Jefferies has shared its analysis of the transport and logistics sector, highlighting key trends and expectations for the upcoming years. The sector faced challenges in 2H2024, but a recovery is anticipated on the horizon.
Key insights:
- Weak performance in 2024:
- The second half of 2024 was a relatively weak period for logistics stocks, with rail and domestic truck volumes underperforming expectations.
- Recovery expected from FY26:
- Jefferies expects volume recovery on a low base beginning from Q1FY26, driven by structural improvements in the sector.
- Rail container volumes:
- Rail container volumes are expected to stabilize as the impact of Indian Railways’ busy season surcharge gets fully absorbed.
- Dedicated Freight Corridor (DFC):
- The completion of the Dedicated Freight Corridor (DFC) to JNPT by December 2025 is projected to significantly enhance logistics efficiency and boost volumes.
- Top picks in the sector:
- Jefferies identifies JSW Infra, Concor, and TCI Express as its top picks, citing their strong positioning to capitalize on the sector’s recovery.
The transport and logistics sector is set to benefit from long-term infrastructure upgrades, creating opportunities for key players despite recent challenges.
Disclaimer
This article is for informational purposes only and does not constitute investment advice. Readers should perform their own research or consult a financial advisor before making investment decisions.
