Logistics and transport stocks witnessed mixed reactions today, a day after the Goods and Services Tax (GST) was passed in Rajya Sabha on Wednesday. There is still uncertainty on actual roadmap of GST implementation, said sources.

Tiger Logistics, BlueDart, Transport Corporation of India and Gateway Distriparks witnessed gain in stock price. However, Gati, Sical Logistics, Arshiya, VRL Logistics and Concor saw decline in share prices.

Implementation of GST will be positive for port logistics players such as Concor, Gateway and Allcargo Logistics as it will lead to a realignment of warehousing and supply chain requirements of companies, said K Ravichandran, Senior Vice President, ICRA Ltd.

Profit-booking

It should lead to increased demand for inland container depots, container freight stations, multi modal logistics parks and container trains. While service tax burden will increase, the industry should be able to pass it on to trade without impacting their margins, he said.

India has been growing annually at 7-8 per cent and historically for India to maintain these levels railways can grow every year by around 9.5 per cent with impetus of GST, said Harsh Dhingra, Chief Country Representative, India, Bombardier Transportation.

Big role for Railways

Rail Transportation will then, create new jobs, save energy, improve environment, while moving people, raw material and goods more efficiently nationwide. With modernisation and restoration of balance in inter-modal transport, rail transportation can be a significant engine of inclusive growth and development for India and can potentially contribute up to 2 per cent from current 1 per cent GDP levels, he said.

Navin Gupta, CEO & Co-Founder, Autoload, a broking platform for trucks, said that transparency and efficiency will reduce costs and increase visibility. For example, today a truck runs daily an average of 250 km. With GST, it can run 400 km per day. This means, there will be increased the productivity of the truck resulting in more money for the truck owner and reducing freight for the manufacturer"

Boost towarehousing

With GST, warehousing in India will undergo a major change and this will disrupt existing plant to warehouse logistics set-up. Companies will consolidated their warehouses and set up larger facilities that will bring in supply chain efficiency.

New mega warehouses, new routes, trucks with higher tonnage and mechanised loading and unloading, he said.

Halving delays due to roadblocks, tolls and other stoppages could cut freight times by 20-30 per cent and logistics costs by an even higher 30-40, he said quoting World Bank estimates.

Technology that enables automation and speed will be critical to win business as clients move to Just-in-Time model of inventory, he said.

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