truck owners. This could help logistics players to double margins and resolve key issues.

The way companies use FTLs, LTLs, and milk runs, for example, is changing. In the supply chains of fast-moving consumer goods and some other products, milk runs are more efficient because they can effectively aggregate demand across several different Stock Keeping Units (SKUs) and companies. To become more responsive to changing demand, companies are also increasing their use of LTLs. Strategically choosing when to use LTLs, FTLs, and milk runs to meet demand is one of the key decisions that must be made, and the principles that guided them before the pandemic have been overtaken by events. (https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/indias-postpandemic-logistics-sector-the-need-for-technological-change) Already, logistics players are attempting to create a network at scale through one of three approaches: Line haul (FTL/LTL) focused network (asset-backed/"asset right"): This model requires the right mix of asset ownership and service provider partnership to be cost competitive. The load needs to hit a critical mass on the network to ensure maximum utilization of trucks resulting in cost leadership.

Last-mile delivery network: While this model helps to reduce costs by consolidating loads to convert LTL into FTL movement, it can also use the same network for only FTL services. Offerings include same-day delivery, time-window/slotted delivery, multiple payment options, streamlined return logistics and 24x7 visibility. The fulfilment centres also function as warehouses.

Hyperlocal services: This model requires high utilization to address skewed demand during peak time periods. For this model, load consolidation and route planning are critical to reduce costs. Key success factors also include expanding the network to multiple cities across India as well as deep pin-code level coverage within the city. Logistics players could choose a mix of different models to offer integrated, "one-stop shop" services to their customers.


VRL core strength is the large size and scale of operations we undertake on a pan India basis. With a track record of over four decades, we are one of the largest distribution networks in India. We are the only "Asset- Right" organised player in Less than Truck load logistics business in India. Our wider spread provides us greater stability during regional disturbances. VRL is a well-established brand in the country when it comes to surface transportation and the industry leader in the parcel transportation space. As on 31st March 2022, the Company operated with the total of 4816 vehicles with a carrying capacity of 71056 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 fleetof commercial vehicles with dedicated in-house vehicle body designing and vehicle maintenance facilities to cater to the parcel transportation. The Company presently operates across 23 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 through Hub and Spoke model in terms of service levels and safety of consignments.

The below figure depicts the ‘Hub and Spoke consignment delivery model followed by the Company.

The hub-and-spoke model creates numerous benefits, including:

Continuous movement for loads thanks to centralized handoffs.

Reduced lengths-of-haul, which improve scheduling, reduce transit time and help drivers

Consistent on-time performance, which enhances service levels and ensures products arrive in the right place at the right time.

Improved driver recruiting and retention. benefits,including higher tenure, routeThis produces additional consistency, increased transit dependability and performance, and improved safety.

Reduced costs and enhanced productivity

Lower carbon footprint, because few empty miles driven reduces wasted fuel and emissions.

Consistent pricing mitigates the risk of third-party carrier price fluctuations.

The policy at VRL is to own its vehicles for offering LTL services as also own significant of ware houses and maintenance facilities. We also have a dedicatedin-houseITsetupwhichis significantstrength of your Company and the same has renderedalotofcontrol,costsavingsandbusinessflexibilityover 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 Available Capacity (tons) Tanker (1) Cranes (2) Total Vehicles Owned Buses TOTAL FLEET
31-Mar-22 358 933 3489 71056 22 14 4816 295 5111

Note: (a) – this category consists of electric vehicles. (1) Used for transportation of liquid (2) 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. ~50.37% of the Goods transportation vehicles are fully depreciated ensuring vehicle fleet availability with no additional depreciation costs. Also ~91.24% of the Goods Transportation fleet is debt free no associated finance costs.

Your company proposes to add 1,600 customized trucks comprising of 1,000 trucks of TATA LPT 2818 make, 200 trucks of TATA LPT 1415 make, 100 trucks of TATA 610 SFC make, 200 trucks of Ashok Leyland 1920 make and 100 trucks of Ashok

Leyland 4620 make and the fleet addition is expected to commence by April 2022 would be spread over the time frame of over 12-18 months.

