is Mahindra Logistics is good buy now, Price to book all time low and price to sales all time low and company continuously trying to expand the business
can anyone let me know what are the negative factors about their business model now
3 Likes
Last two quarters standalone EBITA margin jump to 8% from 5% .As per management this is because of the operational efficiency and can sustain going forward But the growth is not visible in the consolidated EBITA because of revigo acquisiton loss(-18cr).once the revigo EBITA break even happens (expected in q3fy24) Market may consider the growth and reward the stock
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Hi,
Another bad set of results at the consolidation level. Seems like situation is getting worse instead of improving.
Q2 FY24 MLL Standalone compared with Q2 FY23
• Revenue Rs. 1,136 crores as compared to Rs. 1,195 crores
• EBITDA Rs. 74 crores as compared to Rs. 64 crores
• PBT Rs. 26 crores as compared to Rs. 15 crores
• PAT Rs. 19 crores as compared to Rs 11 crores.
• EPS (Diluted) Rs.2.59 as compared to Rs 1.5
Q2 FY24 (consolidated) performance compared with Q2FY23
• Revenue Rs. 1,365 crores as compared to Rs. 1,326 crores
• EBITDA Rs. 54 crores as compared to Rs. 68 crores
• PBT Rs. (8 crores) as compared to Rs. 17 crores
• PAT loss Rs 16 crores compared to profit of Rs. 11 crores
• EPS (Diluted) Rs. (2.21) as compared to Rs. 1.69
It is quite evident that the acquisitions made by the management is backfiring. They have not been able to streamline the processes yet. EBIDTA margins have deteriorated significantly due to higher operating expenses.
If we see standalone results it is improving, and they could have been better off instead of acquiring these loss-making cheap businesses. Even there is no revenue growth also.
Senior border please suggest your views!
Disclaimer: Invested, no buy/Sell recommendation.
Thanks,
Deb
5 Likes
Just checked that they are also participating in the ONDC program through their zipzap logistics service as a last mile delivery provider
does any one know about their Financial liabilities, that is increasing year by year and hitting hard on the cash flow (321 cr on FY24)
New CEO and MD - Hemant Sikka
Dividend 2.5 Rs per Share
Standalone business has done well in FY25
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Still their cash generation poor
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My calculation of open offer by Mahindra Logistics.
Right Entitlement 8 by 3.
If you buy 8 shares
-
Primary Purchase
Shares bought = 8
CMP = ₹404
Investment = 8 × ₹404 = ₹3,232 -
Rights Entitlement (RE)
RE Ratio = 3 for every 8 shares
So, you get 3 REs
Rights Investment = 3 × ₹277 = ₹831
Total Investment = ₹3,232 + ₹831 = ₹4,063
-
Exit Proceeds @ ₹404
Total shares = 8 + 3 = 11
Sale price = 11 × ₹404 = ₹4,444 -
Profit and Return
Profit = ₹4,444 – ₹4,063 = ₹381
Return = ₹381 / ₹4,063 ≈ 9.38%
Big assumptions: Price will remain Rs. 404, will it? In last month price moved 325 to 404.
Disc: Looking closely, may invest if gets attractive price. No investment as of now. Do your own research.
2 Likes
That’s a very big assumption One can apply some logic to it (thought that can be debated too).
Like for example…
- Let’s assume the mcap post dilution will be nearly same as now + the cash coming in from rights. Which is 3000+750 = ~3750 Cr.
- It’s a ~37% dilution, post issue, no. of equity shares comes to 9,91,80,771 … so dividing the mcap / no. of post issue share comes to ~350/-.
The counter points to the logic could be, that company aims to pay off debt of 550 Cr. out of the proceeds and could save 50 odd cr. of interest payment as a result and become PAT positive in FY26 (?). Hence market will be able value more appropriately in terms of earnings multiple. But this is different topic than benefitting from the rights issue
But with the above assumption, only way, rights subscriber will make money, is if there is lukewarm response from market and there us huge over subscription.
2 Likes
@rajpanda Agree
I have calculated as below.
PE is not available so took CFO.
343 cr cfo
Current no of shares: 7,21,31,470
Price to cfo (PTC): 47.55
RE to be added: 27049301
Total share post RE: 99180771
Price to cfo post RE: 34.58
CMP: 412, PTC 47.55
With PTC 34.58 price will be 300
However such exact calculation won’t work exactly. Just mean to say there is possibility of price adjustment, hence can’t take CMP as fix price.
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Lukewarm response hence more RE will get converted in acutal share, right?
How over subscription helps, please through some light. Thanks.
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I think, even after the introduction of RE, there are still people who will neither sell their REs nor apply in the rights issue. Hence the under-subscribed rights will have to be distributed among people who apply for higher number of shares than their entitlement. But this is never a given. For people who buy RE from markets with the intention of applying for rights, very less chance of not applying.
3 Likes
How can one check the subscription status of a rights issue?
1 Like
Hi Tushar, you can track the status in following link :
Cheers
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