Morgan Stanley has initiated an “underweight” rating on Zinka Logistics, assigning a target price of ₹450. This implies a downside potential of 16% from the current market price of ₹538.00.
The brokerage acknowledged that Zinka Logistics has built a niche position with strong competitive moats in a large and fragmented market through its diverse offerings. The company has recently turned profitable, showcasing a rapidly expanding margin profile. Morgan Stanley projects a steady-state adjusted EBITDA margin of 38%, with incremental margins stabilizing at 60% by FY27.
However, the brokerage finds the current risk-reward equation unattractive, noting that the stock has surged 105% since its November 2024 listing. Additionally, the valuation at 34x FY27 adjusted EBITDA is considered to be at the higher end compared to relevant peers.
Disclaimer:
This article is for informational purposes only and does not constitute financial advice. Please consult a qualified financial advisor before making investment decisions.