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ICICI Securities Report
We visited the Farukh Nagar sorting centre of GATI Ltd. in Haryana. It’s 113,000 square feet facility is located inside Allcargo Logistics Park.
Farukh Nagar has helped GATI consolidate three different erstwhile National capital region hubs across 84,000 square feet allowing the benefits of consolidation, cross docking (having 89 bays), dock lever, improved planning for IT integration and better connectivity.
According to the management, current infrastructure is adequate to meet GATI’s NCR infrastructure needs for the next 10 years.
GATI Chief Executive Officer Pirojshaw Sarkari reiterated the exit revenue run-rate of Rs 30 billion in three years and the exit FY23E gross margin/Ebitda run-rate of 29/9% and FY24E exit gross margin / Ebitda run-rate of 32 /12-15%, respectively.
There will not be any meaningful increase in lease expenses despite Seven new sorting centres coming up as GATI will be giving up old sorting centres.
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