Your Company also has a very well diversified customer base of 7 lakhs plus clients across the various

During FY 2021-22, 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. 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.

With emphasis on connectivity, the management have taken the right steps to identify and expand the branch network. Going further this would lead to openings of newer business premises and help into tapping newer sectors from which the company would greatly benefit.


As per International Monetary Fund (IMF) World Economic Outlook, October 2021, the global recovery is continuing, but the momentum has slowed, hampered by the pandemic. Pandemic outbreaks in critical links of global supply chains have resulted in longer-than-expected supply disruptions, further feeding inflation in many countries. However, downside risks emanating from outbreak of new variants of COVID-19 remain.

Indias logistics sector is highly fragmented and the aim is to reduce the logistics cost from the present 14% of GDP to less than 10%. Indias logistics sector is very complex with more than 20 government agencies, 40 PGAs, 37 export promotion councils, 500 certifications, 10000 commodities, 160 billion $ market size. It also involves 12 million employment base, 200 shipping agencies, 36 logistics services, 129 ICDs, 168 CFSs, 50 IT ecosystems and banks & insurance agencies.(source: https://commerce.gov.in/press-releases/national-logistics-policy-will-be-released-soon-policy-to-create-a-single-window-e-logistics-market-will-generate-employment-and-make-msmes-competitive-nirmala-sitharaman/)

The sector is also constantly grappling with inefficiencies, however, because of which the cost of Indian logistics is 13 to 14 percent of GDP (in developed nations these costs amount to 8 to 10 percent of GDP). These inefficiencies stem from three reasons:

1. The two most unorganized sectors dominate the logistics market—road transport and warehousing. Road transport is particularly deeply fragmented truck owners with fewer than five trucks constitute more than half of all goods vehicles on the road. 2. Indias modal mix is heavily skewed towards road, with 60 to 65 percent of transport happening via road compared to 25 to 30 percent in developed countries, prompting higher costs. The use of inland waterways and coastal shipping is limited, while the containerization of cargo in rail remains minimal.

3. Indirect costs are high and include inventory carrying costs, theft and damages— often because of poor planning, forecasting and lack of proper management of stock.

The key issues affecting the overall performance included gaps in infrastructure which had so far been developed on a sectoral basis, a varied and silo-based legal and regulatory environment, disjointed IT systems, overdependence on road transport, suboptimal use of existing infrastructure due suboptimal sharing of capacities, lack of skilled manpower, low predictability and visibility in supply chains resulting in heavier than necessary inventory costs and so on. With logistics costs in the country still high), integrated development of the logistics sector was identified as a key area of reform. To achieve this, it was necessary to build a single government institution that would oversee, coordinate with multiple and fragmented stake holders across union government and states and would help develop the logistics sector into a strength for the economy by bringing down logistics costs. This offered a huge scope for improvement in the competitiveness of supply chains in India.

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 are inherently seasonal and were affected by the pandemic during the first quarter of the fiscal. Operations subsequently resumed and picked up from the second quarter. 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, Surat, Mangalore, Mysore, Vijayapura, Ballary Gangavati, and Davangere. Long term leases have also been entered into at key locations such as Chennai, Delhi, Ambala, 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 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 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.


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.

The mandatory E-Invoicing by the business entities with Turnover of Rs. 500 crores and above from October-2020, and further limiting it to Rs. 20 Crores and above from April-2022 would further lay emphasis on entities being more compliant. The vehicle scrappage policy is a government-initiated program to replace old vehicles from Indian roads. According to the new policy, commercial goods vehicles greater than 15 years will have to be mandatorily scrapped if they do not pass the fitness and emission tests from April 01, 2023.

The imminent implementation of scrappage policy is being tentatively viewed by the road transport industry as there would

61 th 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 al 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 1265 vehicles from the existing fleet would be required to be scrapped, in terms of capacity these vehicles account for hardly 18% 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 of the operating costs and any inability to pass on the same in entirety affects margins.Theserepresentasignificant 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 further waves 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 Overall revenues of the Company increased by 36% during the current year in comparison with the earlier year. The total revenue of the Company increased from Rs. 177578.73 lakhs to Rs. 241046.54 lakhs.

