Gati to return to profitability after lockdown

Gati

Allcargo Logistics expects Gati, the express provider it recently acquired, to return to profitability next quarter, after having been stalled by the Coronavirus lockdown in the current quarter.

Allcargo Logistics appointed turnaround expert Alvarez and Marsal to revive Gati and to integrate and improve the best practices between the two companies, in which it acquired 46.83% in March 2020. Allcargo Chairman Shashi Kiran Shetty expects the integration of the two companies over the next 16 months.

Chairman Shashi Kiran Shetty also expects a brighter future for the Hyderabad-based subsidiary as it is awaiting a tax write-back of Rs* 500-600m through the ongoing dispute settlement scheme and thus close the fiscal year with a healthy bottomline.

“We’ve applied for the Vivad Se Vishwas scheme, under which the government is encouraging taxpayers to end their disputes with taxmen through a negotiated settlement. Gati has a disputed tax claim of Rs 150-160bn and we hope to settle it at half… and thus will be able to write back at least Rs 500-600m by December,” Shetty told PTI.

“While April was really bad, from mid-May, the situation began to improve and so far June seems to be normal. But Mumbai being But Mumbai being still shuttered is a big drawback,” Shetty added.

Additionally, Allcargo has appointed McKinsey & Co to chart out a path for the new normal post the Covid-19 crisis, which will include greater dependence on digital strategy, among other things.

Source: Allcargo

*Rs 85.5 = €1.00 / Rs 76 = $1.00

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