Logistic shares rally; Blue Dart Express, Gati surge over 10%

Last week, Blue Dart Express announced a 9.6 per cent hike in its average shipment price from January next year to offset higher costs

Shares of transportation and ,logistics companies rallied up 12 per cent on the BSE on Tuesday on expectations of improved earnings as global freight rates are taking off.

Among individual stocks, Blue Dart Express and Gati rallied 11 per cent and 12 per cent, respectively. Snowman Logistics, VRL Logistics, Mahindra Logistics and TCI Express were up in the range of 3 per cent to 7 per cent on the BSE. In comparison, the S&P BSE Sensex was up 0.5 per cent at 38,168 points at 02:34 pm.

Shares of Blue Dart Express hit a 52-week high of Rs 3,280 today. The stock advanced 26 per cent in the past six trading days, after the company announced a 9.6 per cent hike in its average shipment price from January next year to offset higher costs.

As per the General Price Increase (GPI), effective January 1, 2021, the average shipment price increase will be 9.6 per cent as compared to 2020, depending on the shipping profile, Blue Dart said in a press release on September 22.

The upward revision in prices is part of the annual exercise undertaken to adjust inflation, fluctuation in currency and fuel price, among others. The price increase, however, will not be applicable to customers signing up with the company between October 1 and December 31, 2020, it said.

The economic activity has started showing some early signs of recovery with resumption of factories, people returning to offices and improved business activity is expected to bode well for logistics sector and economy, according to analysts.

Analysts at YES Securities expect Blue Dart Express’s utilization to reach Pre‐COVID levels by start of second half of the current fiscal or H2FY21. The brokerage firm continue to believe that Air express would grow at much lower pace than surface cargo.
However, Blue Dart’s market share in Surface express is likely to increase gradually with higher competition in the industry. This would continue to impact the overall growth in near to medium term, the brokerage firm said.