NEW DELHI : Logistics is very essential for the Indian economy as it is the differentiating sector that can largely affect the exports with the underlying assumption of a robust logistics sector. An effective logistics industry can help to determine the degree of ability that business enterprises can keep up with demand.
The Indian government had launched the PM GatiShakti National Master Plan for multimodal connectivity infrastructure to various economic zones in the country. This fresh transformative plan approach by the government has been to improve logistic efficiency, reduce logistic costs, integrate infrastructure development plus ensure seamless movement of people and goods. While logistic efficiency is envisaged as a function of integrated infrastructure with services and human resources, the government has proposed the development of the entire logistic ecosystem in the National Logistic Policy.
The policy vision is to develop a trusted logistic ecosystem in the country for accelerated inclusive growth. The Govt target is to be among the top 25 countries in the Logistic Performance index and reduce the cost of logistic in the country and thus create a data driven mechanism for an efficient logistic ecosystem.
The national logistic policy is proposed to be implemented through a comprehensive logistic action plan divided into eight key action areas. These areas are the integrated digital logistic system, standardisation of physical assets and benchmarking, logistic human resource, development and capacity building, state and city level development of export import, improving regulatory service framework, plans for efficient development of logistic parks and warehouses.
One company which has been in the business of logistics for more than 30 years is CONCOR or formerly known as Container Corporation of India Ltd. The company was incorporated in 1988 as a Public Sector Enterprise under the Ministry of Railways with the prime objective of developing modern multimodal transport logistics and infrastructure to support the country’s growing international trade.
CONCOR was incorporated by taking over the Inland Container Depots from the Indian Railways located at Delhi, Ludhiana, Bangalore, Coimbatore, Guwahati, Guntur and Anaparti. Containerization of exports and imports does not begin and end at the ports. CONCOR provides transport linkages between ports and the hinterland. Regular container trains are run to and from ports to CONCOR’s terminals in the hinterland. Some of the terminals are also served by road. With liberalisation and opening up of the India economy, there is an increasing trend in the containerisation of exports and imports, with CONCOR even providing transport linkages between ports and the hinterland. The major advantage of containerized movement to the hinterland is the decongestion of ports which leads to higher turnover and growth. To improve the quality of service CONCOR is running special high speed trains to and from the gateway ports for facilitating the movement of heavy cargo thus contributing significantly to the end user.
CONCOR is the largest container freight services provider in the country with a revenue base of over Rs 8,000 crores and strengthen its foothold in the domestic and international markets, the company has outlined a capital expenditure plan of over Rs 8,000 crores to be spend over the next few years. The company posted good quarterly financial results with consolidated net profit jumping 21% year-on-year to Rs 481.76 crores in the second quarter of the fiscal year FY24.
In the year-ago period, the company had reported a net profit of Rs 303 crores and therefore sequentially the profit after tax has increased in the September 2023 quarter while it stood at Rs 252.55 crore in Q1 FY24. Concor’s Q2 revenues rose over 10 % year-on-year to Rs 2,194.87 crores due to a 26% year-on-year growth in domestic volumes in the September quarter.
The quarterly numbers were also higher sequentially as the revenue in the June 2023 quarter was Rs 1,922.84 crore. The CONCOR stock price at around Rs 715 is a recommendation by fund managers and analysts alike betting on the Indian Logistic sector. It can appreciate tremendously over the next 18 months time frame on the back of disinvestment and good performance.