4 Stocks To Boost The Booming Indian Supply Chain Industry

5 August 2022
5 mins read
4 Stocks To Boost The Booming Indian Supply Chain Industry

The Covid-19 led lockdown was one of the biggest threats to global supply chains. It caused the closure of many factories and disrupted the logistics chain. The broken chains have been identified as the biggest pain points for India and other countries. According to a study conducted by Accenture, almost all Fortune 1000 companies experienced supply chain disruptions due to Covid-19.

The supply chain crisis has largely affected India’s manufacturing industry. However, it has recovered well due to the country’s growing economy. India has robust macroeconomic fundamentals, a favourable demographic dividend, and improving ease of doing business. Despite a slow growth rate, the country is expected to maintain its robust growth.

In this fast-evolving environment, Indian companies are adopting new strategies to improve their supply chain management. Indian investors should start planning for their future to take advantage of the country’s potential to become a global manufacturing centre.

Let’s take a look at the Using the supply chain stocks that are creating a buzz in the market:

Blue Dart Express

  • Blue Dart Express is a logistics company that provides various services such as courier delivery, freight forwarding, and air cargo with a robust network that spans more than 35,000 locations and serves more than 220 countries and regions.
  • They are awarded for their innovative express delivery. They serve various industries such as banks, insurance, e-commerce, and healthcare.
  • Since the statewide lockdown started in 2020, Blue Dart has been delivering essential supplies to help keep the supply chain operating. For the September 2021 quarter, the company posted a profit after tax of Rs. 895 million, which is higher than Rs. 414 million from a year ago.
  • During the third quarter, the company’s consortium was launched, which aims to bring healthcare services to the nation’s interior.

TCI Express

  • Gurugram based TCI Express is a leading express delivery company that operates across India with a customer base in various sectors such as auto, pharma, textile, engineering, and fast-moving consumer goods.
  • During the pandemic, the company became a key player in the distribution of Covid-19 vaccines. They have reported a strong set of numbers for the second quarter of 2021, with its asset-light model helping its margins.
  • For the quarter ended September 2021, the company posted a standalone profit of Rs. 340 million. The new services and railway project contributed around 15% of the company’s total business in the September quarter. The topline growth of the company is expected to increase by 20% annually. In the next five years, the company sees the new services contributing around 25% to the overall business.
  • Since its inception, TCI Express has been focused on developing and implementing cutting-edge technologies to provide our customers with better and faster solutions. For its first drone trials, the company tested the capabilities of unmanned aircraft.
  • This multi-bagger stock has gained about 300% since the beginning of the year.

Mahindra Logistics

  • Mahindra Logistics is a logistics service provider that offers various solutions in the areas of supply chain management and mobility.
  • Due to the lock-down imposed in various states, the company’s operations were affected. But it is on its way to a stronger recovery path following a strong performance in the first half of this fiscal year.
  • In November, they signed a long-term lease for 1.4 million square feet of warehouse space with LOGOS Logistics. LOGOS is a leading logistics company with operations in Australia, China, Indonesia, Malaysia, the Philippines, and New Zealand.
  • The company has also acquired Meru, a leading mobility company. With this acquisition, the mobility arm will now be able to offer a full range of solutions to its customers.
  • Mahindra Logistics has returned 75% of its shareholders’ money in the last 12 months.

VRL Logistics

  • VRL Logistics is a company that deals in the transportation of goods. Other businesses include the operation of air travel and the transportation of passengers.
  • VRL is focused on the B2B segment. They operate over 5,000 vehicles and are planning to add around 100 vehicles per quarter in the second half of the current financial year. They also plan to add 100 branches during the remaining months of the year.
  • For the third quarter, the company’s profit rose by 4.8% as compared to the same period a year ago. Net sales also grew by 45%.
  • Despite the difficulties faced, the company said that its supply chains were able to handle the situation. The robust growth in VRL earnings might propel the industry’s earnings in the next couple of years.
  • VRL Logistics has delivered a 125% return in the last year.

The Bottom Line

Due to the continuous shortages and supply chain problems affecting various global companies these stocks have become popular among investors. Though if the supply chain crisis continues for a long time, it could affect various sectors and cause inflation to rise. While the global economy is still in turmoil, investors should still consider all the factors before investing.



Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on Investment or recommend buying and selling any stock.