GST illuminates logistic earnings
Logistic sector is one of the key sectors of the Indian economy. Indian logistic industry consists of Road transport, warehousing and storage and third-party logistics services.
The sector is reaping benefits of GST regime now, as we can observe from the earnings. GST implementation has changed the industry aspects and tax structure which aided the overall growth of the companies.
Going ahead, we expect more growth with the development of freight corridors and of logistic parks. With the expansion plans and relief on FDI, Indian logistic companies are attracting more investment with the robust outlook.
Further increasing demand for e-commerce solutions coupled with integrated warehousing is aiding operational efficiencies for the companies. Also increasing road network and simplified tax structure 3PL logistic provider are witnessing growth.
If we look into the Q2 earnings, the major players like Container Corporation of India, Sical Logistic, Transport Corporation of India have reported a PAT growth of 30-40 per cent on yoy basis, which was driven by increased revenues and reduced effective tax rates while VRL Logistic has posted an exceptional earning with 56 per cent yoy PAT growth.
These earnings reflect the benefits passed on to the companies post-GST implementation and suggests strong outlook in the coming years. During the last 30 trading days, the logistic stocks have surged around 3 to 16 per cent overall.