Logistics firm Allcargo Group is bullish on its business prospects and expects to grow at an average 15 per cent annually, mainly driven by organic growth, its Chairman Shashi Kiran Shetty has said. The company is also looking to be among the top 10 players in the global logistics space in the next 3-4 years.
According to a recent investors’ presentation, the group is aspiring to achieve Rs 25,000-30,000 crore topline by 2026 with as much as Rs 20,000-25,000-crore revenue from its international supply-chain business, and Rs 2,700-3,500 crore from its express and contract logistics segment.
“We are pretty bullish (on our business prospects) in the years to come. Fundamentally, we are focussed and these businesses have infinite growth opportunities. We are among the top 20 logistics companies in the world today and we can get into the top 10 in the next 3-4 years,” Shetty told PTI.
The company’s strategy will always be long-term, sustainable and growth-minded to consolidate the industry and take opportunities as they come, he said.
“Our recent restructuring programme is also giving a clear signal that want to be an asset light business model and all our assets getting into one company,” he said.
“We are looking to grow at 15 per cent annually. We may go higher (than this number) as well,” he added.
Allcargo board last December approved the demerger of its CFS/ICD and real estate businesses, aimed at creating strategic business undertakings to drive growth across distinct opportunities.
Under the proposed scheme of demerger, equipment rental and real estate businesses will move to TransIndia and CFS/ICD (container freight stations/inland container depot) business to Allcargo Terminals Limited.
The restructuring process is awaiting NCLT approval and “is expected to be completed by March next year”, Shetty said.
He said the company continues to do well, but added, “We see some headwinds. Freight rates have gone down in some markets internationally. Some markets are still strong. This low freight regime will continue for another quarter, there is a general feeling.”
“We have taken a lot of innovations and our business will not get impacted because there will be volatility in the market, which is always good for us,” Shetty stated.
“We have a lot of insights into our costs through data analytics and we are now acquiring a lot of business digitally and earning revenue through that,” he said.
Asked when the normalcy in supply chain is expected to come, Shetty said it all depends on how the Ukraine war situation unfolds.
“Also, though it is already factored in, I think it will also depend on how the governments will make the decision, whether they will make more popular decisions or more fundamental shift to the policies, it will all depend largely on that…”
He added, “Governments don’t have patience, they want votes. They take short-term measures which may not be the right measure.”
On his company’s acquisition strategy, Shetty said, “We do value picks and we have the wherewithal and the courage to go after those value picks. We see our acquisitions as very thoughtfully executed acquisitions. We are financially prudent.”