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AVG Logistics Ltd

| Q3 FY26 Earnings Conference Call

NEUTRAL SENTIMENT

Report Source

⬤24th Feb 26

Summary : AVG Logistics expands into high-margin cold chain and green logistics, targeting 15-20% growth, despite past misses and market volatility.

Management Perspective positive : "Very much hopeful that in coming years, we will grow as much as we have grown.""Confident that our asset-light approach will create long-term value.""Definitely 15% to 20% growth we are expecting year-on-year.""Next 5 years, huge change in industry; electric, LNG, CNG well up."

Concall Report Analysis & Insights

Business Overview

  1. Leading multi-modal logistics provider with pan-India presence.
  2. Expanded into liquid logistics and cold chain segments.
  3. Deployed 55-ton electric trucks and LNG-powered fleet.
  4. Secured 6-year Parcel Cargo Express Train (PCET) contract.
  5. Signed long-term supply chain contracts with FMCG companies.

Future Growth Prospects

  1. Targeting 15-20% year-on-year organic growth.
  2. Planning to add 5 lakh square feet of warehousing by FY27.
  3. Expanding cold chain fleet, targeting INR150 crores revenue.
  4. Developing new rail routes like Delhi-Kolkata.
  5. Sustainable logistics (electric, LNG) is a key growth driver.

Management Insights

  1. Committed to continuous evolution and sustainable models.
  2. Strengthening operational and financial foundation.
  3. Confident in asset-light approach and integrated offerings.
  4. Focusing on calibrated growth, network expansion, technology.
  5. Prioritizing customer requirements for business sustainability.

Signs of Skepticism

  1. Analyst noted modest revenue growth despite fleet expansion.
  2. Past revenue targets for FY26-28 were not met.
  3. Company's market cap is low compared to competitors.
  4. Concerns about cold chain retail value being "stuck."

Risk Factors

  1. Logistics industry is in a consolidation year.
  2. Global equity markets are currently volatile.
  3. Market fluctuations and GST changes caused instability.
  4. Return load imbalances on certain rail routes.
  5. Intense competition in FMCG logistics limits growth.

Good To Know

  1. Q3 FY26 revenue: INR134.08 crores; 9-month: INR402.13 crores.
  2. Q3 FY26 EBITDA margin: 20.29%; PAT margin: 4.03%.
  3. Current fleet utilization is 97-98% across 900 vehicles.
  4. Warehousing capacity: 9 lakh sq ft, targeting 15 lakh next year.
  5. Warehousing margins are 25-30%, better than truck business.

Key Drivers

  1. Government infrastructure spending boosts logistics.
  2. New high-margin logistics verticals.
  3. Green fleet adoption attracts clients.
  4. Long-term contracts ensure revenue.

Key Analyst Discussions

Competitive Environment

  1. Less competition and better margins in new segments.
  2. Market cap not reflecting potential versus competitors.

Market Trends & Consumer Behavior

  1. Shareholder perspective on stock performance amid volatility.
  2. Huge demand in cold chain due to growing country.
  3. Impact of Holi festival on demand and driver availability.

Financial Highlights

  1. Capex budget for FY27 and projected returns on assets.
  2. Current fleet utilization and plans for improvement.
  3. Discussion on revenue targets for FY26.
  4. Optimizing asset turns across rail and warehousing.

Product Composition

  1. Most profitable segments: liquid logistics, cold chain.
  2. Warehousing capacity utilization and expansion plans.
  3. Rail route capacity utilization and return loads.

Strategic Considerations

  1. Scaling liquid logistics and cold chain businesses.
  2. Business verticals driving next phase of growth.
  3. Owned vs. partner vehicles for demand flexibility.
AVG Logistics Ltd (AVG) Concall Report Analysis & Insights | Dhanarthi