Mahindra Logistics Q1 FY27 earnings call

Mahindra Logistics reported a robust start to FY27, with consolidated revenue growing by 23% year-on-year to ₹2,003 crores. The company achieved a PAT profit of ₹25.4 crores, a significant turnaround from a loss of ₹10.8 crores in Q1 FY26. Adjusted EBITDA saw a 76% increase year-on-year, reaching ₹57 crores, with the adjusted EBITDA margin improving by 85 basis points to 2.8%.

The company's performance validates its transformation efforts, anchored by four strategic pillars: 3PL scale-up, B2B Express turnaround, operational excellence, and technology as a differentiator. The focus is on 'intelligent scale,' ensuring every customer, contract, and investment contributes meaningfully to long-term profitable growth. LogiOne, the digital ecosystem, enhances visibility and data-driven insights for smarter supply chains.

Contract Logistics revenue grew by 26% Y-o-Y to ₹1,623 crores, with EBITDA growing by 31% Y-o-Y and margin expanding from 6.6% to 6.9%. The B2B Express business saw a 58% Y-o-Y revenue increase to ₹152 crores, with gross margin turning positive at ₹9.2 crores from a negative ₹3.6 crores. Mobility business revenue grew by 38% Y-o-Y to ₹111 crores. Last Mile Delivery revenue declined by 16% Y-o-Y as a conscious strategic choice, but gross margins expanded from 5% to 9% Y-o-Y.

Despite strong growth, Contract Logistics gross margins were diluted by 46 basis points Y-o-Y. This was attributed to temporary factors including start-up costs for new sites (due to aggressive expansion), manpower shortages leading to ad hoc hiring, and a lag in passing on fuel price increases to customers. Management expects these costs to normalize as the year progresses, with about half of the Y-o-Y dilution stemming from start-up costs.

The B2B Express business continues its turnaround journey, with significant improvements in both volume and yield. Revenue grew by 58% Y-o-Y, and the gross margin improved from negative 3.8% to 6%. The EBITDA loss reduced significantly from ₹11.8 crores in Q1 FY26 to ₹1.6 crores in Q1 FY27. The company remains confident in achieving EBITDA breakeven for this business within the current financial year.

The share of business from Mahindra & Mahindra (M&M) has increased to approximately 60% due to strong performance in M&M's auto and tractor businesses. Management stated there is no target to reduce this concentration, as they aim to win all possible business from both M&M and non-M&M clients. They continue to secure new wins from non-M&M customers, particularly in e-commerce, manufacturing, and telecom verticals.

The company is adopting a cautious, profitability-driven approach to its airport taxi business. This involves focusing on airports where they have secured preferred partner status, such as Delhi and Noida International Airport, and withdrawing from less profitable locations like Mumbai Airport where they lack such rights. This strategy ensures scaling is aligned with profitability rather than just volume.