Buy Mahindra Logistics; target of Rs 584: Prabhudas Lilladher

Moneycontrol • 6 days ago

Original source

Key Investment Pillars

  • Mahindra Logistics' contract logistics business has achieved EBITDA break-even, driven by new client wins and a turnaround in the B2B express business.
  • The company expects EBITDA margin expansion in the contract logistics business due to fuel inflation pass-through clauses and an increase in the share of higher-margin warehousing components.
  • Network expansion is likely to drive growth and profitability in the B2B express business.
  • The company has reduced its white space by 95%, which is expected to improve operational efficiency.

Thesis Validation Checklist

  • Investors should watch for continued growth in the contract logistics business, driven by new customer additions and an increase in wallet share from existing customers.
  • Margin expansion in the contract logistics business, driven by fuel inflation pass-through clauses and an increase in the share of higher-margin warehousing components.
  • Improvement in the B2B express business, driven by network expansion and yield growth.
  • The company's ability to maintain its white space reduction and improve operational efficiency.