Buy Mahindra Logistics; target of Rs 455: Sharekhan

Sharekhan's research report on Mahindra Logistics

MLL reported marginally weak operational performance for Q1FY2024 while net loss widened due to higher tax outgo. OPMs stayed in-line despite sustained operating losses in express business. The company maintained its slower revenue growth guidance for FY2024 due to moderation of growth in auto, consumer durables, higher competitive intensity in E-com and pricing pressure in freight forwarding. The express business is targeted for EBITDA breakeven by mid-Q3FY2024 with encouraging volumes in July. Focus stays on improving margin profit in its network services businesses.

Outlook

We retain a Buy on Mahindra Logistics Limited (MLL) with an unchanged PT of Rs. 455, considering a favourable valuation which factors in near-term demand weakness.