March 8, 2018

Ports & Shipping Industry Analysis

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Ports & Shipping Industry Analysis

Must know facts:

  • India has 12 major ports and 64 minor ports handling Export Import cargo.
  • India’s overall coast line is over 7500 kilometres with major, minor and intermediate ports. 90% of the country’s trade by volume and 70% by value is moved through maritime transport.
  • As published on MakeinIndia – Cargo handled at ports in 2014-15: Dry bulk (34% iron ore, coal, fertilizer. food grains); liquid bulk (33% petrol, oil and lubricants); break bulk (17%) and container (16%).  12 major ports in India handle approximately 57% of total Cargo traffic.

 

Influencing Factors for price change:

  1. Individual Stocks in Ports & Shipping sector are best judged when benchmarked against – ‘S&P BSE CAPITAL GOODS’, ‘NIFTY CPSE’, ‘S&P BSE Industrials’ indices.
  2. Government initiatives major initiatives such as the Sagarmala project, ports modernization and Inland Waterways & Coastal Shipping development contribute to price moves.

 

Understanding the Industry:

Major ports are under the jurisdiction of the Government of India and are governed by the Major Port Trust Act, 1963 (except Ennore Port which is administered under the Companies Act, 2013).  Non-major ports are under the jurisdiction of the respective state governments maritime boards.

The Indian ports and shipping industry plays a vital role in sustaining growth in the country’s trade and commerce. India is the sixteenth largest maritime country in the world, with a coastline of about 7,517 km. The Indian Government plays an important role in supporting the ports sector. It has allowed Foreign Direct Investment (FDI) of up to 100 per cent under the automatic route for port and harbour construction and maintenance projects. It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports.

 

Estimated Market Size:

Cargo traffic handled by India’s major ports increased 3.64 per cent year-on-year to 499.41 million tonnes (MT) during April-December 2017.The highest growth was witnessed by Cochin Port 17.27 per cent, followed by Paradip 14.59 per cent, Kolkata (including Haldia) 12.45 per cent, New Mangalore 6.6 per cent and Jawaharlal Nehru Port Trust 5.94 per cent. In terms of composition of cargo traffic, iron ore traffic volume rose 29.32 per cent to 18.73 MT, petroleum oil and lubricants rose 8.36 per cent to 93.14 MT, and container traffic rose 6.44 per cent.

 

Road Ahead:

There are two geographical factors that put the Indian maritime sector at an advantageous position – the vast coastline of 7,500 km and the strategic location along most major shipping highways. For years, the maritime routes have been used for trade and a show of strategic strength. Today, the country boasts of a modern shipbuilding and shipping sector, replete with all the variables necessary for overall industrial growth.

Combined, these factors provide a strong basis to attract big investments in the Indian maritime sector. In fact, as per Prime Minister Narendra Modi, the sector has huge potential to become, “the engine of growth” for India.

Increased investments together with the ‘Make in India’ impetus can increase the sector’s contribution to GDP and trade volumes.

 

Top Stocks in the industry:

Gujarat Pipavav, GE Shipping, Shipping Corp, Reliance Navel, Shreyas Shipping .. many more.

(Please note above stocks are not recommendations, they are purely for information purpose only)

 

Information Source / References: IBEF, ForbesIndia, MakeinIndia, The Economic Survey 2016–17 & 17/18, Agricultural and Processed Food Products Export Development Authority (APEDA), Department of Commerce and Industry, Union Budget 2017–18, Press Information Bureau, Ministry of Statistics and Programme Implementation, Press Releases, Media Reports,

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Knowledge Seekers Paradise: PDF DOWNLOAD’s of HANDBOOKs released by Government of India:

RBI Hand book

RBI Handbook 2018

RBI Handbook 2017-18

 

 

 

 

 

Government Schemes Announced in Budget 2018

Government Schemes Announced in Budget 2018

Government Schemes Announced – Budget 2018-19

 

 

 

 

 

 

Economic Survey 2018 – Volume 1 & 2

ECONOMIC SURVEY 2017-18 VOLUME 1 and 2

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