Q4FY21 Result Update - Mahindra Logistics - ICICI Direct

Mahindra Logistics (MLL) continued to report its normalised performance at pre-Covid levels in its auto segment (28% YoY growth due to weak base and QoQ largely flat). However, the non-auto segment declined QoQ (down 16% QoQ, up 29% YoY due to weak base), which the management has clarified was affected by seasonality (non-festive season), indicating the growing importance of e-commerce and flex-warehousing solutions in its revenue mix. Enterprise mobility solutions continued to face headwinds due to lower utilisation of buses by companies, as most employees continued to work from home. Due to a change in product mix, margins stayed unchanged YoY (contracted 40 bps QoQ) to 4.7%. The company also reported an exceptional expense of Rs. 2.8 crore due to an impairment loss on investment in JV.

Valuation & Outlook

MLL has been strengthening its cash position in the balance sheet during the pandemic and has even improved its WC position. Going forward, given MLL's strong B2B and B2C expertise in warehousing, first-mile, last-mile, line-haul, the changing situation presents a good opportunity for MLL to expand its relation with existing clients as well as win newer clients, by providing customers with multi-modal offering and invest in digitisation and innovation. We remain positive on MLL's future prospects and faster growth in its core segments. We maintain our BUY recommendation on the stock with a revised target price of Rs. 630 (earlier Rs. 540).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_MahindraLogistics_Q4FY21.pdf

Shares of Mahindra Logistics Ltd was last trading in BSE at Rs.520.75 as compared to the previous close of Rs. 535.75. The total number of shares traded during the day was 9222 in over 857 trades.

The stock hit an intraday high of Rs. 536.6 and intraday low of 516. The net turnover during the day was Rs. 4815618.

Source : Equity Bulls

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