Logistics stocks in focus:VRL Logistics up 5% on ICRA credit rating upgrade

Logistics stocks were in focus in early morning trade on the BSE on Wednesday on the back of heavy volumes amid expectations of earnings improvement.

Snowman Logistics, VRL Logistics, Gati, Aegis Logistics, Navkar Corporation, Sical Logistics and Allcargo Logistics were up in the range of 3 to 10 per cent on the BSE in intra-day trade. In comparison, the S&P BSE Sensex was down 0.17 per cent at 39,680 points at 09:43 am.

VRL Logistics was up 5 per cent to Rs 315 after the company said that rating agency ICRA has upgraded the long-term rating of the Company from ICRA A to ICRA A+. The outlook on the long term rating is stable.

In the past eight trading days, the stock has rallied 29 per cent after VRL reported 71 per cent year-on-year (YoY) growth in its consolidated net profit at Rs 20.52 crore in March quarter (Q4F19), on back of strong operational performance. Ebitda (earnings before interest, taxes, depreciation and amortization) margin improved to 12.02 per cent from 9.47 per cent in year ago quarter.

Its revenue performance remained subdued with around 5 per cent YoY growth as volumes in its two large businesses Goods Transport (GT; volume in tonnage) and Passenger Transport (PT; number of passengers travelled) improved by mere around 1.5 per cent YoY and around 3 per cent YoY, respectively.

VRL has the largest fleet of owned vehicles in the country, which combined with the captive body-building and maintenance facilities, provides considerable operational synergies.

“Prioritization of owned vehicles, usage of biodiesels, redemption benefits from IOCL, in-house goods vehicle body design facilities and economies of scale in spares procurement provides cost advantages to VRL. In addition, benefits arising from implementation of GST and eway bill are benefiting organized players. Also, partly shifting of the freight markets towards less-than-truck load on account of accelerated warehouse consolidation places VRL in a sweet spot,” analysts at YES Securities said in company update.

Snowman Logistics has rallied 10 per cent to Rs 39.40 on the back of two-fold jump in trading volumes. A combined 801,303 shares have changed hands on the counter on the NSE and BSE so far.

SNOWMAN LOGISTIC 38.55 30.45 26.6
VRL LOGISTICS 309.35 264.80 16.8
ARSHIYA 33.00 28.50 15.8
GATI 85.90 76.35 12.5
SICAL LOGISTICS 133.40 120.10 11.1
ALLCARGO LOGIST. 117.00 105.55 10.9
GATEWAY DISTR. 151.15 136.85 10.5
CONTAINER CORPN. 525.40 485.55 8.2
MAHINDRA LOGIS. 522.10 489.45 6.7

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