VRL Logistics Limited — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

VRL Logistics reported a stable Q3 FY26 with total income of INR 831 crores, despite a 9% YoY tonnage decline due to exiting low-margin contracts. Profitability significantly improved, with EBITDA margin at 20.9% and PAT growing 9% YoY, supported by higher realizations and cost controls. The company is optimistic about future volume growth, targeting 10-12% for FY27, driven by new client additions, branch expansion, and strategic fleet investments, while maintaining strong margins and healthy cash generation.

Highlights

  • Total income for Q3 FY26 stood at INR 831 crores, broadly flat YoY and grew 3% sequentially.

  • EBITDA margin for Q3 FY26 was 20.9%, up 20 basis points YoY and 130 basis points QoQ.

  • Profit After Tax (PAT) for Q3 FY26 was INR 65 crores, registering a 9% YoY growth and almost 30% QoQ increase.

  • Realization per tonne increased by approximately 10% YoY to INR 8,117, driven by price hikes.

  • Net debt reduced to INR 272 crores as of December '25 from INR 304 crores in September '25.

  • The company expects 10-12% volume growth and 11% revenue growth for FY27, targeting INR 3,600 crores revenue.

  • An interim dividend of INR 5 per share was approved, reflecting improved cash profits.

  • 500 new commercial vehicles were ordered for FY26, with 100 already delivered in January, to meet demand and improve fleet efficiency.

Key financials

3 periods

Headline

  • Net Debt (Dec '25)
    ₹272 Cr
  • Receivable Days
    11 days
  • Interim Dividend
    ₹5

Q3 FY26

  • Total Income
    ₹831 Cr
    YoY 0% QoQ +3%
  • EBITDA Margin
    20.9%
    YoY +0.2% QoQ +1.3%
  • PAT
    ₹65 Cr
    YoY +9% QoQ +30%
  • Tonnage Growth
    -9%
  • Realization per Tonne
    ₹8,117
    YoY +10%

9M FY26

  • Total Income
    ₹2,386 Cr
  • EBITDA Margin
    20.5%
    YoY +3.3%
  • PAT
    ₹165 Cr
    YoY +52%

What they filed

Q1 FY27: revenue up 18.1%, net profit up 62.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue799 825 809 744 797 −0%827 +0%853 +5%879 +18%
EBITDA133 166 187 152 151 +14%170 +2%177 −5%187 +23%
Net profit36 59 74 50 50 +39%65 +10%72 −3%81 +62%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Volume

  • Tonnage Growth Volume · Q4 FY26 · Medium confidence 3-4%
    Volume growth, one thing is we are expecting at least around 3% to 4% sequential growth in tonnage even in last Q4.

    — Sunil Nalavadi

  • Tonnage Growth Volume · FY27 · Medium confidence 10-12%
    that will lead to at least around 10% growth in tonnage in the next financial year. That's what we are expecting.

    — Sunil Nalavadi

Revenue

  • Revenue Growth Revenue · FY27 · High confidence 11%
    Yes, 11% revenue growth, that will lead to the revenue of around INR3,600 crores in the financial year '27.

    — Sunil Nalavadi

  • Total Revenue Revenue · FY27 · Medium confidence INR 3,600 crores

    — Sunil Nalavadi

Margin

  • EBITDA Margin Margin · FY27 · Medium confidence 20-20.5%
    And with the EBITDA of around 20.5%, then EBITDA will be in the range of around INR730 crores, INR740 crores.

    — Sunil Nalavadi

Capex

  • Total Capex Capex · FY27 · Medium confidence INR 350 crores
    So in total yes, next year. So total capex we are expecting next year around INR350 crores.

    — Sunil Nalavadi

  • Vehicle Addition Capex · CY26 · High confidence 500 commercial vehicles
    And during the quarter, we placed an order of 500 commercial vehicles, new HCVs to meet the demand and improve fleet efficiency

    — Sunil Nalavadi

Realization

  • Realization Gain Realization · Next 2-3 quarters · Medium confidence 1-2%

    Previously 4-5% → 1-2%

    No, see around 1% or 2%, you can assume not beyond that.

    — Sunil Nalavadi

Infrastructure

  • Captive Fuel Pumps Infrastructure · Next Financial Year · High confidence 3-4
    And going forward, we are having a plan to add another at least around 3 to 4 pumps in the next financial year.

    — Sunil Nalavadi

Risks & concerns

  • Industry-wide shortage of skilled drivers

    medium

    VRL's on-roll driver model is highlighted as a key competitive advantage to mitigate this risk.

