Logistics player Gati plans to launch a pilot project later this year in Hyderabad involving electric vehicles for last-mile deliveries, as it looks to build infrastructure to support its expansion plans.
The company plans to expand its daily package handling capacity from the present 3 lakh to one million, by 2022.
"We are going to do a pilot for intra-city delivery, first in Hyderabad and later possibly in National Capital Region," Deputy Managing Director Bala Aghoramurthy told Moneycontrol.
He added that the company is in talks with suppliers of electric vehicles.
Electric vehicles will help the company service clients in cities where there are restriction on the entry of heavy vehicles during the day time.
The Hyderabad-based company is also increasing its warehousing capacity, and expanding its network. While it is adding 8 lakh square feet of space to the existing 3.5 million square feet of space, Gati is also increasing the count of its delivery locations by 100.
"We are also adding 500 business partners, to the present 3,000 business partners for last mile and line haul operations," said Aghoramurthy.
" In early 2016, we had announced our vision for 2022. While we were on it, demonetisation and GST happened, and we have been waiting for the things to settle down. We have already done work on building the IT capacity for expansion. Now we are focusing on building the infrastructure," he said.
Gati has a network of 600 locations, and is present in 700 districts. It also has 70 transhipment centres for surface, air & rail operations. The operations also include a network of 6,000 vehicles, 90 per cent of which are owned by business partners.
The company is spending over Rs 100 crore in building its IT, automation and infrastructure capacity.
The expansion will be crucial for the company has it looks to push its numbers. Gati's scrip has been down 25 per cent in one year, whereas the BSE Sensex has been up nearly 20 per cent over the same time.
"We expect the numbers to improve in the coming quarters. GST has helped the organised players as now clients want companies that can give them integrated service," said the Joint Managing Director.
By the end of the expansion, Gati expects the profile of its clients to change. At present, 45,000 of the 3 lakh daily packages are serviced for B2C clients. By 2022, the share of B2C clients will increase to 50 per cent of the targeted 1 million packages.