Logistics counters rally as GST enters last lap; Blue Dart results

MUMBAI: Shares of logistics companies surged up to 10 per cent in intraday trade as the Goods and Services Tax Bill enters its last lap. The Union Cabinet has cleared the changes to the Constitutional Amendment Bill incorporating the changes proposed by the Select Committee.

The GST Bill will now go to Parliament for a final okay.

JPMorgan said is hopeful that the GST Constitutional Amendment Bill will go through. The global brokerage firm expects GST rate to be in the 15-20 per cent range.

Logistics companies are likely to benefit from the GST Bill as it would lead to lower tax and hassle-free transport of goods from one state to another. The Bill will also have a positive impact of warehouses and inventories.

Sunil Kant Munjal, Joint Managing Director, Hero MotoCorp, told ET Now that GST will make it easy to do business. The government must get GST started in whatever form and added that keeping products out of GST will dilute it.

Better-than-expected quarterly result of Blue Dart is also resulting in a rub-off effect on other logistics companies.

Blue Dart Express reported 33.46 per cent YoY jump in standalone net profit at Rs 45.59 crore for the April-June quarter against a net profit of Rs 34.16 crore in the same quarter of the previous fiscal.

Net sales of the company increased to Rs 619.60 crore during the first quarter of 2015-16, from Rs 526.94 crore in the same quarter of 2014-15, added the report.

Blue Dart Express surged 7.93 per cent intraday. It closed at Rs 6,874.70; up 5.27%, on the BSE. AllCargo Logistics gained 5.6 per cent intraday. It ended the session at Rs 297.10; up 2.96%. Patel Integrated Logistics rallied 9.5 per cent intraday. It closed at Rs 103.45; up 3.55%. Snowman Logistics gained 5.12 intraday. It closed at Rs 110.95; up 2.40%.