– Fuel is a major cost driver in logistics (up to 40%) Frequent hikes shrink operating margins
Stock Impact Breakdown
– Asset-heavy firms like TCI, GATI face margin compression – Asset-light firms like Delhivery more resilient Companies with fuel surcharge mechanisms perform better
Why This Matters to Investors
– Margins directly tied to diesel volatility – Fuel spikes often impact quarterly earnings – Impacts long-haul more than urban logistics
Risk Areas to Monitor
– Sudden global oil shocks or tax hikes Poor hedging or no fuel adjustment clauses
Investment Insights
– Prefer firms with diversified transport modes (rail, sea) Track fuel hedging strategies in quarterly reports