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The implementation of the Goods and Services Tax (GST) regime has helped Apollo LogiSolutions, the ₹1,000-crore logistics subsidiary of Apollo Group, bag bigger and longer term contracts from its existing customers like Hero, JSW, Honda and ITC in its third party logistics segment.
This is because of the “value added” advantages that the company offers to its customers, meeting corporate governance and compliance norms of customers. The company that has focussed on providing value added services and had been interacting with them for the past few years has also helped.
Transportation business
Raaja Kanwar, Vice-Chairman and Managing Director, Apollo LogiSolutions, told BusinessLine that the company, which had consciously focussed on warehousing so far, has now started looking at sprucing up its transportation business.
Now, the company does not have to compete with transport rates offered by smaller truckers who do not have as much expenses, added Kanwar, stating that it has consolidated its warehousing business.
At present, the value-added services business contributes 80-85 per cent of the revenue, while 15-20 per cent is contributed by the transport business. They will be procuring larger trucks from Indian truck makers that will ply on longer distances.
With customers increasingly outsourcing their logistics functions, third party logistics segment of Apollo LogiSolutions is seeing a “phenomenal” growth, he said, while declining to share further details regarding bigger customer contracts.
On its container freight station front, the company said that the Katupalli facility will be operational in the next 10 days.
Additionally, the firm is looking to focus on the movement of liquid logistics business in the tankers across India, a business it started with Singapore-based Singamas Management Services Ltd.
With contributions from these businesses, Apollo LogiSolutions expects to clock ₹1,300 crore business this fiscal, reflecting a robust 30 per cent growth.
Public issue
The company, which had raised a debt from Piramal Finance last year, plans to pay-back the debt over the next six years. It also plans a public issue over the next two-and-half to three years.
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