Indian Logistic: Speeding away as Stock Prices Soar

The movement of  goods and services has been ongoing since time immemorial. Modes of transport-ships, planes, rail and road transport are being modernized so is the nature and pace of logistics with focus on technology, efficiency & sustainability. In the last few years, Indian logistic companies have seen an unprecedented growth due to thriving inter dependencies on e-commerce and other industries.

Logistic sector is estimated to to grow at a CAGR of 12.17% by 2020 as against the current 8%. Engaging ~16.7 million employees today, the demand for skilled workforce in logistics is estimated to reach 28.4 million by 2020, gaining momentum as the Indian economy grows at an exponential rate.

Nexensus: Indian Logistic Large Listed Companies Recently in July 2016, The World Bank in its report on Logistics Performance Index (LPI) ranked India at 35th position out of 160 countries, a sparkling long jump by 19 places from 54th in 2014.

As a result in 2015-16 many institutional investors placed their bets on large logistic companies of India and were rewarded with sizable returns. Nexensus Explores these investments and companies that have outperformed.

The Logistic Giants

Nexensus identified 20 large, listed companies operating in the logistic sector including aviation, road transportation, railways, shipping, warehousing and supply chain. Stock prices for most of these have increased consistently and for some stock prices rose by 600% in just 2 years.

Listed Logistics PlayersHeadquartersFocus
ABC India KolkataFreight Forwarding through Air and Sea
Aegis Logistics Ltd MumbaiLogistics services for oil, gas, and chemical industry
Allcargo Logistics Ltd MumbaiLess-than-container load (LCL) consolidation player with global multi-modal transport, container freight station, inland container depot and project engineering solutions
Arshiya International LtdMumbaiFree Trade Warehousing Zones, Rail, 3PL, 4PL, Warehousing, Supply chain
Asis Logistics LtdMumbaiTransport, Custom Clearance (CHA), Warehousing, Freight Management
Blue Dart Express LtdChennai, Tamil NaduIntegrated air express carrier and premium logistics-services
Balurghat Technologies LtdKolkataCommercial Air Transport  and logistics
Central Provinces Railways Company LtdMumbaiTransportation services through railways
Chartered Logistics LtdAhmedabadTransportation and logistics
Container Corporation of IndiaNew DelhiMulti modal transport,container port, air cargo complex, air freight station, warehousing, logistics park and supply-chain management.
Corporate Courier & Cargo LtdMumbaiValue-added logistics services
Gateway Distriparks LtdMumbaiContainer Freight Station (CFS) / Inland Container Depot (ICD) services
Gati Ltd DelhiExpress Distribution and Supply Chain Solutions
North Eastern Carrying Corporation LtdDelhiTransportation and Freight Management
Patel Integrated Logistics LtdMumbaiCargo and Vendor Management
Sical Logistics Ltd ChennaiEnd to End logistics solutions for bulk and containerized cargo, custom house agency, stevedoring, dredging 
Snowman Logistics LtdBangaloreIntegrated logistics service provider  with cold storage
Tiger Logistics (India) LtdDelhiEnd-to-End supply chain solutions
Transport Corporation of India LtdGurugram , HaryanaCargo transportation (surface)
VRL logistics LtdMumbaiTransport, 3PL warehousing

2 Year & 5 Year Performance

Better known companies like Blue Dart Express, Tiger Logistics Ltd, Aegis Logistics Ltd, Central Provinces Railways Ltd, Allcargo Logistics Ltd that are much tracked, grew positively. Surprise came from the lesser know logistic companies like Patel Integrated Logistics Ltd , Chartered  Logistics  Ltd and Sical Logistics Ltd whose price rose by 113%, 68.16% and 25.53% respectively over the last 2 years.

The top gainers in the short term (2 years) were Tiger Logistics (India) Ltd, Aegis Logistics Ltd and Patel Integrated Logistics Ltd that gained 658%, 297% and 113.55% respectively. Price drop was capped at -50% with North Eastern Carrying Corporation Ltd reporting the highest fall in prices over 2 years. Albeit North Eastern Carrying Corporation reported a drop in short term yet over a period of 5 year its stock prices have increased by 178.62%.

Overall the sector average price gain over 2 years is reported at 57% for 20 companies between 2014-2016.

