ALLCARGO GATI

Logistics company GATI Ltd, disappointed the markets with its Q1FY16 numbers. The market had probably expected the sky and the moon from the Q1FY16 performance and the company disappointed. Its consolidated net profit for the quarter came in lower at Rs.8 crore, down 32% (YoY) on a 5% rise in total income at Rs.416 crore.  A 8% rise in total costs, led by 5% increase in operating costs and a 35% rise in employee costs put pressure on the flat topline, leading to the fall in bottomline.

Its express distribution and supply chain, which contributes over 85% to the total revenue showed a 27% drop in EBIT while fuel sales showed a 18% rise at Rs.1 crore. Gati e-Connect, the e-commerce logistics services for e-Tailing companies, has widened its customer base by adding new e-Commerce, as well as m-Commerce players. Gati e-Connect currently delivers 40,000 packages per day and it has set itself the target of 90,000 packages per day in upcoming festive season. This company will be one of the biggest beneficiaries of GST getting implemented.