Mahindra Logis.

Mahindra Logistics reported a robust Q2 FY26 with revenue growing 11% year-on-year to ₹1,685 crores, primarily driven by e-commerce and the M&M Auto and Farm businesses. The consolidated gross margin expanded to 10.1% in Q2 FY26 from 9.2% in Q2 FY25, attributed to a favorable business mix, customer mix, and volume leverage. EBITDA for the quarter stood at ₹85.1 crores, an increase from ₹66.4 crores in Q2 FY25, while the PAT loss marginally improved to ₹10.4 crores, despite a one-time^📎 charge of ₹4.8 crores for doubtful debts.

Following a successful rights issue of ₹749 crores, the company significantly reduced its consolidated debt from ₹601 crores at the end of Q1 to ₹73 crores by the end of Q2 FY26. This substantial deleveraging is projected to result in annual interest cost savings of ₹40-45 crores. The remaining ₹187 crores from the rights issue proceeds are allocated for general corporate purposes. The outstanding ₹73 crores in consolidated debt primarily represents long-term debt in the 2x2 Logistics subsidiary, used for vehicle acquisition.

The Express Logistics business achieved a significant milestone by becoming gross margin positive for the first time since its acquisition, reaching 0.2% in Q2 FY26 compared to -5.2% in Q2 FY25. The segment's revenue grew 14% year-on-year to ₹104.4 crores, supported by a 7% increase in volume and improved yields. Despite this operational improvement, the Express business still reported a PAT loss of ₹20 crores, an improvement from ₹24 crores in Q2 FY25, with one-off^📎 expenses related to share capital increase impacting the bottom line.

Mahindra Logistics has undertaken a 360-degree review of its operations, resulting in a 20%+ reduction in white space during the last quarter. The company is on track to achieve its target of reducing white space cost by approximately 95% by September 2026. Management emphasized disciplined cost optimization, stringent control over overheads, and strategic recalibration of the business portfolio, including renegotiating or exiting adverse contracts. The company also operationalized 8 new projects across manufacturing and e-commerce and launched a 3 lakh sq ft facility in Nashik.

The company's warehouse network is now largely built out, with the current quarter reflecting peak rental costs due to previously committed build-to-suit (BTS) spaces coming online, including new facilities in the East (Guwahati, Agartala) and Nashik. Consequently, the depreciation component, largely driven by Ind AS 116 leases, is expected to stabilize at approximately ₹72 crores quarterly going forward^⏳. Future warehouse expansion will primarily focus on ready-to-move (RTM) spaces, avoiding long-term landlord commitments unless backed by specific client agreements.

The Mobility segment demonstrated strong growth, with revenue increasing 16% year-on-year to ₹93.8 crores and achieving a PAT of ₹1.6 crores. The company successfully launched Alyte Prive, a premium B2C mobility service, in Delhi NCR, with plans for expansion to Noida International Airport. The last-mile delivery business (Whizzard) also grew its revenue to ₹68.4 crores and reported a PAT of ₹1.07 crores, but continues to navigate customer-driven pricing pressure, prompting strategic adjustments to its customer mix to maintain margins.

Mahindra Logistics noted a positive industry outlook, supported by increasing domestic resilience, government infrastructure push, and rapid expansion in e-commerce and quick commerce. Despite global headwinds^🌐 affecting the freight forwarding business, the company's diverse customer portfolio ensures revenue stability. For the second half of the fiscal year, management's strategic focus remains on yield improvement, operational excellence, customer retention, and network optimization, aiming to establish MLL as India's leading integrated logistics company.