ICICI Direct initiates coverage on Mahendra Logistics, target price Rs 415

ICICIdirect has initiated coverage on Mahindra Logistics in the long term with a target price of Rs 415. The stock ended up 0.5% at Rs 339.95 on Thursday while the Sensex fell 382.91 points down at 37,068.93.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 899.03 crore, down -11.40 % from last quarter sales of Rs 1014.68 crore and down -3.14 % from last year same quarter sales of Rs 928.19 crore. The company has reported net profit after tax of Rs 18.68 Crore in latest quarter.


Investment Rationale

The brokerage has initiated coverage considering the rising importance of services like inbound, outbound and infactory logistics along with prospects of performing further value added services. Increased revenue share from the non-Mahindra business (especially FMCG, e-commerce) would enable higher warehousing revenues, providing higher gross margins and translating into higher profitability.