Gati Limited

Investor Presentation August 2014

FORWARD LOOKING & PRECAUTIONARY STATEMENT

The presentation contains certain forward looking statements concerning future

business prospects and business profitability of Gati and its affiliates, which are subject
to number of risks and uncertainties that could cause actual results to differ materially
from those in such forward looking statements. The risks and uncertainties relating to
these statements include, but not limited to, risks and uncertainties regarding fluctuation
in earnings, our ability to manage growth, competition(both domestic and international),
economic growth in India and the target countries for exports, ability to attract and
retain highly skilled professionals, time and cost overruns on contracts, our ability to
manage our international operations, government policies in action with respect to
investments, fiscal deficits, regulations, etc., interests and other fiscal costs generally
prevailing in the economy. The company does not undertake to make any
announcements in case of these forward looking statements become materially
incorrect in future or update any forward looking statements made from time to time
by or on behalf of the company.

INDEX
Company Profile

Unparalleled Infrastructure

Key Milestones

GATI Group Structure

Key Financial Metrics

GATI-EDGE & IT Capabilities

Key Business Verticals

10

Other Verticals

15

Debt Management

18

Capex Plans and Financial Highlights

19

Awards & CSR Activities

22

Way Forward

24

PROFILE

First company to introduce time sensitive movement of

commercial packages on door to door delivery concept in
India since 1989

Hub & Spoke

Gati moves 1.4% of Indias non-service GDP on its

network
Multimodal capabilities and delivers more than 5.5 million
commercial packages every month

World Class IT
Capabilities

One stop solution to all logistics requirements

Covers 667 district out of total 671 districts. Largest
Express network in India
Company ventured into the reefer truck transportation
through 100% acquisition of Kausar India Ltd. Currently it
has a fleet strength of over 200 Vehicles.

Largest Express
Network

Company identified potential of E Logistics business and is

growing it as a separate business vertical since FY 2011-12

UNPARALLELED INFRASTRUCTURE
600+ Offices
including 16
Distribution
hubs

1300 Plus
Gati Business
Associates

5000+ Young
Work Force

400+ Truck
Partners

500+ Bikers

2 eFullfilment
Centres

4500 Fleet
Size

Over 200
Reefer Trucks

2.6 Million Sft

of Warehouse
Capacity

24X7 Call
Centre
4

KEY MILESTONES
Launched India-centric distribution
solutions and forayed into Asia Pacific
region
Gati Millennium Express: First cargo
train of Gati
Ventured in Cold Chain Logistics

Introduction of 24*7 customer

convenient centre

2007-14

Launch of Mechatronic
Warehouses

2001-06

Introduction of own
Customized ERP GEMS

1996-00

1989-95

Introduced door to door service

Introduced cash on delivery

Joint Venture with KWE Japan

Ventured into E Commerce Logistics

Project Udaan: Business transformation

exercise with IBM

Expansion of Cold Chain Vertical through

warehouses

Creating Vision 2020

Establishing e-Fulfillment centers for eCommerce clients

Expansion to SAARC
Received ISO Certification

GATI GROUP STRUCTURE

Gati Limited
(Consolidated)

Partly Owned
Subsidiaries

Wholly Owned
Subsidiaries

Gati Limited
(Standalone)

Gati Kausar
(Cold Chain)

E -Commerce

Gati Import Export

(Trading)

GATI-KWE
(70%)

Surface Express
Air Express

Freight Forwarding
Fuel Stations

Zen Cargo Movers

(CHA)

Parcel Train (GTS)

Gati Asia Pacific Pte
Ltd (Singapore)

Supply Chain
Subsidiary

Service Offering

KEY FINANCIAL METRICS

Rs. In Millions

st
* For FY 2014 the figures of Total Revenue and EBITDA are pertaining to period of July 2013-June 2014. Reserves & Surplus and Gross Block figures are as on 31

March2014

THE GATI-EDGE

Pioneer In
Express
Distribution
Pan India
Multimodal
Network

Customized
Services

GATI-EDGE

World Class
IT Capabilities

Professional
Management
One Stop
Solution For
Logistics

WORLD CLASS IT CAPABILITIES

Gati Enterprise
Management System
(GEMS)*

Enterprise Management

Oracle Financials

Oracle CRM

Warehouse
Management System
HR
Information
System

Employee
productivity

Integrated
technology
systems

Real time shipment

information

Customer account
management
(Invoicing / transit
details)

