VRL Logistics to scrap 700 low capacity trucks to cut repair costs

August 19, 2020: The owner of the largest fleet of commercial vehicles in India, VRL Logistics has identified 700 low capacity trucks for scrappage and operator of about 5,000 vehicles, including tankers, cranes and buses won’t buy new trucks.

The firm hopes to report a profit for the year started April 1 by cutting costs and halting fresh investment. VRL Logistics reported net loss of Rs 62.71 crore in Q1 as against net profit of Rs 27.45 crore in Q1 June 2019, while net sales slumped 70.3 percent to Rs 160.09 crore compared with Rs 539.64 crore.

“The Karnataka-based firm started operations with a single truck in 1976 and its shares rose more than 40% on debut in 2015. The stock has lost 45% of its value this year, set for a third straight annual decline,” reports Financial Express.

Sunil Nalavadi, chief financial officer, VRL Logistics, said, “VRL, which is operating at about 75 percent capacity, gets more than a third of its business from small and medium-sized firms that are most vulnerable to the economic slump, and plans to remove routes that aren’t seeing enough demand. While business is improving from sectors like pharmaceuticals and farming, demand from textiles and automobiles is weak.”