Capability Study of Kunkal Enterprises on Induction in Zonal Transport on Trial Basis

1) Kunkal Enterprises is interested for Zonal Transport on 3 locations : Varanasi , Patna & Kolkata

2) Group Turnover is approx. 32 lacs/annum , Out of which 40% is contributed by TSL operations.

3) Assuming 15% profit margin on above turnover , there is a profit of approx. 4.8 lacs per year or 40 thousand per month .

4) Party has only 2 own trailor & 3 hired trailors , hence it will need to make arrangements for 4 more trailors on ownership & 2 on trial .

5) Approx. Instalment of 1 trailor on debt is 75k per month , which means a cost of 2.25 lacs per month.

6) Cost of Rented Trailors will be approx . 15k per month for approx 7 trips.

7) Other cost involves setting up an office at destination & deploying atleast 2 manpower there . This means an additional cost of 50k per month.

8) In 7 trips on 10 trailors , avg tonnage will be approx . 1500 MT per month . This means a turnover of Approx . 15 lacs & a margin of 2.5 lacs .

9) Considering all the points above , cost of doing business is approx. 3 lacs & profit is almost same .

10) This effectively means that there is no contingency left for penalties , pilferage , emergency , demurrage etc.

11) Hence , Kunkal Enterprises should be given chance iff it is assumed that it wont incur penalty or it has resileince to grow business on a very thin margin at the earlier stages & using this as a step forward.

12) Other option is that it look for opportunities for reverse logistics from destinations which will act as additional income to it

13) Third option is to delay this as of now & let the business turnover to grow & then give it a chance.