Hem Securities has come out with its report on Mahindra Logistics. The research firm has recommended to "Subscribe " the IPO in its research report as on October 30, 2017.
Co’s competitive advantage is its “asset-light” business model pursuant to which assets necessary for co’s operations such as vehicles and warehouses are owned or provided by a large network of business partners. Co operate its SCM business through a pan-India network comprising 24 city offices and over 350 client and operating locations as at August 31, 2017. Co have a large network of over 1,000 business partners providing it vehicles, warehouses and the other assets and services for its SCM business, thus depicting wide network of company. As at August 31, 2017, co managed over 10.0 million square feet of warehousing space spread across co’s pan-India network of multi-user warehouses, built-to-suit warehouses, stockyards, network hubs and cross-docks. Certain key clients for co’s SCM business include Volkswagen India Private Limited, Vodafone India Limited, Thermax Limited, JSW Steel Limited, Ashok Leyland Limited, Siemens Limited, Bosch Limited, BMW India Private Limited, 3M India Limited, and Mercedes-Benz India Private Limited. In PTS business, co offer its services through a fleet of vehicles provided by a large network of over 500 business partners. As at August 31, 2017, co operated its PTS business in 12 cities and over 120 client and operating locations across India. Certain key clients in India for co’s PTS business include Tech Mahindra Limited, AXISCADES Engineering Technologies Limited and ANZ Support Services India Private Limited, thus depicting strong clientele of company.
Co is bringing the issue at price band of Rs 425-429/share on post issue annualized Q1FY18 eps at p/e multiple of 50.Co being the the Mahindra brand, operates an “asset-light” business model has-presence across diverse industry verticals with long-standing client relationships. However on valuation front issue looks bit expensive. Hence ,we recommend " Subscribe" on issue for long term .
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