BlackBuck Hits Lower Circuit For 2nd Straight Session

After closing in the green for 10 of the last 11 trading sessions, shares of BlackBuck cooled off for the second consecutive day, hitting the 5% lower circuit at INR 461.10 on the BSE today (February 12).

This marks the second straight session in which the stock has hit the lower circuit, following five consecutive days of locking in the upper circuit before yesterday.

The stock opened at the lower circuit level, down 5% from its previous close of INR 485.35 per share. At this price, BlackBuck’s market capitalisation stood at INR 8,159.49 Cr, though trading volume remained limited to just 1 lakh shares.

The stock has given a return of 23% in the last month at the current market price, while it is 65% above its listing price of INR 279.05 on BSE.

Since announcing its Q3 results on February 5, BlackBuck’s stock has surged 7.68%. Not to mention, it remained locked in the upper circuit from February 4 to 10.

The company reported a widened net loss of 145% to INR 48.03 Cr in the third quarter of the fiscal year 2024-25 (Q3 FY25) from INR 19.57 Cr in the year-ago quarter. This loss widened due to exceptional loss, incurring an IPO expense of INR 8.45 Cr and a share-based payment expense of INR 69.44 Cr in the reported quarter. 

However, had it not been for these exceptional expenses, the company would have given a profit of INR 29.86 Cr in Q3 FY25 against the net profit of 12.49 Cr from its continuing operations in the September quarter.

Founded in 2015 by IIT Kharagpur alumni Rajesh Yabaji and Chanakya Hridaya, along with Rama Subramaniam, BlackBuck is a B2B marketplace for inter-city full truckload (FTL) transportation. It connects truck operators with businesses with shipping requirements in real time through its tech-enabled platform.

While BlackBuck started its journey as a truck aggregator, it has since shifted its focus to selling value-added services such as FASTag, fuel cards, vehicle tracking software, subscriptions and loans.

On December 30 last year, global brokerage firm Morgan Stanley initiated coverage on Blackbuck’s parent Zinka Logistics Solutions with an ‘underweight’ rating, suggesting that its current valuation and risk-reward profile are unappealing after IPO gains. They set a target price of INR 450 per share.

The firm’s concern was that changes to the merchant discount rate (MDR) for FASTag transactions or a shift to Global Navigation Satellite System (GNSS)-based tolling could negatively affect Zinka’s profit margins and disrupt its current business model.

Although Blackbuck is investing in new areas like vehicle financing and a freight marketplace, Morgan Stanley said that these ventures are still in the early stages of generating revenue and their ability to grow and scale is uncertain.

More importantly, the brokerage firm then believed that Zinka’s valuation was at 34 times enterprise value by EBITDA ratio for fiscal 2027, which was steep compared to its peers.