Total Transport Systems LtdQ1 FY22Transport Services

Total Transport Systems Ltd

Q1 FY22 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 2

→Total Transport Systems Limited expects a turnover of around Rs. 670 crore to Rs. 690 crore in the next financial year, indicating growth from the current level.
→The company plans to double its Full Container Load (FCL) volumes this year by focusing on shipments into regions like CIS, South America, and Africa.
→One World Logistics, a subsidiary, is targeting significant top-line growth by expanding last-mile and first-mile delivery services, including partnerships with Amazon and Flipkart.
→The company aims to start 3PL logistics services by hiring warehouses and expanding into new locations catering to e-commerce and pharma sectors.
→Despite high freight rates and equipment shortages, the company expects to maintain its current profit margin levels with planned revenue growth.

Margin guidance

Category 3

→Total Transport Systems Limited expects turnover of Rs. 670 crore to Rs. 690 crore for the next financial year, reflecting growth from the current levels.
→The company aims to maintain the current bottom line/profit levels despite market challenges.
→The One World Logistics subsidiary plans to move out of losses and post a profit at the PBT level in the current financial year.
→Growth is expected from expansion into first-mile transportation for Amazon and Flipkart, and scaling up 3PL logistics services targeting small e-commerce platforms.
→FCL business volumes are targeted to double, focusing on profitable routes like CIS, South America, and Africa.
→EPS showed a strong increase last year (6.38 for FY22), indicating improving profitability that the company aims to sustain.
→Overall, the company projects steady revenue growth with stable profit margins for the upcoming year.

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Fundraise plans

→There is no specific mention of any current or future fundraising plans through debt or equity in the provided transcript.
→The company has discussed managing working capital and financing growth internally, including reducing interest costs and improving cash flows.
→They have successfully negotiated better interest rates with banks and have not fully utilized their future credit limits, indicating no immediate need for additional debt.
→No new equity fundraising or issuance of shares was mentioned during the call.
→The focus appears to be on organic growth, operational efficiency, and expanding business segments like last mile delivery and FCL without explicit plans for external fundraising.

Order book

The transcript provided does not explicitly mention the current or expected order book or pending orders for Total Transport Systems Limited. However, relevant insights include: - The company is experiencing significant top-line growth, with a revenue increase of 79.51% YoY in Q4 FY22. - One World Logistics subsidiary is growing steadily, with expected significant top-line growth from last-mile delivery business. - Plans to double volumes in the Full Container Load (FCL) business, focusing on regions like CIS, South America, and Africa. - They have ongoing tie-ups with major e-commerce players like Amazon and Flipkart expanding first and last mile logistics. - Management expressed confidence in achieving Rs. 670-690 crore turnover in the next financial year based on current market conditions and freight levels. - Continuous inquiries and new business tie-ups are being received daily, especially in the One World Logistics segment. No specific numeric or detailed order book data was provided in the transcript.

Capex plans

Yes

→Current capital expenditure includes the purchase of cars for directors and trailers used for moving empty containers to the CFS, reflecting investment in vehicles to support operations.
→The company has made investments in mutual funds and equities (Blue Chip companies) through systematic investment plans (SIPs) as part of its strategic financial management.
→Future strategic plans involve expanding the One World Abhilaya model by entering the first mile segment with Amazon and Flipkart, targeting 3PL logistics services with rented warehouses across India.
→The focus will be on hiring warehouses for e-commerce logistics, indicating planned investment in logistics infrastructure though primarily rented, not owned.
→Overall, future investments appear focused on expanding service capabilities (e.g., last mile and first mile logistics) rather than large-scale asset ownership.

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