Release Date: February 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Volume growth has been consistent, with a 10-15% increase each quarter.
- The company has launched a new digital platform, FreightJar, which is expected to streamline logistics operations and drive growth.
- Tiger Logistics (India) Ltd has entered into a significant MOU with PowerPac Holdings in Bangladesh, which is expected to enhance business opportunities in the region.
- The company has been awarded the prestigious IATA certification, allowing it to negotiate directly with airlines and expand its air freight business.
- A strategic tie-up with ICICI Bank positions Tiger Logistics (India) Ltd as a credible logistics partner, potentially increasing business opportunities.
Negative Points
- Freight rates have been sluggish, impacting revenue and margins.
- Geopolitical tensions, such as the Red Sea issues, have caused disruptions and increased costs.
- The company has seen a decline in revenue due to the correction in freight rates post-COVID.
- There is a lack of detailed financial data separation between air and sea verticals, making it difficult to assess individual performance.
- The company is currently focusing primarily on the North and Western regions of India, limiting its market presence in the South.
Q & A Highlights
Q: What growth do we anticipate for the online platform, FreightJar, and what will drive this growth?
A: FreightJar is a new concept in India, and despite initial low digital adoptability, we have received encouraging responses. The platform allows real-time freight rate discovery and shipment booking within three to four hours, significantly reducing the traditional three to four-day cycle. We are launching the beta version by March end and have tied up with ICICI Bank, which will further drive growth. We aim for each transaction to be profitable without burning money, and we expect robust growth in the coming months.
Q: What growth do we expect in the air transportation segment in the upcoming quarter?
A: After being awarded the prestigious IATA certification, we can now negotiate directly with airlines. Our air business is growing by 15%-20% each quarter, and we expect this growth to continue, given the overall positive business scenario in the air freight sector.
Q: Could you assist us in determining the EBITDA figure for both the ocean and air verticals?
A: We do not maintain separate EBITDA data for air and sea shipments as it is a combined business. However, we can provide the volume data in terms of kilograms handled if requested via email.
Q: Could you provide further details on our revenue market share in the North India versus South India region?
A: We are primarily focusing on the North and Western regions, which account for 80%-90% of our business. The Southern region contributes about 10%-15%, and we do not plan to expand significantly there due to the need for deeper business knowledge in that market.
Q: Can you clarify the cash flow from operations and whether there have been any capital expenditures during the nine months?
A: There has been no capital expenditure as we operate as an asset-light company. We do not plan any major capital expenditures in the near future, focusing instead on utilizing our own resources and existing credit lines for working capital needs.
Q: I have noticed a decline in revenue from quarter to quarter. Is there any specific reason for this, and when do we anticipate this trend to stabilize?
A: The decline in revenue is due to the correction in freight rates post-COVID, which were previously at historical highs. Although our volumes are growing by 10%-15%, the reduced freight rates have led to lower billing and revenue. This trend should stabilize as freight rates normalize.
Q: How will the new joint venture with PowerPac benefit us?
A: The joint venture with PowerPac, part of the Sikder Group in Bangladesh, will leverage their stronghold on Mongla Port and the local market. This collaboration will enhance our logistics solutions between India and Bangladesh, tapping into a growing market and providing significant business opportunities.
Q: Have you seen an improvement in freight rates this quarter, and what are your expectations for volume growth?
A: Freight rates have increased due to the Red Sea issue, with a rise of $1000 to $1500 each month. We expect these levels to persist for another three to four months. Volume growth is steady at 10%-15% each quarter, which is a positive sign for deeper market penetration and long-term business health.
Q: Any other key growth levers or developments you would like to highlight?
A: Our tie-up with ICICI Bank is significant, establishing our credibility and providing new business opportunities. Additionally, our import business is growing due to our digital platform, which we have been developing over the past few years. These factors are expected to drive future growth.
Q: Any revenue margin guidance for next year?
A: Our PAT margins are improving, and we expect this trend to continue, leading to better financial performance in the coming year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
