Mahindra Logistics Limited — Q4 FY26 earnings call

Call held 24 Apr 2026

Management summary

Mahindra Logistics reported a strong turnaround in Q4 and FY26, returning to PAT profitability after two years of losses. The company achieved significant revenue growth and margin expansion across most segments, particularly in Express and Contract Logistics. While the Freight Forwarding business faces geopolitical headwinds, management expressed confidence in the sustained improvement trajectory and strategic focus on profitable growth and operational excellence.

Highlights

  • Company returned to PAT profitability after 2 years of losses, with Q4 FY26 PAT at ₹20.2 crores.

  • Q4 FY26 revenue grew 14% YoY to ₹1,791 crores, and full year revenue grew 15% to ₹6,999 crores.

  • Consolidated gross margin expanded to 10.5% in Q4 FY26 from 9.5% in Q4 FY25, driven by operational discipline and financial rigor.

  • Adjusted EBITDA margin expanded from 2.4% in Q4 FY25 to 3.2% in Q4 FY26, with adjusted EBITDA for FY26 growing 31% to ₹158 crores.

  • Express business (MESPL) Q4 revenue grew 49% YoY, achieving positive gross margins and moving to an EBITDA profit of ₹2.2 crores in Q4 FY26 from a ₹1 crore loss in Q3 FY26.

Concerns

  • Freight Forwarding business is facing headwinds due to evolving geopolitical conditions (West Asia war), impacting trade flows and increasing costs.

  • Express business (MESPL) remains loss-making at an EBITDA level for the full year FY26, with a loss of ₹31 crores.

  • The global environment continues to be uncertain, necessitating a prudent and cautious approach for the coming year.

Key financials

  1. Revenue ₹1,791 Cr +14%YoY
  2. Revenue (FY) ₹6,999 Cr +15%YoY
  3. Consolidated Gross Margin 10.5%
  4. Adjusted EBITDA ₹57 Cr
  5. Adjusted EBITDA Margin 3.2%
  6. PAT ₹20.2 Cr

What they filed

Q1 FY27: revenue up 23.3%, net profit up 411.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,521 1,594 1,570 1,625 1,685 +11%1,898 +19%1,791 +14%2,003 +23%
EBITDA66 74 78 76 85 +29%103 +39%112 +44%115 +51%
Net profit-10 -7 -5 -9 -8 +20%6 +186%22 +540%28 +411%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentRevenue Q4 FY26Gross Margin Q4 FY26Revenue FY26
Supply Chain Management (SCM)———
Mobility——₹386 Cr
Contract Logistics₹1,381 Cr—₹5,490 Cr
Freight Forwarding₹89 Cr——
Express (MESPL)—6.6%₹449 Cr
Last-mile delivery₹72 Cr——

Guidance & targets

Volume

  • Express business volume growth Volume · medium term · Medium confidence mid-teens
    So let me Krupa, thank you so much for your question and for your compliments to our team. Let me answer the second question better that a mid-teen kind of growth is possible in this business, and that's what our team would be driving at.

    — Hemant Sikka

Revenue

  • Express business revenue growth Revenue · future · Medium confidence mid- to high-teen
    Alok, I would like to think about like we are driving towards a mid- to high-teen kind of growth for this business.

    — Hemant Sikka

Warehousing

  • White space reduction Warehousing · by September '26 · High confidence 95%
    We ended the year at 0.7 million. And our commitment in my first call was that we will reduce our white space by 95%. So we have still some more work to do by September of this year. So by September of this year, we will achieve that glide path, and we are currently at that stage and maybe slightly better than that on our glide path.

    — Hemant Sikka

Business Development

  • Entry into new contract logistics segments Business Development · this year · High confidence one of those segments
    So right now, we are doing a lot of market study in these areas. And in this year, we will certainly enter into one of those segments.

    — Hemant Sikka

Profitability

  • Overall EBITDA Profitability · near term · Medium confidence breakeven
    All I can tell you a very positive news is we are very close to an EBITDA breakeven. Without giving a concrete timeline, I can say with a lot of confidence, we are very close to EBITDA breakeven.

    — Hemant Sikka

Market context

  • Express business EBITDA Profitability · near term · Medium confidence positive
    And I can share with you that we are very close to an EBITDA positive number. I can't commit a timeline to you, but I can just tell you that we are very close to that kind of profitable metric reach.

