In Monday’s trading session, the shares of one of the leading Logistics companies in India almost surged by 7.5 percent after acquisition of Transhipment Hub from Bengaluru worth Rs. 229.30 crores.
Price action
With the market capitalization of 4,702.31 Crores on Monday, the shares of VRL Logistics Ltd (NS:VRLL) jumped up to 7.5 percent making a high of Rs 584.40 compared to its previous closing price of Rs.537.70.
Don’t miss out on today’s opportunities—equip yourself with InvestingPro and take advantage of our Black Friday offer to stay ahead.
What happened
VRL Logistics Ltd surged on Monday following the announcement of its acquisition of the existing Transshipment Hub in Bengaluru, a critical facility handling 3,000 tons of cargo daily. The company purchased the property for ₹229.30 crores, which it had previously occupied on a lease basis paying a monthly rent of ₹1.31 crore (inclusive of GST) and the hub spans a vast area of 27.30 acres.
This acquisition is expected to significantly reduce operational costs as the company has invested significantly in infrastructure at the hub over the years including a fueling station, weighbridge, solar installations, and floor strengthening. Owning the property will save VRL approximately ₹15.72 crores annually in lease rentals.
The acquisition was funded through a combination of internal accruals and a ₹185 crore term loan from HDFC Bank (NS:HDBK) where a loan tenure was 10 years with a one-year moratorium. The purchase will not only reduce dependency on lease arrangements but also offer flexibility for future expansion and operational improvements for the company.
About the company
VRL Logistics Ltd is a leading Indian logistics company specialised for its extensive network and reliable services in freight transportation, logistics and supply chain management in Karnataka, the company has a strong presence across the country with a fleet of vehicles that cater to both domestic and international logistics needs.
It specializes in road transportation particularly in the handling of large consignments and offers services like express cargo, parcel delivery and temperature-controlled shipments. With a focus on efficiency, cost-effectiveness and customer satisfaction.
VRL Logistics continues to drive innovation in the logistics sector, providing tailored solutions to meet the growing demands of various industries. The company is also making significant strides in expanding its infrastructure and technological capabilities to further strengthen its position in the competitive logistics market.
Key Insights (H1FY25)
VRL Logistics Ltd experienced notable growth, with its fleet size increasing from 5,994 vehicles in FY24 to 6,158 vehicles. The company added 300 new vehicles, including 30 electric vehicles (EVs), 208 heavy commercial vehicles (HCVs), 19 light commercial vehicles (LCVs), 33 small vehicles (SVs), and 10 tankers.
VRL Logistics invested Rs. 119.41 crores in capital expenditure (CAPEX) during H1FY25, with Rs. 42.93 crores directed towards expanding its owned transshipment area in Mangaluru
Financials
The company’s revenue rose by 12 percent from Rs 715.33 crore in Q2FY24 to Rs 801.98 crore in Q2FY25. Meanwhile, Net profit increased by 82 percent from Rs 19.71 crores to Rs 35.82 crore during the same period.
Key Financial ratios
VRL Logistics Ltd has an impressive Return on Equity (RoE) of 8 percent and a Return on Capital Employed (RoCE) of 10 percent and Furthermore, the company’s debt-to-equity ratio is 1.03.
Stock Performance
The stock has provided decent returns of about 23 percent over the last three years, along with an impressive 6 percent gain in the past week of 2024, it has continued to perform strongly.
Written By Sridhar J
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post Logistics stock jumps 7% after acquiring Transshipment Hub in Bengaluru appeared first on Trade Brains.
To understand more about InvestingPro, watch this video: https://www.youtube.com/watch?v=_WfQcN5vjI