Customized
warehouse
management

Vehicle Tracking
System
Business Intelligence

Customer relationship
management

24 X 7
Customer care

Mailing systems

KEY BUSINESS VERTICLES

GATI-KWE: EXPRESS DISTRIBUTION

GATI KAUSAR: INTEGRATED COLD CHAIN SOLUTIONS

GATI: ECOMMERCE LOGISTICS SOLUTIONS

OTHER BUSINESS VERTICALS

10

GATI-KWE: EXPRESS DISTRIBUTION

Business Overview

Gati hived off its Express Distribution and Supply Chain division to its joint venture with Kintetsu World
Express (KWE), a Japanese logistics player
With close to 80% contribution in the total revenue and ~16% market share in the industry, This is one of
the key verticals for the Company
Provides express surface cargo, premium air cargo, rail transport solutions, supply chain management &
warehousing solutions through pan-India presence
Fleet strength of over 4,500 vehicles and a warehousing capacity of 2.6mn sq. ft.
Direct relationships with air line companies for moving air cargo
First to introduce parcel train movement in India, runs parcel train between Kalyan-KolkattaGuwahati
Revenue Break-up (FY2014) Well spread across the country with dominance in surface transport
Geography

Industry-wise

Mode of Transport

15%

24%

14%

2%
13%

11%

79%
31%

8%

13%
6% 8%

Surface

35%

31%

Rail

Air

Others

Pharma
Engineering
Others

IT Hardware
Textiles

10%
Auto Ancillary
FMCG

South

West

East

North

11

GATI-KWE: EXPRESS DISTRIBUTION

Key Highlights

GROWTH PLAN
16%

Grown at 16% in FY 13-14 to reached

a annual turnover of 1063Cr.

1063

1230

13-14

14-15

EBITDA improved to 10.9% in FY 1314.

Expected to grow consistently at 16% .

REVENUE in Cr
20%

Delivers over 5.5 Million packages in a

month

116

139

13-14

14-15

Project Udaan to continue unlocking

values.

EBITDA in Cr
12

GATI KAUSAR: INTEGRATED COLD CHAIN SOLUTIONS

Leading integrated player in the reefer truck transportation.

GROWTH PLAN

Fleet size of over 200 vehicles.

17%

Climate control capability from +20 degrees to 20 degrees Celsius.

Transporting 2 Lac tons annually.

47

55

ISO 9001:2008 certified.

Pan India network.
Plan to set up 10 cold chain warehouses across 8 strategic locations with a
total capacity of approximately 43,000 pallets.

13-14

14-15

REVENUE in Cr
75%

13-14

14-15

EBITDA in Cr
13

ECOMMERCE LOGISTICS
Amongst top 5 E-logistic players in the country.
Growth Plans
Capacity to deliver over 23000 shipments per day.
Provides value added services: COD, packing, reverse
logistics, E-Fulfillment.

Increase delivery capability to 30,000 shipments per

day by Dec 2014.
Capacity expansion:

525 Bikers for last mile delivery.

Bikers 1000 Nos

E-logistics outlets - 90 Nos
E-Fulfillment Centers - 19 Nos

Growth over 100% YoY and expected to sustain for next

two years

Tabs to all Bikers for real time track & trace.

2.6 Mn packages delivered in last 9 months.

Customization of IT to suit E-tailers requirements.

6 e-Pick centers & 3 e-Pack Center.

109
62

25
12

11-12

12-13

13-14

REVENUE in Cr

14-15E

14

OTHER VERTICAL: GIETL

Gati Import
Export Trading
Ltd. (GIETL)

Enables import, trade and distribution in India

Forayed into a integrated supply chain contract with a major player in the hospitality industry to manage
inventory requirements

Offers an end-to-end solution for companies including international freight forwarding, customs handling, import of
goods, warehousing and last-mile delivery to the end-customer (B2B, B2C)

OUR CUSTOMERS

New entrants/ Single-brand players entering Indian market

Trading companies procuring from multiple product manufacturers abroad

Companies wanting to test waters before establishing their own set up, including product manufacturers with facilities
outside country
Organizations with philosophy of focusing in core strength
16
15

CASE STUDY: GIETL

Need: Supply chain framework to build and improve efficiency in the domestic hospitality industry
procurement process. Current engagement with one of the largest hotel chains comprising of close to
100 hotels in 40 locations across India

