Total Transport Systems Limited (TTSL) Q4 FY 2023 Earnings Conference Call Summary
Overview of Logistics Operations
• TTSL offers cargo consolidation, airfreight, and end-to-end logistics services.
• Significant market share in India's LCL segment.
• Part of the I Cargo Alliance, enhancing global reach.
• Launched last-mile delivery services via One World Logistics, focusing on rural e-commerce deliveries.
Financial Performance
• Q4 FY 2023 revenue: INR 113.16 crores (decline due to 80% drop in freight rates).
• Full-year revenue: INR 590.27 crores (1.21% year-on-year increase).
• Net profit decreased from INR 9.08 crores (FY 2022) to INR 4.65 crores (FY 2023).
One World Logistics Insights
• Revenue increased to INR 68 crores, but incurred losses of INR 7 crores.
• Operational challenges faced, particularly with Amazon during Diwali.
• Corrective measures include closing unproductive stations and launching new business models.
• Joint venture for distributing imported fruits and vegetables expected to generate INR 25 crores turnover with 2.5% margin.
• Optimism for profitability by end of FY 2024.
Freight Rate and Market Conditions
• Significant drop in freight rates due to increased shipping capacity and reduced demand, especially in Europe.
• Anticipation of low freight levels until early 2024, with potential recovery thereafter.
• Focus on niche markets in CIS and Russia for profitability.
Operational Updates
• Completed three transport projects in the last two months; more expected in upcoming quarters.
• Received 70 stations from Flipkart, with 58 operational, contributing to a monthly shipment volume of 22.7 million (projected to reach 30 million by June).
Financial Metrics and Challenges
• Debt repayment confirmed due to improved cash flow.
• Fixed assets increased due to purchases of trailers and containers.
• Tax rate increase attributed to losses from One World, not a rate change.
• Rising interest costs due to higher RBI rates; EBITDA declined due to falling freight rates.
Future Outlook
• Strong top line maintained with INR 522 crores in revenue.
• Growth drivers include increased volumes and operations in CIS and Africa.
• Plans to enhance sales efforts by hiring additional staff.
• Expectation of freight rate stabilization and potential increases starting January.
Shipment Volumes and Business Focus
• Approximately 3,000 containers handled per month.
• LCL shipments yield higher margins (65-70% of business).
• Potential growth in FCL despite lower margins to increase overall turnover.
• Abhilaya achieved 24.5 lakh shipments in April, expected to increase to over 27 lakh in May.
• Focus on cargo-generating centers rather than new ports; plans to expand last-mile delivery with EV scooters for Flipkart post-Q2.
Conclusion
• Management expressed gratitude to the team and participants, highlighting ongoing efforts and future growth potential.