The shares of logistic companies surged up to 14 percent on Friday as positive developments on the COVID-19 vaccine and opportunities ahead for distribution services fuelled optimism about future growth prospects.
Snowman Logistics, Allcargo Logistics, Mahindra Logistics, Navkar Corporation among others rallied between 7 and 14 percent on the BSE as compared to a 0.5 percent gain in the benchmark Sensex.
Investors turned buoyant on the logistic companies following the media reports suggesting a possible policy for the logistics sector from the government soon.
According to the CNBC-Awaaz report, the central government has readied a master plan for MultiModal Connectivity and will soon come out with a National Logistic Policy. The government proposes lower taxes for the sector, easy access for funds, fiscal and financial incentives such as co-funding options for basic infrastructure, transshipment warehousing, handling facilities.
The government aims to inoculate 300 million most vulnerable people by August 2021.
Meanwhile, Snowman Logistics has signed a memorandum of understanding (MoU) for storage, transportation, and distribution of COVID-19 vaccines with SpiceJet.
“Snowman will handle the ground services which include activities such as transportation to/from manufacturers, warehouses, airports and consumption points, packing, storage and warehousing, in the required temperature zones,” the company said in an exchange filing.
SpiceJet will provide the air connectivity for temperature-controlled distribution of the vaccines across the country and internationally, Snowman statement added.
Speaking to CNBC-TV18, Sunil Nair, CEO of Snowman Logistics said that the company has a good spread of cold storage facilities and all its facilities can go down up to minus 30 degree centigrade.
“We have reserved capacity equivalent to 100 million dosages storage. This is available immediately and in a month’s time we can create another 100 million capacity,” he said.
According to him, it’s difficult to estimate the revenue potential from COVID vaccine logistics. “If I go by the existing pharma segment, we do close to Rs 25 crore worth of business in pharma and with the capacity that we have reserved and if we end up using the whole capacity then we are expecting it to go up to Rs 60-70 crore, the pharma vertical,” he said.