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GATI Q4 Review - Commentary Focussed On Execution: ICICI Securities

GATI Q4 Review - Commentary Focussed On Execution: ICICI Securities

<div class="paragraphs"><p>Gati Ltd.'s fleet outside the warehouse. (Source: Company website)</p></div>
Gati Ltd.'s fleet outside the warehouse. (Source: Company website)

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ICICI Securities Report

GATI Ltd.'s management expects express volume growth to be approx. two times industry growth, gross margins to improve to 29-30% and 8% operating margin in the medium term.

While we are sharing management optimism, the transition needs to be carried out in a time-bound manner. Revenue share in express from micro, small and medium enterprise, SME and retail accounts stood at 42% for Q4 FY22.

Debt/cost of debt has significantly reduced. Management did highlight possible restructuring on-

  1. business structure of GATI and

  2. finding suitable synergies in the business of contract logistics (in Allcargo) and express logistics (in GATI).

With an increased focus on MSME and retail business during the latest restructuring of sales force, management expects ~50% of total business contribution from the same channels.

Click on the attachment to read the full report:

ICICI Securities GATI Q4FY22 Update.pdf

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