    — Hemant Sikka

What to watch in Q1 FY27

Express business EBITDA breakeven

next quarter / near term
Current ₹2.2 crores EBITDA profit in Q4 FY26, but ₹31 crores EBITDA loss for FY26
Target Sustained EBITDA positive performance

Why it matters

Achieving consistent EBITDA profitability in the Express business is crucial for the company's overall financial health and turnaround story.

And I can share with you that we are very close to an EBITDA positive number. I can't commit a timeline to you, but I can just tell you that we are very close to that kind of profitable metric reach.

Risks & concerns

  • Geopolitical headwinds impacting Freight Forwarding

    medium

    West Asia war causing issues with shipping lines, jammed containers, increased freight premiums, insurance costs, and fuel surcharges, leading to customers delaying decisions.

    Management acknowledged

  • Uncertain global environment

    medium

    The company believes it is critical to remain prudent, selective, and cautious in the coming year due to the uncertain global environment.

    Management acknowledged

  • Inflationary impact of diesel price hikes on overall economy

    medium

    While diesel price increases can be passed on to customers, a significant hike could have a broader inflationary impact on the economy, potentially slowing demand in various sectors.

    Management acknowledged

  • Express business (MESPL) still EBITDA loss-making for full year

    medium

    Despite achieving positive gross margins and Q4 EBITDA profit, the Express business recorded an EBITDA loss of ₹31 crores for FY26, indicating ongoing efforts needed for sustained profitability.

    Management acknowledged

Q&A highlights

3 direct, 1 evasive
Express business volume growth vs. yield focus Partial
So let me answer the second question better that a mid-teen kind of growth is possible in this business, and that's what our team would be driving at. Coming to your first question, not right for us to only look at volume because any volume growth will not give you much insight into the business overall.

Management emphasized a shift from solely volume-driven growth to a focus on profitable volume and yield, indicating a strategic change in how the Express business is managed.

Asked by Krupashankar NJ

Adjusted EBITDA margin trajectory compared to historical levels Direct
So, Krupa without giving you any forward-looking guidance, directionally I would agree with every word that you said because this is -- I mean, I would be very disappointed if anybody has the view that this is our best case analysis. I mean we have just started this turnaround. And I think there are a lot of work still left to be done for us. So directionally, I would completely agree with you.

Analyst questioned if current adjusted EBITDA margins (3.2%) could surpass historical highs (3.6-3.9%), and management confirmed this directional ambition, signaling confidence in further margin expansion.

Asked by Krupashankar NJ

Completion of last-mile delivery business pruning Direct
So all the pruning of the last mile has been done in FY26. We don't expect any more pruning to be done. From here on, our profit-making clients should grow with us. So I would expect this to be growing business.

Management clarified that the strategic pruning of the last-mile delivery business for profitability is complete, implying future growth will be focused on profitable clients and should lead to improved performance.

Asked by Krupashankar NJ

Timeline for Express business EBITDA breakeven and technology investment Partial
And I can share with you that we are very close to an EBITDA positive number. I can't commit a timeline to you, but I can just tell you that we are very close to that kind of profitable metric reach. On the tech side, we do employ a very strong tech in this company. And we will also do a little bit of investment in our tech in FY27 because we believe that in the last 2 years, we have not invested into that.

While not providing a specific timeline, management indicated the Express business is very close to EBITDA positive and plans to invest in technology in FY27, suggesting future operational improvements.

Asked by Alok Deora

Impact of diesel price hikes on profitability and pass-through to customers Direct
Yes, Khushi, so an increase of this magnitude that you spoke about will be passed on 100% to our customers. That shouldn't be a problem. And I can, but let me express my concern that if this kind of a diesel increase happens, then it will certainly have an inflationary impact on the overall economy of the country, and that may impact certain sectors that we play in.

Management confirmed that diesel price increases would be fully passed on to customers, mitigating direct impact on company margins, but acknowledged broader concerns about the inflationary effect on the economy.

Asked by Khushi Soni

Nature of ROU reversal and credit provision, and potential for future similar events Partial
On your second question on expected credit loss, this is in line with accounting prudence. We have taken some action on aged receivables based on our assessment of recoverability or lack thereof, and you see that reflected in our numbers as well. Again, this is a part of the ongoing business. And like I said, we have provided in line with prudence and management judgment. ... Khushi, nothing that I would like to call out for the moment. Like I said, this is business. There are always issues under discussion, under negotiation, but nothing that warrants provisioning at this moment in our assessment.

