MOSL: THE CORNER OFFICE (MAHINDRA LOGISTICS) — Non-Mahindra to post above-industry revenue growth

​THE CORNER OFFICE (MAHINDRA LOGISTICS) — Non-Mahindra to post above-industry revenue growth; Proportion of warehousing revenues to increase

Mr Pirojshaw Sarkari — Chief Executive Officer

Mr Pirojshaw Sarkari holds a Bachelor’s degree in Commerce from the University of Mumbai. He is a qualified Chartered Accountant. He had completed a course on Mahindra Universe from Harvard Business School, Boston. Mr Sarkari joined Mahindra Logistics in April 2010, prior to which he served as MD in UPS Jetair Express Private Limited and UPS International Incorporated, Philippines.

• The third-party logistics (3PL) space in India appears set to shift in favor of organized trade post the recent initiatives (GST, demonetization) undertaken by the Indian government. Mahindra Logistics (MLL) is well placed to capitalize on this opportunity, in our view, particularly led by the Non-Mahindra segment, which is expected to see superior growth relative to industry.
  
• Already present in Auto, E-commerce, Bulk and Consumer Pharma, MLL is now evaluating options to venture into Pharma Cold-chain and Project Logistics.
  
• MLL is focusing on increasing the share of warehousing revenue by introducing a new part-selling revenue model. It will also continue operating under the previous Built-To-Suit model.
  
• Warehousing margin (currently at ~12-13%) may see some volatility due to the introduction of the part-selling model. However, its margin is expected to still be higher than the Transportation margin of ~6-7%.
  

Our view: We believe that MLL is well placed to tap the huge potential in the under-penetrated 3PL space. The shift in trade away from the unorganized segment, along with MLL’s healthy client base, will enable it to achieve superior growth relative to industry.