Mahindra Logistics Share Price: This logistics stock is down over 43% from recent highs! Should you buy dip?

Shares of Integrated Logistics Service Provider, Mahindra Logistics Limited ,mll) has fallen more than 43 percent from its August 2021 highs, leaving the stock firmly in the grip of bears. The company with a market capitalization of over Rs 3,300 crore on June 29 hit a 52-week high of Rs 819.15 on August 30, 2021.

Sharekhan, in its recent report, said the company is looking to add warehousing capability, expand its network services business and acquire capabilities based on capabilities in the logistics sector. Also, the five-year revenue target of Rs 10,000 crore with net profit margin expansion remains intact.

It further added that higher overhead absorption, increased integrated solutions revenue mix, and reduced charges related to new warehouse additions in line with the new accounting standards are expected to drive faster growth in the company’s net income.

The brokerage firm remains optimistic about the long-term growth potential and has retained the ‘buy’ recommendation with a target price of Rs 630 per share, indicating a rise of over 35 per cent in the counter, compared to its previous Rs. The closing was from Rs.466.55. on Tuesday. believes that order intake is trailing expectations. This is mainly due to slow growth in the wide selection of platforms, which contribute 75 per cent of MLL’s e-commerce revenue, while gaining market share and delivering superior volume across the category. It added that MLL has slowed down the pace of adding warehousing space due to lower-than-expected orders.

“We maintain ‘add’ on MLL with a revised target price of Rs 465 (30x FY24E EPS) from Rs 550/share. We have slowed down our margin estimates for FY23/24E as compared to the expected efficiency ramp. given,” it added.

The brokerage house highlighted that better-than-expected traction in warehousing revenue, margin surprise due to continued improvement in product mix, and management’s ability to execute on its Rs 10,000 crore revenue guidance by FY26 are key factors Who can do good work for the company. ,

However, slowdown in industry adoption of Grade A+/Grade A++ warehousing, higher competition, and lower-than-expected auto sector revenues remain major downside risks.

As per the data available on Trendline, the average price target is Rs 535, which indicates a growth of over 15 per cent.

Mahindra Logistics reported 20 per cent growth in net profit at Rs 12 crore for the March 2021 quarter, primarily driven by e-commerce, consumer, automotive and freight forwarding businesses. The company had posted a net profit of Rs 10 crore in Q4 FY20.

Net sales in the quarter also grew nearly 20 per cent to Rs 974 crore as compared to Rs 812 crore in the March quarter of FY15.

The company also has an upcoming dividend of Rs 2 per share payable on 21 July 2022. Mahindra Logistics has declared 5 % dividend with effect from July 25, 2018. In the last 12 months, the company has declared equity dividend amounting to Rs.2.50 per share.

Promoters held 58.18 percent stake in the company as of 31-March-2022, while FII Ownership 20.39 percent, DII 12.13 percent.

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent whose views) economic times,

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