Allcargo Group's Ravi Jakhar Expects Restructuring To Boost Growth Of Express Unit

The express business of Allcargo Group is set to witness a double-digit growth and gain market share after the recent restructuring of various divisions, according to Ravi Jakhar, chief strategy officer of the group.

Last year, the group had announced restructuring of the Allcargo Logistics and Allcargo Gati businesses under which the international supply chain unit will be demerged into a separate entity named Allcargo ECU Ltd.  

“Express business and the contract logistics business would come under the resulting entity, Allcargo Logistics (post ISC demerger), which will benefit from combined synergies,” the company had said in a press release dated Dec. 21, 2023.

Talking to NDTV Profit, Jakhar said that the express business will gain market share due to the restructuring arrangement.

“On the express business, I would say we would gain market share, which means that we would outgrow the business growth that we witnessed by the industry,” he predicted.

The top executive guided for a double-digit growth for the express business in the upcoming quarters.

“Last year, the growth was in the single digit, but we expect the growth to rebound to double digit on the market side, and we would outgrow that, gaining market share,” he said.

Jakhar explained that the express business has seen a strong momentum in the recent months. 

“On the express business side, we have in fact seen strong momentum. For the month of October, we have already updated the monthly numbers, and October saw the highest ever revenue and volumes for the company,” he said.

The volumes and the gross profit have also improved on the express business front, the top executive noted.

“This business is seeing a significant positive momentum. If you look at the last two or three quarters sequentially as well, both volumes as well as the gross profits have improved on the express business,” Jakhar said.

Sharing an update on the demerger front, Jakhar said that things were moving forward as expected. It has already received a no-objection certificate from the stock exchanges and is now with the NCL (NSE Clearing Ltd.), he revealed.

“We believe that should be completed around April 2025. That is the estimated timeline. Maybe a month out from the initial timeline of March, but it's progressing well. So that restructuring is also going on well,” the chief strategy officer said.

Shares of Allcargo Logistics were trading 0.63% lower at Rs 53.69 apiece on the NSE at 2:35 p.m. on Monday, while Allcargo Gati shares were trading at Rs 91.24 apiece, down 0.83%, on the NSE, compared to a 0.48% decline in the benchmark Nifty.

The stock closed 0.59% lower at Rs 53.71 apiece on the NSE on Monday, while Allcargo Gati shares settled at Rs 91.53 apiece, down 0.51%, compared to a 0.34% decline in the benchmark Nifty.