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Mahindra Logistics - Review / Recommendation

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resh:
Mahindra Logistics Ltd IPO Review and Recommendations are as under,

K R Choksey has the following recommendation,


--- Quote ---In terms of valuation, on the upper price band of INR 429, the company has been valued at ~65x on FY17 earnings as against 71x for Blue Dart Express, 34.2x for Gati Ltd and 54x for TCI Express. We believe, valuations look expensive, however, the
management expects MLL to receive a tax refund of approximately Rs 540 mn, which will result in positive cash flows in the coming period. The company plans to support this growth by focusing on increasing business from Non-Mahindra Group clients, leveraging the changing industry with the implementation of GST regime with greater focus on warehousing, continuing focus on technology enhancements and diversifying into other industry verticals. Thus, we recommend ‘SUBSCRIBE’ rating on the issue with long term perspective.
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Destimoney Research has the following view,


--- Quote ---However, over dependence on third parties for the operating assets makes the business risky and less profitable reflected in thin PAT margin of 1.72% and moderate RONW of 13.1%. On the back of that, asking premium of 65.5x its FY17 earnings on upper price band is comparatively expensive and is difficult to justify. Therefore, we remain NEUTRAL on the issue being cautious of the aggressive valuation.
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Gupta Equities has the following Review,


--- Quote ---Mahindra Logistics stands to gain from operating leverage. At a P/E of 64xs of FY17 Earning. We believe that Mahindra Logistics has a unique business model and strong growth metrics which will make them lucrative. We assign a Subscribe rating to the IPO.
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