Mahindra Logistics Limited

Mahindra Logistics achieved profitability in Q3 FY26 after 11 consecutive quarters of losses, marking a significant inflection point. The company reported a 19% year-on-year revenue growth to INR 1,898 crores, driven by strong volume growth across key segments. EBITDA increased by 40% YoY to INR 102.8 crores, reflecting improved operational efficiencies and tighter cost management. The consolidated gross margin expanded by 76 basis points, reaching 10% in Q3 FY26 compared to 9.2% in Q3 FY25.

The 3PL business demonstrated robust growth with a 20% increase in revenue and a 27% rise in gross margins. The Freight Forwarding business also performed strongly, with revenue growing 33% YoY and gross margins up 36%, benefiting from improved trade flows. The Mobility business saw a 38% revenue growth and an 18% increase in gross margins. The MESPL Rivigo (Express Logistics) segment experienced a 19% YoY volume growth and a 27.5% revenue increase, with its gross margin expanding significantly from 0.2% in Q3 FY25 to 2.4% in Q3 FY26, indicating progress towards profitability.

The last mile delivery business faced headwinds, with revenue declining from INR 103 crores in Q3 FY25 to INR 82 crores in Q3 FY26, and gross margin falling from INR 7.3 crores to INR 2.7 crores. This decline was attributed to ongoing pricing pressures and strategic decisions to exit non-viable customer relationships or sites. Management is actively engaged in discussions with customers for rate renegotiations and expects profitability to improve from Q4 FY26 onwards, with sustained efforts on operational excellence.

Mahindra Logistics remains committed to its goal of 'almost eliminating our white space by September '26,' confirming they are 'on track' and 'slightly better' on their glide path. This initiative is a core part of their strategy to enhance profitability. The company has also reinforced pricing discipline, improved contract renewals, and recalibrated several engagements, even stepping away from non-profitable relationships, to ensure services reflect their true value.

The joint venture with Seino, a prominent Japanese logistics company, is progressing with the team now in place, including a Managing Director nominated by Seino and a CFO from Mahindra Logistics. While there is currently no material revenue due to the longer sales cycle with Japanese clients, the company is in active discussions with large Japanese companies in India. Management anticipates securing 'some wins in the next year,' leveraging the combined strengths of both partners.

The company's capital structure saw improvements, with no debt on a standalone basis as of December 31, 2025, and consolidated gross debt standing at INR 64 crores. Management highlighted that interest costs have 'reduced materially' due to debt repayment through a rights issue. This reduction in finance costs is expected to further strengthen the company's profitability profile, and working capital requirements continue to be closely monitored.