The revenue from Goods Transport segment which is the major segment in our operations increased by 34.19% from Rs. 159275.00 lakhs to Rs. 213738.24 lakhs. The revenue from Bus Operations Segment increased by 57.16% from Rs. 13033.56 lakhs to Rs. 20483.75 lakhs.

The revenue from Sale of Power segment increased by 43.71% from Rs. 1757.44 lakhs to Rs. 2525.69 lakhs.

The revenue from Transport of Passengers by Air segment decreased by 5.83% from Rs.1182.37 lakhs to Rs. 1113.38 lakhs.


In the press release issued by the Ministry of Finance, GST collections in April touched all time high of Rs. 1.68 lakh crores which have been driven by a 11 year high GDP growth, tightening of compliance by Govt which has led to lower tax evasion and up-tick in high ticket consumption post pandemic Further, the mandatory E-Invoicing by the business entities with Turnover of Rs. 500 crores and above from October-2020 , and limiting it to Rs. 20 Crores and above from April-2022 would further lay emphasis on Entities being more compliant. We believe the above steps taken by the Government clearly indicates that the business transactions needs to be done in a complied and organized way rather that the non-complied manner which were or being supported by the unorganized transporters while transporting the Goods.

In the aftermath of the pandemic, financially strong and organized players stand to benefit at the expense of 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.

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 observations and recommendations along with corrective actions thereon are therebystrengthenthecontrols.Significant 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 level as well as at the transshipment level and cover the entire branch business. Inspectionteamsareformed attheheadoffice 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 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 in the system to further strengthen controls as the case may be. Your management appreciates the need to remain efficientin their working and recognize its responsibility in establishing controls as also effectively implementing them and monitoring their effectiveness on a periodic basis


(Rsin lakhs)
Particulars Year Ended 31st March, 2022 Year Ended 31st March, 2021
Total Income 2,41,046.54 1,77,578.73
Profit Before Finance Costs and Depreciation 42,098.16 26,035.04
Finance Costs 4,309.18 3,681.96
Depreciation and Amortisation of expenses 16,799.76 15,979.01
Profit Before Tax 20,989.22 6,374.07
Tax Expense 4,977.96 1,867.28
Profit for the Year(excluding other comprehensive income) 16,011.26 4,506.79

The revenue from operations increased by 35.78% from Rs 176292.24 lacs to Rs 239365.25 lacs. Including other income the growth rate increased by 35.74% from Rs 177578.73 lacs to Rs.241046.54 lacs. EBITDA of the company for FY 2021-22 was Rs.42098.16 lacs.

Your company clocked the highest ever revenues in this fiscal as compared to our

The improvement in Turnover is on account of Growth in Good Transport segment which is the major segment in our operation. Revenue from Bus operations also stabilized post covid.

We believe that the growth in our core Goods Transport segment was amply aided by the proactive decisions taken by the management. The change in strategies post covid not only helped in expanding our clientele base but also helped in garnering a large chunk of market share of the shift to the compliance efficient organized business houses, from risky unorganized logistics service providers.

We laid emphasis on expanding our network as is evident from addition of 91 new branches in FY22. Going further, we plan to open more number of branches in the untapped markets. The below diagram illustrates the Zonewise percentage of new branches opened in FY 2021-22.

On the Vehicle side, we added 241 vehicles of different capacities in line with our expansion plans to garner more market share and also reduce dependency on third party vehicles. This also includes 19 electric vehicles of smaller capacity. The below chart illustrates the capacity wise breakup of our vehicles as on 31.03.2022

The mandatory E-Invoicing by the business entities with Turnover of Rs. 500 crores and above from October-2020, and further limiting it to Rs. 20 Crores and above from April-2022 would further lay emphasis on Entities being more compliant. We believe the steps taken by the Government clearly indicates that the business transactions needs to be done in a complied and organized way rather that the non-complied manner which were or being supported by the unorganized transporters while transportation of the Goods. We have also seen that commodities which was being handled majorly by the unorganized sector has seen a major shift to our company , for example : Coconut products – In FY19 we used to handle 48 tons and in FY 22 the same has increased to 5595 tons, Leather products has seen an increase from 2422 tons in FY19 to 15000 tons in FY 22. Areca nuts products has seen an increase from 4925 tons in FY 19 to 11500 tons in FY 22. To concentrate on the High growth oriented and High Return LTL Goods Transportation business the company has decided to sell the non-core segment of Sale of Power business and also sold one of the Aircraft in Q4 of the current fiscal.


