Moneycontrol Bureau Brokerage firm Citi maintains a buy on Container Corporation and Gateway Distriparks Ltd as it believes Indian logistics –surface, marine ports and services, engineering and construction— may see a milder demand in the near-term, though it is likely to be a beneficiary in the long run. Despite the near-term demand softness continues to impact container trains operators (CTO), concrete progress on Dedicated Freight Corridor (DFC) and the Goods and Services Tax (GST) continues to provide structural tailwinds. Commissioning of DFC in 2019 and roll-out of GST would give substantial boost to CTOs, Citi believes. With 90 percent land acquired and compensation paid, 80 percent contracts awarded and overall physical progress of 29 percent and financial progress of 327.4 percent, DFC execution seems to be progressing well. The note says Indian Railways' exim container volume grew 3.2 percent year-on-year in July 2017 after growing almost 5.5 percent in the first quarter of FY17. "Even though volume is growing now after falling 3.3 percent in FY16, reduction in average lead distances has adversely impacted," the brokerage says in its note.
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