Nexensus: Indian Logistic Listed Companies and stock Performance
Price gain in 2 years

The sector stood through the test of time and yielded positive returns to long term investors. An analysis of price gain reveals that 9 out of 11 companies stock prices soared by over 100% during the last 5 years between 2011-2016. The top performers being Aegis Logistics, Blue Dart Express and North Eastern Carrying Corporation whose stock price increased by 681%, 228% and 179% respectively.  The only 2 companies to report a drop in stock price by 34% & 8.3% were ABC India Ltd and Balurghat Technologies Ltd.

Nexensus: Logistic India Price Performance
Price gain in 5 years

Institutional Investors in Indian Logistic Sector

The opportunity that Logistics provides has not been hidden from many seasoned investors and funds. Over 25 large global institutional investors and banks have over 1% holdings in logistic companies depicting a positive sentiment . These include international investors like Government Of Singapore and T.Rowe Price Emerging Markets Stock Fund.

Institutional InvestorsLogistics Players (% Shareholding)
Idfc Premier Equity FundBlue Dart Express (1.56 %)
, Gati Ltd (3.63%)

Matthews India Fund, Matthews Pacific Tiger fundBlue Dart Express (1.46 %) ,Container Corporation Of India (2.81%)
Bright Star Investments Pvt LtdBlue Dart Express
(3.35 %)
Macquarie Bank LimitedGati Ltd (5.69%)
Icici Prudential Value Discovery FundGateway Distriparks Ltd (4.87%)
Blackstone Gpv Capital PartnersCentral Provinces Railways Company Ltd (10.04 %), Allcargo Logistics Ltd (4.44%)
Aberdeen Global Indian Equity LimitedAllcargo Logistics Ltd
(3.23%)
Government Of Singapore and Monetary Authority Of SingaporeAllcargo Logistics Ltd
(3.37%)
Acacia PartnersCentral Provinces Railways Company Ltd (6.19 %)
Life Insurance Corporation Of India
Central Provinces Railways Company Ltd (14.97 %)
Goldman Sachs India Fund LimitedVRL Logistics Ltd (2.27%)
Morgan Stanley Sicav (Mauritius) LimitedTiger Logistics (India) Ltd (4.37)

Many individual investors like Amal N Parikh, Praveen K Manivannan, Vivek Kapoor, Sharad Kanaiyalal Shah, Nisha Kanubhai Makwana have also been much ahead of the curve to identify and en-cash on this trend.

Apart form large listed companies ,we observe that there are over 28000 companies operating in this space. 70% (~19000) of these are situated in the top metro cities of India including Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad and Ahmedabad. Some of the large ones include Coldex Logistics,  Tulsidas Khimji and Liladhar Pasoo. This sector being highly fragmented is likely to undergo major consolidation and is likely to buzz with activity in coming years as a lot of scope for Merger, Acquisitions and Strategic Partnerships exists. A few Unlisted Companies with stronghold in this arena are –
Nexensus: Indian Logistic Private Listed Companies

In a Nutshell

Logistic sector in India still continues to grapple with many challenges including lack of skilled workforce, fragmented nature of industry, slow infrastructure development, complex regulatory clearances and shortage of capital investment. There is a wide gap between Logistics network and facilities available -in developed countries where logistics is organised versus India where ~80% of the sector continues to be unorganized. In India, this directly impacts ease & cost of doing business where the annual spend on logistics is  ~13-15 % of  GDP as compared to 9%  in developed countries.

It is especially noteworthy countries like Germany, U.S, Australia, Sweden, Japan, Netherlands etc. have tapped the fifth fuel- Internet. Implementing “Internet of Things” to improve logistical inefficiencies has lead to saving 1.5 billion tons of oil in 2011, approximately worth ~ $743 billion. Cost savings and lowering Carbon footprint going hand in hand.

Focusing on India- Implementing GST, Modernizing of ports, Cold Storage and new road development projects are positive efforts by the Indian Government that may help reducing this gap furthur. Private Players too are playing their part of revolutionizing logistics space with innovation and Technology.

In conclusion, for those who have missed the boat earlier, we anticipate for this sector to continue attracting investments and reap positive returns in the near future.

To know more about Nexensus

Nexensus Website Nexensus Website

For more information & detailed reports contact us directly

Nexensus Phone Contact us+91 784-009-8995/01141662253              Nexensus Email info@nexensus.com

Leave a Reply