In absolute terms, the EBITDA of the company increased by 61.7% from Rs 26,035.04 lakhs to Rs 42,098.16 lakhs. However, when expressed as a percentage to the total income for the year, the EBIDTA margin increased by 2.8% from 14.66% to 17.46% in FY 22. Total operating cost, in absolute terms increased by 31.28% from Rs 1,51,543.71 lakhs to Rs 1,98,948.38 lakhs The EBIT of the company increased by 151.57% from Rs 10,056.03 lakhs to Rs 25,298.4 lakhs When expressed as a percentage of total income, the same increased by 4.84% from 5.66% to 10.5%. Deprecation increased by 5.14% from Rs 15,979.01 lakhs to Rs 16,799.76 lakhs The PBT of the company increased by 229.29% from Rs 6,374.07 lakhs to Rs 20,989.22 lakhs. When expressed as a percentage of total income, the same increased by 5.12% from 3.59% to 8.71%.

Interest Expense increased by 17.03% from Rs 3,681.96 lakhs to Rs 4,309.18 lakhs

Profit after tax of the company increased by 255.27% from Rs 4,506.79 lakhs to Rs 16,011.26 lakhs. When expressed as a percentage to total income it increased by 4.1% from 2.54% to 6.64% Dividend - The Board of Directors at their meeting held on February 02, 2022 have recommended an interim dividend of Rs.8/- per equity share out of the current years profits. The same has resulted in a total outflow of Rs.7,067.47 lakhs.

Goods Transport (GT)

Increase in volume and better realisations leads to higher EBITDA margins
Geographical Expansion
Business shift from unorganized to organized fleet operators due to GST, E-way Bill & E- invoicing reforms
Operational Efficiencies
Increased contribution from newer commodities.

GT revenue increased by 34.19% from Rs.1,59,275 lacs to Rs. 2,13,738.24 lacs.

Tonnage increased by 27%. The increase in tonnage is on account of addition of new customers in the existing branches, expansion in network by opening of new branches in untapped market, focusing on geographic product-wise marketing and shifting of customers from the unorganized transport service providers to organized service providers on account of reforms in GST and E-way bill compliance norms.

We are hoping that considering our focus to increase our network going forward to the untapped market by opening of new branches and the shifting of customers from unorganised players to organised players (who are contributing major share in the Indian Transport Industry) our growth pattern will continue even going forward. GT EBITDA of the company increased by 51.13% from Rs 26,641.04 lakhs to Rs 40,263.3 lakhs in absolute terms while margins increased by 2.11% from 16.73% to 18.84% inspite of fuel prices rising continuously in FY 22.

The improvement in EBITDA is mainly on account of increase in GT volumes and increase in freight rates. The higher growth in GT volumes resulted in to higher growth in revenue during the year and the percentage of certain variable costs and certain fixed costs to the revenue have been declined due to operational synergies.

