VRL Logistics Ltd to sell its Bus Operations business

Karnataka - VRL Logistics Limited. Of Karnataka has announced its plans to sell its bus division to Vijayanand Travel Private Limited², a promoter entity of VRL, for USD28.05mn in a slump sale.

The Bus operations Division recorded revenue of USD249.8mn which contributes 8.50% of the total revenue of the company. The Net Worth of the Bus Operations Division as of March 31, 2022, was USD42.1mn as against the overall net worth of USD 794.67mn being 5.30% of the Net Worth.

Bus operations contribution to Total Revenue has declined from 19% in FY18 to 8% in FY22.  This segment's contribution to group revenue and margins has fallen below 10% in the last two years. Even though the cost of gasoline as a proportion of revenue climbed from 37 to 47 per cent between fiscal 2020 FY20 and FY22, the average revenue per passenger fell from $12.20 to $11.27 in the last two years. "Bus operations margins drag down combined earnings, resulting in weaker Ebitda margins," the company stated in the statement.

Furthermore, 60 of VRL's 277 buses are at least six years old, and 65 per cent are more than nine years old. Presently operating in the states of Karnataka, Maharashtra, Andhra Pradesh, Telangana, and Goa. This is a debt free segment as of date.

¹VRL Logistics Limited. Of Karnataka, an Indian conglomerate headquartered in Hubballi, Karnataka, India with operations in around 23 states and 4 union territories in the country. Business operations of VRL Group include road transportation, logistics, publishing etc.

²Vijayanand Travels (VTPL) is a private limited company, newly incorporated and owned and controlled by the Promoters/ Promoter group.