Mahin­dra Lo­gis­tics may be an Ex­pen­sive Bet

The Economic Times - - Smart -

Bosch, BMW In­dia, 3M In­dia, and Mercedes-Benz In­dia.


In the past five years, the com­pany’s turnover in­creased at a com­pounded an­nual growth rate (CAGR) of about 15% to ₹ 2,666 crore in FY17. Its net profit ex­panded at a CAGR of about 25% in the same pe­riod to ₹ 60 crore in FY17. Profit ex­cludes le­gal and pro­fes­sional fees.


On the valu­a­tion front, con­sid­er­ing FY17 earn­ings, the IPO com­mands price-earn­ings(P/E)mul­ti­pleof 64.8at the higher end of the price band. The av­er­age P/E of listed peers based on FY17 earn­ings works out to 48.1.

Thep­remi­um­val­u­a­tion­can­beat­tributed to Mahin­dra Lo­gis­tics’ su­pe­rior re­turn on eq­uity (ad­justed ex-sur­plus funds)of 33.8%in­com­par­ison­with­the av­er­age of 16.5% for listed en­ti­ties.

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