Dear Shareholders and Readers,
Having started our journey in 1958, this is the sixtieth year of our company. The one reason why we have endured is, in our business, the customer came first. We did not just offer services to the customer in the expectation of generating an income; we provided services that would take the customer’s business ahead - and that made all the difference.
Performance review, FY2017-18
I am pleased to report that the sixtieth year of your company was also one of the momentous and record-breaking.
TCI on a consolidated basis re po rted 21 % reve n u e g rowt h to Rs. 236,431 lakhs. We enhanced our EBITDA margin 25,334 lakhs bps to 11% and we increased our profit after tax by 52% to Rs. 12,382 lakhs. The improvement in our performance was the result of a high operational efficiency, focus on costs, proactive investment in assets and services, a continuous investment in our people and operating culture.
I am pleased to report that we continued to invest in our future. We acguired another coastal container ship that is expected to become operational during the current financial year on the west-to-south sector. Besides, we reinforced our sectoral thought leadership through the launch of a joint study on insurance reguirements of the Indian logistics and warehousing sector, which was unveiled by the Hon’ble Minister of Road Transport and Highways of India.
Through these initiatives, TCI reinforced its ‘leaders in logistics’ positioning, offering business-strengthening services, innovating constantly and expanding prudently.
A rebounding economy
TCI’s stellar performance rode India’s economic growth during the year under review.
The country recovered from the transitory disruption caused by the 2016 demonetisation as well as 2017 GST implementation. Even as growth was muted in the first two guarters of the year under review, the Indian economy recovered substantially to report 7.7% GDP growth during the last guarter, regained its position as the world’s fastest-growing economy.
It took India sixty years to become a $ 1000 billion economy; it took only seven years thereafter to replicate this and is expected to emerge as $ 7000 billion economy in 2030 according to informed estimates.
We are optimistic that India’s growth will be facilitated by its vibrant logistics industry.The industry on its part will endeavor to leverage the national infrastructure backbone to moderate costs: from ~14% share of the GDP to the level of 8% of GDP as in developed countries.
I am pleased to report that the year under review was marked by the single most important indirect tax reform in the country’s history with a significant trickle-down impact for the country’s logistics sector. More than 62% of India’s domestic freight movement takes place through roads; a bulk is inter-state in nature where the incidence of multiple taxes and State Government levies had in the past entailed long gueues at check-posts with transportation vehicles idling unproductively for around 40% of the transit time. This delay translated into higher logistic costs for the related companies and the nation. The irony then is that the country’s extant tax regime dictated logistics decisions, including the choice of setting up inventory and distribution centres rather than business reasons.
The GST implementation has proved to be a game changer for businesses in general in India and organised logistics players in particular. The GST regime replaced state and federal tariffs to a single tax payable at the point of sale. We believe that the successful and extensive implementation of this tax can strengthen the businesses of warehousing agents, supply chain managers and third-party logistic players leading to capacity investments across the sectoral ecosystem. In return, this will inspire the absorption of modern technologies (automatic storage and retrieval, material handling eguipment and RFID, among others) that minimize manual intervention and errors, optimize costs and encourage a guicker transition of business from unorganized to organised players.
GST introduction is also encouraging manufacturers to graduate from warehouse ownership in different states to the creation of centralised regional warehouses, strengthening operational and logistical efficiency. The introduction of the E-way bill is expected to strengthen organised sector prospects through complete transparency across the value chain.
As the country’s logistics sector enters a new sectoral era, I am optimistic that TCI is attractively placed to climb into a new orbit.
The company provides customers a range of exciting services. It intends to enhance the cross-sale of these services. The company possesses adequate infrastructure to scale the business. It intends to invest in state-of-the-art technologies, setting up multi-user and multiproduct warehouses and widening through access to ships, trucks and trailers.
With “NavigatingTomorrow” being the inherent philosophy that we carry forward, our vision for the future is to continue to strive hard to fulfil TCI’s destiny and contribute to the growth of the world’s largest democratic nation, economically, socially and sustainably. TCI will continue to work with all stakeholders to support India’s solid growth.
Before I conclude, I would like to thank our “TCI Parivar” and all other stakeholders for their consistent commitment, engagement, support, and encouragement in our 60 years journey. We will continue to seek our shareholders’interest and support, as we make our way to create new pathways to progress.
D P Agarwal
Vice Chairman & Managing Director