Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,921.50-96.9
Stock Analysis, IPO, Mutual Funds, Bonds & More

Logistics sector to grow at 8-10 per cent over the medium-term; outlook stable: ICRA

The key drivers for demand pick-up would be the festive season as well as the anticipated revival in infrastructure spending post monsoon and improvement in receivable cycle of contractors.

PTI|
Oct 09, 2019, 10.12 PM IST
0Comments
BCCL
1
The credit metrics of ICRA's sample of logistics companies are anticipated to remain comfortable.
NEW DELHI: The domestic logistics sector is set to grow at 8-10 per cent over the medium term with the outlook remaining largely stable, ratings agency ICRA said on Wednesday. The key drivers for demand pick-up would be the festive season as well as the anticipated revival in infrastructure spending post monsoon and improvement in receivable cycle of contractors, it said in a statement.

"ICRA Research has forecast the domestic logistics sector to grow at 8-10% over the medium term with the outlook remaining largely stable," it said.

The ensuing demand momentum will lead to higher freight volumes in the second half of FY2020 despite weak macroeconomic scenario, it added.

ICRA Ratings Vice President Shamsher Dewan said: "We expect the sector to continue to outpace the GDP growth over the medium-term, which apart from demand side factors would also be supported by supply-side positives like emergence of integrated logistics players, investments in infrastructure development - warehouses & inter-modal transport hubs and; capacity augmentation being undertaken by large logistics players."

"Industry capex towards capacity augmentation (fleet, warehousing, cold storage, terminals etc) and investments in technology to improve service offerings is estimated at Rs. 9-11 billion annually (which translates into 2-3 per cent of operating income)," the statement added.

The credit metrics of ICRA's sample of logistics companies are anticipated to remain comfortable, it said.

On the flip side, however, ICRA's analysis of sample of 12 large logistics players in Q1 FY2020 has indicated a slowdown to 7 per cent as compared to 11 per cent in Q4 FY2019 and 10 per cent in Q1 FY2019.

Dewan added: "ICRA expects the Indian logistics industry to continue evolving/being shaped in the medium term as reflected by the on-going trends. This includes trends like shift towards organized players post GST and E-way bill implementation, focus on multi-modal offerings, increasing interest by private equity and foreign players in the space, emergence of e-commerce logistics requirements, focus on warehousing and cold chain services, and increased adoption of technology."

Also Read

Shadowfax set to mark its imprint on the 'China-to-India' logistics sector

Logistics sector to add 1.49 lakh new jobs in April-September this fiscal

Panel asks government to ease norms for cargo movement, improve logistics sector

GST provided much-needed reform to the logistics sector

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service