In Cold Storage?

Logistics stocks zoomed due to news about COVID-19 vaccines. But adverse political and financial factors may reverse the trend

- Himali Patel

Akshay Sakaria, a chartered accountant, has high hopes of buying listed stocks in the logistics sector, as he believes they will gain traction with COVID-19 vaccination rollout. Recently, these shares witnessed massive gains. An analysis of 11 key stocks shows their market prices zoomed from 45 percent (Container Corporation Of India) to 125 percent (Snowman Logistics) between their lowest points this year in March-April and December 18.

Medical experts indicate that a significant percentage of Indians—estimates indicate 300 million or more than a fifth of the population—will need to be vaccinated. Each person may have to get it done several times in a year based on the drug’s efficacy. Logistics firms in transportation, cold storage, warehousing, and related activities will benefit. Many have started to gear up for the massive operation in anticipation of higher revenues and profits.

A few of them are focussed on storing the vaccines, which may require low temperatures and minimal fluctuations for limited periods. Vaccines are highly temperature sensitive and can lose potency. For example, Snowman Logistics is investing in two new temperature controlled warehousing facilities. It runs 31 such centres across 15 locations, with a combined capacity of 108,375 pellets.

Container Corporation Of India

Share Price ₹279 24-Mar-20

` 405.25 18-Dec-20

% Change 45

Motilal Oswal expects a 30 percent earnings growth by 2025, led by healthy volume growth in the near future. May be able to leverage benefits