ALLCARGO GATI

GATI, a leading logistics company was in the limelight yesterday, thanks to some good news coming in. After a long winding legal wrangle, the company finally won the arbitration against Air India and the Arbitral Tribunal directed Air India to pay Rs. 27 crore to Gati. In May 2007, Gati partnered with Air India for dedicated freighter service. Due to certain dispute the service had to be discontinued from March 2009. The matter was referred to Arbitration for adjudication of disputes between Air India and Gati. As per the statement issued by the company, the Arbitral Tribunal had passed its verdict dated 17 September 2013 directing Air India to pay a net sum of Rs 26.82 crore towards claims, damages interest and costs to Gati. Also, the Arbitral Tribunal has said that in the event of Air India failing to comply with the award within 30 days, Air India shall be liable to pay future interest at 18% per annum thereafter.

Financially, the company is doing well. The company ends its year on 30^th June 2013 and it ended the year on a good note. In 2012, the company had an other income of Rs.89 crore through sale of its subsidiary and it was only thanks to this component that it was able to end the year on a positive note. In 2013, net profit stood at Rs 17 crore v/s loss of Rs. 13 crore (excluding non-recurring item) last year. The consolidated total income stood at Rs. 1290 core for the year ended June 30, 2013 compared to Rs. 1200 crore in FY12 (excluding non-recurring item). EBIDTA was at Rs. 100 crore v/s Rs.91 crore (YoY) and PBT was at Rs.32 crore v/s loss of Rs.8 crore. This improvement in performance was on account of significant reduction in the interest cost, down from 62 crore to Rs.44 crore and lower depreciation due to sale of 2 ships in Gati Ship. During the year, merger of its 5 subsidiaries was successfully completed through a court approved scheme. Gati Ship has started its operating partnership with ISL which is a subsidiary of Tata Steel. Four voyages have been completed on Kandla - Cochin sectors and the last 2 voyages are with full capacity. Its JV with Japanese company, KWE completed one year and all benefits of integration have started coming. In Q4 ended 30^th June 2013, the company contributed Rs.3 crore to the revenue. Its first power project initiated by the promoters in the state of Sikkim has successfully been commissioned and COD was announced. It is generating power at full capacity and GE has infused equity at SPV level. Its next big trigger would be the news of divestment in its cold storage unit, Gati Kausar. The company is in talks with a few global companies and hopes to complete the divestment in this year.