India's logistic sector perhaps is the most hot sector nowadays. The logistic companies are traded at P/E of almost 70x. The sector is buzzing for multiple reasons and most discussed is the GST. The sector is poised for accelerated growth for several broad reasons.
Growth of the logistic sector is directly co-related with the economic activities. The past trend suggests that logistic industry grows at 1.5 to 2x of the GDP growth.
Expected E-commerce market growth over the next few years is 25-30% CAGR. The main factors are internet penetration and urbanization.
India logistic spend is 13% of the GDP as compared to 7-8% of the developed countries.
And finally the implementation of the GST will be the game changer for the several organized logistic players.
Among many players we are discussing GATI which is one of the top five logistic service providers in India. The company has sound fundamentals and is currently trading at P/E of 43.3. The emphasis however in our analysis of the Company is more Technical than Fundamental. Along with other players GATI is also one of the buzzing stocks among the market participants. It has been witnessing quite higher volumes during recent past. It took a nosedive from 335 levels and posted a low around 95. It started steady recovery backed by huge volumes and now knocking its resistance level of 184. It formed a doji candle during previous session and started today's session with gap up opening which remained unfilled through out the session suggesting strong bull power. Strong close above 184 may add fuel and the counter may touch 215-225 levels in no time. Reasonable SL for this volatile counter is below 157 which is its recent swing low.
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