VRL IPO an attractive investment opportunity: Hem Sec

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VRL Logistics IPO note by Hem Securities

"VRL Logistics is one of the leading pan-India surface logistics and parcel delivery service providers. Company provide general parcel and priority parcel delivery (less than truckload services, (“LTL”), courier and full-truckload (“FTL”) services through its widespread transportation network in 28 States and four Union Territories across India. Co’s operational infrastructure for the goods transportation business as of December 31, 2014 comprised 624 branches (comprising 604 leased branches and 20 owned branches) and 346 agencies across India, and of such 624 branches, 48 (41 leased branches and seven owned branches) served as strategic transshipment hubs for its operations. Co’s differentiated service offerings, large integrated hub-and-spoke transportation network, extensive operational and maintenance infrastructure and in-house technology systems have enabled company to develop its brand across India. Co’s goods transportation service business serves a broad range of industries, including the fast moving consumer goods (FMCG) sector as well as other industries including food, textiles, apparel, furniture, appliances, pharmaceutical products, rubber, plastics, metal and metal products, wood, glass, automotive parts and machinery."

"The company is bringing the issue at price band of Rs 195-205  per share thus turning up into p/e multiple of 19-20 on post issue annualized eps of Rs 10 per share.
The Company with its healthy financial position with strong margin & return ratios, established brand name with track record of over 38 years, pan India presence of across 28 States and four Union Territories, large fleet size included 3,546 owned vehicles & strong business model of integrated and widespread hub-and-spoke network which enables effective consolidation and distribution of consignments of various sizes, looks an attractive investment opportunity. Hence we recommend "Subscribe" on issue", says Hem Securities research report.