Shares of VRL Logistics Ltd rose more than 6% on May 22 after the company reported a three-fold jump in net profit for the March quarter.

The stock touched a high of Rs 707.80 on the BSE in morning trade. Shares were quoted at Rs 698 at 1:06 pm, up 6.2% from their previous close, while the benchmark Sensex rose 0.24% to 61,879.

VRL Logistics reported a 244% rise in net profit to Rs 193.18 crore in the third quarter, compared to Rs 56.19 crore a year earlier. The company’s total revenue rose 17.04% to Rs 702.88 crore in Q4FY23, compared to Rs 600.55 crore a year ago.

Goods Transport (GT) revenue grew 22% in the fiscal year, compared with a 17% increase in the quarter. This growth can be attributed to strategic planning, an increase in new branches and clients, and strong economic recovery leading to increased demand from MSMEs and enterprises.

The board approved a dividend of Rs 5 per share for FY23 and approved in principle the subdued sales of the air passenger business. This sale at a reduced price is subject to all applicable licenses and approvals from the relevant regulatory authorities.

The company has several strategies in place for its business, including a continued focus on the higher-margin GT business, expanding geographic presence in untapped markets, prioritizing volume growth, adjusting freight rates as needed, and growing fleets with successful plans.

Following the recent sale of its bus business, VRL has transformed into a pure cargo transportation (GT) business focused on the highly profitable less-than-truckload (LTL) segment. Tonnage’s growth in VRL’s cargo shipping segment is expected to be driven by several factors. An increase in new branches (184 new branches in FY23) will help tonnage growth, especially in new geographies.

Analysts expect tonnage growth to be aided by rising client numbers amid rising demand for pan-India service providers. Additionally, VRL may gain market share from smaller, unorganised competitors due to rising compliance requirements.