Indian logistics to grow by 7-9% y-o-y in FY2023: ICRA

Rating agency ICRA Ratings Ltd has in its new report highlighted a stable outlook for the Indian road logistics sector. Accelerated pace of business activities and lower lockdown-linked restrictions from Q2 FY2022 aided faster recovery in revenues for FY2022. The growth momentum is likely to continue with a growth of 7 to 9 per cent in FY2023 over FY2022. Demand may remain sensitive to any further waves or new virus variants, given the sector’s linkage to economic activity on an aggregate basis, stated the report. The ability to command pricing premiums on account of the rise in fuel prices, driven by the fallout of the Russia-Ukraine conflict, while maintaining the cost rationalisation measures shall support the industry operating profitability in FY2023.  “The margin movement shall, however, continue to depend on consumer demand sentiments, trend in diesel prices and the competitive intensity within the industry. Debt coverage metrics are expected to weaken in FY2023 compared to FY2022 levels owing to the expected debt-funded capital expenditure for vehicle replacement required prior to introduction of the scrappage policy along with the rising interest rate regime,”