VRL Logistics - BUY - TP Rs.450 - Result Update - Kotak

- VRL reported Q2FY18 numbers, marginally below our expectation with de-growth in both trucking as well as the bus segment Trucking segment was impacted by weak volumes in July 2017 due to GST implementation, while the bus segment was weak due to seasonality. Sales was reported at Rs 4.52 bn (-8% QoQ and flat YoY) with YoY improvement in EBIDTA margin at 12.3% (+120 bps YoY) on the back of improving turnaround time for trucks with removal of interstate check post. Interest cost has further decreased with prepayment of debt in the quarter. Consequently the company has reported PAT of Rs 216 mn (+27% YoY) marginally below our expectation of Rs 232 mn. The company has also announced a buyback of shares worth Rs 414 mn in which the promoter's won't participate

- Outlook remains strong for VRL with 1) GST Act and Motor vehicle Act; 2) Effective internal control systems; and 3) Strong credible history of the company. Maintain estimates and continue to value the company at 26x FY19 earnings and Recommend BUY with an unchanged TP of Rs 450

Shares of VRL Logistics Ltd was last trading in BSE at Rs.381.95 as compared to the previous close of Rs. 384.25. The total number of shares traded during the day was 2612 in over 116 trades.

The stock hit an intraday high of Rs. 385.5 and intraday low of 380.5. The net turnover during the day was Rs. 998785.

Source : Equity Bulls

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