Page 17 - CV- Feb-March 2023 copy

During the financial year 2022-23, the domestic road

logistics sector's growth is anticipated to continue due to

the rapid expansion of business activities along with the
support of robust growth in 2021-22 (FY22), said rating

agency Icra recently.

A growth rate of 7-9 per cent during FY23 over FY22 was through better integration of different modes of transport and in
estimated by rating agency Icra. The organised players' ability to turn to improve demand identification, thereby enabling better
command a price premium in the current fuel price inflation availability of trucks.
scenario while retaining cost reduction initiatives will support
operating profitability in FY23, the rating agency said in a report. The rating agency said the implementation however remains the
key, given the coordination of multiple agencies, stakeholders,
The agency said, however, the margin movement would continue and physical entities involved. "The logistics sector's quarterly
to depend on customer demand attitudes, diesel price revenues increased by 5.8 per cent in Q1 FY2023 compared to
fluctuations, and the industry's competitive intensity. As a result Q4 FY2022, thanks to solid and sustained demand from the
of the anticipated debt-financed capital expenditures for vehicle manufacturing sector. The revenue remains close to multi-year
replacement required prior to the commencement of the high quarterly revenues, supported by a sustained recovery in
scrappage policy and the rising interest rate environment, it is industrial activities," Suprio Banerjee, vice-president & sector
anticipated that debt coverage metrics will marginally weaken in head for corporate ratings, ICRA, said.This is also reflected by
FY23 relative to FY22 levels, it said.The introduction of the the stability in monthly e-way bill volumes as well as FASTag
National Logistics Policy (NLP) aimed at promoting the seamless volumes during Q1 FY23, which also continued in the current
movement of goods, overcoming transport-related challenges, quarter for July-August 2022. Following a 16.5 per cent growth in
and encouraging digitisation along with the significant reduction FY22 (over pre-Covid levels) and a 5.8 per cent growth in Q1
in time and cost, is targeted to reduce the logistics costs from 13- FY2023 on the back of a revival in economic activities and firm
14 per cent of GDP to single digits. This augurs well for the road freight rates, ICRA expects the logistics sector to grow by 7-9 per
logistics sector, as it shall reduce the overdependence on road cent YoY, Banerjee said.

February-March 2023 / CONSTRUCTION VISION / 15