Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Tiger Logistics (India) Ltd (BOM:536264) reported a significant increase in air transport volume, growing 4.5 times year-on-year due to becoming IATA agents, which enhanced their purchasing power.
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The company has successfully renewed several government contracts, contributing to a stable revenue stream.
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There is a strong focus on new growth engines, including imports, project logistics, and government logistics, which are performing well.
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The company is exploring inorganic growth opportunities through potential acquisitions, particularly in the LCL space, to enhance their service offerings.
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Tiger Logistics (India) Ltd (BOM:536264) is investing in IT to improve efficiency and reduce costs, indicating a commitment to technological advancement.
Negative Points
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The company has seen a substantial increase in short-term borrowings, primarily for working capital, which could indicate cash flow challenges.
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There is a noted dip in ocean freight volumes quarter-on-quarter, attributed to seasonal factors, which could affect revenue consistency.
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The adoption of their digital logistics platform, Freja 2.0, is slower than expected, potentially limiting its immediate impact on customer acquisition and cost efficiency.
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The company's focus remains heavily on exports, with imports contributing only 20% to the business, indicating a potential over-reliance on export markets.
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The EV logistics initiative, while innovative, does not currently offer cost reductions and requires significant capital investment, posing a financial risk.
Q & A Highlights
Q: There has been a notable 4.5 times increase in air transport volume year on year. What strategies are driving this growth? A: The strategy involves becoming IATA agents, which has allowed us to focus more on this business, enhancing our buying and purchasing power. This shift from outsourcing to handling it ourselves has driven the growth. - Managing Director
Q: The balance sheet shows a substantial increase in short-term borrowings in H1 FY25. What is the purpose of this borrowing? A: The borrowing is solely for working capital purposes. As the business grows, the credit periods are extending, necessitating more working capital. We are not planning any major capital expenditures. - Managing Director
Q: Can you elaborate on the progress and adoption of Freja 2.0 and its impact on customer acquisition and cost efficiency? A: Freja is performing well, opening doors to new businesses. While adoption is slow, it helps us showcase our digital logistics capabilities, leading to new customer engagements and insights into customer needs. - Managing Director