Zinka Logistics Q4 Results Review: Strong Execution Aids Profit Improvement; ICICI Securities Reiterates Buy

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ICICI Securities Report

In Q4 FY25, BlackBuck-Owner Zinka Logistics Ltd.’s revenue grew ~6.9% QoQ and given the scale efficiencies, adjusted Ebitda margin expanded ~280 bps QoQ, in line with our thesis that revenue growth should lead to disproportionate margin expansion as businesses scale atypical of value-added platform businesses.

Sustained growth momentum from newer businesses (~50% YoY in Q4) was aided by growth in fuel sensor business (~2x in Q4).

The in-principal approval for PPI license should aid revenue growth and profitability in core tolling business over medium term.

The new product developed in telematics may drive growth by improving the affordability of the product. We believe high customer engagement on Blackbuck app may be a key growth driver.

Reiterate Buy with target price of Rs 650.

Key risks:

Changing regulations hampering existing businesses; stalling growth in new businesses if management is unable to scale its marketplace and slowdown in logistics due to geopolitics/ muted consumption.

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