Motilal Oswal has given Buy recommendation for VRL Logistics recommended buy rating on the stock with a target price of Rs 540 in its research rep with a target price of Rs. 540 in its research report issued on Nov 22, 2021
Motilal Oswal’s research report on VRL Logistics
We released our Logistics thematic report recently (Report link), wherein we highlighted that a) the Logistics sector is set to move towards formalization and b) there would be strong growth opportunities for some of the established players in this space. With a robust growth outlook, we expect strong upside in the stock from current levels. The strong tailwinds for VRL would drive consistent growth in volumes and earnings over the next few years. The company would benefit from a) the uptick in economic activity, b) the general price hikes taken post 1QFY22, and c) easing fuel prices (on account of tax cuts).
VRL is focusing on the high-margin LTL business (driven by the B2B segment) and expanding its network into newer markets. We expect VRL Logistics to clock a revenue/EBITDA/PAT CAGR of ~19%/19%/45% over FY21-24. We reiterate our Buy rating, with TP of INR540/share (35x FY24E EPS).