From the Desk of Vice Chairman & Managing Director
Dear Shareholders and Readers
Having started our journey in 1958 this is the sixtieth year of our company. The onereason why we have endured is in our business the customer came first. We did not justoffer services to the customer in the expectation of generating an income; we providedservices that would take the customer's business ahead and that made all thedifference.
Performance review FY2017-18
I am pleased to report that the sixtieth year of your company was also one of themomentous and record-breaking.
TCI on a consolidated basis reported 21% revenue growth to RS 236431 lakhs. Weenhanced our EBITDA margin 25334 lakhs bps to 11% and we increased our profit after taxby 52% to RS 12382 lakhs. The improvement in our performance was the result of a highoperational efficiency focus on costs proactive investment in assets and services acontinuous investment in our people and operating culture.
I am pleased to report that we continued to invest in our future. We acquired anothercoastal container ship that is expected to become operational during the current financialyear on the west-to-south sector. Besides we reinforced our sectoral thought leadershipthrough the launch of a joint study on insurance requirements of the Indian logistics andwarehousing sector which was unveiled by the Hon'ble Minister of Road Transport andHighways of India.
Through these initiatives TCI reinforced its leaders in logistics' positioningoffering business-strengthening services innovating constantly and expanding prudently.
A rebounding economy
TCI's stellar performance rode India's economic growth during the year under review.
The country recovered from the transitory disruption caused by the 2016 demonetisationas well as 2017 GST implementation. Even as growth was muted in the first two quarters ofthe year under review the Indian economy recovered substantially to report 7.7% GDPgrowth during the last quarter regained its position as the world's fastest-growingeconomy.
It took India sixty years to become a $ 1000 billion economy; it took only seven yearsthereafter to replicate this and is expected to emerge as $ 7000 billion economy in 2030according to informed estimates.
We are optimistic that India's growth will be facilitated by its vibrant logisticsindustry. The industry on its part will endeavor to leverage the national infrastructurebackbone to moderate costs: from ~14% share of the GDP to the level of 8% of GDP as indeveloped countries.
I am pleased to report that the year under review was marked by the single mostimportant indirect tax reform in the country's history with a significant trickle-downimpact for the country's logistics sector. More than 62% of India's domestic freightmovement takes place through roads; a bulk is inter-state in nature where the incidence ofmultiple taxes and State Government levies had in the past entailed long queues atcheck-posts with transportation vehicles idling unproductively for around 40% of thetransit time. This delay translated into higher logistic costs for the related companiesand the nation. The irony then is that the country's extant tax regime dictated logisticsdecisions including the choice of setting up inventory and distribution centres ratherthan business reasons.
The GST implementation has proved to be a game changer for businesses in general inIndia and organised logistics players in particular. The GST regime replaced state andfederal tariffs to a single tax payable at the point of sale. We believe that thesuccessful and extensive implementation of this tax can strengthen the businesses ofwarehousing agents supply chain managers and third-party logistic players leading tocapacity investments across the sectoral ecosystem. In return this will inspire theabsorption of modern technologies (automatic storage and retrieval material handlingequipment and RFID among others) that minimize manual intervention and errors optimizecosts and encourage a quicker transition of business from unorganized to organisedplayers.
GST introduction is also encouraging manufacturers to graduate from warehouse ownershipin different states to the creation of centralised regional warehouses strengtheningoperational and logistical efficiency. The introduction of the E-way bill is expected tostrengthen organised sector prospects through complete transparency across the valuechain.
As the country's logistics sector enters a new sectoral era I am optimistic that TCIis attractively placed to climb into a new orbit.
The company provides customers a range of exciting services. It intends to enhance thecross-sale of these services. The company possesses adequate infrastructure to scale thebusiness. It intends to invest in state-of-the-art technologies setting up multi-user andmulti-product warehouses and widening through access to ships trucks and trailers.
With "Navigating Tomorrow" being the inherent philosophy that we carryforward our vision for the future is to continue to strive hard to fulfil TCI's destinyand contribute to the growth of the world's largest democratic nation economicallysocially and sustainably. TCI will continue to work with all stakeholders to supportIndia's solid growth.
Before I conclude I would like to thank our "TCI Parivar" and all otherstakeholders for their consistent commitment engagement support and encouragement inour 60 years journey. We will continue to seek our shareholders' interest and support aswe make our way to create new pathways to progress.
|D P Agarwal |
|Vice Chairman & Managing Director |