Rising tension across the Middle East has begun to impact India’s transport and logistics sector. Early signs are already visible in container volumes and trade flows.
A fresh report by Jefferies says the pressure is uneven, with liquid cargo and container-linked businesses facing the brunt while bulk cargo remains relatively insulated.
Key logistics shares in focus
The brokerage has mapped stock-specific impact, maintaining positive ratings on select names where domestic exposure or business mix offers protection, even as global risks loom.
Indian Railways container volumes have already dropped 12% month on month in March, according to the report, signalling early stress. At the same time, India’s trade exposure to the Middle East remains significant, particularly in petroleum products, which form a large part of port volumes. Against this backdrop, Jefferies has laid out its preferred bets along with downside risks across the sector.
Jefferies on JSW Infra: ‘Buy’
Jefferies has a ‘Buy’ rating on JSW Infrastructure with a target price of Rs 360, implying an upside of 48%. The brokerage’s positive stance rests on the company’s cargo mix, which is heavily skewed towards bulk and liquid segments that are less sensitive to global trade disruptions.
JSW Infra derives nearly all of its volumes from bulk and liquid cargo, with minimal exposure to container traffic. A large portion of its business also comes from group companies, which cushions it from external shocks tied to global demand cycles. The report notes that domestic linkages, especially through JSW Steel, further limit downside risks since a large share of steel sales is within India.
The brokerage also points out that realisations at several terminals are linked to wholesale price index movements, which helps preserve margins during volatile periods. Even though the company has some exposure to the Middle East through a terminal in the United Arab Emirates, this is not seen as a major structural risk in the near term.
“JSW Infra is best placed with a higher share of bulk volumes and WPI-linked realisations at terminals,” Jefferies said in its report.
Jefferies on Container Corporation of India: ‘Buy’
Jefferies maintains a ‘Buy’ rating on Container Corporation of India, also known as Concor, with a target price of Rs 640, suggesting an upside of 49%. However, the brokerage acknowledges that container-linked businesses are the most exposed to global headwinds.
Container volumes are closely tied to global economic activity, and any slowdown in trade flows directly affects throughput. The report notes that Indian Railways’ container volumes have already shown weakness in March, which could be an early indicator of broader pressure ahead.
In addition, export-import imbalances can lead to higher empty running costs for container train operators, further weighing on margins. Jefferies estimates that a 10% drop in container volumes could reduce Concor’s earnings before interest, taxes, depreciation and amortisation by around 8%.
“Container volumes also have a higher correlation to global GDP growth and medium term growth is a key monitorable in this context,” the report said.
Jefferies on Gateway Distriparks: ‘Buy’
Gateway Distriparks is another stock where Jefferies has retained a ‘Buy’ rating, with a target price of Rs 75 and a potential upside of 53%. Despite its exposure to container logistics, the brokerage sees value at current valuations.
The company operates across rail and container freight stations, which exposes it to the same global trade risks affecting the broader container segment. However, Jefferies believes that the stock already factors in much of the downside, given its relatively low valuation multiples compared to peers.
The brokerage also notes that Gateway’s diversified operations, including cold chain logistics through its Snowman business, provide some cushion against volatility in container volumes. Still, earnings sensitivity remains high if global trade weakens further.
“For container train operators we see additional margin impact due to export import imbalance and higher empty running costs,” Jefferies said.
Jefferies on TCI Express: ‘Buy’
Jefferies has a ‘Buy’ rating on TCI Express with a target price of Rs 805, indicating a 68% upside. The brokerage’s confidence in the company comes from its relatively stable cost structure and ability to manage fuel-related volatility.
Unlike port and container operators, TCI Express operates in the road logistics segment, where diesel costs are a key input. However, the report notes that most players in this space have fuel cost pass-through mechanisms built into contracts, which helps protect margins.
Historical data also supports this view. Even during a period when diesel prices rose sharply between financial year 2020 and financial year 2022, companies like TCI Express were able to maintain operating margins within a reasonable range.
“Diesel prices so far are stable and road logistics players have fuel cost pass thru built in their contracts,” the report said.
Jefferies on Delhivery: ‘Buy’
Jefferies has reiterated a ‘Buy’ rating on Delhivery with a target price of Rs 525, implying a 28% upside. The brokerage sees improving profitability trends and scale benefits supporting the long-term outlook.
Delhivery’s business spans express parcel, part truckload and supply chain services, which makes it less directly exposed to port-level disruptions. However, it is not immune to broader economic slowdowns, particularly if consumption and industrial activity weaken.
The report notes that while fuel costs have remained stable and manageable, second-order effects such as slower consumption and production could impact demand for logistics services over time. That said, Delhivery’s improving margins and operating leverage offer some comfort.
“Potential second order impacts in the form of industrial production inflationary pressures and consumption are a key monitorables,” Jefferies said.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.