24-04-2025
I-Sec upgrades Mahindra Logistics to Add; lowers target price to Rs 350
CICI Securities has upgraded the
Mahindra Logistics
stock to ADD, from Hold. Their revised target price works out to Rs 350/share (Rs 360/share earlier). The current market price of
Mahindra Logistics
is Rs 316.25. Mahindra Logistics, incorporated in 2007, is a Mid Cap company with a market cap of Rs 2299.91 crore, operating in Logistics sector.
Mahindra Logistics' key products/revenue segments include Services Rendered for the year ending 31-Mar-2024.
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Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 1571.68 crore, down -1.80 % from last quarter Total Income of Rs 1600.45 crore and up 8.12% from last year same quarter Total Income of Rs 1453.64 crore. The company has reported net profit after tax of Rs -5.31 crore in the latest quarter.
The company's top management includes Shah, Swaminathan, Raju, Sinha, Mungale, Davda, Pandole, Hariani, Vohra. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-03-2025, the company has a total of 7 Crore shares outstanding.
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Investment Rationale
Mahindra Logistics' EBITDA has improved from its low of 3.7% in Q3FY24 to 5% in Q4FY25. The improvement is mainly on account of paring losses at Rivigo and improved performance across other verticals. Rivigo has incurred an EBITDA loss of Rs 511 million for FY25 (Rs 803 million loss in FY24); management remains optimistic and expects EBITDA to break even by Q2FY26. Further, the earnings of contract logistics are also expected to improve on the back of better utilisation of white spaces and cost normalisation. ICICI Securities believes that achieving break even in Q2FY26 could be difficult for the company, as the industry is going through a tight phase; also, Mahindra Logistics faces heightened competitive intensity and pricing pressure. Taking into account the FY25 numbers and with the expectation of improvement ahead, the brokerage increased its EBITDA estimates by 5.6% in FY26 and 1% in FY27, while cutting PAT estimates taking into account higher depreciation and interest costs. ICICI Securities has upgraded the stock to ADD, from Hold. Their revised target price works out to Rs 350/share (Rs 360/share earlier), based on the revised valuation methodology of EV/EBITDA (earlier PE multiple); they value the stock at 7x FY27E EV/EBITDA.
Promoter/FII Holdings
Promoters held 57.97 per cent stake in the company as of 31-Mar-2025, while FIIs owned 5.22 per cent, DIIs 13.85 per cent.
