Cautious on GATI, will wait for Q4FY18 results, management commentary on FY19 outlook: Akash Jain

Bala Aghoramurthy, Deputy Managing Director, GATI Kintetsu Express Limited said in the analyst call in Q3FY18, it did not have the festival season built into it, the festival season in this 2017 year was spread between September and October and this Q3 is not directly head to head comparable with last Q3, etc.

“Having said that we do not expect the business to go down any lower, but I must say our bigger interest is not about the topline on e-commerce, our bigger interest is on the bottomline, so our efforts are more directed towards what mix of the e-commerce business and gave us better bottomline."

Aghoramurthy also said "E-commerce logistics continues to see significant competitive pressure in terms of pricing and also volume fragmentation within local geographies, so clearly e-com is continuing to be in a state of evolution there as an industry and as a business. We are less worried on the topline of e-commerce.”

In its call, the company said that the cash-on-delivery (COD) orders has been stabilized and it is not a cause for worry. COD orders contributed about 50 percent in terms of volumes, and 55 percent in terms of income. In Q3FY18, consolidated profit after tax (PAT) stood at Rs 4.9 crore. Consolidated revenue from operations was Rs 448.5 crore, up 5.6 percent over Q3 FY17.

However at current market price, it’s prudent to remain cautious after this massive rally and wait for Q4FY18 results and management’s commentary on FY19 outlook.

Disclaimer: The author is Vice-president, Equity Research at Ajcon Global Services. The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.