MAHLOGNSEQ4 FY25April 21, 2025

Mahindra Logistics Limited

11,446words
75turns
9analyst exchanges
6executives
Management on call
Anish Shah
CHAIRMAN – MAHINDRA LOGISTICS LIMITED
Rampraveen Swaminathan
MANAGING
Hemant Sikka
ADDITIONAL DIRECTOR, MD &
Saurabh Taneja
CHIEF FINANCIAL OFFICER – MAHINDRA LOGISTICS LIMITED
Jignesh Parikh
COMPANY SECRETARY – MAHINDRA LOGISTICS LIMITED
Shogun Jain
STRATEGIC GROWTH ADVISO
Key numbers — 40 extracted
rs,
I would like to personally thank Ram for all his efforts and dedication and hard work over the years, which have helped build a strong foundation at Mahindra Logistics, and wish Hemant and the MLL tea
20%
ve farm sentiments. The FMCG industry, which probably represents around a little bit of -- around 20% of our demand and probably a larger part of our growth, continues to navigate a challenging exter
8.2%
ke, especially in contract logistics. This has been very important. Overall, our revenues grew by 8.2% in the quarter on a year-on- year basis and contract logistics was a positive thing. From an order
1 million
s a positive thing. From an order intake perspective, we have completed contracting approximately 1 million square feet of additional space. This is going to basically be against some of the white space, w
90%
ynergies. Overall operations have remained stable. I think our net service levels remain North of 90% on an adjusted basis. And I think as I said the network is well tuned today, though there is obvi
INR1,570 crore
inancial performance for the quarter. Our revenue for Q4 increased by 8.2% year-on-year to around INR1,570 crores. Revenue from the warehousing segment stood at INR297 crores in Q4 compared to around INR249 cro
INR297 crore
sed by 8.2% year-on-year to around INR1,570 crores. Revenue from the warehousing segment stood at INR297 crores in Q4 compared to around INR249 crores for the same quarter last year, a growth of around 19%. A
INR249 crore
,570 crores. Revenue from the warehousing segment stood at INR297 crores in Q4 compared to around INR249 crores for the same quarter last year, a growth of around 19%. As we end 2025, the warehousing business
19%
crores in Q4 compared to around INR249 crores for the same quarter last year, a growth of around 19%. As we end 2025, the warehousing business has more than quadrupled compared to what it was in 202
95.5%
y chain management business, including our 3PL and network services businesses contributed around 95.5% of overall revenue and the mobility business contributed the balance. Gross margin at a fully con
9.5%
he mobility business contributed the balance. Gross margin at a fully consolidated basis stood at 9.5% in Q4 '25 compared to 9.4% in Q4 of the previous year and 9.2% in the preceding quarter of the ye
9.4%
ted the balance. Gross margin at a fully consolidated basis stood at 9.5% in Q4 '25 compared to 9.4% in Q4 of the previous year and 9.2% in the preceding quarter of the year. Our gross margin withou
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Guidance — 20 items
Rampraveen S.
opening
“As this mahindra 6> LOGISTICS demand increases, so will the need for stronger supply chain networks and we expect to see more investment, obviously, in warehousing, transportation and technology-driven solutions.”
Rampraveen S.
opening
“We are expecting the segment will maintain its growth trajectory backed by kind of continued positive farm sentiments.”
Rampraveen S.
opening
“The Indian Meteorological Department's forecast of above normal temperatures and potential heat waves is already shaping market dynamics.”
Rampraveen S.
opening
“And therefore, we expect this -- these projects we look at -- are under implementation and we expect them -- this 1 million square feet to be fully occupied well before Diwali this year.”
Rampraveen S.
opening
“But I think for the forwarding business, we do expect to see a period of volatility in demand and pricing probably through the first two quarters of this year at least.”
Rampraveen S.
opening
“New project launches have been a challenge in terms of stretched out time lines compared to the past.”
Rampraveen S.
opening
“To remind you all, I think our broad target has been to be around 10.5% on the basket.”
Rampraveen S.
opening
“And we have got new orders and new customers who are ramping up slowly and therefore, it will be a couple of quarters before we actually catch up on revenue rate.”
