For the Indian logistics, which is undergoing a fundamental shift, the "growth-at-all-costs" model is increasingly being replaced by a focus on yield and profitability. Allcargo Group, one of the top sectoral players, is betting on AI-driven "decision intelligence" to widen its margins, rather than sticking with the basic track-and-trace visibility capabilities of the past.
The company recently swung back into the black with a Q1 profit, and is now charting a course to crack the double-digit EBITDA target by FY28. In an emailed interaction with NDTV Profit, Allcargo Group Chief Business Officer Punit Misra outlined the operational levers driving the company's margin expansion, how artificial intelligence is being deployed across its 19,800-pin-code network, and why the recent corporate restructuring is shielding the domestic business from global supply chain volatility.
Edited excerpts from the interview:
1. In the Express business, EBITDA margins stood at around 6.2% in Q1, against your management's medium-term target of 10%. What specific operational levers—whether dynamic pricing, hub automation, or route rationalisation—will you prioritise to bridge this 380-bps gap over your three-year plan?
Improving margins is a steady, multi-year journey... Our guidance for FY27 is 7.5%, with an expectation to reach around 10% by FY28 and a longer-term ambition of exceeding that. There are three broad levers that will drive this improvement: pricing, productivity and operating leverage.
First, we are focused on institutionalising a more data-driven approach on customer pricing to optimise our yield and make us more agile. Second, technology and automation are increasingly becoming embedded in our operations. Over the past year, we have rolled out a docket-booking application, delivery-booking application, GPS and vehicle-monitoring systems, and a control tower for line-haul operations... Third, as volumes grow on an increasingly optimised network, we expect to benefit from operating leverage.
2. The logistics industry conversation is rapidly shifting from basic track-and-trace capabilities to 'Agentic AI' and self-healing supply networks. How is Allcargo Logistics practically deploying AI today to optimise middle-mile dispatch, dynamic capacity planning, and predict fleet turnaround times?
The industry is moving simply from knowing where a shipment is to using data to determine what should happen next. That is the shift from visibility to decision intelligence. At Allcargo Logistics, we are developing AI capability into day-to-day operations to manage our vast logistics network covering 19,800 pin codes across over 730 districts in India.
Our cloud-based data lake brings together operational, shipment and vehicle data, while our in-house data science team is developing use cases around network optimisation and line-haul profitability... The real-time vehicle and network data captured are fed into our cloud-based control tower. This helps us anticipate movement patterns and improve our ability to predict and manage turnaround times. We have deployed an AI-led Gate Scan and Bay Management application to intelligently manage vehicle entry and dock allocation at hubs.
3. Allcargo Logistics swung back to profitability with a PAT of Rs 15 crore. What are your top-line and bottom-line expectations heading into the close of FY27, and what will be the primary revenue drivers powering this turnaround?
Our philosophy is very simple; service quality drives volume, and consistent service quality gives us the right to command the right yield. That is the principle guiding our turnaround... We expect the Express business (domestic and international express logistics and freight services) to grow in double digits in the coming quarters, while Consultative Logistics (contract logistics or third-party logistics business) should continue to deliver high-single-digits growth.
The two fundamental drivers of our revenue growth are volume and yield. We are focused on growing volumes while maintaining pricing discipline and improving the quality of revenue we generate... We are not pursuing growth at any cost. Our focus is on service quality first, with volume and customer retention as the outcomes, and healthy yield and profitability as the rewards.
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4. Domestic express volumes grew nearly 7% YoY to over 312,000 tonnes in the first quarter. How is your customer mix evolving across Enterprise, SME, and E-commerce right now, and where are you seeing the strongest volume stickiness?
Our strongest stickiness continues to be with our key enterprise customers, where we are seeing double-digit growth and expect that to continue. Broadly, our overall customer mix remains stable, with approximately 60% coming from key enterprise accounts and 40% from retail and SME customers. Automotive, electricals and white goods have remained relatively consistent, while categories such as fashion and apparel naturally tend to be more seasonal.
Retail and SME opportunity, however, is particularly exciting... Since July, we have therefore introduced cluster-level initiatives, including dealer-leader and franchise incentive programmes, supported by stronger local engagement in key SME markets.
5. Aligning with the PM Gati Shakti framework, Allcargo has been expanding its outreach to MSMEs and has integrated into the ONDC network. How significantly do you expect ONDC-driven digital commerce to alter your SME volume share over the next 18 to 24 months?
ONDC is still evolving for our business... At this stage, however, it would be premature to put a specific number on the contribution ONDC could make to our industry over the next 18 to 24 months.
Most of our SME customers operate through a mix of offline and online channels. Our broader objective is to ensure that our logistics capabilities are accessible to businesses irrespective of the channel through which they transact. We will continue to evaluate emerging digital ecosystems based on the value they create for customers and the growth opportunity they offer the business.
6. As the Group navigated the restructuring and separation of its domestic operations (Allcargo Logistics) and international supply chain (Allcargo Global), did the restructuring provide Allcargo Logistics with greater agility to navigate global freight volatility?
The NCLT-approved restructuring, effective November 1, 2025, brought the express distribution and consultative logistics businesses under one focused domestic platform... For the domestic business, it also creates opportunities for greater customer integration, cross-selling and network efficiencies.
The restructuring has made the domestic business more agile by allowing us to leverage common capabilities, talent and skill sets, particularly across workforce management and operating efficiency. More importantly, it has given the business greater strategic clarity and accountability. We can now focus our investments, capabilities and management attention on the specific opportunities within the domestic logistics market.
7. Geopolitical disruptions and the Middle East crisis have created uncertainty across global trade and supply chains. How is this impacting Allcargo's businesses, and how do you see the company navigating this evolving environment?
For Allcargo Logistics, the impact is relatively limited because our business is primarily focused on domestic logistics... Fuel cost increases are also largely passed through to customers under our contractual mechanisms, which provides a degree of insulation to the domestic business from fuel price volatility.
The impact is more pronounced for businesses exposed to international trade and export-import activity. Geopolitical disruptions can affect cargo flows, trade lanes and shipping routes, while alternative or longer routes can increase freight costs and transit times. One important lesson from recent disruptions is that supply-chain shocks can be more structural than temporary. Businesses therefore need to build resilience into their supply chain through alternative sourcing, diversified routes and greater visibility.
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