Buy Mahindra Logistics, target price Rs 580: Sharekhan by BNP Paribas

Sharekhan by BNP Paribas has buy call on Mahindra Logistics with a target price of Rs 580. The current market price of Mahindra Logistics is Rs 437.95.

Mahindra Logistics, incorporated in the year 2007, is a Mid Cap company (having a market cap of Rs 3154.81 Crore) operating in Logistics sector.

Mahindra Logistics key Products/Revenue Segments include Services Rendered for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 1120.50 Crore, up 9.74% from last quarter Total Income of Rs 1021.07 Crore and up 6.87% from last year same quarter, Total Income of Rs 1048.51 Crore. Company has reported net profit after tax of Rs 5.07 Crore in latest quarter.

Investment Rationale
Mahindra Logistics' operational performance is likely to be affected in the near term on account of weakness in the farm and agri sector, chip shortages affecting electronics and appliances sectors, startup costs related to Bajaj Electrical account, and rising diesel prices.

However, the company continues to focus on addition of warehousing capacities, scaling up network services business, and eyeing capabilities-based acquisitions in the logistics space. The company’s five-year revenue target of Rs. 10,000 crore remains intact along with net profit margin expansion.

The brokerage remains optimistic on the long-term growth potential for Mahindra Logistics although near-term headwinds are likely to affect its operational profitability.

Promoter/FII Holdings
Promoters held 58.18 per cent stake in the company as of 31-Dec-2021, while FIIs owned 21.66 per cent, DIIs 11.09 per cent.