Neutral Mahindra Logistics for the Target Rs 400 by Motilal Oswal Financial Services Ltd
Decent performance; losses of the express business reduce
* Mahindra Logistics (MLL)’s revenue grew ~23% YoY to ~INR20b in 1QFY27 (8% above). EBITDA margin was in line and stood at 5.8% (up 110bp YoY/down 50bp QoQ). EBITDA grew ~51% YoY to INR1154m (7% above estimate).
* Adjusted profit stood at INR254m vs. adjusted net loss of INR108m in 1QFY26.
* Supply chain management recorded revenue of INR18.9b (+23% YoY) and EBIT of ~INR373m. Enterprise Mobility Services (EMS) reported revenue of INR1155m (+42% YoY) and EBIT of INR17.8m for the quarter.
* MLL reported healthy revenue growth and EBITDA margin in 1QFY27, driven by broad-based growth across the 3PL, freight forwarding, mobility, and express segments. We maintain our EBITDA estimates for FY27 and FY28 and forecast a revenue and EBITDA CAGR of 16% and 25%, respectively, over FY26-28. We reiterate our Neutral rating with a revised TP of INR400 (premised on 20x FY28E EPS).
Healthy execution and margins drive earnings
* MLL reported a 23% YoY growth in consolidated revenue in 1QFY27, driven by a 26% YoY increase in the Contract Logistics segment, ~57% YoY growth in the Express segment, and a 39% YoY rise in the Mobility business.
* The company delivered healthy gross margins across business segments, with strong improvements in the Last Mile, Cross-Border, and B2B Express segments, while Contract Logistics also witnessed a marginal uptick. The Express business reported its highest consecutive quarter of positive gross margin at INR92m. However, it continued to report losses at the EBITDA level.
* White space reduction in warehousing remains on track, with the company targeting a 95% reduction by Sep’26 from an initial 1.6m sq. ft. It has already achieved a reduction of ~0.9m sq. ft in FY26
Valuation and view
* MLL reported healthy revenue growth and EBITDA margins in 1QFY27, driven by broad-based growth across the 3PL, freight forwarding, mobility, and express segments. The company remains focused on boosting execution, enhancing yields, optimizing existing capacity, and improving the Express business.
* We maintain our EBITDA estimates for FY27 and FY28. We forecast a revenue and EBITDA CAGR of 16% and 25%, respectively, over FY26-28, and reiterate our Neutral rating with a revised TP of INR400 (premised on 20x FY28E EPS).
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