[ad_1]
Shares of VRL Logistics surged 6 per cent to hit a record high of Rs 599.55 on the BSE in Thursday’s intra-day trade on strong business outlook. The stock of the logistics solution provider surpassed its previous high of Rs 591.50 touched on February 7, 2022.
In the past three days, the stock has rallied 17 per cent after VRL Logistics signed Memorandum of Understanding (MoU) on April 18, 2022 with Ratna Cements (Yadwad) for transfer of the Wind Power (Sale of Power) undertaking along with all underlying assets and liabilities as a going concern on a slump sale basis.
The management of the company is looking to dispose off this undertaking considering the limited balance life of the said machines as also to focus on its Goods Transport business which is the major business segment, VRL Logistics said.
In the past one month, VRL Logistics has outperformed the market by surging nearly 30 per cent as compared to 1 per cent decline in the S&P BSE Sensex.
On April 6, 2022, VRL Logistics announced a capex plan of Rs 560 crore to purchase 1,600 trucks (~25,000t carrying capacity) spread over the next 12-18 months. This capex is essential to replace its older fleet that moves out due to the vehicle scraping policy and capture the pick-up in demand in the less than load (LTL) segment.
It is expected that the company would lose owned fleet capacity of upto 12,000 MT owing to scrapping owing vehicles. The proposed capacity addition duly staggered over the period indicated above would result in the addition of around 25,OOO MT resulting in a net addition of upto 13,000 MT (around 20 per cent of existing fleet capacity). This would also cater to expected growth volumes in the near medium term, the company informed.
Motilal Oswal Financial Services believe VRL Logistics would be very well placed to capitalize on the growth opportunity after this capacity addition. With strong balance sheet, the company would comfortably manage the capex funding by availing an additional debt of Rs 300-350 crore along with internal accrual, the brokerage firm said with ‘buy’ rating on the stock and target price of Rs 665 per share.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
[ad_2]
Source link