VRL Logistics Limited — Earnings Release 2023

Nov 10, 2022

Corporate Office: Giriraj Annexe Circuit House Road HUBBALLI- 580 029 Karnataka State Phone : 0836- 2237511 Fax : 0836 2256612 e-mail : headoffice@vrllogistics.com

To,

Mumbai- 400 001 Mumbai – 400 051 Scrip Code: 539118 Scrip Code: VRLLOG

BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, Plot No.C/1, G-Block, Dalal Street Bandra – Kurla Complex, Bandra (E),

Dear Sir / Madam,

Sub: Submission of Earnings Presentation

With respect to above captioned subject and in accordance with the extant provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and other applicable laws for time being in force, we enclose herewith the Earnings Presentation of the Company which would also be hosted on the website of our Company.

We request you to kindly take note of the same

Thanking you,

Yours faithfully

For VRL LOGISTICS LIMITED

ANIRUDDHA ANIL PHADNAVIS Digitally signed by ANIRUDDHA ANIL PHADNAVIS Date: 2022.11.10 14:49:37 +05'30'

ANIRUDDHA PHADNAVIS COMPANY SECRETARY AND COMPLIANCE OFFICER Date: 10.11.2022 Place: Hubballi

Q2 FY2022-23 Earnings presentation

• Certain statements contained in this document may be statements of future expectations/forward looking statements that are based on management's current view and assumptions and involve known and unknown risks and uncertainties that could cause actual results/performance or events to differ materially from those expressed or implied herein.
• The information contained in this presentation has not been independently verified and no representation or warranty expressed or implied is made, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information or opinions contained herein.
• This presentation may contain certain forward looking statements within the meaning of applicable securities law and regulations. These statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results of operations and financial condition of the Company. Such forward-looking statements are not a guarantee of future performance and actual results may differ from those in such forward-looking statements as a result of various factors and assumptions which the Company presently believes to be reasonable. Many factors could cause the actual results, to be materially different and significant factors that could make a difference to the Company's operations include domestic and international economic conditions, changes in government regulations, tax regime, etc
• None of VRL Logistics Ltd. or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.
• This document does not constitute an offer or invitation to purchase or subscribe for any shares and neither it nor any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

VRL – MARKET LEADER IN B2B PARCEL SEGMENT

Only "Owned Asset" organised player in Less than Truck load logistics business in India

Dedicated in-house maintenance facilities, inventory of spare parts and In-house software & technology capabilities

Pan-India surface logistics services provider with an established brand having one of the largest distribution networks in India

Apt asset owned model leads to higher operating margins, higher cash flows & return metrics

Integrated hub-and-spoke operating model ensuring efficient consignment distribution

Diversified Customer base with varied Commodity mix

H1FY23 CONSOLIDATED FINANCIAL PERFORMANCE

KEY HIGHLIGHTS

CONSOLIDATED FINANCIALS

6

Consolidated	Q2		YoY	Q1	QoQ			YoY
(INR in Lakhs)	FY23	FY22	Growth (%)	FY22	Growth (%)	H1FY23	H1FY22	Growth (%)
Income from operations	73075	63637	15%	71711	2%	144786	105014	38%
Other Income	220	177		296		517	528
Total Income	73295	63814	15%	72008	2%	145303	105542	38%
EBITDA	10142	11506	(12%)	11738	(14%)	21880	15463	42%
MARGINS (%)	14%	18%				15%	15%
EBIT	5852	7549	(22%)	7837	(25%)	13689	7738	77%
MARGINS (%)	8%	12%				9%	7%
PBT	4396	6568	(33%)	6606	(33%)	11002	5807	89%
MARGINS (%)	6%	10%				8%	6%
PAT(exclusive of othercomprehensive income)	3146	4948	(36%)	4937	(36%)	8082	4344	86%
MARGINS (%)	4%	8%		7%		6%	4%

Q2 FY23 CONSOLIDATED FINANCIAL PERFORMANCE

VRL has continuously surpassed its Quarterly Revenue by recording its highest ever turnover on quarterly basis.

2% QoQ 15% YoY QoQ YoY (14%) QoQ (12%) YoY (36%) QoQ (36%) YoY EBITDA @ Rs.10142 lakhs Revenue @ Rs.73295 lakhs PAT @ Rs.3146 lakhs

Q2FY23

KEY HIGHLIGHTS

Q2FY23 records the highest ever Quarterly turnover driven by increased demand across all sectors in the GT segment

Revenue increases 15% YoY & 2% QoQ

Goods Transport revenue increases 14% YoY & 7% QoQ

Bus Operations revenue increases 46% YoY & decreases 25% QoQ &. Bus Operations EBITDA decreases 81% QoQ

Dip in Q-o-Q Performance of Bus segment in Q2FY23 impacted the consolidated EBITDA and EBITDA margins

Sale of Wind Power segment – considered as "Assets held for sale" with effect from 01.08.2022, thereby eliminating contribution from this segment to the consolidated numbers from August 2022

Profit on sale of Wind Power segment is not yet recognized in Q2 FY23 & is being depicted as "Asset held for sale" - Would be recognized upon obtaining necessary regulatory approvals.

