Widespread impact of West Asia crore

Following the recent restructuring, what is the strategic direction of Allcargo Logistics over the next few years?

Our strategy is closely aligned with the ongoing structural transformation in the Indian economy. The logistics sector is going through a period of rapid change. Historically, the industry was highly fragmented, but government reforms such as the Goods and Services Tax (GST), e-way bills, dedicated freight corridors, Bharatmala and logistics parks are bringing greater efficiency and formalizing the industry.

Our focus over the next 5-10 years will be technology, digitalisation, visibility and performance sustainability. Reliability and scalability are key things customers value.

How does restructuring improve your revenue opportunity?

The restructuring enables a far more integrated customer engagement model. Customers no longer need to connect with multiple service providers for express, CL and transportation requirements. We can now offer integrated supply chain solutions through a single interface, improving operational efficiency, pricing competitiveness and customer stickiness. Given the intensity of pricing competition, scale is important in logistics, and this integrated model significantly strengthens our market position.

How is the Middle East crisis affecting your business?

The most immediate impact has been on fuel prices, with diesel prices seeing a sharp rise in the last few days. However, given that our business is largely domestic-focused, the broader impact is relatively limited compared to companies that rely heavily on international trade. India’s consumption and production trends continue to be healthy, and based on what we are seeing in April and May, the economic outlook for FY27 appears to be quite positive.

What is the impact of rising diesel prices on margins?

We follow a transparent diesel price increase mechanism which is communicated to the customers and revised from time to time. This allows the increase in fuel costs to be passed on in a structured and systematic manner.

Are you facing any fuel availability issues?

At present the situation remains manageable. We work closely with our trucking partners, many of whom have been with us for decades. While the majority of the fleet is diesel based, we are selectively deploying Electric Vehicles (EVs) wherever commercially viable and in line with customer requirements.

Can you explain your investment plans in detail?

We currently operate approximately 8 million square feet of storage space and expect to add approximately one million square feet going forward. On the technology side, we are investing in a revamped delivery application, a new customer portal and an upgraded warehouse management system (WMS). Technology is at the heart of our business. We have made significant investments in digitalization, Internet of Things (IoT), machine learning and AI-based capabilities.

For logistics companies, the physical infrastructure of trucks and warehouses is as important as the digital infrastructure powered by data, AI and IoT.

What is Allcargo Logistics’ contribution to the group’s revenues currently, and what is the growth path forward?

Group revenues are approximately $2 billion, of which Allcargo Logistics contributes approximately 10 percent. Our overarching aspiration is to continue to grow our market share. Our goal is to drive overall industry growth through strong execution, deep customer engagement and differentiated service capabilities. In logistics, quality of service is ultimately the only real differentiator.

The group now has four listed entities, enabling investors to participate in specific growth themes. Those looking at India’s domestic consumption-led and manufacturing-led growth can invest in AllCargo Logistics, while investors focused on global business opportunities can participate through AllCargo Global, which is expected to be listed soon.

Your revenue grew 5 percent in FY26 while profit growth stood at 2 percent. How confident are you about the FY27 financial numbers?

FY26 was primarily about strengthening the foundation of the business. The investments we have made in processes, service quality and technology are now beginning to translate into strong business momentum, which is visible in the trends for April and May. Our approach has never been to achieve growth at any cost. We are focused on profitable growth – profitable customers, profitable geographies and profitable verticals. As a result, FY27 growth will be driven not only by top line expansion but also equally by improvement in earnings before interest, taxes, depreciation and amortization (Ebitda) margins and overall profitability.

What are your focus areas for expansion?

Within CL, we are particularly focused on expanding our chemical logistics and automotive logistics businesses, where we have developed strong operational capabilities, particularly around just-in-time supply chain management. On the Express side, pharmaceuticals and automotive will continue to be key focus areas. We currently have 14 per cent market share in the express segment and are among the top five players in the industry. Our aspiration is to further strengthen our position and emerge as a market leader over time.

How intense is the pricing competition currently?

Pricing competition remains extremely intense throughout the industry. Rising diesel prices have put further pressure on costs, especially when the fuel accounts for nearly 50 per cent of operating costs. Despite these challenges, our yield realization improved meaningfully between FY25 and FY26, reflecting the strength of our service quality and customer relationships. Improving profitability will remain a key focus area in FY27 also.

Do you see consolidation accelerating in India’s logistics sector?

Yes, industry consolidation is likely to accelerate over time. Small and unorganized players will find it difficult to compete as large organized companies will continue to invest aggressively in infrastructure, technology and compliance capabilities. This pressure will likely lead to industry consolidation over time.