Buy VRL Logistics; target of Rs 825: Motilal Oswal

Motilal Oswal is bullish on VRL Logistics recommended buy rating on the stock with a target price of Rs 825 in its research report dated August 08, 2023.

Broker Research

August 12, 2023 / 12:19 IST

Buy

26 Aug, 2025 12:21

Volume

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Motilal Oswal's research report on VRL Logistics

VRL Logistics (VRL)’s 1QFY24 revenue grew 10% YoY to ~INR6.7b vs. our estimate of INR7.1b (-3% QoQ), primarily led by volumes. Volumes rose 10.7% YoY to 1.0m tons in 1QFY24 from 0.9m tons in 1QFY23. EBITDA margin was at 15.1% in 1QFY24 (vs. our est. of 16.4%), hurt by lower volumes, and higher employee costs & other expenses. EBITDA stood at INR1.0b (+12% YoY) against our estimate of INR1.2b. Weak operating performance with higher depreciation and interest expenses led to a 7% YoY decline in APAT to INR340m for the quarter.

Outlook

As the share of organized players is likely to grow in the coming years, the outlook appears promising for established Pan-India players like VRL. We cut our FY24E/25E EPS by ~13%/2% to factor in near-term softness in demand. Reiterate BUY with a revised TP of INR825 (based on 25x FY25E EPS).

For all recommendations report, click here