Logistics shares gain on infrastructure status; Gati, VRL hit 52-week highs
Gateway Distriparks, Gati, Sical Logistics, VRL Logistics, Transport Corporation of India, Lancer Container Lines, Allcargo Logistics and Mahindra Logistics were up in the range of 2% to 6% on the BSE. By comparison, the S&P BSE Sensex was up 0.31% at 33,463 at 09:44 AM.
Of these, Gati, VRL Logistics, Arshiya and Lancer Container Lines hit their respective 52-week highs on the BSE in intra-day trade.
The government has given infrastructure status to logistics sector, covering cold chain and warehousing facilities, a move that is likely to attract more funding at competitive rates for these segments, the PTI report suggest.
Having the infrastructure status would help the logistics sector get credit at competitive rates and on a long-term basis as rising logistics cost impacts global competitiveness of exporters, added report. CLICK HERE TO READ FULL REPORT.
Meanwhile, according to rating agency ICRA, with a gradual improvement in most of economic indicators over the past couple of months, the outlook for the logistics companies is positive in the medium term.
The Indian logistics industry is expected to grow by 9-10% p.a. over the medium term. While there have been fluctuations in the economy and freight demand due to Goods and Services Tax (GST) implementation, the impact of the same would be temporary and would be corrected over the near term, ICRA said in recent press release.
Gati has rallied 5% to Rs 149, extending its past two days’ 18% rally on the BSE after reported a consolidated net profit of Rs 20.77 crore in September 2017 quarter (Q2FY18). The company recorded other income of Rs 28.37 crore, which include foreign currency exchange gain of Rs 8.41 crore for the quarter. It had profit of Rs 7.44 crore in the same quarter previous year.