Buy VRL Logistics; target of Rs 665 : Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on VRL Logistics

VRL Logistics (VRLL) announced a capex plan of INR5.6b to purchase 1,600 trucks (~25,000t carrying capacity) spread over the next 12-18 months. This capex is essential to: a) replace its older fleet that moves out due to the vehicle scraping policy and b) capture the pick-up in demand in the LTL segment. VRLL currently has a fleet capacity of ~69,000t and with this capex, there would be a net capacity addition of 20% (adjusted for scrappage of old trucks). The capex would be funded by internal accruals and debt. We believe VRLL would be very well placed to capitalize on the growth opportunity after this capacity addition. With strong balance sheet, VRLL would comfortably manage the capex funding by availing an additional debt of INR3-3.5b along with internal accruals. We revise our numbers to incorporate the higher capex numbers as well as the expected rise in debt.

Outlook

We now expect VRL to clock a revenue/ EBITDA/PAT CAGR of ~22%/29%/63%, respectively, over FY21-24. The stock trades at 22x FY24E EPS. We maintain our BUY rating with a TP of INR665 (premised on 30x FY24E EPS).

More Info

At 17:30 VRL Logistics was quoting at Rs 488.65, up Rs 8.75, or 1.82 percent.

It has touched an intraday high of Rs 494.40 and an intraday low of Rs 480.60.

It was trading with volumes of 26,260 shares, compared to its thirty day average of 18,028 shares, an increase of 45.67 percent.

In the previous trading session, the share closed down 0.79 percent or Rs 3.80 at Rs 479.90.

The share touched its 52-week high Rs 591.50 and 52-week low Rs 201.60 on 07 February, 2022 and 12 April, 2021, respectively.

Currently, it is trading 17.39 percent below its 52-week high and 142.39 percent above its 52-week low.

Market capitalisation stands at Rs 4,316.90 crore.

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