TRANSPORT CORPORATION OF INDIA LIMITED

SUNIL SHAWENROLLMENT NO-040201133PGDM 2014-16

CONTENT

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• Logistics industry

• Macro economic environment in India

• Introduction of TCI

• TCI Group

• Industry Dynamics

• SWOT ANALYSIS

• Future Outlook

Logistics industry in India

• The Indian logistics industry is expected to grow annually at the rate of 15 to 20%.

• Logistics spend in India is estimated to be around 13% of the GDP, which is

comparatively higher than other developed countries

• The sector’s contribution to the GDP has been increasing mostly because of the

growing economic developments in the country

• India’s logistics sector attracted huge investments, leaving behind some of the

major sectors including aviation, metals, and consumer durables

Impact of Macro-economic changes on Logistics

DFC/Diamond

Quadrilateral

GST

• Rationalizing the impact of taxes on Production, Distribution and Inventory management

• Consolidation of warehouses and moving towards Hub-and-spoke model

• Multi modal movement between Hubs

• With increased per capita disposable income, consumption driven sectors will grow

• Sectors like Food services, e-commerce, consumable durables etc. will get a boost .E-commerce

driven growth in consumption

• Growth in trend towards outsourcing of logistics in non traditional industries

• Larger scope of outsourcing e.g. order processing, packaging, kitting etc. will go up

Increased outsourcing of Logistics

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• Creation of additional dedicated rail freight capacity

• Increased bulk multi modal movement for improved productivity & efficiency

• Will result in development of logistic Warehouses in the vicinity of Freight Corridor.

Group TCIKey Facts GST Ready New Warehouse locations

Year ofEstablishment

Turnover

Company Owned Branches

Warehouse Covered AreaVehicles/Day Managed on Road

1958

2.5%

1400+

10.5 Mn Sft

9000

5 new Warehouses (For W/H management only)

One atNagpur

(1.65 lakhs sq. ft.)

Two at Chennai

(45,000 & 8lakhs sq. ft.)

One at NCR(2.5 lakhs

sq. ft.)

One at Hyderaba

d(1 lakhs

sq.ft.)

Movementby Value of India GDP

2800 Cr.

Employees Strength 6000+

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Group TCISBUs & Services

FTL/FCL, LTL & Over-dimensional cargo services through Road, Rail & Sea.

India’s fastest growing express company for door to door courier and cargo.

A Single-window solutions enabler from Conceptualization to Implementation

Leading player in Coastal Shipping , NVOCC & Project Cargo

Completes the service offering of the Group with connectivity & services across the world at global standards

Other Group Companies & Services

JV with CONCOR to provide end to end multi modal solutions.

TDL undertakes development of the commercial properties of TCI. It also develops large scale Warehouses, Logistics Parks etc.

JV with Mitsui & Co for Auto logistics (Toyota India project)

TCI Transportation Company Nigeria Ltd.

A JV between Indorama Eleme Petrochemicals Ltd. and TCI Global

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Industry Dynamics and SBU Snapshot

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IndustryScenario

Mature, Fragmented, Low barriers to entry,

low cost

Growth, niche, high entry barriers,

cost efficiency

Nascent, knowledge based, very high barriers, single

window

Growth, high entrybarriers, low cost

Industry Growth 5-8% 8-12% 15-20% 10-15%

% of Total Revenues

(FY 15-16 Q3)

37%(611 cr.)

29%(483 cr.)

28%(460 cr.)

6%(96 cr.)

TCI EBIDTAMargins

3-5% 8-10% 10-12% 25-30%

Rev. Growth CAGR 5 Yrs.

2.2% 11.3% 19.8% 13.2%

ROCE (5-yrAverage)

11% 46% 25% 17%

ROCE (10-yrAverage)

15% 40% 23% 19%

TCI : Serving the Complete Ecommerce Chain

Customers

Companies

Consolidation center

Warehouses Dedicate & Shared

Suppliers

1. Marketplace

2. Inventory Based

Vi Return To Vendor

~ 200,000units / day

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~ 150,000Orders / day

~ 20,000Deliveries / day

2. Inventory / Marketplace / Cross Dock- FC

i Receipts and Bar Codin

g

ii Put away and Storage

iii Order processing on SL

A

iv Sortation and Ship

v Return Shipment Mana

gement

1. At Supplieri Supplier

Coordination

ii Scheduling

iii Route optimization

3. At Customer placei Doorstep delivery

ii FOD

iii Reverse logistics

Strengths• Largest integrated road transport player

• providing value added services

• Strong relationship with clients & IT penetration

• Goodwill in market

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SWOT ANALYSIS

Weakness• Presence in largely unorganised and fragmented

market

• Reliance on spot market for truck availability

• Highly competitive

Threats

• Railways getting more aggressive

• Increasing fuel cost / de-regulation of diesel prices

• Increase in toll rates could reduce margins

• Lower bargaining power with big consignors

Opportunities

• Introduction of GST to boost revenues

• Improvement in sea freight rates

• Very few big players in the market

Entry Barriers: Low

Low capital requirement easy credit availability, low skills / qualification required and ease in obtaining

license.

Entry Barriers: Low

Low capital requirement easy credit availability, low skills / qualification required and ease in

obtaining license.

• Entry Barriers: Low

• Low capital requirement easy credit availability, low skills / qualification required and ease in obtaining

license.

Entry Barriers: Low

Low capital requirement easy credit availability, low skills / qualification required and ease in

obtaining license.

Competition: HighHighly fragmented market

with lack of differentiation in

services

Porters Five Force Model

Growth Drivers

• Warehousing• Consumption driven sector like FMCG, Retail , Auto etc.• E-Commerce

Cost Drivers• Economies of scale• Operational efficiency key to maintain cost control• Receivables management

Macro Drivers

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• Economic reforms, Implementation of GST and infrastructure investment: Logistics sector to be in higher trajectory.

• Ambitious Capex and expansion plans in current fiscal

Future Outlook

THANK YOU

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