Logistics Stocks in India 2022: The coronavirus pandemic will be remembered as one of the biggest black swan events in history. It has disrupted the functioning of the entire world. This exposed the vulnerabilities in various sectors such as in the modern global supply chains.
Broken supply chains have been the foremost pain-points for India and other countries as it struggles to match up with the demand faced globally.
According to research by Accenture, 94% of Fortune 1000 companies witnessed supply chain disruptions from Covid-19. 75% of companies had a negative or strongly negative impact on business and 55% plan to downgrade their growth outlook.
Recently, the Indian logistics industry has undergone some significant changes. It is continuing to evolve and these changes are likely to last for the foreseeable future. That said, as the year draws to an end, let’s look at how the industry has transformed and analyse the Top 5 Logistics Stocks in India 2022. Keep reading to find out!
The Logistics Sector – overview
Global Logistics Industry includes all activities of the supply chain such as transportation, customer service, inventory management, the flow of information and order processing. Other activities include warehousing, material handling, purchasing, packaging, information dissemination and maintenance among others.
The Logistics Performance Index (LPI) is an interactive benchmarking tool created by the World Bank. It help countries identify the challenges and opportunities they face in their performance and what they can do to improve it. India’s rank in LPI has gone up from 54 in 2014 to 44 in 2018 in terms of overall logistics performance.
According to a report by Statista Research Department, the market value of warehousing by 3PL (Third Party Logistics) in the country is estimated to reach almost $6 Billion by 2025.
The sector is making a move towards Green logistics. This comes as an attempt to reduce the carbon footprint to achieve Net Zero emissions across the sector.
To support this initiative, many modern logistics parks have been built with solar rooftops to sell carbon-free electricity rather than consuming it.
The Indian logistics sector is valued at USD 160 billion. The sector contributes around 13 to 14% of the country’s GDP and employs over eight million people directly. Let us now take a look at the top logistics stocks in India 2022.
Top 5 Logistics Stocks in India 2022
Container Corporation of India Ltd. (CONCOR) is an undisputed market leader having the largest network of 61 ICDs/CFSs in India (59 terminals and 2 strategic tie-ups). CONCOR operates three core businesses: cargo carrier; terminal operator, warehouse operator & MMLP operation.
The company has the highest market capitalization among its peers in the industry with a value of Rs 40,153 Cr. The return on Capital employed per cent had declined drastically in the year, but it has recovered and is currently at 12.37% for FY22. The company has a low debt which is a positive sign and has a debt to equity ratio of 0.01.
The price to earnings(P/E) ratio of the company is 38.92 as against the industry average of 34.02. This shows that the company is slightly overvalued in the market. The promoters holding remained unchanged. The promoters pledge is zero for the company. The net profit for FY21 was Rs 469 Cr and for FY22 it stood at Rs 1028 Cr.
Blue Dart Express is an Indian logistics company that provides courier delivery services. It has a subsidiary cargo airline, Blue Dart Aviation that operates in South Asian countries. In 2002, Blue Dart formed a business alliance with DHL Express. Since then, DHL Express has invested €120 million in it and is now a major shareholder in the company.
The company offers E-Business solutions namely InternetDartTM, ShopTrackTM, PackTrackTM, MobileDartTM, ShipDartTM and ImageDartTM. It has a market capitalization of Rs 19,100 Cr which is the second-highest among its peers. The company has reduced its debt to equity ratio to 0.23 in FY22.
The company has tripled its net profit to Rs 382 Cr in FY22 as opposed to a profit of Rs 101.81 Cr which it posted in FY21. The promoters holdings for the company has remained unchanged with zero promoters pledge. The return on capital employed was 17.21%.
The valuation of the company is a little higher than its peer as it has a P/E ratio of 42.60. The return on equity for the company is 43.83% which is the highest among the top five companies.
TCI Express Ltd. was established in 1996 as one of the foremost divisions of the Transport Corporation of India (TCI). This division offers domestic courier and international courier services through road, rail and air with some value-added services. It also provides E-Commerce delivery services in India.
