Real growth will come from B2B segment in 2021: Chander Agarwal, MD, TCI Express

Chander Agarwal, Managing Director, TCI Express, talks about opportunities related to COVID-19 vaccine distribution, the outlook for 2021 and target of doubling revenue and tripling profits by FY2025 during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts: 

Q: Logistics space is one of the few sectors where a lot of opportunities is visible in 2021 added e-Commerce first and now due to expectations related to COVID vaccine distribution. How your company will leverage on this opportunity and what are the internal targets of your company and what kind of incremental revenue is expected in 2021 with vaccine distribution and what is your strategy on it?

A: Vaccine distribution is likely to start in the fourth quarter of 2020-21 and its real effect will be seen in the financial year 2021-22. In general, e-Commerce play was pent-up demand and going forward it may not be seen to these levels. But in reality, the real growth that will come will come from B2B (Business to Business) from the actual manufacturing that is taking place in the country and the benefit that we will get from the GDP growth and that will be more through manufacturing. This vaccine distribution and e-Commerce are a short-term play and you can have a bonanza in a short term but B2B will always be beneficial for a long term and this will be growing a lot next year.

Q: You have been expanding capacity significantly at existing sorting centres as well as you have plans to add new centres. What can be the number on which you are working at present and what kind of progress has been seen there? Can we expect a significant hike in capacity in 2021 to make up for the corona disruption this year?

 A: We are augmenting the capacity of the shorting centres at the main centres, like Delhi and Pune, by almost four times and it will also include automation. Unfortunately, when we started it last year, about one-and-a-half-year ago, some or other problem has been coming in between and the construction has to be stopped. There was a National Green Tribunal (NGT) notice was given in Delhi due to which construction didn’t take place in 2020. Then, of course, we had the virus. It delayed a bit due to all these reasons but when this will be operational, it will be India’s first leading shorting centres and no one would have created such a thing in India. So, a lot of work has been done on it and a lot of investment will be required on it and all these investments will be made through internal accruals, not through any bank loans. So, I think, we will solve two problems (i) problem of fast delivery, as we will make it faster and (ii) customers do not get visibility of their material, today, and now they will get it because we will be introducing the latest technology for that also. 

Q: You have guided doubling revenue and tripling profits by FY2025. Is that still on track or it will be revised upward?

A: This is 100% on track. I would not like to revise it upwards at this point and there is no doubt on it. We will have a quest of not only triple but to quadruple the profit. So, I think, with the new shorting centres and the new technology we are bringing, hopefully, it will be done. So, we will work towards it.