Buy VRL Logistics, target price Rs 690: Motilal Oswal Securities

Motilal Oswal Securities has buy call on VRL Logistics with a target price of Rs 690. The current market price of VRL Logistics is Rs 449.1.

VRL Logistics, incorporated in the year 1983, is a Small Cap company (having a market cap of Rs 3932.61 Crore) operating in Logistics sector.

VRL Logistics Ltd. key Products/Revenue Segments include Income From Transportation Services, Income From Travel Operations, Income (Airlines), Power, Services (Courier), Scrap, Service (Hotel) and Income From Advertisement for the year ending 31-Mar-2020.


Financials
For the quarter ended 31-12-2021, the company has reported a Standalone Total Income of Rs 683.30 Crore, up 7.08% from last quarter Total Income of Rs 638.14 Crore and up 20.18% from last year same quarter Total Income of Rs 568.55 Crore. Company has reported net profit after tax of Rs 60.49 Crore in latest quarter.

Investment Rationale
VRL Logistics (VRLL) is well placed given its strong presence in the LTL segment, focus on branch addition, and tight cost control. Its comfortable Balance Sheet position and strong cash flow generation will enable it to meet its capex requirements for future growth.

With a pickup in demand and branch additions in untapped regions, the brokerage expects VRLL to clock 21% revenue CAGR over FY21-24E. With robust volume and cost efficiency measures, it will be able to maintain its EBITDA margin profile at 16% over the next two years, it said.

The brokerage expects the company to clock a revenue/EBITDA/PAT CAGR of ~21%/26%/65% over FY21-24E. The stock trades at 19x FY24E EPS.

Promoter/FII Holdings
Promoters held 69.59 per cent stake in the company as of 31-Dec-2021, while FIIs owned 3.49 per cent, DIIs 16.66 per cent.