It is the fifth-largest company in the logistics sector by market capitalization with a value of Rs 6,175 Cr. The company has a Return on Capital Employed of 31.76%. The company has a return on equity of 24.03% which is the second highest compared to the other companies in the sector. The debt to equity ratio is zero.
The company posted a net profit of Rs 128 Cr in FY22 up from Rs 100 Cr earned in FY21. The Promoters holdings declined by 0.1% compared to last year. The promoters pledge for the company remains zero. The Price to earnings (P/E) ratio of the company is 47.93 which is overvalued when compared to the industry P/E of 20.80.
Allcargo Logistics Ltd is an Indian logistics company that was established in 1993 and is headquartered in Mumbai. It is India’s largest publicly listed logistics company. The operations of this company are spread across 180 countries with more than 300 offices.
Its services comprise global multimodal transport operations, pan-India container freight stations, inland container depots, third-party logistics, warehousing, contract logistics and logistics parks.
The company has made multiple acquisitions over the years. The latest acquisition was of Gati Ltd in 2020. This helped the company foray into express logistics as well as first and last-mile logistics. The market capitalization of Allcargo logistics is Rs 6,977 Crore. The debt to equity ratio of the company is 0.58 which is the highest among the top five companies.
Allcargo logistics recorded a net profit of Rs 883 Cr up from Rs 78 Cr it reported last year. It is a dividend-paying company that has a dividend yield of 1.05. The return on capital for the company is 18.28%.
The promoters holding has decreased by 0.09% in the last year while the promoters pledge remains zero. The return on equity ratio is 19.12. The P/E ratio of the company is 7.58 which is the lowest out of the top 5 companies in the sector.
Aegis Logistics Ltd is a leader in oil and gas logistics. The services provided by the company include sourcing of products, storage and port operations, arranging road and pipeline movement, shipping, and integrated supply chain management.
It also imports, markets, and distributes bulk propane and liquid petroleum gas to various industrial customers in the steel, ceramics, glass, and pharmaceutical sectors.
The company has a market capitalization of Rs 7,404 Crore. The promoters have decreased their holdings by 0.33% in the last year. The promoters pledge for the company remains zero. The company has a low debt with a debt to equity ratio of 0.18.
It posted a net profit of Rs 384 crores up 54.2% from the previous year. Aegis logistics is a dividend-paying company with a dividend yield of 1.18 which is the highest among the top five companies. The company has a P/E ratio of 20.73 and is par with the sector P/E of 20.80.
The return on equity for the company is 16.40 and the return on capital employed is 17.22 which is the second-least among the top companies.
List of all the companies in the Logistics sector
|Company||Market Capitalization (Rs in Crore)|
|Container Corporation of India Ltd.||40,153|
|Blue Dart Express||19,100|
|TCI Express Ltd.||6,175|
|Aegis Logistics Ltd.||7,404|
|Transport Corporation of India Ltd.||5,723|
|Navkar Corporation Ltd.||939|
|Lancer Containers Lines Ltd.||711|
|Agarwal Industrial Corporation Ltd.||657|
|Orissa Bengal Carrier Ltd.||253|
|Future Supply Chain Solutions Ltd.||139|
|Tiger Logistics (India) Ltd.||255|
|Shreeji Translogistics Ltd.||235|
|Total Transport Systems Ltd.||92.1|
|Ritco Logistics Ltd.||324|
|North Eastern Carrying Corporation Ltd.||128|
|Chartered Logistics Ltd.||57.1|
|Shree Vasu Logistics||101|
The rapid pace of digital transformation is redefining Indian logistics. Automation, artificial intelligence, machine learning, data analytics, and the Internet of Things (IoT) are significantly contributing to increasing operational efficiency. This is making it one of the fastest-growing sectors in the country.
This shows that the sector has a huge potential for growth in the near future. This can be a scope for the investors to invest in this sector. The Logistics market in terms of revenue was valued at US$ 8185.46 billion in 2015.
The sector is expected to grow at a CAGR of 7.5% and reach around $250 billion in the next few years. That’s all for this post. Let us know what you think about the logistics sector in the comments below and be sure to do your own research before investing in these Logistics Stocks in India that we have mentioned. Happy Investing!
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