Gati - Long race horse?

Stock Opportunities
21

It seems that next two quarters may be difficult, and company may face liquidity issues(as per new chairman)…
Let’s see…if it sail through then may be a big thing…

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22

@behlokesh - can you pls share the article where chairman talks about the company and liquidity issues. Good to know the views.

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23

It was a TV interview in 1st week of April…

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24

I have serious issue over Gati operations, I tried trial booking to see if they are really into business, except the customer care there is none!

Tried with different addresses & services after the customer care call there won’t be any contact to you.

I smell something fishy, won’t be touching this stock for now!

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25

Though now as it’s a owned entity of All Cargo, I think that while it would be take some time for them to streamline the processes(Due to Covid) though they would be better than GATi Promoters time.

Disc: Holding this stock, so I might be biased

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26

Is any one still tracking the company?
Any update on recent developments of the company?

27

Company seems to be doing all good things…

Divesting unrelated subsidiaries
Focusing on express business
Gaining market share
Getting asset light
Debt reduction etc …

I

28

Special situation focussed video:

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29

Wrote a short thread on Gati, my first Twitter thread :grin:

https://twitter.com/vineetjain1101/status/1601840294999490560?t=5UcSi2YEQDTjERJSNPM9Rg&s=08

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30

Gati has gotten even more interesting after the recent correction IMO. The old promotors are exiting - TCI Finance share is down to below 0.4% Jubilee Commercial and Bunny investments are almost sold out, and in the stock is now trading at close to one time sales with rapidly improving fundamentals.

The Indian express logistics space is among the more insulated sectors from a global recession, and falling crude prices should help reduce working capital (even though it is largely passed through to customers). I see a large secular growth runway for efficient national players with expanding margins. It is now my third largest holding and I am considering making it the largest holding if the share price falls to below trailing 12 month sales at any point in time.

This is not advice. This is what I am doing base don my interpretation of the industry and I may be wrong by a long shot. In fact I would request members to present counter views so I can strengthen my understanding of the business.

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31

Here is the latest report on GATI

Hope this helps
dr.vikas

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32

This helps thanks
Consolidation & turnaround story, strong parent.
Disc: Invested

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33

Yes. Good report. This can be a great turnaround story. But I guess market is not willing to give it a premium because still its loss making. Maybe once they start posting consistent quarterly net profits, market will upgrade it.
Personal thought. Just tracking.

34

Turnarounds are hard!

Volumes are up, yields are down, both big time. This is worrying for me. The elusive margin uptick remains distant. They continue to guide for 3000cr topline worh 10%-12% Ebitda by FY26. But with new problems surfacing every quarter, it makes me want tonwuqation the capability of the management to make projections in the first place.

Invested and disappointed. I may exit partially or comoletely soon. Will look to add back once the improvement starts reflecting in the numbers, which may be nex quarter or next year. The price will probably be higher then, but thats ok. I dont want to hold on to business underperformance.

Some snippits from the concall:

Gati KWE

  • Volumes up 18%
  • GMs down from 28% to 23%
  • Ebitda up 4% from 370cr to 385cr

H1 FY23
Tonnage up 11%
Revenue from Ops up 2%, Ebitda down 21%

Reasons for drop in yield:

  1. Mix - 65% large, 35% MSME and retail - drop in retail with introduction of E-docket, should stabilize
  2. Drop in prices for intra state (intra zone) to gain more business. For large customer, yield differential between inter to intra state is 20%. Cost reduction will happen subsequently
  3. Increased over 1000 direct pin codes

These have led to higher volumes. Now need to optimize costs and improve yields.

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35

Any idea what are these guys upto by doing all these corporate actions?

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36

Gati has finally started showing NP. But, how will the merger of Gati with Allcargo Logistics affect Gati shareholders? Will they have a overhang until the merger takes place? Any expert opinions?