VRL Logistics’ (VRL) general efficiency was in-line with avenue’s expectations in Q4FY22. Passenger transport income additionally witnessed a robust rebound with 10.7% year-on-year (YoY) progress within the fourth quarter, thereby, sustaining constructive EBITDA.
Brokerage agency ICICI Securities has maintained Purchase score on the VRL Logistics shares with a revised goal value of ₹770 per share ( ₹600 earlier). The multibagger inventory has rallied greater than 139% in a yr’s interval, whereas, it’s up over 39% in 2022 (YTD) to date.
Discount in general working prices and powerful quantity progress in good transportation (GT) section allowed VRL to additional enhance on gross margin at 35%. YoY quantity progress in GT section nonetheless stays sturdy in mid-teens. The corporate has guided for 20-25% enhance in tonnage in FY23.
VRL Logistics turned in a robust Q4FY22 and it displays a broad-based restoration throughout sectors, and the potential runaway advantages of an asset-owned transportation mannequin throughout an upcycle, stated one other brokerage Edelweiss in a word.
Larger utilisation within the items transportation section delivered excessive working leverage positive factors with EBITDA margin sustaining at ~19%—clearly additionally hinting at excessive efficiencies.
“After a bumpy FY22, we argue FY23 ought to mark an acceleration from unorganised trucking to organised. And VRL’s deliberate fleet addition ought to additional unleash its full potential in FY23/24. All in all, we’re elevating FY23/24E PAT by 5%/2% and goal one-year ahead PE to 22x,” the word acknowledged. Edelweiss has retained purchase tag on the inventory and raised goal value to ₹750 (up from ₹600).
After its agency foothold in South, VRL is now eyeing growth into the North, NorthEastern and Western areas. The corporate plans so as to add about 100 branches within the untapped areas throughout FY23, after including 91 in FY22.
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Supply: Live Mint