“Future of express delivery will stride on growth of e-commerce”
A focus on express cargo distribution with an emphasis on burgeoning e-commerce business, TCIEXPRESS is one the leading players in express delivery sector. Over the years, TCIEXPRESS has grown with its wide distribution network locally and globally. PC Sharma, CEO and Whole Time Director, TCIEXPRESS speaks to Rashmi Pradhan on company’s growth plan and, trends and impact of GST on express delivery
How was the performance of TCIEXPRESS last year? The performance of the company has been satisfactory for the last fiscal year. We have witnessed an overall growth of 14 percent for the quarter that ended on December 31, 2016. Our net revenue grew at 14 percent to Rs 187.90 crores. The EBITDA stood at Rs 17 crores witnessing growth of 25 percent over last year. Our Profit After Tax (PAT) jumped by 41 percent to Rs 10.03 crores for Q3 FY-17 over Q3 of the last year.
What are the projections for this year (2017)? The current government has been very encouraging towards business growth. The initiatives that were outlined improved the ease of doing business in the country. Current, contribution of the logistics industry to the country’s GDP is about 1.5-2 percent. In the budget an allocation of Rs 3,961,354 crore was made to boost the aging infrastructure industry.
Are you looking at exploring any new vertical this fiscal year? We are working aggressively towards verticals such as e-commerce and pharmaceuticals. We look forward to expanding in these sectors and explore new business opportunities. With our wide distribution network of 550 owned branches we have managed to reach this height. So, we have widened our reach in almost every state in the country and also to remote regions. The fastest growing verticals as per the industry that we have also noticed are pharmaceuticals, auto and e-commerce sector. We have been catering to these verticals since long and have noticed upward trend in these sectors primarily.
Over the years, what kind of growth you have witnessed in express delivery segment in India? The express logistics segment in India has witnessed a giant leap since its inception. The industry has significantly expanded not only in size but also in reach and solutions. The industry from time to time has invested in technology and services to meet the changing consumer dynamics. We ourselves have evolved and adopted to new technologies which encompass automation, safety and security. Some of the technologies that we have worked upon are tamper proof locking systems. Few other technologies that are in use and add value to the system are diplomat service (extended delivery service to locations out of TCIEXPRESS network, POD/e-POD (Proof of delivery), COD (Collection on delivery), FOD (Freight on Delivery), and Sunday, holiday and late pickup services on demand. Even though there is evolution in the technology and services, we see a lot of unorganised players coming into the fray. We see this as a challenge and with GST and other fiscal/policy measure being meted out by the government, we hope to see a more formalised set up.
Elaborate on the trends in express delivery sector that will rule the market. The major growth driver that will be noticed in the express delivery segment would be the appropriate allocation of resources from both public and private sector players in enhancing the infrastructure of the country. Advanced infrastructure plays a critical role. Secondly, technology will play a crucial role in meeting the consumer demands. Thirdly, the ease of doing business with India will witness increase in trade with Asia, Europe, and North America which will promote the need of express logistics services. However, other factors such as the timely implementation of GST, and the penetration of e-commerce giants into hyper- local delivery segment and express market will change the dynamics of the industry.
e-commerce segment is growing at a fast paced than ever, how do you see this sector shaping the express delivery segment? The future of the express delivery business will stride on the growth of e-commerce sector. There will be an upsurge in the demand of time-definite delivery and the future will be positive for the express business. The sector is also moving towards digitisation and this acceptance is pushing the unorganised players to adapt to newer business models. But we as an organised entity have always been in sync with the changing technology to ensure innovative solutions for the customers. Therefore, the penetration in the e-commerce sector will pave the road for a bright and active future for express logistics where the market requirements will be met at express timelines.
How do you think the implementation of GST will impact the express delivery sector? According to industry reports, the logistics industry is projected to grow at a CAGR of 15-20 percent between 2015-16 and 2019-20. The implementation of GST where inter-state removal of check-posts will accelerate growth of the sector, it will also bring in digitisation in the process which in turn will cut down on the time taken at the check-posts for time taking documentation and help faster movement of goods across the country with a uniform tax structure. Apart from that, this iconic bill implementation will enable the operators to rationalise and restructure their warehouses and other logistics infrastructure which will also help bring down the overall costs. To sum up, the industry is eagerly looking forward to the timely implementation of the GST.