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MOSL: MAHINDRA LOGISTICS: Warehousing drives volume growth

MAHINDRA LOGISTICS: Warehousing drives volume growth

(MAHLOG IN, Mkt Cap USD0.4b, CMP INR473, TP INR515, 9% Upside, Neutral)

• MAHLOG delivered a revenue growth of 36% YoY in 1QFY23, led by warehousing services and solutions, which grew 57% YoY in 1QFY23.
• The 3PL and network business of MAHLOG saw robust volume growth in 1QFY23. The 3PL business saw 40% YoY growth in revenue, led by a recovery in Auto and continued growth in existing accounts.
• The Auto sector is seeing a strong revival and the growth outlook remains robust. The management continues to provide integrated solutions to clients, which can drive volumes, while improving profitability. With a gradual improvement across key verticals and a revival in margin, we expect MAHLOG to clock a revenue/EBITDA CAGR of ~18%/31% over FY22-24. We maintain our Neutral rating with a TP of INR515 (35x FY24E EPS).

 

Volumes improve YoY; the share of the Mahindra group increases

• Revenue grew 36% YoY to ~INR12b (in line), driven by the Supply Chain segment (up 36% YoY; 95% of revenue). Revenue from Enterprise Mobility increased by 33% YoY (5% of revenue).
• EBITDA stood at INR657m, 8% above our estimate, registering a growth of 62% YoY. EBITDA margin stood at 5.5% (up 88bp YoY and 75bp QoQ).

Contribution from the Mahindra group to the Supply Chain segment rose to 54% in 1QFY23 (v/s 51% in 4QFY22). The Farm and Auto segment of MM clocked 40% QoQ growth, with significant growth in the Farm segment