Indian container logistics firm Gateway Distriparks expects its rail business to drive sales, though the high-margin container freight business will continue to be the biggest profit earner, senior officials said.
Gateway Distriparks operates across three verticals-container freight, rail and cold chain logistics.
The firm reported a 40 percent jump in Oct-Dec net profit as sales across businesses. Rail unit Gateway Rail Freight contributed half its revenue in the quarter.
“The rail revenue will grow much faster than CFS (container freight station) revenue…volume growth will be on rail,” Chairman Gopinath Pillai said in an analysts call.
Increased volumes from the exim segment and capacity addition will drive margins for the rail business going ahead, officials said.
Cash-rich Gateway, with reserves of about 1.47 billion rupees is developing a new terminal at Faridabad near Delhi.
Of the 1.25 bln in capex alloted to be spent in the first nine of the fiscal, the group has spent close to 700 million rupees on the rail terminals.
It has rail terminals in the National Capital Region, Mumbai and Ludhiana, besdies the new one at Faridabad.
Gateway, India’s market leader in cold chain logistics, expects to spend between 300-400 million rupees over the next year-and-a-half to almost double capacity in the segment, Ravi Kannan, CEO of Snowman Frozen Foods, said. His unit accounts for about 7 percent of consolidated revenues.
The unit currently has a capacity of about 16,000 pallets for frozen products.
Gateway also expects to spend 500 million rupees as regular capital expenditure to develop and expand container freight business, officials said. It currently operates stations at Navi Mumbai, Chennai, Vizag and Kochi.
The firm expects to generate the capex mostly through internal resources, group Chairman Pillai said.
It is setting up a greenfield container freight station near an existing one in Kochi and is looking to expand in the area.
“We are looking for more facilities to either acquire or build in the case of CFS,” Pillai said. (Reuters)