Buy VRL Logistics; target of Rs 690 : Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on VRL Logistics

We attended VRLL’s investor call to get a sense of the recent developments and business outlook in the Logistics sector. The management touched upon various aspects like: a) volume movement in recent times, b) rising fuel prices, c) branch addition strategy, and d) market share shift towards organized players. Here are the key takeaways from that interaction: Business activity: Logistics activity has been pretty strong in 4QFY22. VRLL expects to end 4QFY22 with a growth on a YoY basis. Improved economic activity is also evident from the recent GST and e-way bill data. Shift towards the organized sector: After 1st Apr’22, e-invoicing will be mandatory for entities with a revenue of over INR200m (from INR500m earlier). There is a lot of pressure on small fleet operators due to compliance, technology, maintenance, billing, etc., leading to higher cost of operations. This will shift a lot of business towards the organized sector. In the current system, long haul transfers have turned to organized players, but intra-state transfers are still unorganized.

Outlook

We expect the company to clock a revenue/EBITDA/PAT CAGR of ~21%/26%/65% over FY21-24E. The stock trades at 19x FY24E EPS. We maintain our Buy rating, with a TP of INR690/share (30x FY24E EPS).

More Info

At 17:30 VRL Logistics was quoting at Rs 452.30, up Rs 7.30, or 1.64 percent.

It has touched an intraday high of Rs 471.50 and an intraday low of Rs 444.95.

It was trading with volumes of 18,446 shares, compared to its thirty day average of 19,375 shares, a decrease of -4.80 percent.

In the previous trading session, the share closed up 1.29 percent or Rs 5.65 at Rs 445.00.

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 23.53 percent below its 52-week high and 124.36 percent above its 52-week low.

Market capitalisation stands at Rs 3,995.78 crore.

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