    Management acknowledged

  • Near-term macro uncertainties

    medium

    Management remains optimistic due to improving demand, marketing initiatives, and geographic expansion.

    Management acknowledged

  • Customer attrition (sequential)

    low

    Management expects 5-6% sequential customer loss but anticipates new customer additions to offset this and improve overall tonnage growth.

    Management acknowledged

Q&A highlights

3 direct
Volume Growth Outlook and Strategy Direct
Volume growth, one thing is we are expecting at least around 3% to 4% sequential growth in tonnage even in last Q4. And basically, out of this, around 345,000 tons have been already delivered in the month of January. So based on that, we are expecting at least around 4% tonnage growth in Q4.

This question directly addresses the future growth trajectory after a period of tonnage decline, providing specific sequential and annual targets and strategies like new branch openings and agent appointments.

Asked by Krupashankar NJ

Sustainability of EBITDA Margins and Cost Control Direct
See basically, out of the total expenditure, almost around 35% to 40% of our expenses are fixed in nature. See one is major the employee cost, which is almost around 18% of the revenue is fixed in nature. Whenever the revenue improves, and again, the percentage of the employee cost will come down.

The analyst questioned how VRL plans to maintain 20% EBITDA margins with rising costs and 10-11% revenue growth, leading management to explain the fixed cost structure and operational leverage.

Asked by Anshul

Fleet Strategy and Vehicle Tonnage Optimization Direct
So because of this, even 20-toner capacity vehicle is also having the size of 32 feet and 28-toner also having the 32 feet size. So because of this reason, what is happening, if you see the payload factor of the vehicle, the 20-toner vehicles are more efficient than the 28 toners.

This question revealed a strategic shift towards 20-tonner vehicles over larger 28-tonners due to better efficiency and payload factors, providing insight into fleet optimization decisions.

Asked by Krupashankar NJ

2 min read 6 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

VRL Logistics reported a total income of INR 831 crores for Q3 FY26, which was broadly flat year-on-year but showed a 3% sequential growth. The company achieved an EBITDA margin of 20.9%, expanding by 20 basis points YoY and 130 basis points QoQ. Profit After Tax (PAT) for the quarter stood at INR 65 crores, marking a 9% YoY growth and a significant 30% sequential increase, primarily due to lower interest costs following debt repayment.

Tonnage and Realization Trends

While tonnage declined by 9% year-on-year in Q3 FY26, primarily due to the exit of low-margin and non-strategic contracts, daily tonnage crossed 10,900+ tons, reflecting improving demand. Realization per tonne increased by approximately 10% YoY to INR 8,117, driven by price hikes and the discontinuation of low-margin businesses. Management expects a gradual uptick in volumes, with a projected 3-4% sequential tonnage growth in Q4 FY26.

FY27 Growth Outlook and Targets

VRL Logistics is optimistic about FY27, projecting a 10-12% volume growth and an 11% revenue growth, aiming for a total revenue of around INR 3,600 crores. The company expects to maintain its EBITDA margins at around 20-20.5% for FY27, which would translate to an EBITDA in the range of INR 730-740 crores. This growth is anticipated to be driven by new client additions, expansion into new geographies through franchisees, and aggressive marketing.

Strategic Capex and Fleet Management

Capex for Q3 FY26 was INR 74 crores, with INR 50 crores allocated to land and building purchases at strategic locations. For FY27, total capex is projected to be around INR 350 crores, split between INR 160-170 crores for vehicle additions and INR 160-170 crores for land and buildings. The company placed an order for 500 new commercial vehicles for calendar year 2026, with 100 already delivered, to meet demand and improve fleet efficiency. A strategic shift towards more efficient 20-tonner vehicles over 28-tonners was also highlighted.

Cost Management and Balance Sheet Strength

Fuel costs as a percentage of total income declined to 24.8% from 26.4% in Q3 FY25, aided by increased bulk procurement and an increase in captive fuel pumps from 7 to 8. Employee costs increased to 18.1% of total income due to annual increments and higher driver incentives, viewed as an investment. The balance sheet remains strong, with net debt reducing to INR 272 crores as of December '25, and receivable days maintained at a low 11-12 days, reflecting efficient collection mechanisms.

Network Expansion and Agent Model

VRL's network operates with around 1,250 branches and 50 trans-shipment hubs across 24 states and 5 union territories. The company is actively appointing franchisees or agents in newer geographies and existing markets, having already appointed 15-20 agents in January. This strategy aims to leverage local expertise and expand consignment booking capabilities, contributing to future volume growth without impacting realization rates.

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