Rohit Chauhan of RC Capital Management presented his in-depth investment thesis on Mahindra Logistics (India: MAHLOG) at Asian Investing Summit 2020.

Thesis summary:

Mahindra Logistics is an asset-light third-party logistics company operating in the automotive, pharmaceutical, and e-commerce segments. The company is a subsidiary of the Mahindra & Mahindra group (revenue of $15 billion in 2019), which is active in the automotive, farm equipment, and IT services industries. Mahindra Logistics started as a division of M&M, responsible for the logistics operations of the vehicle and farm equipment divisions. It was spun out of M&M via an IPO in late 2017.

Mahindra Logistics is the largest third-party logistics provider in India, with revenue of INR 39 billion and net profit of 900 million in FY19. Revenue has grown at a CAGR of 15+%, driven by the formalization of the logistics sector, governmental focus on the sector, and migration of retail to online channels. The business has a long runway of growth, while the shares are quoted at ~20x FCF. The coronavirus pandemic does not impact the company’s long-term prospects.

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About the instructor:

Rohit Chauhan is an Engineer / MBA with 20+ years of experience in different functions in large corporations in India and abroad. Rohit was introduced to the Investment world in the mid-90s when he started managing his family’s Finances. He learnt the basics by reading financial newspapers and books, and from his mistakes in the early days. Rohit’s approach towards investing changed when he came across the book ‘The Warren Buffett Way’. He got interested in Value Investing and started reading books from legendary investors like Benjamin Graham, Philip Fisher and other greats in this field. Their teachings have formed the bedrock of his investment philosophy. Over the years, Rohit has also learnt to apply the behavioural aspects of investing to his process. Rohit has followed the ‘Value Investing’ philosophy for the last 15+ years in managing his capital.