VRL`s valuation looks cheaper; subscribe to IPO: GEPL Cap

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VRL Logistics IPO note by GEPL Capital

VRL logistics (VRL) is one of the India’s leading surface logistics and parcel delivery service providers. VRL owned and operated the largest fleet of commercial vehicles in the private sector in India. They provide general parcel and priority parcel delivery, courier and full truckload (FTL) through widespread transportation network in 28 states and four union territories across India. VRL comprise of 624 branches and 346 agencies across India.

VRL has robust transportation fleet included 3,546 owned vehicles of which 1,166 vehicles were less than five years, 2,375 were debt free and 1,235 were fully depreciated. The company has also owned and operated 55 buses of which 399 were less than 5 years, 87 were debt free and six were fully depreciated. Fully owned vehicles system help to reduce huge operating cost which makes company to achieve higher operating margins. The company hires third party vehicles on the certain routes where there is no assurance of return loads during the high demand and emergency situation.

Valuation & Recommendation
"VRL logistics Ltd. (VRL) is available at the IPO price band of Rs 195 to Rs 205 which is available at 17-18 P/E multiple. We believe that this valuation looks cheaper. So we recommend SUBSCRIBE to this IPO", says GEPL Capital research report.