– Fuel is a major cost driver in logistics (up to 40%) – Frequent hikes shrink operating margins – Pressures passed to clients or absorbed by firms
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 Overdependence on road transport
Investment Insights
– Focus on 2–3 year horizon – Buy low, wait for re-rating