Gati Ltd reported higher profits for the fourth quarter of 2017 compared to the same period the previous year, however revenue and profits declined on a consolidated basis. The company's CEO attributed the performance declines to a slowdown in the e-commerce industry following festivals and the tapering effects of demonetization. Currently, the Indian logistics industry faces many challenges like fragmentation, inefficiencies, and limited technology adoption as the majority of the market remains unorganized. However, experts see significant business opportunities for organized logistics companies to grow, with the logistics market in India expected to reach $50 billion by 2025. Factors like the implementation of GST, growth of e-commerce, and emerging tech-driven logistics companies

1. wwww.digitalerra.com
The Great India Logistics Opportunitiesand
Challenges
Gati Ltd posted a profit of Rs 7.7 crore for the fourth quarter ended March 31, 2017 as against a
profit of Rs 5.99 crore for the corresponding quarter last year on a standalone basis.
#DigitalErra Thought Corner
The express distribution and supply chain logistics company net sales was at Rs 126.07 crore for
the fourth quarter as against Rs 131.38 crore for the same period previous fiscal.
During the fourth quarter, Gati registered consolidated revenue of Rs 418.4 crore, down 3.4 per
cent over Q4 FY15-16. The consolidated net profit dropped by 40 per cent to Rs 9.3 crore in Q4
FY16-17 over last year.
Mahendra Agarwal, Founder and CEO, Gati, quoted, “The post festive slowdown in ecommerce
industry and the slow tapering down of the after effect of demonetization on both B2B and B2C
segments had a material impact on the company’s performance.”
Challenges In The Logistics Space
Currently, poor industry management, combined with high amounts of waste, losses due to
transit damages and limited adoption of technology, create significant challenges are some of the
key challenges plaguing the supply chain ecosystem.At present unorganized companies dominate
the industry, accounting for approximately 80 percent of the total logistics market in India,
according to Alvarez &Marsal. It is rife with fragmentation and inefficiencies.

2. wwww.digitalerra.com
Meanwhile, experts see a $50-billion business opportunity in India by 2025. “As the Indian
logistics industry shifts from unorganised to organised, the need for supply chain performance
improvement and the need for logistics companies that serve as supply chain partners will help
advance investment opportunities,” according to a report by Alvarez &Marsal.
It added that the Indian logistics market was estimated at approximately Rs 8.1 trillion in FY16.
It is expected to grow at a compound annual growth rate (CAGR) of 10.5 per cent to roughly Rs
20 trillion in FY20.
Factors Driving Logistics Ecosystem
Advantages stemming from India’s maturing logistics market coupled with a more structured
norm will positively impact the logistics ecosystem:
 Implementation of GST
With the introduction of the Goods and Services Tax (GST) from July 1, 2017, inter-state
transportation of goods would become more efficient. And among all, the logistics sector,
comprising inbound and outbound segments of manufacturing and services supply chains, is
likely to get the much-needed boost.
Companies such as TCI express, Transport Corporation of India, Allcargo, Snowman Logistic,
GDL, Gatiand VRL Logistics are likely to see good growth going forward.
 E-tailing increasing the value of logistics
Logistics helps drive growth for organized B2B and B2C online retail. Although in-house
logistics firms command 50 per cent of the e-commerce market, third-party logistics, including
traditional providers, have partnered with e-tailers to meet their business requirements.

3. wwww.digitalerra.com
The evolving organized Omnichannel B2C logistics combined with e-commerce could create a
market opportunity of $5 billion by 2025.
(Source: Alvarez &Marsal)
“With the focus shifting to specialised deliveries from standard, third-party logistics have to
invest in capacity-building and related infrastructure,” Nielson research pointed out.
 Emergence of tech-driven logistics
Emerging opportunities in the tech-driven logistics industry have led rise to supply chain
management and solutions providerslikeRivigo, BlackBuck, GoBolt and others offering third
party, inter-city and inter-state surface transport logistics to retailers and e-tailers in diverse
sectors across the country.
The growing need for organized logistics companies in India is propelling opportunities for
investors.Increasingly India’s e-commerce logistics model will focus on value added services as
expanding technology adoption and customer focused approaches enhance e-commerce logistics
growth.