Management explained the ROU reversal as a result of lease terminations and credit provision as prudent accounting for aged receivables, stating these are part of ongoing business and no immediate similar provisions are anticipated, providing clarity on one-off vs. recurring items.

Asked by Khushi Soni

Target of INR20,000 crores turnover Evasive
Manishji, thank you for your comments. I did not talk about INR20,000 crores in the last AGM at all. So that was not my statement. ... And Manishji, I would also like to tell you that in this business, logistics business, there is no meaning in just picking up revenue. We can pick up any amount of revenue, but then profit is not made in that.

Management explicitly denied a previously rumored revenue target, reinforcing their current strategic focus on profitable growth rather than just top-line expansion.

Asked by Manish Vyas

Volume momentum in Express business in April and Freight Forwarding headwinds Partial
Khushi, I would like to think about in this Express business or any logistics business per se that we operate in that quarter 4 is our best quarter of the year. So, it will not be fair to compare quarter 1 in your calculations with quarter 4. That's the first thing. Secondly, on the Express side, we are not getting so much impacted by the West Asia crisis. Freight forwarding is purely related to and I want to emphasize that purely related to the West Asia crisis.

Management cautioned against comparing Q1 with Q4 for Express business due to seasonality and clarified that while Freight Forwarding faces West Asia crisis headwinds, other segments are not significantly impacted, providing context for near-term performance.

Asked by Khushi Soni

2 min read 6 chapters

Detailed narrative

Overall Performance and Turnaround

Mahindra Logistics achieved a significant turnaround in FY26, returning to PAT profitability after two years of losses. The company's Q4 FY26 revenue grew 14% year-on-year to ₹1,791 crores, contributing to a full-year revenue of ₹6,999 crores, up 15% YoY. This transformation is attributed to deliberate choices, disciplined execution, and rebuilding of fundamentals, with a focus on sustainable performance rather than short-term outcomes.

Margin Expansion and Profitability Focus

The company demonstrated strong margin expansion, with consolidated gross margin increasing to 10.5% in Q4 FY26 from 9.5% in Q4 FY25. Adjusted EBITDA margin expanded from 2.4% to 3.2% in Q4 FY26, and adjusted EBITDA for the full year grew 31% to ₹158 crores. This improvement is a result of initiatives like operational discipline, financial rigor, and a focus on profitable customers and service reliability across verticals.

Express Business (MESPL) Turnaround

The B2B Express logistics services (MESPL) showed significant progress, with Q4 revenue growing 49% year-on-year and achieving positive gross margins. The business moved from an EBITDA loss to an EBITDA profit of ₹2.2 crores in Q4 FY26. For the full year, MESPL revenue reached ₹449 crores, a 25% growth, and its gross margin turned positive at 1.3%, though it still recorded an EBITDA loss of ₹31 crores for FY26, a substantial reduction from ₹51 crores loss in FY25.

Contract Logistics and White Space Management

The contract logistics business saw its Q4 revenue grow by 12% year-on-year to ₹1,381 crores, with gross margins increasing by 19%. For the full year, revenue was ₹5,490 crores, up 16%, and reported EBITDA grew 24% to ₹389 crores. The company also successfully reduced its warehousing 'white space' by 9 lakh square feet in FY26, ending the year at 0.7 million square feet, and is committed to achieving a 95% reduction by September '26.

Geopolitical Headwinds and Diesel Price Impact

The Freight Forwarding business experienced headwinds in Q4 FY26 due to evolving geopolitical conditions, particularly the West Asia crisis, which impacted trade flows and increased costs. While Q4 revenue grew 17% YoY, management expects these challenges to persist in the near term. Regarding diesel price increases, the company stated that any significant hike (e.g., 10-15%) would be 100% passed on to customers, though management expressed concern about the broader inflationary impact on the economy.

E-commerce and Last-Mile Delivery

The e-commerce and quick commerce business scaled meaningfully, reaching over ₹1,000 crores in annual revenue. In the last-mile delivery business, revenue declined by 18% in Q4 FY26 to ₹72 crores due to strategic choices to improve profitability, but gross margins increased by 7% YoY. Management confirmed that all pruning actions in the last-mile segment were completed in FY26, and they expect this segment to grow with profit-making clients going forward.

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