Up 95% since listing in November, Morgan Stanley initiates 'underperform' on this new D-Street debutant

Zinka Logistics shares in Monday's trade fell 4.5 per cent in early trade to the day's low price of Rs 509.4 as global brokerage Morgan Stanley initiated coverage on the stock with an 'underweight' rating pegged target at Rs 450. The set target implies a potential downside of 16 per cent from the previous close.

Giving its rationale for the rating, the brokerage said the logistics service provider Zinka has built a niche & competitive moats in large fragmented market with multiple offerings. The company turned profitable with rapidly expanding margin profile.

Nonetheless, with the share price up 105 per cent since Nov-24 listing, the brokerage finds risk-reward unattractive.

Furthermore, the brokerage believes the company's core business (tolling, telematics) has potential to deliver 24% CAGR, F25-27. It also added that new service offerings are in early stage of monetization offering optionality if executed well.