An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.
Sharekhan's research report on NMDC
Q4FY21 numbers were strong with 15% beat in operating profit at Rs. 4,240 crore (up 53.3% q-o-q) led by higher iron ore realisation of Rs. 6,138/tonne (12% above estimate) partially offset by higher-than-expected royalty. PAT at Rs. 2,836 crore (up 31.4% q-o-q) also marginally exceeded estimate. Iron ore production guidance of 44 MT implies 29% y-o-y increase for FY22 and thus we model strong 31%/7% y-o-y increase in iron ore sales volume to 41 MT/44 MT in FY22/FY23 while royalty premium be go up to 22.5% from Q1FY22. Steel plant demerger to be completed by Q3FY22. We raise our FY22-FY23 earnings estimates to factor higher iron ore prices (18-23% discount to current prices) and expect EBITDA/PAT CAGR of 9%/13% over FY21-23E despite assuming royalty premium of 22.5% on entire volumes.
Outlook
We retain a Buy rating on NMDC with a revised PT of Rs. 205 as core business’ valuation of 3.8x its FY23E EV/EBITDA is attractive. Strategic sale of steel plant to unlock value but likely stake dilution by government through OFS is a near-term overhang.
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