VRL Logistics Limited , a leading logistics company in India, reported a significant increase in net profit for the first quarter, despite facing challenges in volume growth. The company's strategic decisions to focus on profitability have yielded positive results, even as it navigates through a period of industry recalibration.

Financial Highlights

• Net profit surged to Rs. 50.00 crores, up from Rs. 13.00 crores in the same quarter last year, marking a remarkable 285% year-on-year increase.
• Total income grew marginally by 1% year-on-year.
• EBITDA margins remained robust at approximately 21%.
• PAT margins improved to 7%, up from 1.8% in the same quarter last year.

Operational Performance

• Volumes declined by 12% year-on-year due to the company's strategic exit from low-margin contracts and price rationalization implemented in the previous fiscal year.
• Realization per ton improved to Rs. 7,800.00, reflecting the success of the company's pricing strategy.
• The company operates 1,241 branches and 50 transshipment hubs, serving 9 lakh GST registered customers.
• Fleet size stood at 5,949 vehicles, slightly down from 6,177 vehicles in the same period last year.

Cost Management Initiatives

VRL Logistics has implemented several cost control measures to improve profitability:

• Fuel costs reduced from 29% to 25% of total income, aided by improved internal procurement from 33% to 41.5%.
• Lorry hire charges declined from 7% to 4% of total income due to better utilization of owned vehicles.
• Employee costs remained stable at around 18% of total income.

Future Outlook

• Management expects volume normalization from Q3 onwards.
• Anticipates volume growth of 7-8% in the next fiscal year.
• Plans to expand into new markets, particularly in the Northeastern region.
• Investing in technology upgrades and planning new hub investments in Kerala worth Rs. 20.00-25.00 crores.

Management Commentary

Sunil Nalavadi, Chief Financial Officer of VRL Logistics, stated, "VRL Logistics continues to demonstrate resilience and strategic clarity as we navigate a period marked by contract restructuring and broader industry recalibration. Our focus on profitability and operational efficiency has yielded positive results, as evident from our strong margin performance."

He added, "While we have seen a temporary decline in volumes, we are confident that our strategic decisions will position us for sustainable long-term growth. We expect volume normalization from Q3 onwards, supported by positive macro tailwinds, including a strong festive demand cycle and favorable monsoon conditions."

VRL Logistics remains committed to leveraging its extensive network, operational advantages, and technological capabilities to capture additional market share and ensure consistent, reliable service delivery in the evolving logistics landscape.

VRL Logistics Limited , a leading player in the Less Than Truckload (LTL) segment, has reported robust financial results for the first quarter, alongside significant corporate governance updates and strategic initiatives.

Q1 Financial Highlights

VRL Logistics demonstrated strong performance in Q1:

• Total income increased by 1% year-over-year to ₹750.83 crore, compared to ₹741.98 crore in the same quarter last year.
• EBITDA surged by 55.5% to ₹158.10 crore, with the EBITDA margin expanding significantly to 21.1% from 13.7% in the same quarter last year.
• Profit After Tax (PAT) saw a remarkable growth of 272.4% to ₹50.04 crore, up from ₹13.44 crore in the same period last year.
• Earnings per share (EPS) for the quarter stood at ₹5.72, compared to ₹1.54 in the corresponding quarter of the previous year.

The company's impressive margin expansion can be attributed to effective cost management strategies, particularly in fuel costs and lorry charges. Fuel costs as a percentage of total income decreased from 28.7% to 25.4% year-over-year, while lorry charges reduced from 7.4% to 3.9% over the same period.

Corporate Governance and Strategic Updates

New Auditor Appointments

At its 42nd Annual General Meeting held on August 6, VRL Logistics appointed Walker Chandiok & Co LLP as its new statutory auditors for a five-year term. The firm, established in 1935, brings extensive experience with its presence across 17 offices in 15 Indian cities.

Additionally, the company appointed R. Parthasarathy as its secretarial auditor for a five-year period. Parthasarathy, a practicing company secretary based in Bengaluru, brings over 25 years of experience in corporate laws, SEBI regulations, and FEMA compliance.

Bonus Share Issue

The Board of Directors has approved the issuance of bonus equity shares in a 1:1 ratio, subject to shareholder approval at the upcoming Annual General Meeting. This move will involve capitalizing up to ₹87.47 crore from the company's free reserves.

Authorized Share Capital Reclassification

VRL Logistics is set to reclassify its authorized share capital, converting the entire authorized preference share capital into equity share capital. This will result in 2,370 lakh equity shares of ₹10 each, pending shareholder approval.

Operational Updates

The company has implemented several operational initiatives to enhance efficiency and profitability:

• Increased in-house fuel supply from 33.3% to 41.5% year-over-year, contributing to reduced fuel costs.
• Focused on maximizing own fleet usage and reducing reliance on external vehicles to improve operational efficiency.
• Optimized driver scheduling to balance loads and reduce idle time.

Future Outlook

Looking ahead, VRL Logistics plans to:

• Intensify marketing efforts in established and new branches to improve volumes.
• Implement strategic expansion based on demand.
• Maintain stringent control on key operating expenses.

The company's strong Q1 performance, coupled with its strategic initiatives and corporate governance updates, positions VRL Logistics well for continued growth in the evolving logistics landscape.

Dr. Vijay Sankeshwar, Chairman and Managing Director of VRL Logistics, commented on the results, stating, "Our robust Q1 performance reflects the strength of our business model and the effectiveness of our cost management strategies. The appointment of new auditors and the proposed bonus share issue underscore our commitment to strong corporate governance and shareholder value creation."

As VRL Logistics continues to navigate the dynamic logistics sector, its focus on operational efficiency, strategic growth, and shareholder value remains steadfast.