Opportunities in Logistics Management - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Opportunities in Logistics Management

Apr 17, 2000

According to a Nasscom study the e-business market in India is around Rs 3 bn currently and is poised to become Rs 100 bn by year 2002. Apart from the vendor who sells his goods through the net, the other players to benefit from this growth would be:

  • Banks: which will transfer funds for the purchase of goods through the net (for instance HDFC bank and ICICI bank)
  • Express industry or logistics solution provider: which will implement the entire process from picking the goods from the vendor, delivering it, collecting the payment and remitting it to portal company or the manufacturer which uses internet to sell goods.

The express industry in India is still in its nascent stage and currently has a turnover of Rs 14 bn. The industry is poised to grow by over 20% pa and could reach Rs 35 bn in another 5 years. This growth could be higher if e-business in India does as well as it is projected to be. Apart from opportunities from e- business, the industry could also do well from the increasing globalization of trade.

For manufacturers who plan to use the Internet to do business and portals that offer shopping facilities on the net, it makes sense to tie up with a logistics solution provider as these companies have the expertise, distribution strength and technology to move goods on a large scale. Manufacturers and portal companies would not have to spend money to set up distribution channels or warehouses to store goods. Using such solution providers for transport of goods also enables the manufacture to reduce inventory and the cost of holding inventory. These logistics solution providers can be used to supply end products to consumers and also procure raw materials from suppliers. Thus, the entire chain of procuring raw materials to the actual delivery of end products can be outsourced. In the long run this can significantly reduce cost of producing and delivering. It would also result in optimum use of transport and warehouse facilities.

The two quoted players that offer exposure to this growth in India are Blue Dart and Elbee services. Blue Dart also has a tie up with FedEx, which is one of the world leaders in this field.

Though the sector appears to be poised for good growth, the two stocks in this sector have run much ahead of their fundamentals and appear expensive. From its 52 week high Elbee has declined by 50% while Blue Dart has declined by 25%. Despite the decline Blue Dart is quoting at 50 times its historical earnings and Elbee actually incurred loss in FY99. The current global decline in technology and e-commerce companies could exert some downward pressure on these stocks.

Equitymaster requests your view! Post a comment on "Opportunities in Logistics Management". Click here!

  

More Views on News

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.

CAREER POINT 2020-21 Annual Report Analysis (Annual Result Update)

Nov 22, 2021 | Updated on Nov 22, 2021

Here's an analysis of the annual report of CAREER POINT for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of CAREER POINT. Also includes updates on the valuation of CAREER POINT.

ANTONY WASTE HANDLING 2020-21 Annual Report Analysis (Annual Result Update)

Nov 22, 2021 | Updated on Nov 22, 2021

Here's an analysis of the annual report of ANTONY WASTE HANDLING for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of ANTONY WASTE HANDLING. Also includes updates on the valuation of ANTONY WASTE HANDLING.

Top Performing Sectors in 2021 (Views On News)

Aug 10, 2021

A look at this year's best performing sectors and what has helped them rally.

Nazara Technologies IPO: Should You Apply? (IPO)

Mar 17, 2021

Should you bet on this gaming company backed by ace investor Rakesh Jhunjhunwala?

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS