Published on Nov 02, 2018
By Ultra News
Future Supply Chain Solutions Limited, the logistics arm of the biggest large-format retail chain in the country, continued to report strong growth on the top line and improving profits, but expenses too largely kept pace.
The company’s revenue from operations grew by 34.4% on year to Rs 276.2 cr for the September quarter, an increase of Rs 71 cr.
However, the company’s total non-tax expenses also rose by Rs 65 cr on year to Rs 248 cr.
The increase in expenses, coupled with a fall of Rs 7 cr in its non-operating income, was enough to cause a decline in pretax profit to Rs 29.48 cr from Rs 30.10 cr last year.
Net profit rose only Rs 1 cr to Rs 21.27 cr.
However, said the company, net profit growth would have been 61% if the comparison period last year did not have an ‘other income’ of Rs 7 cr.
The improvements were clearer on a sequential comparison.
Compared with the June quarter, operating revenue was up Rs 48 cr to Rs 276 cr, while net profit was up by Rs 3.3 cr to Rs 21.3 cr.
The company’s primary income comes from the services it provides to its parent, Future Group, the country’s most prominent retailing group along with Reliance Retail.
However, the share of its external clients in its revenue increased to 39% in the first of the current financial year from 33% in the year-ago period.
During the quarter, it added several external clients during the quarter, including Voltbek Home Appliances Private Limited, JK Helene Kurtis Limited and Tilda Ltd.
It said it will get potential revenue more than Rs 90 cr per year just from the new clients added in the first six months of the current year. Last year, it had generated Rs 258 cr from third party customers.
It said it has a “sales funnel” of Rs 400-500 cr for the next 12 months.
The company’s warehouse space increased by 0.79 million sq. ft. to 6.40 million sq. ft. during the quarter, while revenue per square feet rose to Rs 123 per month during the quarter from Rs 110 the June quarter.
Managing Director Mayur Toshniwal said the company’s first built-to-suit integrated food distribution center at Banur was operationalized during the quarter.
“The re-constructed distribution model for Food and FMCG supply chain is beginning to take shape,” he said, adding that the company continues to work towards enhancing its warehousing capacity.