Business Standard

Volume IconDoes new logistics policy make related-stocks a favourable bet?

Logistics stocks traded mixed on Monday after the govt announced National Logistics Policy. It aims to integrate and develop a technologically-enabled logistics ecosystem in India. Here's a report

ImageLovisha Darad New Delhi
Logistics, trade, global market

On September 17, the government announced the National Logistics Policy, to develop a cost-efficient and integrated logistics ecosystem for India.
The government plans to reduce the cost of logistics below 10 per cent from current 13 to 14 per cent of the GDP in a span of eight years.

This would be in-line with developed countries like the US and Germany, where logistics costs are in the range of 7 per cent to 9 per cent.
In order to reduce these costs, the government has launched several initiatives like Integration of Digital System, Unified Logistics Interface Platform, Ease of Logistics, Network Planning Group and System Improvement Group.

Not only will these measures bring several modes of logistical routes under one centralised platform, it will also abate any operational inefficiency via a digital resolution platform.
While some of these policy measures may take some time to materialise, analysts believe that platforms like Unified Logistics Interface Platform and Ease of Logistics can reduce logistic costs in the medium-term.

In a conversation with Business Standard, Ronald Siyoni, AVP, Research, Sharekhan by BNP Paribas says, National Logistics Policy (NLP) will curb unscrupulous activities. Organised players likely to benefit. Bullish on TCI Express, Mahindra Logistics, Gati. NLP positive for autos and cement sectors

That said, analysts believe that the synergies from the new policy is already priced in.

Ambareesh Baliga, Independent Market Analyst, believes NLP will help minimise cost of logistics. New policy to trigger leadership change. Logistic stocks already priced in National Logistics Policy. No upside likely in the near-term, he says. 

Meanwhile, on the bourses, shares of Aegis Logistics, Allcargo Logistics, Concor, VRL Logistics have surged in the range of 2 per cent to 50 per cent so far this calendar year 2022 (CY22). In comparison, Nifty50 and the S&P BSE Sensex gained two per cent each, during the same period.

FII flows, rupee movement, crude oil prices, global cues will continue to guide domestic markets today.
Globally, ECB Christine Lagarde’s speech on interest rate trajectory will be tracked. The two-day US FOMC meeting also begins today.

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First Published: Sep 20 2022 | 7:00 AM IST