The party on Dalal Street ain't over yet. Equity benchmark Sensex jumped over 300 points to touch a record intra-day high of 54,779.66, and the broader NSE Nifty 50 index hit 16,359.25 as a record high on Tuesday.
Amid the ongoing market rally, shares of VRL Logistics rose 4 per cent to hit an intraday high of Rs 316.15 on BSE after the company posted a strong set of numbers for the quarter ended June 2021.
This multibagger stock has surged from Rs 149.65 to Rs 316.5 mark today in the last 12 months - yielding around 111.5 per cent return in this period. An amount of Rs 5 lakh invested in this logistics stock a year ago would have turned into Rs 10.57 lakh today.
With a market capitalisation of Rs 2,835 crore, the small-cap share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
The company reported a net loss of Rs 6.04 crore for the quarter ended June 2021 compared to a net loss of Rs 62.71 in the year-ago period. Revenue from operations grew 158 per cent to Rs 413.77 crore in the June-ended quarter against Rs 160.09 crore a year ago.
According to MarketsMojo, the company has declared positive results for the last 3 consecutive quarters. It has a strong ability to service debt as the company has a low Debt to EBITDA ratio of 0.87 times and has high institutional holdings at 20.7%.
Also, the technical trend has improved from Mildly Bullish on June 3, 2021, and the stock is technically in a Bullish range now. Multiple factors for the stock are bullish like MACD, Bollinger Band, KST, and OBV. However, the valuation seems to be expensive right now.
"There has been a sharp increase in diesel prices (procured diesel prices for VRL went up 6.3% to Rs84/litre), yet VRL could maintain gross margin at 30.8% (31.9% QoQ). This has been helped with the decrease in lorry hire charges, hamaali, rent, etc," ICICI Securities noted.
"Goods transportation (GT) segment witnessed 28% QoQ decline in volumes and 2% QoQ decline in realisations (change in route mix). The number of GT vehicles have increased by 54 (9 electric vehicles) during Q1FY22. VRL has also ordered 15-20 busses; new additions targetted profitable routes for continuity of service," the brokerage house said.
"We have factored in a 6% increase in tonnage volumes for FY22E. We have also assumed a double-digit % increase in realisation given the sharp spike in diesel rates. The sharp spike in inflation is behind a relatively more muted volume growth assumption. We expect higher volume growth (~10%) in FY23E and lower pricing as diesel prices normalise in FY23E. We maintain 'BUY' on VRL with a target price of Rs 380 per share," it added.
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