Q4 results disappoint for VRL Logistics; scrip locked in lower circuit

Even as Logistics stocks were making headlines with hopes of GST bill being cleared, VRL logistics is down by 20 percent and is locked in lower circuit on Tuesday.

The prices are down owing to extremely poor set of results announced by the company. The YoY profit for the company has declined by almost 32 percent at Rs. 13.21 crores for Q4FY16. 

The profits declined even as the revenues have increased by 4.5 percent indicating shrinking in margins for the Logistics giant in India. VRL Logistics is the largest transportation and logistic company in India and owns the largest fleet of commercial vehicles in India.

EBITDA (Earnings before interest, taxes, depreciation and amortization) margins have come in at 12.07 percent from 15.35 percent indicating a margin decline of 328 basis points. 

The stock is under considerable pressure, also due to reports that the VRL promoters have expressed their interest in commencing a regional airline in coming months. The promoters were quick to clarify that they do not have any intentions of lowering the stakes in VRL logistics and that a new company will be floated in their individual capacity to run the domestic airline company.

VRL logistics has lost almost all of its gains acquired over a 3 month period. Over a one year period the stock is up by almost 6 percent.