The overall performance of VRL Logistics’ (VRL) in Q4 FY22 was in line with Street’s expectations. Passenger transportation revenue also saw a strong rebound in the fourth quarter with year-on-year (YoY) growth, maintaining positive EBITDA.
Brokerage ICICI Securities maintains buy rating on VRL Logistics shares with a revised target price of Rs. 770 per share ( 600 earlier). multibagger stock There has been an increase of over 139% in the one year period, whereas, it is over 39% so far in 2022 (YTD).
Reduction in total operating cost and strong volume growth in the Good Transportation (GT) segment allowed VRL to further improve on gross margin at 35%. Year-over-year volume growth in the GT segment still remains strong in the mid-teens. The company has guided for 20-25% growth in tonnage in FY13.
Another brokerage Edelweiss said in a note that VRL Logistics turned in a strong Q4FY22 and reflects broad-based recovery across sectors, and potential runaway gains of an asset-owned transportation model during an upcycle .
Higher utilization in the freight transport segment delivered higher operating leverage, with EBITDA margins remaining at ~19% – clearly hinting at higher efficiencies as well.
“After FY 2012, we argue that FY 2013 should mark an acceleration from unorganized trucking to organized. And VRL’s planned fleet should reach its full capacity in FY 2013/24. Overall, we are increasing FY23/24E PAT by 5%/2% and are targeting one-year forward PE of 22x. 750 (from above 600).
After establishing a strong foothold in the South, VRL is now eyeing expansion in the North, Northeast and West regions. After adding 91 in FY 2012, the company is planning to add around 100 branches in untapped areas during FY 2013.
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