Midcap Logistics Stock Hit 52-Week High, Board Recommends Dividend, Buy For 21% Gains: Motilal Oswal

Motilal Oswal has placed a Buy on VRL Logistics Ltd. with a target price of Rs. 840 apiece. The stock has the potential to give up to 21% return if purchased at the current market price considering the given target price.

The Board of Directors of the company in their meeting held on May 20, 2023, recommended a final Dividend at a rate of Rs. 5 per equity share for the financial year 2022-23.

VRL Logistics is a midcap logistics sector company. The company is engaged in logistics services dealing mainly in the domestic transportation of goods. It has a market capitalisation of Rs. 6,162.84 crore.

Recommends Dividend

According to the Regulatory filing by the Board of the Directors of VRL Logistics Ltd., "The Board recommended a final dividend at a rate of Rs. 5/- (Rupees five only) per equity share (face value of Rs.10/- each) for the financial year ended 31" March 2023, subject to approval of shareholders at the ensuing Annuai General Meeting of the Company. The dividend would be paid within 30 days from the date of declaration at the said ensuing Annual General Meeting. Record date / book closure, as the case may be, would be intimated in due course."

Valuation and view

Motilal Oswal said, "We expect VRL to clock 17% volume CAGR over FY24-25, with faster addition of branches in untapped regions. The implementations of GST, e-way bills and e-invoicing have facilitated the transition of businesses to the organized sector from the unorganized one."

It added, "We raise our FY24E/FY25E EPS by ~1%/ 10% to factor in higher volume growth. We expect VRL to clock revenue/ EBITDA/PAT CAGR of 19%/25%/34% over FY23-25. Reiterate BUY with a revised TP of INR840 (based on 25x FY25E EPS)."

Stock Outlook

The stock last traded at Rs. 697.60 apiece, down 3.73% from its previous close of Rs. 724.60 apiece. Its 52 week high is Rs. 738 apiece recorded on 23 May 2023, while its 52-week low on 10 February 2023 at Rs. 483 apiece.

It has jumped 9.39% in 1 week and 8.2% in 1 month, respectively. It jumped 24.49% in 3 months. In 1 year, it has given a 9.22% positive return. In 3 years, it has given 368.19% positive return. In 5 years, it has given 74.4% positive return.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.