Mahindra Logistics - Entry In New Businesses To Keep Margins Under Check: Motilal Oswal

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.Mahindra Logistics Ltd. is transitioning its business model from a pure third-party logistics player to a more integrated player with focus on network solutions— freight forward, busness-to-business express, etc. While this would need Mahindra Logisitcs to invest aggressively, we feel this may hurt the margin trajectory in the near to medium term. Furthermore, the competitive landscape has intensified significantly in the 3PL space, making margin expansion more challenging. With ~75% of Mahindra Logistics’ business being low margin transportation, the overall margin expansion now may be gradual.Recent acquisition of Rivigo’s B2B business could negatively impact margins as the business is currently loss making at Ebitda level. Though Mahindra Logistics is confident of turning it breakeven by Q1 FY24, we believe it could be challenging with the presence of established players in that segment.In the medium term, Mahindra Logistics intends to increase the scale of network services and achieve faster turnaround of recent acquisitions. It remains focused on improving the revenue mix by increased share of non-Mahindra and Mahindra Ltd. revenues, warehousing revenues, and value added services.The company is looking to focus on cost optimisation and improve the efficiency and integration of mobility business solutions..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Mahindra Logistics - Entry In New Businesses To Keep Margins Under Check: Motilal Oswal

Recent acquisition of Rivigo’s B2B business could negatively impact margins as business is currently loss making at Ebitda level.

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