Logistics Sector: Double-Digit Growth for Rail Operators Expected
WAREHOUSING & LOGISTICS

Logistics Sector: Double-Digit Growth for Rail Operators Expected

India Ratings (Ind-Ra) has projected robust growth for the logistics sector, anticipating double-digit revenue increases for rail operators and 3-5% year-on-year growth in organic rentals for the warehousing segment during this fiscal. The demand for Grade-A warehousing space is expected to remain steady. Port volumes, buoyed by coastal goods movement and easing geopolitical tensions such as the Red Sea crisis, are also poised for growth. The ratings agency expects container freight station (CFS) profitability to remain stable due to direct port delivery increases and heightened competition at major ports. While revenue growth for freight forwarders may moderate due to global freight rate adjustments, initiatives like the National Logistics Policy and PM Gati Shakti National Master Plan are set to boost multimodal connectivity and operational efficiencies across the industry. Pratik Mundhada, Associate Director at Ind-Ra, highlighted that sustained investments in ports, rail, road, and air transport are improving cost efficiency and operational flexibility, enhancing profitability for integrated logistics companies. Rail operators, benefiting from significant private investments in rakes and dry terminals, are expected to see continued revenue growth in FY26. The agency noted India's improving logistics infrastructure, citing the country's rise in the Logistics Performance Index ranking from 44 in 2018 to 38 in 2023, with aspirations to break into the top 25 by 2030 under Maritime Vision 2030. Public-private partnerships and increased private capital expenditure in network expansion for trains, dry terminals, and warehousing are seen as key growth drivers. The full commissioning of the Western Dedicated Freight Corridor is expected to enhance rake and terminal utilisation, bolstering container train operators' profitability. Similarly, the Eastern Dedicated Freight Corridor is likely to improve supply chain efficiency for thermal plants through faster and scheduled train operations. Ind-Ra maintained a "Stable Outlook" for logistics and supply chain companies, citing steady operational performance and comfortable leverage profiles. The agency emphasised that logistics infrastructure firms must optimise asset utilisation and secure long-term debt at competitive rates to maintain favourable credit profiles. A reasonable budgetary allocation for logistics infrastructure in the upcoming fiscal budget will be critical for sustaining sector growth, according to Ind-Ra. (ET)

India Ratings (Ind-Ra) has projected robust growth for the logistics sector, anticipating double-digit revenue increases for rail operators and 3-5% year-on-year growth in organic rentals for the warehousing segment during this fiscal. The demand for Grade-A warehousing space is expected to remain steady. Port volumes, buoyed by coastal goods movement and easing geopolitical tensions such as the Red Sea crisis, are also poised for growth. The ratings agency expects container freight station (CFS) profitability to remain stable due to direct port delivery increases and heightened competition at major ports. While revenue growth for freight forwarders may moderate due to global freight rate adjustments, initiatives like the National Logistics Policy and PM Gati Shakti National Master Plan are set to boost multimodal connectivity and operational efficiencies across the industry. Pratik Mundhada, Associate Director at Ind-Ra, highlighted that sustained investments in ports, rail, road, and air transport are improving cost efficiency and operational flexibility, enhancing profitability for integrated logistics companies. Rail operators, benefiting from significant private investments in rakes and dry terminals, are expected to see continued revenue growth in FY26. The agency noted India's improving logistics infrastructure, citing the country's rise in the Logistics Performance Index ranking from 44 in 2018 to 38 in 2023, with aspirations to break into the top 25 by 2030 under Maritime Vision 2030. Public-private partnerships and increased private capital expenditure in network expansion for trains, dry terminals, and warehousing are seen as key growth drivers. The full commissioning of the Western Dedicated Freight Corridor is expected to enhance rake and terminal utilisation, bolstering container train operators' profitability. Similarly, the Eastern Dedicated Freight Corridor is likely to improve supply chain efficiency for thermal plants through faster and scheduled train operations. Ind-Ra maintained a Stable Outlook for logistics and supply chain companies, citing steady operational performance and comfortable leverage profiles. The agency emphasised that logistics infrastructure firms must optimise asset utilisation and secure long-term debt at competitive rates to maintain favourable credit profiles. A reasonable budgetary allocation for logistics infrastructure in the upcoming fiscal budget will be critical for sustaining sector growth, according to Ind-Ra. (ET)

Next Story
Infrastructure Urban

Paras Defence Subsidiary Wins Rs 460 Mn Anti-Drone Order

Paras Defence and Space Technologies (PDST) saw its shares rise 1.5 per cent to Rs 701 after its subsidiary, Paras Anti-Drone Technologies, secured a defence contract from the Ministry of Defence, Government of India, valued at approximately Rs 460.19 million.The order covers the supply of Anti-Drone Systems, including Drone Jammers, marking a significant milestone for Paras Anti-Drone in India’s growing counter-UAV segment. The contract is scheduled for execution by March 2026. According to official filings, the award is from a domestic entity, not a related party transaction, and no promot..

Next Story
Building Material

Jindal Stainless Launches First Stainless Steel Fabrication Unit in Mumbai

Jindal Stainless, India’s largest stainless steel manufacturer, through its subsidiary Jindal Stainless Steelway (JSSL), has inaugurated its first stainless steel fabrication unit at Washivali, Patalganga, Mumbai. The 4 lakh sq ft facility is designed to serve the bridge sector, fabricating critical components such as girders, arches, nuts, bolts, and handles. The unit was inaugurated by CEO & CFO Tarun Khulbe in the presence of senior leadership.Developed with an initial investment of Rs 1.25 billion, the facility strengthens Jindal Stainless’ position as a provider of end-to-end fabr..

Next Story
Infrastructure Energy

Hero Future Energies Secures Rs 19.08 Bn for 120 MW Hybrid Project

Hero Future Energies (HFE), through its SPV Clean Renewable Energy Hybrid Three, has secured Rs 19,080 million in funding from State Bank of India (lead) and Canara Bank for the development of its 120 MW renewable energy (RE) hybrid project in Kurnool, Andhra Pradesh.The project, contracted with SJVN, integrates wind, solar, and storage technologies to provide reliable peak power. The funding, structured with a 21-year repayment tenure, will support timely project execution and the commencement of commercial operations.This financial closure underscores the banking community’s confidence in ..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?