Mahindra Logistics Limited

Mahindra Logistics reported a 14% year-on-year revenue increase to INR 1,625 crores for Q1 FY26. The warehousing segment showed robust growth of 18% YoY, reaching INR 306 crores. Consolidated EBITDA stood at INR 76.3 crores, up from INR 66.3 crores in Q1 FY25, reflecting a 14.9% growth. However, the company recorded a net loss of INR 10.8 crores for the quarter, primarily due to challenges in the Express business.

The Express business recorded a revenue of INR 101 crores, up from INR 89 crores in Q1 FY25, but incurred a PAT loss of INR 23.9 crores. Management noted that while volumes increased by nearly 10% sequentially, yield remains under pressure. The strategic focus is shifting from pure volume growth to acquiring customers that offer better yield (rupee per kg), with an aim to improve profitability in the coming quarters^⏳ and achieve breakeven.

The company currently manages 21 million square feet of warehousing space, with approximately 1.5 million square feet identified as white space. Management has made reducing this white space a key strategic priority, with focused execution plans. They expect meaningful progress to unfold in the near term, with the number of unutilized spaces projected to decrease post Q2 FY26, thereby improving asset utilization and reducing costs.

Mahindra Logistics announced a rights issue to raise approximately INR 750 crores. Of this, an estimated INR 556.3 crores will be used for partial or full repayment of existing borrowings across MLL Standalone, MLL Express Services, and V-Link Freight Services. This debt reduction is expected to result in annual interest cost savings of INR 40-45 crores, with the company aiming to become debt-free. The remaining INR 187 crores will be allocated for general corporate purposes and strategic initiatives.

The company reported strong momentum in 3PL wins, with a 135% quarter-on-quarter growth, indicating increased customer confidence. They also went live with 10 new projects across manufacturing and e-commerce. New warehousing contracts with Mahindra & Mahindra include a 3 lakh square feet facility in August, another 80,000 sq ft in September, 300,000 sq ft in Nashik, and 100,000 sq ft in Haridwar, demonstrating robust growth in this segment.

Q1 FY26 saw mixed trends, with headwinds from muted industrial output and caution in SME segments. While passenger vehicles and commercial vehicles experienced soft growth or decline, the tractor segment grew by 8%. The company is actively diversifying its revenue mix, with 37% now coming from non-auto sectors, and e-commerce showing strong growth and demand for micro-fulfillment hubs, contributing to overall resilience.

To enhance focus and execution, the company is transitioning its consumer and manufacturing verticals into independent units, each led by dedicated vertical heads. Additionally, the Whizzard and LMD (last-mile delivery) businesses have been integrated into a simplified, unified structure under a single leader. This restructuring aims to improve synergy, reduce costs, and enhance customer experience across these key business areas.