Domestic road logistics sector rebounds strongly, to grow by 6-9% in FY2022n FY2022

The logistics sector reported a strong recovery over H2 FY2021, a sharp contrast to the steep decline in revenues and earnings reported over Q1 FY2021. The logistic sector reported a growth of ~9% sequentially in Q4 FY2021 backed by sustained recoveries across the sectors. Some of the industry players also reported historically highest quarterly revenues during Q4 FY2021. It had witnessed a sharp decline in revenues and earnings over Q1 FY2021 due to demand-supply disruptions amidst the imposition of the nationwide lockdown. Piecemeal relaxations in lockdown related restrictions and adjustment to the new normal, revived economic activity and improved freight availability helped the players.
According to Mr. Srikumar Krishnamurthy, Vice President & Co-head Head, ICRA Ratings, “The sector continued a strong rebound as facilitated by recovery across industries and improving freight availability. With the demand recovery sustaining post the festive season as well over Q4 FY2021, the logistics sector pared back some of the losses of the first half and closed the fiscal with a revenue growth of ~4% for FY2021 against 4% contraction expected earlier by ICRA. Despite returning to pre-Covid levels, freight rates continued to remain firm given the rise in fuel costs. Sustained growth in E-way bill and freight volumes remained a testimony to the firming up of the sector’s performance over Q4 FY2021.”