Chairman & Managing Director, Tiger Logistics (India) Limited
Mr. Harpreet Singh Malhotra on Tiger Logistics Ltd - Business Outlook & Sector Outlook
Get the inside scoop on Tiger Logistics Ltd's Business and Sector outlook straight from the expert himself, Mr. Harpreet Singh Malhotra.
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About Harpreet Malhotra
Harpreet Singh Malhotra, Chairman and Managing Director of Tiger Logistics India, discussed the company's outlook and initiatives in interviews in 2023 and 2024. He described the company's focus on digitization, including a platform called "Freight Jar," which he compared to a "make my trip of logistics industry" that provides real-time freight pricing and reduces shipment booking time from days to hours. Malhotra also stated that the company is investing in expansion into the US and South America, with plans to open an office in the latter, and is focusing on increasing its electronics import business. He mentioned that the company is targeting volume growth of 15 to 20 percent and is exploring inorganic acquisitions. Malhotra praised the Indian government's efforts in the logistics sector, stating that the launch of the National Logistics Policy was a significant development. He attributed the focus on reducing logistics costs to Prime Minister Narendra Modi and noted that infrastructure improvements such as the Dedicated Freight Corridor are underway. Regarding the Red Sea crisis, Malhotra acknowledged that the company faced some problems in early January 2024 but said it was able to control the situation, though freight rates increased.
Transcript (36 segments)
H
Harpreet Malhotra0:06
Thank you.
P
Piyush0:16
Hello friends, welcome to Nirmal Bang. I'm Piyush, your host. Today we bring you a corporate conversation about a company catering to the entire economy. Make in India, government boosting infrastructure – logistics is the heart of this movement. Let me welcome the CMD of Tiger Logistics Limited, Mr. Harpreet Singh Malhotra. Sir, welcome to the show.
H
Harpreet Malhotra1:21
Thank you.
P
Piyush1:24
Thank you for coming. First question: We heard great things from the budget – huge infra spending. What's your take on how this is helping the logistics sector and what you see on the ground from central and state governments?
H
Harpreet Malhotra2:03
Yeah, so I think it has happened for the first time that there is a direct focus from the Prime Minister. The launch of the National Logistics Policy was the best day for the industry – never happened in 75 years. Five or six cabinet ministers were present. That shows the importance. The government is creating dedicated freight corridors, infrastructure, ease of doing business – abolition of tolls, improved truck turnaround times, transit times, double stack trains. This benefits clients and boosts the industry. We are grateful. The focus gives a boost to a very unorganized sector.
P
Piyush4:21
Absolutely. I also want to understand your exposure to government orders and how things are changing in decision making.
H
Harpreet Malhotra4:34
Tiger is a highly diversified company. We handle engineering goods, auto, power projects, sugar plants, auto spare parts. We also work for the defense sector – Ministry of Defense, HAL, and other organizations. We work with RBI for their mint facilities. Exposure to government tenders is increasing every month. The government has created a transparent vendor selection environment. Now anyone technically qualified can participate. Our share from government business is close to 10% and we hope it will be 15-20% in coming quarters.
P
Piyush6:09
Right. If I want a ballpark, is it less than 10% or less than 5%?
H
Harpreet Malhotra6:15
At the moment it is close to 10%, but we are hopeful it will be at least 15-20% in coming quarters.
P
Piyush6:27
Fair enough. I also wanted to ask about the revenue split between domestic and international markets.
H
Harpreet Malhotra6:54
We are a complete international logistics company. We don't have any domestic business. Our focus is purely on exports and imports – 100% international.
P
Piyush7:29
From that perspective, container rates have seen a seesaw. Last year post-COVID they were crazy, then moderation, then a further dip. How is it now? Are you seeing more activity and orders?
H
Harpreet Malhotra8:09
Yes, last two years were very difficult. From 2020 end to 2021 end, rates went from 2000-2500 to 15000-20000 for a 40-footer. Freight was more than cargo value in some cases – ceramics and low-value goods took a hit. But things have improved. Freight rates have stabilized near pre-COVID levels. This gives a level playing field for exporters. We are seeing export order lines picking up. Coming months should be good.
P
Piyush10:28
So are you looking for a much better volume growth in FY24?
H
Harpreet Malhotra10:33
Volumes are increasing quarter on quarter – 15-20% growth. Containers are available, so we can serve clients easily. That should continue.