Decentralized
supplies ordering
system

High transaction
costs for suppliers
and hotels
Uncertain delivery
lead times
Excess inventory
holding at Hotel
stores

Previous
Setup
CURRENT SETUP
SUPPLIERS

F
F
F
:
:

HOTEL
LOCATIONS

GIETL
SUPPLIERS

SOLUTION

HOTEL
LOCATIONS

Improved service
levels

Reduction in
Inventory within
the supply chain

F
:
:

Inventory
Ownership

Reduction in
overall logistics
costs

Fixed Supply Chain Services Fee

(Primary, warehouse, secondary, trading)

Benefits: Stabilization of delivery patterns will drive behavioral change within the procurement process
at individual hotels
16

GATIS PRESCENCE IN AISA PACIFIC & SAARC REGION

International
Freight
Forwarding

Caters to Asia Pacific regions through own offices and other countries through agents
Provides cargo movement between SAARC nations through surface

Nepal Bhutan
Bangladesh

China
Hong Kong

Thailand

Singapore

17

DEBT MANAGEMENT

Rs. In Millions

GATI-KWE credit rating has

been upgraded by ICRA. Long
term facilities : A (A Minus
previous year), Short term
facilities: A1 (A2 Plus previous
year).
Debts are reduced through
better working capital
management.
Debts of Gati Ship are
excluded since June 2014, due
to de-subsidarization
Debts are expected to be
contained below INR 500
Crores.
18

CAPEX PLANS

Future Plans

To invest in cold chain warehouses to offer integrated solutions to the clients

To invest in establishing 19 e-Fulfillment centers across so many cities to offer
customized and value added services to e-Commerce clients
To upgrade and enhance IT infrastructure to offer customized solutions and meet
future growth initiatives
Entity

(Amt. in Rs. Mn)

FY15

FY16

FY17

Total

Gati Kausar

690

913

665

2,268

Gati (e Commerce Vertical)

200

150

150

500

GKEPL

200

200

250

650

Total

1090

1263

1065

3418

19

FINANCILA HIGHLIGHTS: PROFIT & LOSS

Particulars
Year

Total Income

Audited
FY 13

Projected
FY 14#

FY 15E*

12,895

15,029

17,577

EBIDTA

987

1,263

1,687

Depreciation

248

294

298

EBIT

740

969

1,388

Finance cost

437

433

417

Profit before tax

303

535

970
(Consolidated figures in Rs. Mn)

# Figures are annualized as the Company changed its financial year end to March from June with financial year 2013-14

20

AWARDS
Year

Award Category / By

Award

2014

Confederation Of Indian Industry

Scale Award for Supply Chain and Logistics Excellence

2014

3rd Asia Manufacturing Supply Chain Summit

Achievement in Continuous Improvement

2014

ICC Supply Chain and Logistics Excellence Awards

Road Transportation

2014

Confederation Of Indian Industry

5S Excellence

2014

SONY

Best Warehouse Award

2013

Rasbic Awards 2012-13 Recruiting & Staffing Best in Class

Awards

Most Innovative Recruiting & Staffing Program/Initiative

2013

Logistics and Supply Chain Leadership Awards

ELSC CEO of the Year Ms. Chitra Shinde

2013

Logistics and Supply Chain Leadership Awards

Best Road Service Provider of the Year

2013

Foundation for Liberal & Management Education

30 Best HR Leaders - Mr. J. Subramanian

2013

Carlson Rezidor Hotel Group

Corporate Social Responsibility

2013

Mahindra Transport Excellence Awards

"Lady Transport Personality of the Year-2012" & "Lady

Transporter of the Year 2012-Regional
Winner South" - Ms. Chitra Shinde

22

CSR

Adopts Tiger in a Zoo,

Hyderabad

Plantation Drive

Support to WOW
Project

Support to Uttarakand
calamity

Book Donation to
Gati School

Blood Donation Camp,

Hyderabad

Inauguration of
Computer Lab at
Hyderabad

Clothes Donation
Drive

23

WAY FORWARD

Target to deliver 1 million packages per day by 2020

Innovation

Group to grow at a rate of 15 17% in FY 14-15

EBITDA margins to improve by 50 basis points

Growing e-logistics business through a asset light model

Expansion
Capital infusion & construction of cold chain warehouses
Exit from shipping business completely

Efficiency

Debt to be contained below INR 500 Cr & leveraging the

improved credit rating of GATI-KWE
Well positioned to reap the benefits of proposed GST
implementation

24

THANK YOU

25