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Third-party logistics services provider Mahindra Logistics Ltd sees greenshoots in the economy, and expects FY21 to see high single-digit growth.
Observing that non-automobile sectors such as FMCG and consumer durable are seeing growth, Rampraveen Swaminathan, MD & CEO, Mahindra Logistics, said: “The auto business has bottomed out. We are seeing our non-auto business growing marginally. We expect to grow in high single-digits next fiscal.”
He added that in the auto sector, the passenger vehicle segment has bottomed out, while the commercial vehicle segment will take time till Diwali to show robust growth.
“Automobiles and engineering comprise about 60 per cent of our overall business. Currently, both the sectors are in the grip of a slowdown and we are no exception. In the current financial year, for the first three quarters, our revenues are down 7.5 per cent,” he said at a media briefing here on Wednesday.
The company is also strengthening its focus on non-auto sectors such as FMCG, e-commerce, warehouse solutions and supply chain, said Swaminathan. “It is a challenging environment but our asset-light model has helped us improve gross margins by 100 basis points,” he added.
Western focus
As part of its expansion plans, Mahindra Logistics is strengthening its focus on the western markets, specifically Gujarat, which it considers a key region for growth, he said.
Commenting on the impact of the coronavirus scare on the industry, Swaminathan said it is mixed. “The first wave of coronavirus (impact) was primarily of discovery and disruptions. This impacted the global supply chains, while we saw 10-15 per cent downside in businesses during February. But now, we see an upside impact with air freight demand going up and supply chain beginning to improve,” he said.
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