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Third party logistics space to reach Rs 58K crore by FY20: Mahindra Logistics

Third party logistics space to reach Rs 58K crore by FY20: Mahindra Logistics

NEW DELHI: Mahindra Logistics (MLL) today said the domestic third party logistics space is expected grow at a 19-20 per cent CAGR to reach Rs 58,000 crore by 2019-20.

The CAGR of 19-20 per cent has been projected for the period between FY 2017-2020.

There is huge growth opportunity in third party logistics (3PL) is expected to grow at a CAGR (compounded annual growth rate) of 19-20 per cent and reach “Rs 570- 580 billion by FY20 from Rs 325-335 billion in FY17,” the company said in a presentation.

“The domestic logistic sector is projected to grow at CAGR 13 per cent to Rs 9.2 trillion by FY20 from Rs 6.4 trillion in FY17,” it added.

MLL, which is an integrated third-party logistics service provider, said the growth drivers will be GST implementation, technology proliferation, logistics sector getting infra status, among others.

Goods and services tax (GST) will bring down logistics cost and thereby make the Indian economy more competitive on the global arena. Post GST, the average speed of freight transportation has increased. GST will bring down the cost of taxation compliance in India.

With Infra status, there are two distinct benefits coming to the sector. “There is a specific mention of cold chain… the cold chain will get benefited because the overall limit for funding for cold chain is lesser than the overall limit for funding for the normal warehousing…,” it said.

Secondly, post-GST India will see a revolution on the whole warehousing side of the business. The small state local warehouses will now move to large regional warehouses and when you need large regional warehouses you need long-term funding at lower cost. And that is exactly what is going to happen with the infrastructure status, it added.

The introduction of e-way billing will bring about uniformity across India, for seamless inter-state movement of goods. As per the recent GST rules, goods worth more than Rs 50,000 that needs to be transported outside a state boundary will require an e-way bill by prior online registration of the consignment, the company said.

MLL has reported a 35 per cent rise in its profit after tax (PAT) at Rs 15.46 crore for the quarter ended December 31, 2017, as against Rs 11.45 crore in the year ago period.

Its total expenses during the said period were at Rs 812 crore as against Rs 699.62 crore during the same quarter a year ago.

PTI