Mahindra Logistics - Q2FY21 Result Update - ICICI Securities

Mahindra Logistics doubled its revenues QoQ, which led to flat YoY growth in revenues at Rs. 833 crore (E-way bill data normalised only in September). On the segmental front, SCM (90% of FY20 revenues) grew 6% YoY to Rs. 804 crore and PTS segment (10% of revenues) de-grew 71% to Rs. 29 crore. PTS segment has been severely impacted owing to work from home policy adopted by corporates. Warehousing segment saw 18% YoY growth on the back of strong performance by non-auto segment (up 17%). Owing to strong QoQ performance, the company was able to normalise its EBITDA margins at 4.5% (flat YoY) while EBITDA also came in flat at Rs. 37 crore. Higher other income enabled the company to report 31% growth to Rs. 15 crore.

Valuation & Outlook

MLL has strengthened its already strong liquidity position on balance sheet and further improved its cash conversion cycle in H1. With its asset light structure, MLL is well placed to face the volatile situation. Also, its recent performance in the non-auto segment (e-com, pharma, consumer segments), steadily has lowered its dependence on the auto sector (from ~70% in FY17 to 60% in H1FY21). Also, with a changing client profile, it has been able to leverage the situation by enhancing high margin warehousing, value-added services (up 16% in FY20) component in its revenue mix. We remain positive on MLL's future prospects and with the quicker-than-expected recovery in its core segments. We upgrade to BUY recommendation with a revised target price of Rs. 430.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_MahindraLogistics_Q2FY21.pdf

Shares of Mahindra Logistics Ltd was last trading in BSE at Rs.356.55 as compared to the previous close of Rs. 352.2. The total number of shares traded during the day was 499 in over 141 trades.

The stock hit an intraday high of Rs. 358 and intraday low of 355. The net turnover during the day was Rs. 177694.

Source : Equity Bulls

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