Balmer Lawrie lines up Rs 500 crore capex, bets big on rail logistics with 15-rake target

Diversified public sector enterprise Balmer Lawrie & Co Ltd has lined up a capital expenditure programme of nearly Rs 500 crore over the next three years, with railway logistics emerging as the biggest investment area as the company looks to substantially expand its domestic supply-chain footprint.

Of the proposed outlay, about Rs 200-250 crore will be deployed in railway logistics, while around Rs 100 crore has been earmarked for routine operational capex across existing businesses such as industrial packaging, greases and lubricants and chemicals, Chairman and Managing Director Adhip Nath Palchaudhuri said on the sidelines of the company’s 109th Annual General Meeting on Monday. The AGM was held in Kolkata on September 21.

The company also plans to invest Rs 50-60 crore in expanding its third-party logistics (3PL) operations, alongside investments in cold-chain facilities, smaller packaging lines for lubricants and new products across its packaging and travel businesses.

Rail fleet to expand

Railway logistics will account for the largest portion of the expansion programme, with Balmer Lawrie targeting a fleet of around 15 rakes compared with three currently operated under a lease model.

For the first time, the company plans to directly purchase railway rakes. Tenders have been floated for three rakes, while the initial expansion phase envisages adding a total of seven more rakes through a combination of ownership and leasing. The capacity expansion follows fresh rail freight business secured from iron-ore miner NMDC. “Railway logistics has emerged as a very strong segment for us where we are putting in significant capex. We are right now running three rakes, and we intend to grow much more, aiming to bring that to around 15 rakes,” Palchaudhuri said.

With each rake costing around Rs 20-25 crore, railway assets are expected to absorb a significant share of the company’s proposed investment over the next three years. Balmer Lawrie is increasingly emphasising domestic logistics, including rail and third-party logistics, as it adjusts its operations to changes in global trade and supply chains.

3PL network grows

The company is simultaneously building a hub-and-spoke network for its 3PL business. A central hub at Dankuni will anchor the network, with spokes being expanded to locations including Siliguri, Guwahati and Bhubaneswar. The strategy is aimed at widening Balmer Lawrie’s regional reach and strengthening its integrated supply-chain capabilities. The company already operates container freight stations, warehouses and specialised cold-chain facilities.

Palchaudhuri told shareholders that geopolitical tensions, national security considerations and growing tariff protectionism were increasingly influencing global trade, making diversification and a stronger domestic presence important to the company’s strategy.

Packaging portfolio widens

Investment is also being directed towards the company’s greases and lubricants business, where Balmer Lawrie is establishing small-filling packaging lines at regional facilities. New lines have become operational in Kolkata, while similar capacity is planned in southern India.

The initiative is intended to reduce freight costs while helping the company expand its presence in the retail lubricants market. In industrial packaging, Balmer Lawrie has a 35-37 per cent share of the 210-litre steel drum market. The company now plans to move further into adjacent categories, including smaller drums and intermediate bulk containers.

Its chemicals division recorded its highest-ever turnover and profit during 2025-26, while the industrial packaging business continued technology upgrades across its six manufacturing plants. The greases and lubricants division is also developing synthetic and more environmentally friendly products.

Diversification as hedge

Palchaudhuri said Balmer Lawrie intended to retain diversification as a central part of its business model, arguing that operating across different segments provides protection when individual industries face unexpected disruptions.

The Covid-19 pandemic demonstrated that advantage, he said, as the travel business suffered a severe downturn while logistics provided support to the company’s overall financial performance. That strategy is now being reinforced as the company confronts uncertainty arising from geopolitical tensions, the Gulf crisis, protectionist trade measures and disruptions to established supply chains. Balmer Lawrie recorded revenue of Rs 2,785 crore in 2025-26 and has previously indicated that revenue could double by 2030.

Travel business eyes domestic boom

The company is also aligning its Travel & Vacations operations with the expansion of domestic tourism, focusing on tour packages, retail holidays and Meetings, Incentives, Conferences and Exhibitions (MICE). Registrations on its exclusive central government employee travel portal rose 25 per cent, while ticketing volumes increased 15 per cent year-on-year. Its vacations, retail and MICE businesses also recorded their highest-ever gross toplines.

Balmer Lawrie has separately given in-principle approval to demerge the Travel & Vacations business into a wholly owned subsidiary, a move aimed at providing greater operational flexibility to the segment. As the company enters its 160th year, Palchaudhuri identified resilience, alignment with national priorities and adoption of technology as three pillars that would shape its next phase of growth.