VRL Logistics Q3 Results Review - Turnaround Visible; Key Will Be In Sustaining It: ICICI Securities

Volumes in goods transport segment surged to their all-time highs while decline in Ebitda/tonne was arrested.

<div class="paragraphs"><p>VRL Logistics Ltd. (Source: Company official fb page)</p></div>
VRL Logistics Ltd. (Source: Company official fb page)

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ICICI Securities Report

VRL Logistics Ltd.’s Q3 FY23 performance was inline with our estimates. Key takeaways:

  1. volumes in goods transport segment surged to their all-time highs while decline in Ebitda/tonne was arrested;

  2. goods transport business’ Ebitda margin expanded 90 basis points QoQ;

  3. new branches added post-covid accounted for ~12% of total tonnage in Q3 FY23;

  4. VRL Logistics reduced its debt by utilising the proceeds of divesting its non-core businesses; and

  5. company announced buyback of up to 875,000 shares (0.99% of equity) at Rs 700/share through the tender offer route.

Looking ahead, we see VRL ticks all the crucial boxes – profitability improvement, volume growth and debt reduction. In our view, returns are likely to improve to similar levels as its asset-light peers.

Click on the attachment to read the full report:

ICICI Securities VRL Logistics Q3FY23 Results.pdf


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