BlackBuck gets Buy rating as Ambit sees strong growth ahead, values stock at Rs 885

Brokerage Ambit Capital has initiated coverage on Zinka Logistics, the parent company of BlackBuck, with a Buy rating and a target price of Rs 885. The brokerage says the company has emerged as India’s largest commercial vehicle technology platform by sharply expanding its tolling and telematics offerings and improving profitability over the last three years. The stock currently trades at Rs 699.

Ambit says BlackBuck has built a strong position in digitising India’s trucking ecosystem, driven by its FASTag payments network and telematics products. The platform now serves more than 7.9 lakh monthly transacting truck operators, representing about 23% of India’s trucker base.

This helped the company deliver 53% revenue CAGR between FY22 and FY25 in its core business. During this period, adjusted EBITDA margins moved from a loss of 121% in FY22 to a positive 24.2% in FY25.

The road freight market is worth $170-175 billion and is one of the highest operating cost items for Indian companies. BlackBuck’s FASTag-based tolling solution has grown significantly faster than the industry, increasing its market share to about 50% of commercial vehicle tolling in 2QFY26, compared to 22% in FY22.

The company offers end-to-end services such as FASTag issuance, digital payments support, instant refunds, customer service, incorrect deduction protection and a premium FASTag Gold service.

Telematics penetration in India is about 40–45% today and is expected to rise to 65–70% by FY28 as digital adoption increases. BlackBuck has benefited from this trend and now has more than 4.2 lakh active devices. Ambit estimates telematics revenue at Rs 87.6 crore for FY25, driven by both hardware and subscription income.BlackBuck’s single-segment focus on commercial vehicles has created a high-retention user base. Three-year retention is 66%, half of all users consume more than one service, and the time spent on the app has risen to around 43 minutes per day. This helps the company cross-sell new offerings at lower acquisition costs.BlackBuck is also developing its Superloads business, a load-matching platform aimed at reducing empty truck trips. The business is still small and active in only four hubs but has the potential to scale meaningfully because BlackBuck has access to a large trucker network.

Ambit expects Superloads to reach $7.8 billion in gross transaction value by FY42, about 3% of the estimated target market. It values Superloads at Rs 220 of the Rs 885 total target price. In a bull case where Superloads reaches 8% of the market, the target price could rise to Rs 1,241.

For the rest of the business, Ambit values BlackBuck at Rs 665 based on strong profitability improvement and operating leverage. Core businesses of payments and telematics are expected to grow at 24% CAGR over FY25-FY28. Overall net revenue CAGR is expected at 29% over the same period, rising from Rs 426.8 crore in FY25 to Rs 906 crore in FY28.

Adjusted EBITDA margin is projected to moderate near-term to 27.8% in FY28 because of investments in Superloads, before expanding to 50.2% by FY42.