Turnarounds are hard!
Volumes are up, yields are down, both big time. This is worrying for me. The elusive margin uptick remains distant. They continue to guide for 3000cr topline worh 10%-12% Ebitda by FY26. But with new problems surfacing every quarter, it makes me want tonwuqation the capability of the management to make projections in the first place.
Invested and disappointed. I may exit partially or comoletely soon. Will look to add back once the improvement starts reflecting in the numbers, which may be nex quarter or next year. The price will probably be higher then, but thats ok. I dont want to hold on to business underperformance.
Some snippits from the concall:
Gati KWE
- Volumes up 18%
- GMs down from 28% to 23%
- Ebitda up 4% from 370cr to 385cr
H1 FY23
Tonnage up 11%
Revenue from Ops up 2%, Ebitda down 21%
Reasons for drop in yield:
- Mix – 65% large, 35% MSME and retail – drop in retail with introduction of E-docket, should stabilize
- Drop in prices for intra state (intra zone) to gain more business. For large customer, yield differential between inter to intra state is 20%. Cost reduction will happen subsequently
- Increased over 1000 direct pin codes
These have led to higher volumes. Now need to optimize costs and improve yields.
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