The stock of VRL Logistics ie VRLL has become the multibagger of the last 1 year for the investors. This stock has given a return of close to 92 percent in 1 year.
Multibagger Stocks: Due to the COVID 19 epidemic, the restrictions imposed across the country have affected the most logistics stocks. However, the share of VRL Logistics ie VRLL of this sector has become a multibagger of the last 1 year for the investors. This stock has given a return of close to 92 percent in 1 year. Now that the lockdown has been fully opened across the country, this stock is expected to shine further. Brokerage house Motilal Oswal has set a target of Rs 690, expecting a rise of 55 percent in the stock. The brokerage says that the lifting of the ban related to COVID 19 will give a boost to the logistics sector. At the same time, the company is strengthening the business through cast control and branch edition.
focus on cast control
Brokerage house Motilal Oswal says that VRL Logistics is one of the leading logistics companies in the country. The company has a strong presence in the LTL segment. The company’s focus is on expanding its branch in the country, while the company is also working on cast control. The company has a good balance sheet and can easily meet the capex requirements going forward due to strong cash flow generation.
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Growth forecast for EBITDA and PAT
The brokerage says that the demand for logistics is increasing after the lockdown. At the same time, the company is also reaching those areas where it did not have a presence earlier. With this, the income of VRL Logistics can grow at 21 per cent CAGR during FY21-24E. The company’s EBITDA margin profile is expected to remain at 16 per cent in the next two years due to robust volumes and cost control. At the same time, the company’s revenue, EBITDA and PAT CAGR during FY21-24E can be 21 percent, 26 percent and 65 percent. The stock is currently trading at 19 multiple of FY24E EPS. Further it can show a price of Rs 690.
Logistics activity strong
Logistics activity is getting stronger in the country. It is expected to pick up further in 4QFY22. VRLL is likely to witness year-on-year growth at the end of 4QFY22. At the same time, this company will get the benefit of increasing economic activity in the country. Talking about the logistics sector, the focus is increasing on the organized sector, in which VRLL can prove to be the winner. However, rising prices of petrol and diesel is a risk factor.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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