P
Piyush10:56
Where is the momentum – American-Asia route or European-Asia route? Is China plus one helping?
H
Harpreet Malhotra11:14
We have been strong in North and South America. In South America, we are top three globally, competing with international players, not Indians. China plus one policy is favoring India. We are also venturing into Southeast Asia and Africa. European market is a concern, but we have little exposure there. The Ukraine war hasn't affected us much. We see good traction in North America due to geopolitical shifts.
P
Piyush13:22
Let's talk about Freight Jar, your recently launched technology platform. How is it visualized as a revenue driver and how does it synergize with existing operations?
H
Harpreet Malhotra14:09
Freight Jar is a price discovery logistics platform – like MakeMyTrip for logistics. You can get real-time freight rates with a click. We have digitized the whole process. Previously, booking a shipment took 2-4 days; we have reduced it to 3-4 hours. It's a game changer for SMEs and MSMEs.
P
Piyush15:38
Does this mean an SME can book the entire logistics from factory to destination, including customs clearance?
H
Harpreet Malhotra16:00
Absolutely. They get highly negotiated rates, digitized documentation, customs clearance, transportation, handling, shipping. We have added a finance product too – post-shipment credit up to 80% of cargo value within 48 hours, without collateral. The goods are collateral.
P
Piyush16:58
What kind of basis points does this add to your bottom line?
H
Harpreet Malhotra17:22
We see it as a separate sales vertical. We were not catering much to SMEs in smaller areas. This platform lets us reach them. We have tied up with a world-renowned IT company as tech partner. Finance is through NBFCs, not on our books. Tiger's 23 years of operational expertise backs it. It's going to benefit the industry and add to our revenue.
P
Piyush18:52
How digitized is it? Can I upload all papers online without running around?
H
Harpreet Malhotra19:20
It's 100% digitized. You give us invoice and packing list. We file customs documents via EDI with Customs. You just send goods to the customs area. Physical examination is still manual, but that's a small part. Documentation with shipping lines and port authorities is all digitized. You don't have to send anyone.
P
Piyush20:21
Absolutely, that makes life easier and creates value for shareholders. Moving to financials: does this tech platform mean your working capital requirements will come down as turnover increases? Do you see it contributing heavily to turnover?
H
Harpreet Malhotra21:24
Yes, it will improve our working capital cycle. People pay on time online. We are keeping strong checks on receivables. The working capital cycle will reduce significantly, adding to bottom line.
P
Piyush22:21
Two questions: One, you mentioned segments like power, sugar, auto, defense, RBI. Are you also into commodities like agri, breakbulk, or cold chain? Two, on standalone numbers, there seem to be some subsidiary investments. Help us understand?
H
Harpreet Malhotra23:01
Yes, we are very much in commodities – rice, vegetables, fresh fruit from Nashik, seafood from Veraval, including cold chain refrigerated containers. We had put some restrictions during COVID, but moving forward we will focus on both dry and refrigerated commodities. On subsidiaries, we are an asset-light company with no major capital expenditure. We are looking at inorganic growth through M&A. We are keen to acquire an LCL (less-than-container-load) company. That will give us inorganic growth and complete our product range. We are also investing continuously in digital.
P
Piyush24:17
On the subsidiary investments, what sort of numbers are we seeing? The consolidated numbers show some impact.
H
Harpreet Malhotra24:50
We don't have significant standalone investments. We are asset-light. We are looking at acquiring a mid-size LCL company – only a 51% stake, so the management continues. We are not looking to run that business ourselves. We will provide funding, vision, and market support. The target is a company with top line over 100 crores, scalable to 400-500 crores. We are not raising funds externally for this.
P
Piyush26:56
What sort of spending bracket are you thinking? Around 50 crores?
H
Harpreet Malhotra27:17
I would say less than that. We are only taking 51% stake. The company should have a top line of over 100 crores, with scalability to 400-500 crores. That's our target.
P
Piyush28:56
That's great. This sums up a great conversation – exciting developments with Freight Jar, expansion, and container rates coming down. FY24 looks great. Thank you for coming on the show.
H
Harpreet Malhotra29:23
Thank you. All the best to you. I congratulate you for doing a great job making investors aware. Keep up the good work.
P
Piyush29:37
Thank you, sir. With that, dear viewers, we come to the end of this conversation. Subscribe to our YouTube channel and click the bell icon to never miss an update from Nirmal Bang.