AS/RS solutions
AS /RS racking is gaining prominence on account of the following:

« AS/RS can be used across consolidated and modernised warehouses. It is based on computer-controlled
methods for automatically placing and retrieving loads from specific storage locations

e AS/RS is typically used in applications involving moving very high volume of loads into and out of storage,
and storage density is important because of space constraints

Organised players have the capability to customise storage solutions according to client requirements, which
unorganised players are not capable of. Hence, organised players are growing faster on account of higher
realisation, better product and client mix, and larger volume.

Growth drivers
Warehousing industry
Warehousing industry to see high single-digit growth starting next year

Warehousing (captive and 3PL warehouses) occupies more than 50% share of the storage solutions industry. After
a sharp drop of (12) to (10) % in fiscal 2021 in industrial warehousing demand due to Covid-19 led disruptions,
CRISIL Research expects industrial warehousing to log 8-10% CAGR in volume terms over fiscals 2021 to 2024
and reach 1.7 billion sq. ft from 1.3 billion sq. ft. Organised industrial warehousing players are expected to grow
at a faster pace in value terms as end users capitalise on the synergies created by GST implementation.

Industrial warehousing to grow at 8-10% CAGR

2.0 Billion

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g-10% CAGR
5% CAGR
10

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ied es} 1.3 ir

 

FY16 FY20E FY21P. FY24P.

 

Source: Industry, CRISIL Research
Palletised racking demand under storage solutions to lead growth

Going forward, over fiscals 2020 to 2024, CRISIL Research anticipate the mix between shelving and palletised
racking to remain broadly similar, as strong growth in end-user industries would drive growth in both these
segments.

Growth in shelving solutions will be predominantly driven by end-user industries namely e-retail and organised
retailing (physical platform), which is expected to grow at a healthy pace over the next three years. E-retail
industry is expected to clock 17-22% CAGR during fiscals 2020 to 2023, whereas the organised retailing industry
(physical platform) is likely to grow at 4-6% CAGR.

Growth in racking solutions is largely driven by 3PL players, which CRISIL Research estimates to have grown at
12-14% CAGR from fiscals 2017 to 2020.

End-user industries — Growth

   

ae fomityy
Puy
CRISIL Research projects the Indian e-commerce sector to clock 17-22% CAGR
E-retail ~30% between FY20 and FY23. Consumption slowdown following the Covid-19 pandemic

 

 

 

 

will impact demand in FY21, especially in the first quarter. While CRISIL Research

 

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