Moneycontrol PRO
Live Now |Join The Sustainability 100+ Summit and witness the dawn of an era of sustainable development. Click Here!

Accumulate VRL Logistics; target of Rs 370: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on VRL Logistics with a target price of Rs 370 in its research report dated November 05, 2017.

November 21, 2017 / 05:52 PM IST
  • bselive
  • nselive
Todays L/H

Prabhudas Lilladher's research report on VRL Logistics

VRL 2QFY18 results were largely in line with estimates with revenue at Rs4.5bn (up 0.4% YoY), EBITDA margins at 12.3% vs. 11.1% YoY & PAT at Rs216m (up 55.8%YoY). Key highlight has been (i) In GT segment while environemnt was challenging & activity was sluggish due to post‐GST chaos & protests (leading to 10% dip in volumes), 11% higher realisations helped post flattish revenues (ii) Steady performance in BT segment in seasonally lean quarter with 7% revenue growth (iii) Margin improvement of 127bps YoY was a combination of price hikes, lower cost due to sluggish volumes in GT segment & better uilisation of owned fleet leading to lower lorry hire charges. VRLL has announced buy‐back of equity shares at the price not exceeding Rs460/share agggregating upto Rs414m via openmarket route and promoters won’t participate in the same.Though management didn’t comment on whether buy‐back is in lieu of dividend, we believe this is an effcient way of paying back to share holders (and straight away saving on dividend distribution tax to the tune of ~Rs80m)

VRL commands premium valuations, with stock currently trading at 28.1x FY19E PER, considering it being one of the largest organised players with the largest base of drivers on rolls (~8000); Strong balance sheet & cash flow generation. We maintain our ‘Accumulate’ stance with target price of Rs370 (rolling it over to Sept‐19 and valuing it at 25x Sept‐19E PER.)

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Nov 21, 2017 05:52 pm

stay updated

Get Daily News on your Browser
ISO 27001 - BSI Assurance Mark