The stock of VRL Logistics went up by about 10 per cent last week, following news reports that the company was scrapping its ageing fleet of vehicles
The operator managing the asset-heavy business, as per the report, won’t buy new trucks and will get rid of 700 low-capacity trucks to rein in repair costs amid a nascent recovery in demand.
No new vehicle addition was expected in any case, as the company had already added a large number of vehicles (around 319) in the first quarter of the calendar year 2020.
Scrapping of old vehicles and plans to remove routes that aren’t seeing enough demand can cushion margins. In the June quarter, the company reported sales growth of negative 70 per cent y-o-y as the business was severely impacted due to stranded vehicles and for want of migrant labourers amid the nationwide lockdown.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.