India Ratings gives logistics stable outlook in FY22

23 March, 2021 12:00 AM printer

NEW DELHI: India’s logistics sector looks stable in financial year 2021-22 as a recovering economy builds demand, said India Ratings and Research (Ind-Ra) on Monday, citing the commissioning of a dedicated freight corridor.

Adani Ports and Special Economic Zone was among ports that reported resilient volumes in FY21. Ind-Ra estimates an 8 per cent year-on-year improvement in volumes for Indian ports in FY22, compared to an estimated 4 per cent year-on-year decline in FY21, report agencies.

The 8 per cent year-on-year rise will be led by private ports, which in five years have displayed a median multiplier (vs real GDP growth rate) of 1.4x, thus outperforming growth from major ports.

India’s ports volumes closely follow the country’s GDP growth, with container growth coming in 2x of overall cargo volumes.

Domestic air travel, which has continued to recover in 2HFY21, is expected to strengthen in FY22, though the risk to this view arises from a second wave of Covid-19.

Both corporate and domestic travel demand are already showing signs of revival, which has helped support load factors and yields, while cargo volumes are expected to rise amid stronger macro-economic fundamentals and e-commerce push.