GOODS TRANSPORT (GT)

Rupees	Q2		YoY	Q1	QoQ			YoY
in Lakhs	FY23	FY22	Growth (%)	FY22	Growth (%)			H1FY23 H1FY22 Growth (%)	Q2FY23 records the highest ever
Revenue	65001	56882	14%	60887	7%	125888	95364	32%	revenue @ Rs.65001 lakhs driven bydemand across all sectors and addition
EBITDA	10113	10979	(8%)	9976	1.4%	20089	15286	31%	of new SME and Corporate clients
Margin (%)	16%	19%		16%		16%	16%		Q2FY23 Revenue up by 14%YOY & 7%QoQ
EBIT	6619	7929	(17%)	6954	(5%)	13573	9377	45%
Margin (%)	10%	14%		11%		11%	10%		Q2FY23 Revenue up by 32%H1YoY

Q2FY23 EBITDA @ 10113 lakhs & Margins @16%

Addition of new branches supporting revenue increase to all time high

GT PERFORMANCE

Revenue Analysis

• GT revenue increased by 32% H1YoY, 14% YoY and 7% QoQ due to revival in economy and growing demand from SME and Corporates.
• Volumes up by 27% H1YoY, 14% YoY and 7% QoQ. Focus on Volume Growth- Wait and Watch approach on Freight Rates
• Sudden surge in Festive Bookings (@fag end of Q2FY23) as compared to earlier quarters. Related Revenue is not recognised in the current quarter on account of non completion of services.
• 97 new Branches added in H1FY23 and 29 new Branches added in Q2FY23- enhanced VRL Logistics presence in hitherto untapped markets.
• Branches added in H1FY23 & FY 2021-22 contributed ~8% of total tonnage in Q2FY23
• Continued shift of Clientele base to VRL Logistics from unorganized sectors as a result of increase in compliance requirements under GST

GT – PROFITABILITY ANALYSIS

10

YOY	Q2 FY23	Q2FY22	Difference (%)	Reason
		(Percent to Revenue)
EBITDA	15.56%	19.30%	(3.74%)
Fuel cost	30.43%	30.68%	(0.25%)	•Increasein costs due to Retail procurement increases from 47.09% in Q2FY22to 98.3% in Q2FY23 as there was an increase in rates for bulk purchase of Dieselfrom refineries.•Compensated by Decline in Fuel procurement costs per litre due to reduction inExcise Duty
Lorry Hire	10.16%	7.25%	2.91%	•Engagement of more outside vehicles due to sudden surge in festive bookingsspecifically from Suratand Ahmedabad markets•Increase in Lorry hire charges per Km
Vehicle Running, Repairs &Maintenance	6.60%	7.77%	(1.17%)	•Increase in Kmscovered by New vehicles in overall Kmswith lessermaintenance costs.
Bridge & Toll expenses	7.33%	6.14%	1.19%	•Increase in number of toll points , Toll Rates and Increase in Kmsby Companyowned vehicles
Hamali(Loading & UnloadingCharges)	6.39%	5.90%	0.49%	•Increasein Loading and Unloading rates per ton
EmployeeCost	14.90%	13.76%	1.14%	•Annual Increments effected fromJanuary 22
Other Expenses	8.62%	9.20%	(0.57%)	•Rest of all otherexpenses were fairly under control and reduced by 0.57%
EBIT	10.18%	13.94%	(3.76%)	•Due to Decline in EBITDAmargins
Depreciation	5.37%	5.36%	0.01%	•Increaseson account of increase in Capex•Compensatedby reduction in depreciation due to useful life of goods transportvehicles is revised from 8.84 years to 15 years.

GT – PROFITABILITY ANALYSIS

11

	Q2 FY23	Q1FY23	Difference
QoQ	(Percent to Revenue)		(%)	Reason
EBITDA	15.56%	16.39%	(0.83%)	•Sudden increase in Transit tonnage booked during festive surge (fagend of Q2FY23) as compared to earlier quarters. Revenue of thistonnage is not recognised in the current quarter on account of noncompletion of services.
Lorry Hire	10.16%	9.37%	0.79%	•Due to engagement of more outside vehicles on account of festivedemand specifically from Suratand Ahmedabad markets•Increase in Lorry hire charges per Km
Vehicle Running, Repairs &Maintenance	6.60%	6.11%	0.49%	•Due to increase in Spare parts rates
Vehicles Operation-Diesel Cost	30.43%	31.11%	(0.68%)	•Decline in Fuel procurement costs per litre due to reduction in ExciseDuty
Employee costs	14.90%	15.16%	(0.26%)	•Being a fixed cost, percentage to revenue declined on account ofincrease in tonnage and revenue.
Other Expenses	22.36%	21.87%	0.49%	•Rest of all otherexpenses were fairly under control and reduced by0.49%
EBIT	10.18%	11.42%	(1.24%)	•Due to decline in EBITDA margins and increase in Depreciation
Depreciation	5.37%	4.96%	0.41%	•Due to Increasein Capex

