V-Trans, a city-based integrated logistics solution with a national presence, is seeing about 40 per cent top-line growth of Rs 1,500 crore this fiscal year to restore the economy to normal despite rising fuel prices, and competition from unorganized players is a concern.
Launched in 1958 as a regional player in Gujarat as Vijay Transport, today it is an integrated logistics operator with 750 branches offering traditional road transport and its main business V-Trans contributes more than 75% of the total revenue. V-Express Express offers logistics, while V-Logis works in warehousing and e-commerce delivery, primarily providing Amazon and Flipkart services.
V-Trans is the largest player in PTL (part-truck-load) logistics space, controlling almost half of the market, Mahendra Shah, son of founder KK Shah and managing director and chief executive of V-Trans Group, told PTI.
Shah entered the family business in 1975 when he was just 22 years old and was credited with transforming Vijay Transport, a regional transport player, into V-Trans, a Pan-India integrated logistics solution provider and one of the top five in space. Under his leadership, it has grown its business to over Rs 1,130 crore in FY22, with a single offer from 10 branches to 750 branches across the country.
V-Trans closed FY22 with revenue of Rs 1,136 crore from which it achieved a net margin of 5-6 per cent, while it registered revenue of Rs 960 crore in FY21. It has set a target of surpassing the revenue mark of Rs 1,500 crore this financial year, Shah said, based on his optimism over the growing demand across the industry.
However, he acknowledged that rising fuel prices, with increasing competition from smaller players, was a cause for concern.
It is worth noting that the price of diesel in trucks has risen by about 35 per cent since March but due to competition, operators are not able to bear the full inflation for the end customers.
Since about 80 percent of our truck contractors and customers have been around for decades, it’s not easy to fully pay their operating costs. Also, truck rental is a highly competitive business. We can only charge a good premium and full cost pass-on from the remaining 20 percent of the business because they are spot demand, he explained.
Dividing the revenue from the three verticals, Shah said V-Trans chipped in at Rs 880 crore last year and expects to earn Rs 1,050-1,100 crore this financial year; V-Express has contributed Rs 245 crore and will touch Rs 300 crore this financial year; And V-Logis, which received Rs 35 crore last year, should surpass Rs 100 crore this financial year.
Shah said the company has started work on an initial public offering over the next two to three years and has already hired a CFO and a few board members.