What are ColdStar’s biggest growth priorities over the next two to three years?
There are two things, and I would put them in this order.
First, specialised pharmaceutical logistics – it is a small part of our revenue, but it is the vertical that has the highest requirement for capabilities and the highest headroom, and we are investing in it, not as a side product of food. Second, technology. Our in-house platform helps us keep infrastructure growth from outpacing planning and visibility. We have been growing 50-60 per cent YoY for the past few years and the discipline for the next two to three years will be to keep growing the base responsibly and not chasing volume.
How is ColdStar differentiating itself from other cold-chain logistics providers in India?
We don’t sell assets. We are not selling pallet space or truck space; we are selling the product in the right place and in the right condition. This is the opposite of the typical ordering. We design the customer’s supply chain first based on their consumption pattern, inventory policy and demand forecast., and then build the infrastructure to serve their supply chain, not the other way around. That’s not a distinction that can be made for a pharma customer. The question is not how many square feet we have in a city, it’s whether the product’s stability profile, the batch size it flows in and the service level that the customer has agreed to their channel has been designed into the network. The second differentiator is that Never Stock-Out isn’t a service tier that we sell. It’s the design constraint that the whole business is based on, the warehouse layout, training, technology, daily operating rhythm.
How has the pharma cold-chain landscape evolved in recent years, and what will be ColdStar’s key priorities going forward?
Demand side has grown faster than the supply side. The distribution chain below the pharma industry has remained fragmented and largely unvalidated outside metros, whereas the pharma output has shifted towards injectables and biologics, which cannot afford a broken chain. Customers are also far more demanding when it comes to the evidence. Five years ago, they wanted to know that the product had arrived, today they want to know the temperature history, the excursion history and the audit trail behind it. We are currently working on the development of passive packaging solutions are available in our national network. Healthcare accounts for approximately 5-8 per cent of our total business, and is highly specialised, such as bulk consolidation, multimodal transport and delivery to research centres and hospitals. Moving forward, it’s about depth, not volume. The pharma cold chain failures cost the industry in India is estimated to be in the range of Rs 7,000-10,000 crore per year, which is a precision problem and not a capacity problem.
How is ColdStar’s Zero Stock-Out strategy evolving, and what role will technology and data play in scaling it?
The principle remains the same. If a customer orders 100, we must deliver 100. In food and retail, a shortfall is a lost sale. In pharma, it is a patient who doesn’t take a dose that week, and so it takes a different weight. The way we’ve gotten there has changed. We have shifted from experience-based judgement to technology, which is based on operational data and business intelligence, not just dashboards, forecasting, inventory planning and ongoing optimisation based on actual consumption. Our definition of visibility has expanded, too. The ability to locate a truck is a basic requirement. The key is to know the location, condition and timing of each unit’s arrival so we and the customer can be in the right place between overstocking working capital and running out of stock.
What are the biggest challenges facing ColdStar today, and how are you addressing them?
Our challenges are industry-level issues that we’ve decided to base the business on. India requires an estimated 60-70 MT of cold storage capacity while it has an estimated 37 MT, of which only about 90 per cent is available in three states and the capacity is skewed towards single commodities. That’s the problem for pharma – once you get outside the metros, the concentration of treatment volumes is rapidly decreasing, and that’s where purpose-built, temperature-assured capacity is needed. We are doing this by standardisation, creating one network to one specification as opposed to a bunch of different facilities, and Tier-II and Tier-III expansion to disperse it geographically. The other constraint is people. Quick commerce and D2C growth have reduced margins all along the line and increased attrition and cold chain execution is as good as the person on the dock. We have invested in training and made logistics work a skilled job and we have expanded our workforce from 427 in FY22 to more than 3100 in FY25 and improved retention.
What is ColdStar’s process for managing damaged, rejected, or temperature-compromised products across the cold chain?
Quality control is not a one-stop process, it is managed by a clearly defined SOP and our teams huddle each day on it. The answer to this question will depend on what it is we are dealing with. At inward, the temperature abused cargo is escalated to the customer and rejected. Rejected cargo is not inward at all – whatever the reason, it returns from the dock and not to our facilities. If the material is damaged it is flagged, quarantined and, after escalation and written customer sign-off, disposed of in accordance with the appropriate norms for the type of material. If a deviation is found on pharmaceutical consignment, the material is held and physically segregated and the logger data and deviation record are added to the customer’s quality function. The decision on disposition of a drug product is based on the stability data provided by the marketing authorisation holder, and we carry out their written instructions, with documentation held at each stage.
What will be your five-year growth outlook, and which segments or markets do you see offering the greatest opportunities?
Healthcare currently accounts for 5-8 per cent of our business and it is also the most underpenetrated and specialised segment in the pharma cold chain in India as the capability bar is quite high and the field is getting thinner. Today, food and retail are not only close to equally large, but both will continue to grow, but they are not where the capability frontier is at. Geography, especially Tier-II and Tier-III markets, are the best opportunity for us to take metro-standard services into cities that have not been served by anyone to a specification, only by whoever had a cold room. The nature of pharma demand is changing and favouring us, as we’re seeing an increasing trend of merchandise going into hospitals, research centres and directly to patients and it’s a different logistics problem than replenishment.
As you expand, which cities or regions in India do you see as potential locations for new bases, facilities, or distribution hubs?
We have recently added Patna, Guwahati and Lucknow, taking us to 45 distribution centres nationally and strengthening our position in India’s fastest-growing Tier-II markets. We have also opened our largest standalone facility to date in Bengaluru, a 1,75,000 sq ft site at Hoskote with daily processing capacity of 3,00,000 units, to serve rising urban demand in the South. The broader logic is that our next wave follows consumption growth into Tier-II and Tier-III cities across the East, North and South rather than deepening in metros that are already well served. For pharma specifically there is a second map layered on top of that one: manufacturing clusters and treatment centres do not sit in the same places as retail consumption, and a network that serves pharma properly has to answer to both.
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