Dedicated Freight Corridors to Open New Investment Avenues
This will lead to the construction of industrial corridors and logistics park
DFCCL aiming for cost reduction & faster transportation
The Dedicated Freight Corridor Corporation Limited (DFCCIL) commissioned a 192 km stretch in the Western Dedicated Freight Corridor on 15th August. DFCC will be making 432 km of the western corridor and 343 km of the eastern corridor operational by the end of the current financial year. This project is expected to cost Rs 81,000 crore. Once operational, the corridors will increase the national freight carrying capacity to over 2,000 million tonnes up from the existing 1,200 million tonnes as well as reduce the cost of freight transportation.
Read our postweek report to learn where else dedicated freight corridors are planned.
Dedicated freight corridors will help reduce costs and allow faster transportation of freight. Along with that, the corridors will also open new avenues for investments, as this will lead to the construction of industrial corridors and logistic parks along these routes.
You can benefit from the growth of India’s logistics sector by investing in the Transporting India smallcase.
Weakening rupee to positively impact IT profitability
Last week, the rupee touched a historic low of 70 to the US dollar. It has fallen 8.8% since January. This is a huge positive for the export-oriented IT sector. Since most IT contracts are in dollar terms, an appreciating greenback helps increase their revenues and positively impacts profitability. On an average, about 70% of the revenues of IT companies are billed in US dollars and a depreciating rupee would help improve margins of these companies. Analysts expect the weakness of rupee to continue further, and have been generally bullish about the prospects of the IT sector in the near term.
You can take exposure to India’s IT sector with the smallcase IT tracker. The tracker has returned 75.34% over the previous year compared to Nifty return of 15.82%.
