With supply chains hit by coronavirus, should you buy or sell logistics shares? Three stocks to watch

Although supply chain movement of goods remains crucially important, at this juncture the question remains how should investors look to buy these stocks?

Broken supply chains have figured as the foremost pain-points of the tough yet essential 21-day lockdown imposed across India, and other similar moves made by governments across the world. With only essential services being allowed, logistics have taken a backseat. While containers are stranded on ports like China due to unavailability of work-force, flights and trucks too are not seeing major movement apart from essential services. Although supply chain movement of goods remains crucially important, at this juncture the question remains how should investors look to buy these stocks? Here are three picks by ICICI Securities that have a potential to help you pocket gains as much as 53%.

Container Corporation of India Ltd.

Target price: 360

Although the target price has been brought down from Rs 660 per share, down to Rs 360 there is still an upside of 18% on the current price. With the global export, import industry to take a fall due to coronavirus, near-term headwinds remain strong for the public-sector company. “However, a n improved sentiment due to DFC connectivity (Gujarat ports expected to be connected by H2FY21E) and a new private strategic promoter is not captured by the current market price.”said ICICI Securities. Container Corporation is currently trading at 306 per share.

Mahindra Logistics

Target price: 216

The slowdown in the auto sector has hit Mahindra Logistics as the parent company Mahindra and Mahindra draws 54% of its revenues from the auto industry. Subsequently this has impacted inbound, outbound and in-factory leg of third party logistics players. ICICI Securities expects Mahindra Logistics to continue its strong run in the warehousing segment, which according to the brokerage will improve the overall product mix and benefit the company in the long term. Mahindra Logistics is currently trading at Rs 216 per share, an upside of 25% is being expected.

TCI Express

Target price: 850

Medium and small enterprises contribute significantly to the company and due to the current outbreak of coronavirus TCI Express is expected to take a hit. However, the current price of Rs 552 per share makes the scrip an attractive bet. ICICI Securities is expecting the stock to reach Rs 850 that translates to an upside of 53%. The brokerage said that TCI Express will benefit from the government’s efforts to formalise the Indian economy in the long run.