Logistics Organizations May Take Benefit From GST Implementation

Goods and service tax might prove to be a beneficial implementation for logistics firms. This point is creating buzz these days in the share market. But the sector knows that the sudden benefit will not shower upon them and the gradual hike will only be seen after one year of GST implementation.

Time is taken for delivery, Octroi and the overall cost of carrying the goods will obviously see a decline after the introduction of GST but on the other front, there are also many unorganized players which also contribute to the fast pace of this change. Prateek Kumar, analyst at Antique Stock Broking, mentioned that the companies can manage a high earning up to 40 percent and also added that, “Even if GST is rolled out in July, the impact on earnings would be back ended. Further, earnings would likely take a hit owing to some impact of demonetization.”

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Whereas Mukesh Saraf, an analyst at Spark Capital said that, “Customers of logistics firms would rejig their supply chain to make it more logistically efficient on the back of GST. When this happens, organized road logistics companies will benefit.” And another professional in the field, Yogesh Nagaonkar, fund manager PMS, Bonanza Portfolio mentioned that “There doesn’t seem to be a clear vision for this sector and one wouldn’t want to bet on it only based on a one-off event like GST.”