BUS OPERATIONS

	Q2		YoY	Q1	QoQ			YoY
Rupees inLakhs	FY23	FY22	Growth (%)	FY23	Growth (%)	H1FY23	H1FY22	Growth (%)
Revenue	7322	5027	46%	9787	(25%)	17109	6783	152%
EBITDA	381	27	1306%	1995	(81%)	2376	(362)	757%
Margin (%)	5%	0.5%		20%		14%	(5%)
EBIT	20	(290)	107%	1701	(99%)	1721	(1007)	271%
Margin (%)	0.3%	(6%)		17%		10%	(15%)

Q2FY23 Revenue @ 7322 lakhs, up by 46% YoY and (25%)% QoQ

Q2H1FY23 Revenue @ 17109 lakhs, up by 152% H1 YoY

Q2FY23 EBITDA @ 381 lakhs and Margins @ 5%

Number of buses decreases from 280 to 279 - YoY

Number of buses decreases from 297 to 279- QoQ

The Company has, during the current quarter, received approval from the Board for sale / transfer of its Bus Operations to a promoter group company 'Vijayanand Travels Private Limited' by way of slump sale as a going concern, for a sale consideration of ₹ 23,000 lakhs. The said slump sale has been approved by the shareholders on 31 October 2022.

SALE OF POWER

	Q2		YoY	Q1	QoQ			YoY
Rupees inLakhs	FY23	FY22	Growth (%)	FY23	Growth (%)	H1FY23	H1FY22	Growth (%)
Revenue	306	858	(64%)	491	(38%)	797	1412	(44%)
EBITDA	239	690	(65%)	319	(25%)	559	1079	(48%)
Margin (%)	78%	80%		65%		70%	76%
EBIT	148	419	(65%)	50	193%	198	538	(63%)
Margin (%)	48%	49%		10%		25%	38%

The Company has, during the current quarter, executed a Business Transfer Agreement for the sale of its Wind Power Business Undertaking as a going concern on a slump sale basis for an aggregate sale consideration of ₹ 5,285 lakhs. The Company has received an advance of ₹ 4,800 lakhs against the sale consideration from the buyer. Pending approval from the relevant regulatory authorities for the sale transaction, the assets relating to this undertaking amounting to ₹ 3,760 lakhs have been classified as Assets Held for Sale in the Financial Results.

Sale of Windpower segment – considered as "Assets held for sale" with effect from 01.08.2022, thereby eliminating contribution from this segment from August 2022

Goods Transportation Network

• Market Leader In LTL Segment
• Operations:
• 23 States

&

• 4 Union Territories
• 1045 Branches
• 47 Strategically Placed Hubs

INFRASTRUCTURE

VRL has 1292 vehicles > 15 years, as of September 30, 2022 with a total capacity of 14349 tons, whereas VRL added 19358 tons capacity from 2019 onwards. Further 1200+ higher capacity vehicles (~13000 tons) are being added.

Wide range of sectors served

Expertise In Handling Variety Of Commodities

Diversified B2B Customer Base Across Wide Range of Industries

No single customer contributing over ~1% of Total Revenue

Contribution from Top 10 customers account for ~3% of total Goods transportation business

Storage facility available in all our Delivery branches

Lowest Bad Debts and Hassle Free Claim Settlement in the Industry

KEY DEVELOPMENTS

Addition of 97 new branches in H1FY23. 68 new branches added in Q1FY23 & 29 new branches added in Q2FY23. Closed : 8 branches. Total number of branches as on 30.09.2022 is 1045.

Expansion of existing Branch Area and increasing Branch Density in Key Markets like Pune, Ahmedabad, Raipur, Salem, Chennai, Kanpur, Delhi, Kolkata, Patna, Guwahati, Siliguri, Cuttak, etc.

Number of GT Vehicles increased from 5036 vehicles in Q1FY23 to 5193 vehicles in Q2FY23. Total New GT vehicles added in H1FY23- 560 vehicles (Vehicles added in Q1FY23- 312, Q2FY23– 248), Sold/scrapped – 183 vehicles, Net vehicle addition in H1 FY23 is 377 vehicles.

91.2% of the GT vehicles are debt free

Management is focusing on high growth and high margin Goods transport segment as evident from:

• Sale of Bus Operations
• Sale of Wind Power segment
• Sale of an Aircraft

Capex of Rs.16926.74 lakhs incurred during H1FY23 out of which Rs. 15258.93 lakhs was towards Goods Transport Segment

Capex of Rs.8385.48 lakhs incurred during Q2FY23 out of which Rs.7387.70 lakhs was towards Goods Transport Segment

Net debt increased from Rs. 12989.88 lakhs as on Mar 31, 2022 to Rs. 16394.82 lakhs as on 30.09.2022 despite significant Capex 17

Continued focus on higher margin LTL segment

Focus on increasing Geographic presence in hitherto untapped markets

Priority to Volume Growth- Wait and Watch approach on Freight Hike

Well positioned to conclude planned fleet addition

For Further discussions or Queries, Please contact

Sunil Nalavadi Chief Financial Officer +91 93425 59298 cfo@vrllogistics.com