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Activity softens in October 22…

…while freight rates remain stable

* Logistics activity moderated in Oct’22 with daily average e-way bill generations declining 11% MoM. The fleet utilization levels stood at 80-85% during the month. Daily average FASTag toll collections increased ~2% MoM in Oct’22.

* EXIM Container volumes handled by Indian Railways increased ~4% YoY with market share of Indian railways in EXIM containers increasing to 36% as of Oct’22 (32% in Oct’21). Overall, the container volumes handled at ports decreased 5% YoY.

* Volumes handled at major ports rose ~4% YoY to 62.2mmt. Coal/Fertilizer reported 35%/6% YoY growth, respectively. All other commodities posted YoY volume decline.

* Diesel consumption rose 12% MoM during October to 7m tonnes.

Daily average e-way bill generations decline 11% MoM; daily average toll collections up ~2% MoM in Oct’22

Daily average e-way bill generations decreased 11% MoM and clocked ~2.5m/day in Oct’22. Muted logistics activity due to holiday season and stocking up of inventory in Aug’22 and Sep’22 led to 11% sequential decline in daily e-way bill generations. Daily e-way bill generations rose ~5% YoY, with intra-state bill generations increasing 12% YoY and inter-state generations decreasing 6% YoY in Oct’22. The daily average FASTag toll collection increased ~2% MoM to INR1.44b/day in Oct’22.

Rail EXIM container volumes increases 4% YoY in Oct’22; gains market share in container traffic

While overall container volumes handled at ports decreased ~5% YoY, EXIM container volumes handled by Indian Railways increased 4% YoY in Oct’22. The Railways’ market share in EXIM containers increased to 36% in Oct’22 (v/s 32% in Oct’21). Domestic container volumes handled by Railways rose ~1% YoY in Oct’22.

Traffic handled at major ports up ~4% YoY in Oct’22

Coal/Fertilizer posted growth of 35%/6% YoY, respectively, in Oct’22, whereas the container segment reported a decline of 5% YoY in the month of Oct’22. Three major ports, namely Cochin/Mormugao/Chennai, reported 30%/18%/10% YoY decline in traffic in Oct’22, respectively. Kolkata/ New Mangalore/Deendayal clocked 20%/ 15%/10% YoY, growth respectively. Container cargo decreased ~5% YoY in Oct’22, on a TEU basis.

Freight rates remain flat MoM in Oct’22

As fuel prices remain elevated, freight rates remained fairly stable in Oct’22 on MoM basis. The freight rates are expected to remain firm as fuel prices and several other costs continue to remain elevated. The margins for most players are likely to remain rangebound with minor improvement. The rising costs (ex-diesel) and ability to take price hikes would be key monitorable. VRL Logistics continues to remain our top pick in the Indian Logistics space.

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