The Diesel cost as a percent to the revenue increased from 28.38% to 30.09%. We continuously monitor the diesel rates since diesel cost is major expenses for our business. In view to have a better control on Diesel cost we focused to procure more quantity of diesel from the refineries. After the reduction of Duties on diesel from November the procurement of Bio-diesel is not much viable as compared to the procurement of diesel from the refineries. Accordingly the quantity of bio diesel has been reduced. We are having our own pumps in 6 locations and another one in the pipeline to commence. These steps definitely ensure that our fuel procurement costs are way lesser than the market fuel rates. In spite of the rising fuel prices, the company was able to compensate by controlling their other operating expenses (as a percentage of total revenue). Major costs such as Employee costs reduced by 2.02% from 17.15% to 15.13%, Vehicle repairs and Maintenance reduced by 0.92% from 8.08% to 7.16%, Bridge & Toll Charges reduced by 0.40% from 6.69% to 6.29%, Tyres, Flaps and Re-treading reduced by 0.08% from 2.55% to 2.47%, Rates & Taxes by 0.10% from 0.90% to 0.79%,

Insurance by 0.25% from 1.17% to 0.91% , Agency Commission by 0.13% from 1.30% to 1.17%, Hamali by 0.15% from 6.20% to 6.06%, Clearing and Forwarding by 0.02% from 0.07% to 0.05% Some major costs that increased as a percent of margin include Lorry Hire charges by 0.02% from 7.54% to 7.56%, Rental costs by 0.25% from 1.61% to 1.86%, and Claims by 0.01% from 0.09% to 0.11%.

In view of these changes the EBITDA margin improved from 16.73% to 18.84%. 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.

Since we are expanding our Network and also adding many new customers we expect that the volume growth will continue in the coming quarters. Further as we are having the best method of operations with our own infrastructure facilities we can have better control on key expenses such as Diesel costs etc and maintain the margins in the coming quarters.

Bus Operations

Bus operations revenue increased by 57.16% from Rs 13,033.56 lakhs to Rs 20,483.75 lakhs. Bus Operations turns EBITDA positive on the back of increased occupancy and realizations.

The increase in Revenue is due to increase in number of passengers travelled by 46.66%, Increase in realization, increase in number of trips and better seat occupation.

There was increase in number of buses from 291 to 295.

Bus operations EBITDA increased from Rs.(591.58) lacs in FY21 to Rs 1135.19 lacs in FY22. Margins increased by 10.08% from (4.54%) to 5.54%.

Operating costs decreased by 4.3% from 85.82% to 81.51%, Admin expenses by 1.95% from 2.65% to 0.70%, and Employee costs by 3.71% from 15.95% to 12.24% thereby leading to increase in margins by 10.08% from (4.54%) in FY21 to 5.54% in FY22.

Significant changes to key financial Ratios:

Particulars As at March 31, 2022 As at March 31, 2021 Change % Reason for more than 25% change
Current 0.65 0.68 (5.60) -
Debt-equity 0.82 0.71 16.62 The increase in the ratio is on account of additional borrowings made by the Company to incur capital expenditure during the current year and increase in lease liabilities on account of additionalpremises taken on long term leases for expansion of the Companys operations.
Debt Service Cover- Ratio age 1.86 1.23 50.23 The improvement in Debt Service coverage ratio is due to 1.54 times increase in EBIDA from 24,133.32 lakhs to 37,095.57 lakhs.
Return on Equity 25.64% 7.42% 245.38 The improvement in RoE is due to 3.55 times increse in PAT of the Company from 4,506.79 lakhs to 16,011.26 lakhs, with no change in equity base during the year.
Trade Receivables turnover ratio 29.29 19.55 49.85 This ratio has increased due to increase in credit sales turnover during the current year and prompt collection from credit customers.
Trade payables turno- ratio ver 27.36 43.20 (36.66) This ratio has decrease due to timely payments to the vendors on account of good internal cash accruals from the operations of the Company.
Net capital turnover ratio (25.44) (21.54) 18.11 -
Net ProfitRatio 6.69% 2.56% 161.66 The net profit for the current year has increased due to better operating margins and increase in revenue from operations.
Return on Capital employed 30.33% 13.22% 129.49 This ratio has improved due to a 3.55 times increase in Net Profit of the company during the year from 4,506.79 lakhs to 16,011.26 lakhs with a 9.81% increase in average Capital Employed from 111,761.42 lakhs to 122,726.25 lakhs.
Return on Investment 12.14% 6.79% 78.78 This ratiohas improved due to increase in principal amount and interest rates of term deposits placed during the year.


The total employee strength of the Company as of 31.03.2022 was 20788. 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.