Shares of TCI Express, GATI, Aegis Logistics, Allcargo, Mahindra Logistics and Snowman Logistics surged between 4-8 percent in the morning trade on September 14, ahead of national logistics policy release on September 17.
Prime Minister Narendra Modi will release the policy aimed at promoting a seamless movement of goods across the country, commerce and industry minister Piyush Goyal said on September 13.
“The government has emphasised on the need to reduce logistics costs in the country from the current levels of 13-14 percent of GDP,” the minister said.
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The policy is expected to focus on several areas such as process re-engineering, digitisation and multi-modal transport.
According to the commerce ministry, the sector is complex with more than 20 government agencies, 40 partner government agencies (PGAs), 37 export promotion councils, 500 certifications, over 10,000 commodities, and $160 billion market size.
It also involves 200 shipping agencies, 36 logistics services, 129 inland container depots, 168 container freight stations and 50 IT ecosystems, banks and insurance agencies.
As the complexity unravels and the sector gears up for this major government trigger, analysts are bullish on the stocks with a buy recommendation on many.
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Motilal Oswal is positive on Transport Corporation of India (TCI) and has a target price of Rs 860. “We expect the company to clock a revenue/PAT CAGR of around 18%/19 percent over FY22-24,” the brokerage firm said.
Sharekhan has a “buy” recommendation on Mahindra Logistics with a target price of Rs 600. Edelweiss Wealth Research has a “buy” call on Aegis Logistics with a target price of Rs 315.
At around 12.48 pm, Mahindra Logistics was trading 6.28 percent higher on the National Stock Exchange at Rs 522.65, TCI was up 0.17 percent at Rs 693 and Aegis Logistics was up 8 percent at Rs 293.35
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