Logistics stocks shed up to 2% ahead of tabling of GST bill

NEW DELHI: Shares of logistics firms slipped up to 2 per cent in Wednesday's trade ahead of the tabling of the much-debated goods & services tax (GST) bill, which will be taken up for consideration and approval by the Rajya Sabha later on Wednesday.

The market has already been rallying on expectation of passage of the GST bill, which is a very important reform being undertaken by the government. The GST will make logistics companies go for more efficient logistics solutions.

This will improve their operating cost due to expansion in turnaround ratios as deadlocks in movement of goods get removed with lower travel time, experts said.

"GST, perhaps, is the beginning of structural positive news flow to the logistics sector and there is a long way to go. There is a lot of improvements that need to be made with the help of GST of course, but a lot of the gains are in fact ahead," Pramod Gubbi, VP-Institutional Equities, Ambit Capital, said in an interview with ETNow.

"If you are looking at it from a short-term perspective, perhaps much of the gains are made already. But if you really want to invest in the logistics sector, you need to look at the long term and that is where we are perhaps scratching the surface," he said.

At 10.20 am, shares of Allcargo Logistics were trading 1.4 per cent down at Rs 202. Snowman Logistics slipped 1.7 per cent to Rs 89.30. Gati was down 1.3 per cent while Arshiya was trading 1.1 per cent higher. Sical, VRL Logistics and Blue Dart were trading flat.