Gati reported revenues of Rs 418.4 crore for the quarter ended 31st March (Q4-17) around is 3.4 % lower than that of Q416, and lower profits at Rs 9.3 crore, down by 40%. For the full year, revenue was at Rs 1704.1 crore, up 1.3% over the previous year, but the consolidated net profit dropped 19.9% to ₹29.5crore in FY17. Gati attributed the negative impact of the growth to “e-Commerce growth stagnation and lingering effects of demonetization in select industry verticals”.
“The post-festive slowdown in the e-commerce industry and the slow tapering down of the after effect of demonetization on both B2B and B2C segments had a material impact on the company’s performance,” said Mahendra Agarwal, CEO, Gati in a statement.
No ecommerce numbers?
The company did not disclose separate numbers for its e-commerce business, Gati e-connect. For Q3-FY17, ending December 31st 2016, Gati e-connect had reported revenue of Rs 59.5 crore. This was an increase of 27.8% from the same period last year. Sequentially, Gati’s e-commerce business had grown 27.68% from Rs 46.6 crore. Note that in Q2 the company had said the government’s rule on e-commerce discounts had resulted in a slower growth in its e-commerce division.
Ecommerce used to be Gati’s big growth-driver: for the financial year ended March 2016, Gati had reported ecommerce revenues of Rs 207.8 crore, up 63.1% year on year. It had mentioned in its annual report that in FY16, ecommerce had been its fastest growing segment, with the number of packages handled having grown in excess of 70% year-on-year. During demonetization, Gati was forced to reduce the number of pin-codes it delivered to, fire people, and switch to digital payments. Cash on delivery was a major component of ecommerce purchases, and those dried up during demonetization (November-December 2016). More on that in: How Gati dealt with plummeting Cash-on-Delivery ecommerce sales during demonetization
- For the year 2016-17, the total income for Gati Standalone, increased by 5.7% to Rs 526.3crore, from Rs 498 crore in FY15-16. EBITDA in Standalone improved 6.6% to Rs 59.7 crore in FY16-17, from Rs 56 crore in FY15-16.
- For the year 2016-17, the total income for Gati Kintetsu Express Private Ltd (GKEPL), the Express Distribution and Supply Chain Solutions joint venture is Rs 1,111.7crore, a decline of 2.6% to from Rs 1,141.6crore in FY15-16. EBITDA in GKEPL stands at Rs 79.7 crore in FY16-17, a decline by 16% from Rs 95.3 crore in FY15-16.