Brokerage agency Motilal Oswal not too long ago hosted the administration of VRL Logistics (VRLL) to get an understanding of the present enterprise situation and its outlook through which the administration sounded optimistic on VRLL’s progress prospects over the subsequent couple of years, the brokerage mentioned in a observe.
The corporate has launched a mean pace system whereby larger funds are paid to drivers who preserve the next common pace. This has helped in protecting larger distances in a restricted time. Volumes itself have elevated, leading to greater utilization ranges and decreased turnaround occasions, the observe highlighted.
The brokerage has maintained its Purchase score on the multibagger inventory that has surged over 126% in a yr’s interval, with a revised goal value of ₹540 per share.
Textile/Agriculture/Auto phase contributes 18-19%/8-9%/5-6% to income. Textile, Agricultural commodities, and Industrial parts have seen an improved income contribution within the final one yr.
“With a pickup in demand and department additions in untapped areas, we anticipate VRL Logistics to clock 19% income CAGR (compound annual progress fee) over FY21-24E. With strong volumes and price effectivity measures, VRLL would be capable of preserve its EBITDA margin profile at 14-15% over the subsequent two years,” Motilal Oswal’s observe said.
VRLL is trying to purchase warehouse area in Bengaluru for ₹1.7 billion. The identical is pending on account of doc clearance and should take time to materialize. Capex could be between ₹1 billion and ₹1.5 billion in FY22. Inner accruals are sufficient to fund capex, as per the brokerage.
The administration plans to open 100 branches in unexplored areas of North and Northeast India in FY22. Round 50-55 branches have already been opened, and the remainder could be opened over the subsequent 3-6 months.
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Supply: Live Mint