While April saw a disruption in the operations of all logistics players due to the nationwide lockdown, May saw an improvement in traffic as the economy began to open-up phase-wise. June, on the other hand, saw increased momentum towards normalisation of operations. Although during the lockdown, essential services were allowed by GoI, it represented only a fraction of revenues of logistics players. India's major port container volumes for April-June 2020 have de-grown 32% while rail Exim container volumes have de-grown ~16% YoY for the same period, indicating a gain in market share for rail from road players. Overall rail cargo volumes have de-grown by 21% for April-June 2020.
Financial performance expected to remain under pressure
Revenues of our logistics coverage universe are expected to de-grow 46% YoY to Rs. 1839 crore owing to lower scale of operations and under-utilisation of fleet. On the profitability front, we expect all companies in our coverage universe to report losses (except Concor) at the EBITDA level owing to negative operating leverage. Subsequently, profitability at the PAT level is expected to remain meagre.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Logistics_Q1FY21.pdf