Logistics shares in focus; Allcargo, Gati up over 5%

Patel Integrated Logistics, Kesar Terminals, Snowman Logistics and VRL Logistics were up 3%-7% on the BSE

Shares of logistics companies were trading higher by up to 9% on the back of heavy volumesin in an otherwise weak market.

Allcargo Logistics (9% at Rs 158), Gati (up 8% at Rs 128), Patel Integrated Logistics (7% at Rs 101), Kesar Terminals & Infrastructure (6% at Rs 414), Snowman Logistics (4% at Rs 60) and VRL Logistics (3% at Rs 404) were up between 3%-9% on the Bombay Stock Exchange (BSE).

Container Corporation of India, Blue Dart Express, Gateway Distriparks and Transport Corporation of India were up less than 2% as compared to 0.69% fall in the benchmark S&P BSE Sensex at 01:16 pm.

According to Antique Stock Broking, logistics sector is well poised for strong growth over medium-to-long term with volumes driven by revival in domestic macro alongside initiatives like Make in India; expected benefits from the rollout of infrastructure projects including Dedicated Freight Corridor (DFC), port development and investment in road infrastructure, policy measures such as much impending rollout of GST,  a higher level of containerization, and exponential growth in the e-commerce segment.

The brokerage house believes the long-pending rollout of GST aims to simplify the current indirect tax regime by bringing all central and state levies (like excise duty, sales tax, octroi, VAT and other countervailing duties) under one single head having uniform tax rate across goods and services will also benefit the sector.

"A single taxation at a national level will result in resolution of the tax complexity, more efficient cross-state transportation, streamlining paperwork for road logistics operators and bringing down the transit time and logistics costs," a report dated May 16, 2016 suggests.

The Goods and Services Tax (GST) Bill, which has been approved by the Lok Sabha, is pending in the Rajya Sabha because of stiff resistance by the Congress, the largest party in the House, over a few proposals.