This small-cap logistics stock engaged in providing a digital trucking platform for payments, telematics, loads marketplace, and vehicle financing services, is in focus after ICICI Securities covered a “Buy” rating on it with a potential upside of upto 47 percent.
With a market capitalization of Rs. 7,859.10 crore, the shares of Zinka Logistics Solutions Limited is trading at Rs. 440 per equity share, from its previous day’s close price of Rs.438.30.
ICICI Securities, a prominent brokerage firm, has recommended a “Buy” call on Zinka Logistics Solutions with a target price of Rs.650 per share, indicating an upside potential of 47.
Zinka Logistics Solutions Ltd., operating under the brand name BlackBuck, is a leading Indian technology platform focused on digitizing and optimizing trucking operations. Incorporated in 2015 and headquartered in Bangalore, the company provides a comprehensive suite of services, including payments (tolling and fueling), telematics, a loads marketplace connecting shippers with truck operators, and vehicle financing. BlackBuck aims to enhance efficiency, reduce costs, and empower truck operators across India through its digital solutions.
ICICI Securities has given a strong buy recommendation for the stock as Zinka’s revenue grew ~6.9 percent QoQ, and has given the scale efficiency with its EBITDA margin expanded ~280nps QoQ, in line with its expectations that revenue growth would lead to disproportionate margin expansion as businesses scale a typical of value-added platform businesses
This also includes a Sustained growth momentum from its newer businesses, which grew at ~50 percent YoY in Q4 and was aided by growth in the fuel sensor business ~2x in Q4. The in-principle approval for the PPI license should aid revenue growth and profitability in the core tolling business in the medium term. The new product developed in telematics may drive growth by improving the affordability of the product. The Brokerage expects that high customer engagement on the Blackbuck app may be a key growth driver
The company’s management commentary on the company’s future and performance states that the tolling business has received in-principle approval for a PPI license, which would enable end-to-end ownership of the payments stack. It also noted that while the offering will take a couple of quarters to become operational, it is not expected to incur any significant incremental operating costs, with expectations of an improvement in unit economics post-implementation, and some of these benefits will be passed on to customers to enhance stickiness.
The management has also stated that it has developed a new ICAT-certified hardware and built a complete supply chain to deliver a better customer experience while offering a pricing advantage. It added that only about 25 percent of GPS sales are currently driven by regulatory mandates.
On the freight brokerage front, management noted that the business is steadily evolving, With a strong focus on product development and playbook creation for future scale. Management added that the company earns around 6–8 percent commission per transaction in this segment.
The company’s Revenues from operations have increased by 37.43 percent from Rs 99.51 crores in Q4FY24 to Rs 136.76 crores in Q4FY25, and the company’s net profits have turned positive during the same time from a loss of Rs 90.75 crores in FY24 to Rs 280.17 crores in Q4FY25. The company also has a good debt-to-equity ratio of 0.01, and the ROE of the company stands at 43.0 percent.
Written By Likesh Babu S
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