Logistics Q2 Results Preview - Expect Sequential Improvement; But Still Not Out Of The Woods: ICICI Securities

ICICI Securities Report

Q2 FY25 is likely to be another muted quarter for the industry. Key points

1. Likely mid-single-digit volume growth for our coverage universe, except for Gateway Distriparks Ltd., where volumes growth may continue to see pressure.

2. Ebitda/tonne shall improve sequentially, except for Gateway Distriparks due to negative operating leverage.

3. VRL Logistics Ltd.'s margins should improve the most amid price hikes taken and absorbed.

4. Mahindra Logistics may see marginally better profitability, as Rivigo’s losses potentially narrow further.

As per our channel checks, festive season volumes were shy of industry expectation. The industry is enduring a muted volumes growth cycle due to economic slowdown, geopolitical concerns and EXIM imbalances.

Our top picks – VRL Logistics (target price: 655), TCI Ltd. (target price: Rs 1,200) and TCI Express (target price: Rs 1,300); also, we keep close tabs on management commentaries.

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