VRL’s revenue was flat YoY at INR8.0b (+7% QoQ) in 2QFY26, in line with our estimate. Volume dipped 11% YoY to 0.97m tons, while realization grew by 12% YoY to INR 8,079/ton, driven by a price hike. Volume drop was mainly due to contract restructuring and the voluntary exit from certain low-margin contracts. However, volume rose 4% sequentially on the back of a strong festive season and customer recovery from new branch addition.
OutlookWe expect VRL to clock 5% volumes and a revenue/EBITDA/PAT CAGR of 8%/9%/16% over FY25-28. Reiterate BUY with a TP of INR350 (based on 22x FY28E EPS).
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