Motilal Oswal said in the note that due to this expansion of capabilities, VRL Logistics will be able to better take advantage of the growth opportunities available in the market.
Multibagger stock: Domestic brokerage house Motilal Oswal is optimistic about VRL Logistics, a company in the logistics sector. Motilal Oswal, in a recently issued note, announced an expansion plan of Rs 5.6 billion in VRL Logistics under which the company will procure 1,600 trucks in the next 12-18 months. With this purchase, the company’s cargo capacity will increase by about 25,000 tons.
The capex scheme has been introduced to replace the old trucks in the company’s fleet Due to the growing demand in the LTL segment and the new scrapage policy, the company has come up with a new capex scheme to include new trucks in the fleet.
Motilal Oswal has given a buy rating in VRL Logistics with a target price of Rs 665. The brokerage house believes the stock will rise 35 percent to its current level. Motilal Oswal said the stock was up more than 114 per cent over a one-year period whereas in 2022 it was still around 12 per cent.
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Motilal Oswal said in the note that due to this expansion of capabilities, VRL Logistics will be able to better take advantage of the growth opportunities available in the market. The company’s balance sheet is strong, which will enable the company to easily bear the cost of this expansion plan. Therefore, the company will only need an additional Rs 3-3.5 billion. Which will not be a big burden on the company.
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