Examining the quality parameter, VRL Logistics demonstrates robust management efficiency, evidenced by a return on capital employed (ROCE) of 15.42% for the recent period. The company’s operating profit has exhibited a compound annual growth rate of 77.50%, signalling sustained operational strength. Additionally, VRL Logistics has reported positive results for five consecutive quarters, with operating cash flow reaching a peak of ₹557.80 crores and a dividend per share of ₹15.00, underscoring consistent cash generation and shareholder returns.
Strong fundamentals, solid momentum, fair price – This Large Cap from the NBFC sector checks every box for our Top 1%. This should definitely be on your radar!
- Complete fundamentals package
- Technical momentum confirmed
- Reasonable valuation entry
From a valuation standpoint, VRL Logistics presents an attractive profile with a ROCE of 18.6% and an enterprise value to capital employed ratio of 2.7. The stock is trading at a discount relative to its peers’ historical averages, suggesting a valuation that may appeal to investors seeking value within the transport services sector. The price-to-earnings-to-growth (PEG) ratio stands at 0.1, reflecting the relationship between the company’s price, earnings growth, and profitability metrics.
Financial trends reveal a mixed picture. While the company’s profit after tax (PAT) for the nine-month period is ₹174.18 crores, indicating profitability, the stock’s return over the past year is 3.49%, which trails the Sensex’s 9.48% return for the same period. Over longer horizons, VRL Logistics has outperformed the Sensex over five years with a return of 189.20% compared to the benchmark’s 91.65%, though it lags over three and ten-year periods. Institutional holdings remain significant at 28.26%, reflecting confidence from investors with advanced analytical capabilities.
Technical indicators have been a key factor in the adjustment of VRL Logistics’ evaluation. The technical trend has shifted from mildly bullish to sideways, with weekly MACD and Bollinger Bands signalling bearish tendencies, while monthly indicators show mild bullishness. The relative strength index (RSI) remains neutral on both weekly and monthly charts. Moving averages on a daily basis suggest mild bullish momentum, but other indicators such as the KST and Dow Theory on weekly and monthly timeframes indicate mild bearishness. On-balance volume (OBV) shows no clear trend weekly and mild bearishness monthly. These mixed signals have contributed to a recalibration of the technical grade.
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VRL Logistics’ current market price stands at ₹272.50, down 1.61% from the previous close of ₹276.95. The stock’s 52-week high is ₹579.20, while the low is ₹216.23, indicating a wide trading range over the past year. Daily price fluctuations have been contained between ₹270.50 and ₹275.80. The stock’s short-term return over one week is -0.64%, contrasting with the Sensex’s 0.96% gain, while the one-month return is 1.40%, slightly above the Sensex’s 0.86%. Year-to-date returns for VRL Logistics and the Sensex are closely aligned at 8.24% and 8.36%, respectively.
In summary, the adjustment in VRL Logistics’ investment evaluation reflects a comprehensive review of its quality, valuation, financial trends, and technical indicators. While the company maintains strong operational metrics and attractive valuation ratios, the technical signals and recent price performance have introduced a more cautious perspective. Investors may consider these factors in the context of their portfolio strategies and market outlooks.
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