ICRA predicts healthy growth for Indian Road logistics sector in FY2022

According to ICRA, the Indian Road logistic sector is likely to witness healthy growth in FY2022 on the back of demand recovery and improved business activities. This optimistic lookout is supported by the favorable scenario that has presented itself in recent times, wherein most players reported strong growth in freight volumes on a sequential basis in the second quarter of FY’22, and the momentum is likely to continue in the third quarter of the ongoing fiscal. A stable outlook was maintained by the domestic rating agency for the Indian road logistic sector.
After a subdued Q1 FY’22 on account of the second wave of COVID-19, demand recovery and improved business activities from Q2 FY’22 onwards, led to better asset utilization, which, along with cost-rationalization measures, supported the operating margins in the current fiscal, Icra said in a statement.
Demand from segments like e-commerce, FMCG, retail, chemicals, pharmaceuticals, and industrial goods coupled with an industry paradigm shift towards organized logistics players, post the GST and E-way bill implementation will keep the growth steady over the medium-term.