Mahindra Logistics Ltd was scouting for acquisition in Southeast Asia to strengthen its freight forwarding business, expanding its warehousing space and touching Rs 6,000 crore topline by FY21, its CEO Pirojshaw Sarkari said on Tuesday.
Warehousing offers better margin for the company and in the current fiscal plans are in place to add two million square feet of space.
“We are looking for acquisitions in SE Asia in the freight forwarding sector. This segment is just 5 per cent of our total business,” Sarkari said.
The company’s freight forwarding business is handled through Lords Freight, which it had acquired earlier.
Globally, top logistics players generate at least 25 per cent of revenue from freight forwarding.
Sarkari said the immediate target is to double the business in this sector.
Apart from expanding freight forwarding, we will be expanding warehousing space, he said.
“We will add 2 million sq ft in the current fiscal. We have 15 million sq ft now across India and of which 1.5 million will be in east,” Sarkari said.
Mahindra Logistics which follows the asset-light model for both warehousing and trucks, is setting up a 1 lakh sq ft of sorting hub in Dankuni, Hooghly meant to serve the e- commerce sector.
Mahindra Group accounts for 54 per cent of the total business but the same is expected to be below 50 per cent in the near future.
Despite a slowdown in automotive and FMCG sectors, Sarkari does not expect any slowdown in the logistics business.
“We will continue to grow despite the odds as 95 per cent of logistics is unorganised. Our margin would grow with more warehousing space. We hope to touch Rs 6,000 crore revenue by FY21,” he said.