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YES Securities
Mahindra Logistics (Sell)
Target: ₹264
CMP: ₹370
The company has seen pick up in logistics activity and normalcy on monthly basis. Pharma continues to see the positive growth and expect similar trend going ahead. Auto segment has seen good demand from smaller cities and rural sector. Two-wheeler has picked up while medium and heavy vehicles have remained weak and expect such trend for several quarters. H2 FY21 will be better than H1 specially for the automotive sector. Engineering and capital goods segments are doing better but improvement is gradual.
The performance has been driven by the non auto segment and also from segments like warehousing. While some of the auto sub segments like two wheelers have shown decent recovery, M&HCV segment is still slow.
Also, MLL’s EM division is likely to remain impacted, with IT and Financial sector employees largely working from Home. We have marginally increased our estimates to factor in better performance and improved outlook in non auto business and warehousing business.
We retain our SELL rating on the stock with a revised target price of ₹264.
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