LEAP India Targets Huge Growth in Underpenetrated Pallet Market
By Business Desk
LEAP India is set for major expansion in India’s logistics asset pooling sector, capitalizing on its vast network and recurring revenue model to tap into a massive, underpenetrated market.
LEAP India anticipates substantial growth within India’s pallet pooling market, which remains significantly underpenetrated. Sunu Mathew, Founder and MD of LEAP India, highlights that only about 9 million pooled pallets are currently in use against a potential market of nearly 100 million units.
The company operates an asset-pooling business, renting out critical logistics assets such as pallets, foldable containers, crates, and forklifts. This model generates recurring rental income across 38 diverse industries, offering customers an Opex model to avoid capital expenditure on logistics assets.
Key Financials & Market Opportunity
- Current pooled pallets in India: 9 million
- Potential market size: nearly 100 million pallets
- EBITDA profitable for: 10 years
- Profit after tax profitable for: 6 years
- EBITDA margins: between 47% and 56%
LEAP India’s primary competitive advantage lies in its extensive network, encompassing over 10,000 locations across India. This allows customers to utilize and return pallets in various cities without incurring reverse logistics costs.
Operational Edge and Growth Drivers
- Extensive network of over 10,000 locations across India.
- Digital tracking of assets ensures efficiency.
- Charges a "missing pallet charge" for lost items, mitigating risk.
Despite owning assets valued at ₹1,650 crore, which leads to considerable depreciation, LEAP India has demonstrated robust financial performance. Revenue surged by 55%, while profit after tax climbed by 66%, moving from ₹36 crore to ₹62 crore.
The strategic acquisition of CHEP India’s operations, set for 2025-26, is expected to significantly bolster revenue, with EBITDA margins remaining stable around 50%. Management projects an EBITDA growth of 35% to 40%, with profit after tax anticipated to accelerate even faster as depreciation costs naturally decline over time.
Ahead of its IPO, LEAP India acknowledges valuation comparisons are challenging due to the scarcity of similar listed entities globally, with Australia’s Brambles noted as a rare peer. While the company maintains an optimistic outlook, geopolitical factors influencing timber and plastic prices could impact future profitability.