ACLGATI - Allcargo Gati

📊 NSE: ACLGATI 🏢 Trading 📅 Last Updated: 12/13/2025 18:09

💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) was ₹1,698 Cr in FY24, showing a stagnant growth of 1% compared to ₹1,723 Cr in FY23. The revenue is primarily driven by the Surface Express segment, specifically Less-than-Truckload (LTL), which contributes the largest share of revenue, followed by Air Express and Fuel/MVATS (Full Truck Load).

Geographic Revenue Split

The company maintains a pan-India presence with a diversified customer base across various industries. While specific regional percentage splits are not disclosed, the network is designed to cater to national express cargo requirements.

Profitability Margins

Net Profit for FY24 was ₹6.11 Cr, a significant recovery from a net loss of ₹10.91 Cr in FY23. However, the PBILDT margin declined from 4.07% in FY23 to 3.07% in FY24 due to higher operating costs and lower realized yields. The company targets a Gross Margin CAGR of 10%+ to reach ₹598 Cr by FY28.

EBITDA Margin

EBITDA margin stood at 3.07% in FY24. The company has set an aggressive target to achieve an EBITDA of ₹204 Cr (approximately 10.4% margin) by FY25 and targets a 20%+ CAGR for EBITDA through FY30 to reach margins of 12% or higher.

Capital Expenditure

The company has adopted an asset-light strategy, divesting non-core assets including land, buildings, and commercial vehicles to pare debt. It currently maintains a lean balance sheet with available funds of ₹300 Cr for strategic initiatives and tech-driven growth.

Credit Rating & Borrowing

The company's credit rating is monitored by CARE Ratings. Interest coverage moderated to 1.74x in FY24 from 2.39x in FY23. Total Debt to Gross Cash Accruals (TD/GCA) improved marginally to 5.84x from 6.20x. The company raised ₹169 Cr via QIP to strengthen its capital structure.

⚙️ Operational Drivers

Raw Materials

The primary operational costs are third-party logistics (3PL) costs, vehicle hire charges, and fuel, which are the 'raw materials' of the express cargo business. Fuel and transportation costs represent the bulk of the operating expenses, though specific percentage breakdowns per component are not disclosed.

Import Sources

Not disclosed in available documents as the company operates as a service provider utilizing domestic transport networks.

Key Suppliers

The company utilizes a network of unorganized players, transport contractors, and vendors for its asset-light flexible network. Specific vendor names are not disclosed.

Capacity Expansion

The company is shifting to an asset-light flexible network. It has divested owned commercial vehicles (CVs) to focus on a scalable partner-led model. Strategy 2030 focuses on 'Growth Acceleration' through tech-driven hubs and digitized gate scans.

Raw Material Costs

Operating costs increased in FY24, leading to a margin compression from 4.07% to 3.07%. The company is implementing a 'Continuous Focus on Cost Reduction' and 'Yield Management' to offset these rising logistics costs.

Manufacturing Efficiency

Efficiency is measured by 'Yield Management' and 'Hub Eye' technology. The company reduced employee costs by 9% compared to FY20 levels to improve lean operations.

Logistics & Distribution

Distribution is handled through a pan-India network. Sales to related parties accounted for 0.42% of total sales (₹15.09 Cr) in the reported period.

📈 Strategic Growth

Expected Growth Rate

12%

Growth Strategy

Growth will be achieved through 'Strategy 2030' which includes: 1) Tech-driven pivots like Gen AI enablers and Cloud Native systems; 2) Yield management to improve margins; 3) Integration of Allcargo Supply Chain to offer end-to-end solutions; 4) Market share expansion by targeting macro and high-performance micro indicators; and 5) Maintaining an asset-light flexible network.

Products & Services

Surface Express (LTL and FTL), Air Express distribution, Supply Chain Management, and Warehousing services.

Brand Portfolio

Allcargo Gati (formerly Gati), Gati-KWE.

New Products/Services

New Booking App, Consignee App, Customer Portal, and Hub Eye (tech-enabled tracking). These digital tools are expected to drive the targeted 12% revenue CAGR.

Market Expansion

Targeting increased market share in the express cargo industry by leveraging a pan-India presence and the 'Gati 2.0' digital transformation.

Market Share & Ranking

Established position as a leading player in the Indian express cargo industry.

Strategic Alliances

Merger with Allcargo Supply Chain Pvt Ltd (ASCPL) and operational synergies with Allcargo Logistics Ltd (ALL).

🌍 External Factors

Industry Trends

The industry is shifting toward organized players due to GST and tech-integration. Allcargo Gati is positioning itself as a 'Tech Driven, Leaner, and Innovative' player to capture this shift.

Competitive Landscape

Fragmented market with intense competition from traditional unorganized transporters and new-age digital logistics startups funded by international PE investors.

Competitive Moat

Moat consists of a pan-India reach and a long-standing brand reputation in express logistics. Sustainability is supported by the financial backing and operational synergy of the Allcargo Group.

Macro Economic Sensitivity

Highly sensitive to India's GDP growth and manufacturing output, as these directly correlate with LTL and FTL volumes.

Consumer Behavior

Increasing demand for 'Mobile First' and 'Cloud Native' tracking and booking solutions from B2B and B2C customers.

Geopolitical Risks

Minimal direct impact on domestic express cargo, though global supply chain disruptions can affect the Air Express segment volumes.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to transport and logistics regulations. The company recently underwent a composite scheme of arrangement approved by the NCLT on October 10, 2025, overriding certain Ind AS requirements for accounting treatment.

Taxation Policy Impact

The company recovered ₹150+ Cr in income tax refunds. It follows standard Indian corporate tax rates.

Legal Contingencies

A search operation was carried out by Income Tax Authorities during the quarter ended March 31, 2025, at various business premises and the residences of three Key Managerial Personnel (KMPs). The financial impact of this search is currently under review.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the impact of the IT search operation and the successful integration of the supply chain business merger. Margin pressure from competition remains a 2-3% risk to EBITDA targets.

Geographic Concentration Risk

Low, due to pan-India presence, though revenue is concentrated in the domestic Indian market.

Third Party Dependencies

High dependency on third-party vehicle providers under the asset-light model, making the company vulnerable to transporter strikes or localized supply disruptions.