Shares of VRL Logistics rose as much as 4.8% in early trade on Wednesday after the company informed stock exchanges that ICRA has upgraded its long-term rating.
VRL Logistics said the rating has been upgraded to ICRA A+ from ICRA A. The outlook on the long-term rating is stable, the company said.
Notably, other logistics stocks were also trading higher due to improved earnings outlook. Gati jumped 8%, Allcargo Logistics was up 3.8%, Snowman Logistics gained nearly 10% and Tiger Logistics rose 7.8%.
At 10:53 am, VRL Logistics stock was trading 2.5% higher at Rs 309.20, while the benchmark BSE Sensex was down 52 points, or 0.1%, to 39,697.78.
VRL Logistics last week said March quarter net profit rose 70.8% to Rs 20.5 crore against Rs 12 crore a year ago, while revenue was up 4.9% to Rs 513 crore.
Operating profit, or earnings before interest, tax, depreciation and amortization (Ebitda), jumped 35.3% to Rs 59.9 crore, while margin was up 200 basis points to 11.7%.
Research and brokerage firms are bullish on the prospects of India’s port and logistics sector in 2019. Logistics players may gain due to increased domestic consumption, rising exports, surging container volumes, loosening infrastructure bottlenecks and increased investments in the new facilities, according to brokerage firms.
Also, steps such as implementation of the goods and services tax (GST) and introduction of the e-way bill, which allows online monitoring of the movement of goods, will make logistics players more efficient. It is expected that the size of India’s logistics sector will be around $215 billion by 2020, aided by the implementation of the GST.