 "This recently listed stock zoomed 102% so far in Dec after subdued debut")
Shares of Zinka Logistics Solutions (Zinka), the parent company of digital freight platform BlackBuck, hit a new high of Rs 546.80, as they rallied nearly 9 per cent on the BSE in Monday’s intra-day trade. The stock of the transport-related services provider company is trading higher for the fifth straight day, having surged 36 per cent during the period.
Thus far in the month of December, the stock price of Zinka has more than doubled, or zoomed 102 per cent, from the level of Rs 270.95 on November 29. Currently, the stock is trading 100 per cent higher against its issue price of Rs 273 per share. It fell below its issue price at Rs 248.25 on November 27.
On November 22, Zinka made a subdued market debut, with shares of the company ending at Rs 260.20, lower by 5 per cent from its issue price on the BSE.
The BlackBuck IPO, which closed on November 18, 2024, received a moderate subscription of 1.86 times. Qualified institutional buyers (QIBs) led the demand, and subscribed 2.72 times their reserved portion, followed by retail investors at 1.7 times. Non-institutional investors (NIIs), however, showed limited interest, with a subscription rate of just 0.24 times.
Zinka, through its digital platform BlackBuck, offers services such as payments, telematics, load marketplaces, and vehicle financing. The company aims to streamline operations for truck operators by providing digital tools to enhance efficiency and profitability.
India’s growing economy needs the support of robust logistical capabilities and small and medium size truck operators are the backbone of the logistics sector in the country. These truck operators are served through value chains that are unorganised and fragmented, making their operations inefficient.
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The company is on a mission to digitally empower India’s truck operators, helping them manage their business and grow their income. Using the company’s platform, their customers (primarily truck operators) digitally manage payments for tolling and fueling, monitor drivers and fleets using telematics, find loads on their marketplace and get access to financing for the purchase of used vehicles.
The company generates revenue from truck operators through commission income from the company’s payment’s offerings, subscription fees from a combination of telematics, payments and loads marketplace offerings and service fees from vehicle financing offerings.
A strong uptick in the stock price of Zinka was seen after the company, on December 13, announced healthy earnings for quarter (Q2FY25) and half year ended September 2024 (H1FY25).
Overall revenues of the company grew 54 per cent year-on-year (YoY) in Q2FY25 and 53 per cent YoY in H1FY25. The core businesses (tolling and vehicle tracking solutions), which contribute to a majority of its revenues, continued its growth momentum and delivered an YoY growth of 47 per cent in Q2FY25 and 49 per cent in H1FY25.
The core businesses continue to compound strongly, leveraging the digital tailwinds of the Indian economy and the modernisation story of the truckers, the company's management said.
The company's operational metrics continued to grow at a healthy pace, demonstrating the strong value proposition of the platform. On a YOY basis, the company reported 22 per cent growth in monthly transacting truck operators, 32 per cent growth in Payments GTV, and growth of 8 per cent in time spent by users on its app.
The company said, multiple new business verticals continue to take shape and scale well, with the revenue momentum from Loads Marketplace and Vehicle Finance businesses, its new businesses, demonstrating an YoY revenue growth of 144 per cent in Q2FY25 and 120 per cent in H1FY25.
In Q2FY25, the company has reported adjusted Ebitda (earnings before interest, tax, depreciation and amortisation) of Rs 12.36 crore, against a loss of Rs 5.10 crore in the year-ago period. It posted an adjusted profit after tax (excluding exceptional items and discontinued operations) of Rs 12.36 crore, against a loss of Rs 39.70 crore in the year ago period.
Meanwhile, according to analysts, the trucking industry offers vast revenue potential for companies that solve challenges and inefficiencies and enhance value for truck operators. Innovating digital products to tailor solutions for meeting truckers' specific needs and scaling these offerings through a strong distribution network can unlock significant opportunities, according to them.
The Indian trucking sector is a $18- 25 billion revenue pool as of fiscal 2024 and expected to be up to $35 billion by fiscal 2028.