Shreyas Shipping reviving logistics expansion plans

Shreyas Shipping & Logistics Ltd is reviving expansion plans in the logistics segment which it had put on the backburner after the slowdown in 2008.

With an improvement in the domestic economy, Shreyas has lined up aggressive plans to diversify from the core shipping business to become an end-to-end containerised cargo logistics operator.

The company plans to invest around `100 crore to expand its shipping, warehousing and inland transportation capacities.

Shreyas, which started as a shipping company, first set foot in the logistics segment in 2006 with a wholly owned subsidiary Shreyas Relay Systems Ltd (SRSL).

The company currently has a debt-equity ratio of 0.4 with a debt of Rs50 crore.
“The expansion plan at the moment includes setting up warehousing facilities at 8 to 10 locations across the country. These facilities would be taken up on the long-term lease model,” said Vinay Kshirsagar, CFO, Shreyas Shipping and Logistics Ltd.

Some of the locations being considered for the facilities of 25,000 sq ft capacity each include Mundra, Cochin, Kandla, Tuticorin and Delhi. Negotiations for the Delhi facility have been completed and the space would be available for operations in a couple of months.

“The company also plans to add more trailers to its inland transportation fleet. At present, we currently operate around 8 trailers and plan to increase the number to 100 over a period of time. This expansion would be undertaken in phases with probably around 10 trailers per quarter,” Kshirsagar said.

To complement its container logistics business, Shreyas Shipping plans to move its existing four vessels into main operations and plans to add two more container vessels to its fleet. The two new vessels would also be used for self operations.

While, the warehousing and transportation expansion would be under SRSL, the acquisition in the shipping space would be made by the parent company. The expansion in the warehousing and shipping segments would be undertaken in the next six months.

Shreyas Shipping is expected to post higher profits for the September quarter compared to its June quarter. “The second quarter for the current financial year seems encouraging. At a consolidated level, the profits are likely to touch Rs5 crore, while on the standalone basis they are expected to be around Rs3.5 crore,” said a market source. The company had reported a loss of Rs8.98 crore for the September quarter last year.