Whalesbook
ICICI Securities has reaffirmed its 'Buy' recommendation on BlackBuck Ltd., adjusting its target price to Rs 650 from Rs 775. This new valuation implies a 32x one-year forward EV/Ebitda multiple for FY28E.
Strong Q4 Performance
The company reported robust 52.2% year-on-year growth in its core business during the fourth quarter of fiscal year 2026. This surge was propelled by an 11 percentage point outperformance in tolling gross transaction value (GTV) against the industry average, alongside significant gains in telematics. Notably, volumes for AIS-based tracking devices saw a notable quarter-on-quarter increase of approximately two times.
Expanding Market Share and New Ventures
BlackBuck's dominance in the tolling sector is evident, holding nearly a 50% market share while still outperforming industry growth. The company's new business segments also experienced substantial expansion, growing approximately three times year-on-year, largely fueled by strong traction in its Superloads and vehicle financing operations.
Navigating Market Challenges
Despite the positive outlook, ICICI Securities acknowledges potential near-term pressures. The ongoing Middle East conflict could temporarily impact freight activity. Furthermore, significant investment in growth initiatives may keep the margin outlook subdued in the immediate future. Consequently, ICICI Securities has revised its EBITDA estimates downwards by 9.3% and 10.8% for FY27 and FY28, respectively, leading to the adjusted target price and a lowered EV/Ebitda multiple for FY28E.
Long-Term Optimism Persists
ICICI Securities maintains a constructive stance on BlackBuck's medium and long-term potential, underpinning the continued 'Buy' rating. Key risks identified include potential regulatory challenges for existing operations, difficulties in scaling new business ventures, and broader economic slowdowns stemming from geopolitical instability or weaker consumer demand.