💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 10.88% YoY to INR 6,104.83 Cr in FY2024-25. Segment growth included 3PL Contract Logistics at 10% (INR 4,743.66 Cr), Freight Forwarding at 20% (INR 305.53 Cr), and Last Mile Delivery (LMD) at 62.6% (INR 381.29 Cr). In Q2 FY26, consolidated revenue reached INR 1,685 Cr, up 11% YoY, driven by e-commerce and M&M Auto/Farm sectors.

Profitability Margins

FY2024-25 consolidated gross margin decreased to 9.35% from 9.55% due to higher operating expenses. However, Q2 FY26 gross margin improved to 10.1% from 9.2% YoY, driven by a favorable business mix and volume leverage. Net profit margin declined from 1.37% to 0.87% in FY25 due to increased finance costs and operating expenses.

EBITDA Margin

Consolidated EBITDA for FY2024-25 was INR 284.05 Cr, up from INR 229.04 Cr. For Q2 FY26, EBITDA stood at INR 85.1 Cr, a 28.16% increase from INR 66.4 Cr in Q2 FY25. The improvement is attributed to the curtailment of losses in the B2B Express business and operational synergies.

Capital Expenditure

The company has moderate capex plans for FY2026, which are expected to be met through available liquidity and internal accruals. Historical capex was impacted by the capitalization of assets and Ind AS 116 rental amortizations, contributing to increased depreciation expenses.

Credit Rating & Borrowing

ICRA reaffirmed ratings at [ICRA]AA (Stable) and [ICRA]A1+ for bank lines (INR 350 Cr) and assigned [ICRA]A1+ for Commercial Paper (INR 100 Cr). Borrowing costs are expected to decline following the prepayment of INR 556.3 Cr of debt using rights issue proceeds.

⚙️ Operational Drivers

Raw Materials

Primary input costs include Freight and related expenses (approx. 70-75% of operating costs), Labor and related expenses, Warehouse rent, and Fuel-linked transport costs.

Capacity Expansion

Warehousing revenue grew 20% to INR 333 Cr in Q2 FY26 due to the addition of new sites and volume ramp-ups. The company is targeting the elimination of 'white spaces' (underutilized capacity) by September 2026, having already achieved a 20% reduction.

Raw Material Costs

Operating expenses were 85.83% of revenue in FY25 compared to 84.54% in FY24. The increase was driven by inflationary pressures on labor and freight, which the company aims to offset through economies of scale and resource sharing.

Manufacturing Efficiency

Not applicable as a service provider; however, operational execution is tracked via NSL metrics (>90%) and a 20% reduction in warehouse whitespace to optimize fixed cost absorption.

Logistics & Distribution

Distribution and freight expenses are the largest cost component, contributing to the 85.83% operating expense ratio. The company uses volume scaling to mitigate these costs.

📈 Strategic Growth

Expected Growth Rate

10-12%

Growth Strategy

Growth will be achieved through three main levers: reducing interest costs via the INR 749.3 Cr rights issue, eliminating warehouse whitespace by September 2026 to lower rental drags, and turning the MESPL (Express) business profitable (which reached 0.2% gross margin in Q2 FY26).

Products & Services

3PL Contract Logistics, B2B Express delivery, Last Mile Delivery (LMD), Cross-Border Freight Forwarding, and Mobility (Employee Transportation) services.

Brand Portfolio

Mahindra Logistics, Rivigo (B2B Express), Whizzard (Last Mile Delivery).

New Products/Services

Operationalized 8 new projects in Q2 FY26 and expanded e-commerce fulfillment, which dispatched over 3.5 crore shipments during the festive season.

Market Expansion

Focusing on e-commerce and M&M Auto and Farm business segments, which currently drive 11% YoY revenue growth.

Market Share & Ranking

Describes itself as a 'formidable competitor' in a highly fragmented market, with 3PL and network services contributing 95% of turnover.

Strategic Alliances

Maintains a Joint Venture for 2x2 Logistics (vehicle acquisition) and utilizes M&A to build tech-based partnerships with new-age companies.

🌍 External Factors

Industry Trends

The industry is shifting toward integrated 3PL solutions and tech-driven logistics. MLL is positioning itself by integrating advanced tech to counter disruptors and scaling its warehousing footprint (up 20% YoY).

Competitive Landscape

Faces intense competition from unorganized players and technology-driven startups that act as market disruptors.

Competitive Moat

The primary moat is the 'Mahindra' brand and its deep integration with M&M's supply chain, providing financial flexibility and a steady volume base. This is sustainable due to the parent's [ICRA]AAA rating and strong market position.

Macro Economic Sensitivity

Highly sensitive to economic conditions affecting demand and supply, as well as inflationary pressures on input costs like fuel and labor.

Consumer Behavior

The shift toward e-commerce is a major demand driver, evidenced by the 3.5 crore shipments handled during the festive season.

Geopolitical Risks

Monitors policy development landscapes both domestically and internationally to mitigate non-market risks from policy changes.

⚖️ Regulatory & Governance

Industry Regulations

Subject to government regulations and taxation policies over which it has no direct control; utilizes a compliance framework to monitor domestic and international policy developments.

Taxation Policy Impact

The company maintains a robust compliance framework to monitor taxation and regulatory changes. Direct taxes paid (net of refund) were INR 57.48 Cr in the half-year ending September 2025.

Legal Contingencies

Recognized a one-time charge of INR 4.8 Cr for Provisions for Doubtful Debts (PDD) due to the bankruptcy filing of a 3PL customer in Q2 FY26.

⚠️ Risk Analysis

Key Uncertainties

Key risks include cost escalation from inflation, competition from new-age startups, and macroeconomic events impacting demand. The bankruptcy of customers poses a credit risk (INR 4.8 Cr impact).

Third Party Dependencies

Relies on vendor partners for transportation and labor; manages this through 'trust-based partnerships' and robust cash flow monitoring.

Technology Obsolescence Risk

New-age startups with advanced tech are viewed as disruptors; MLL mitigates this by integrating its own tech solutions and pursuing tech-based M&A.

Credit & Counterparty Risk

Prudent accounting measures are in place, such as the INR 4.8 Cr provision for a bankrupt 3PL customer, to reflect potential credit exposure on outstanding receivables.