Gati Surges Ahead Full Steam - Major Brand Re-structure Announced

Top Quote Hyderabad, August 18 2010 - Beating all expectations, Gati has done a complete turnaround from its performance last year and has announced its 2009-2010 full year performance which clearly puts its trajectory on a steep growth path. End Quote
  • (1888PressRelease) August 20, 2010 - The Revenue has shot up to Rs 20,847 lakhs for the Q4 this year as compared to Rs 15,836 lakhs for Q4 last year which is a growth of 31.6%. The revenue for the year 2009-10 has also shot up to Rs 75,122 lakhs as compared to Rs 63,016 lakhs for year 2008-09 which is a growth of 19.2%. Gati has also out performed on the EBITDA level by delivering a solid 39.9% growth over last year i.e Rs 8,611 lakhs for the year 2009-10 compare to Rs 6,153 lakhs for the year 2008-09. The profit after tax this year is Rs 1,511 lakhs, as compared to 1,505 lakhs loss for last year which is an increase of 200.4%.

    The Express Distribution & Supply Chain division was the star performer with an exceptional performance on Revenue and EBITDA growth. This growth reflected by 43.5 million parcels delivered this year compared to 33.1 million parcels delivered last year which is a growth of 31.5%. Gati's penetration now reaches 622 out of the 626 districts covering 1, 32,106 locations across the country. Most significant of all, the major thrust towards Rural Markets resulted in an increase from 14% to 18% QoY.

    With a complete turnaround from its last year's performance, the Board of Directors have declared a 20% dividend.

    The Board of Directors, while acknowledging the sterling performance of the Management team, announced a path-breaking and comprehensive "Go to Market" strategy for Gati's 2014 Silver Jubilee Vision to be a half a billion dollar (Rs2500 cr) company. Speaking on behalf of the Board, Mr Mahendra Agarwal, Managing Director & CEO announced the final restructure plans which they had been working on during the last quarter.

    "Our strategy is clearly on a focused growth for the two major areas we see as the future of Gati - Express Distribution and Supply Chain (Ambient and Cold Chain) Solutions. As such, these are the two verticals in which Gati is now being restructured.

    Shipping is an area which is more cyclical and needs a different kind of strategy for its sustained growth. We have not been able to give it the much needed attention and investments in the shipping haven't been made due to the turbulent market conditions which prevailed for most of last year.

    We have therefore made the decision to de-merge the Shipping Division into a wholly owned Subsidiary. The new subsidiary will be called "GatiShips". Strategically, this now allows us to focus our internal investment efforts on the core segments of Express Distribution and Supply Chain, with a special focus on the Cold Chain.

    "With our strategy to build upon our core strengths of Express Distribution towards Solutions and Knowledge offerings to our customers, Gati will form the new Division for Supply Chain & Cold Chain. Under the brand Gati RedSun, the new Division will offer both Cold & Ambient Supply chain solutions. This move will also allow us to bring into alignment our existing subsidiary and the Kausar Brand as a product offering under the new Division. Under Redsun we will offer complete E2E Cold Chain Solutions including temperature sensitive Storage and product life cycle management. Last year has seen us strengthening our Supply Chain business and we are now geared to taking on larger and more sophisticated contracts for management of our customers total supply chain. With a focus on the Auto, Telecom and Consumer Electronics sector, we are confident; we shall be the market leader in supply chain business in the country."

    Explaining the detailed re-structure, Mr Agarwal clarified

    "Our Go to Market approach is in Two Main Divisions:
    1. Gati Express Distribution (surface and air)
    2. Gati RedSun Supply Chain & Cold Chain Solutions

    With Gati Express Distribution we shall have the following key Product lines & Services:
    a) Express Parcel and Freight Services
    b) Gati Transport Solutions ( Full Truck, LTL and Rail Network )
    c) International Express and Freight

    With Gati RedSun Supply Chain Services our Product lines shall be:
    a) Kausar Cold Chain Distribution
    b) RedSun Cold Chain Solutions
    c) RedSun Managed Services for Contract Logistics
    d) RedSun Managed Services for Distribution Value Added Services
    e) RedSun Re-Engineering & Consultancy Services
    f) RedSun Business Process Outsourcing Services

    "Our strategy of being a truly global company is bearing strong results as our International business has shown the strongest growth this quarter. Our focus is on India, while we ramp up our presence in the APAC region. Today, through our International Division we are present in Thailand, Singapore, China, Dubai & Hong-Kong. We recently opened our offices Malaysia and shall soon be doing the same in two more countries this half. Our SAARC business continues to show strong growth and we are looking at offering our Indian customers the benefit of a seamless Asia Pacific wide Distribution and Freight Forwarding solutions."

    "I am quite open to acquisitions or partnerships in the APAC region as this allows us to foster an accelerated growth strategy. The team is working on this and we shall make periodic announcements on this." said Mr Agarwal.

    "The Logistics sector will be a major beneficiary with the introduction of GST. We expect the distribution model to change and get realigned to the way and manner the procurement will be done that involves redesign of supply chain structure to make it simpler and more efficient. The Model suggests different rates i.e 16% for services and 20% for goods which we recommend should be one. Unified GST and not central GST and State GST rates would have been a simpler option."

    "Our Go to Market strategy, will clearly differentiate us from our competitors and shall be focused on creating value for our customers as well as our shareholders, taking our brand closer to the market and the consumer, creating platforms of IT and Solutions for better engagements and longer contracts with our customers and finally take us to an unassailable market leadership position" concluded Mr Agarwal.

    About Gati Limited:

    Gati Limited was the pioneer and is now the leader in Express Distribution and Supply Chain Solutions in India. Having started as a cargo management service provider in 1989, Gati has grown into an organisation with more than 3500 employees and a turnover of Rs 630 Crore covering 622 out of 626 districts in India. Gati has over 4000 vehicles on the road not including their fleet of refrigerated vehicles, container shipping vessels and world class warehousing facilities across India. Furthermore Gati has a strong market presence in the Asia Pacific region and SAARC countries. Today, Gati has offices in Singapore, Beijing, Shanghai, Qingdao, Hong Kong, Bangkok, Kuala Lumpur and Dubai apart from SAARC countries that concentrate on India-centric distribution solutions.

    For further details, please contact: Raghav, Perfect Relations @ 98482 34106

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