The booming online retail has injected a major booster to the logistics business as major player in the segment including Gati, Blue Dart and Transport Corporation, Snowman, among others, have been recording roaring business and the trend has also attracted more and more investors to the segment. Making the most out of the emerging situation, Damani in the recent past has created value in a highly competitive retail industry by successfully running the retail chain D-mart.
The reports emanating from various sources indicated that there are a few reasons why investors are so aggressive on logistics stocks: First, the huge opportunity arising out of the e-commerce boom in the country; second, the stocks of these companies are great mediums to play the economic recovery theme; and finally introduction of GST which can be a big boost for the logistic industry, explained, head of research, Edelweiss Financial Services, Vinay Khattar.
As a matter of fact, the introduction of Goods and Services Tax (GST) will also be a big positive as it would drive consolidation in the logistics industry, promote exports, reduce carrying and forwarding agency costs, impact warehouse and depot fixed. And variable costs help slowly eliminate entry tax including octroi, summed up an analyst, SBI Capital, Viral Shah.