Amit Dixit
qa
“And when do we expect these to break even on profitability front?”
Amit Dixit
qa
“So in the last call, you mentioned that you expect 6,000 to 7,000 tons of additional monthly volume to achieve EBITDA breakeven.”
Risks & concerns — 15 flagged
The urban markets are experiencing a sustained slowdown, while rural demand is showing signs of gradual recovery.
— Rampraveen S.
Our inflationary pressures remain a key concern for most of our end customers and there's a focus on keeping the -- not just the raw material costs, but also associated things like logistics costs low.
— Rampraveen S.
And while the end industry continues to try to make price hikes across categories, there has been the negative impact of the way volume growth has moved.
— Rampraveen S.
Global trade remains pretty volatile with all the tariff actions across the world led by the U.S.
— Rampraveen S.
New project launches have been a challenge in terms of stretched out time lines compared to the past.
— Rampraveen S.
And that, I think, remains a challenge for us.
— Rampraveen S.
And given just the broader inflation, the overall economy, I think we are seeing the pressure in terms of cost control and cost management.
— Rampraveen S.
Our gross margin without the impact of the Express business was at 10.3%.
— Rampraveen S.
Our consolidated losses for the quarter were around INR6.8 crores, pretty much all the entities were positive with the exception of MESPL, where losses have continued to decline year-on-year and sequentially quarter-on-quarter, but obviously, something which we need to continue to focus on.
— Rampraveen S.
A lot of that's just been the pressure we have continued to see from a pricing volatility perspective in Q4 as some of the -- especially from an ocean perspective, where we've had a lot of challenge in terms of the moving prices.
— Rampraveen S.
But the market scenario is very difficult in the Express side.
— Alok Deora
It's coming at some impact of yield as well, which is a question which you have raised in the past saying that we -- and I think we've taken cognizance of some of those market issues as well, and we've adjusted pricing, and that's impacted some yield for us as well, as I mentioned.
— Rampraveen S.
But what I would say is that our low tonnage is both an opportunity and a challenge, okay?
— Rampraveen S.
And that's a toggle which we are doing between balancing between risk and systemic inefficiency, which happens because of infrastructure constraints, versus assetizing our business.
— Rampraveen S.
And I think that remains a challenge for the industry.
— Rampraveen S.
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Q&A — 9 exchanges
Q
Hi, thanks for the opportunity, a couple of questions from my side. The first one is on Contract Logistics. So if I look at it, if you can highlight the quantum of unabsorbed cost that was there in this quarter. And similarly, for the 4 new warehouse locations, what kind of revenue trajectory should we build in for these? In the prepared presentation, it is mentioned that 3 of them will start breaking in Q1 FY '26. And when do we expect these to break even on profitability front? That is the first question?
Rampraveen S.
Okay, Amit. Do you want to ask the second question as well? I'll take them together. Yes, sure. The second question is on the Rivigo again. So in the last call, you mentioned that you expect 6,000 to 7,000 tons of additional monthly volume to achieve EBITDA breakeven. Now this quarter, we have achieved around 5,000. So what is the rate looking like in April? And how soon can we achieve this breakeven run rate? Sure. So let me just answer the first one and Saurabh might add in some more details as well. I think, in the Contract Logistics business, we rarely -- we don't generally have unabsorbed
Q
Good Evening, Alok.
Alok Deora
Good evening. Firstly all the best for your new endeavors and also all the best to Mr. Hemant Sikka for the new position at Mahindra Logistics. So I'll just quickly jump on the question side. See, just wanted to understand, so if we look at the Y-o-Y numbers, the Express revenues are lower in the fourth quarter. And I'm assuming the pricing would not have changed much. It's mostly the volumes which have been on the lower side. So in the scenario right now, it's that the first quarter, second quarter should also be kind of similar than what it was that we would have done in the fourth quarter.
Q
Good evening and thank you for the opportunity. The first question is on the warehousing business…
Management
Q
It's kind of breaking. Krupa, I don't know if it's disturbance. Breaking for sure. So if you want to come back on the queue. Why don't we just go to Vikram and then we'll come back to Krupa when he comes back on the queue?
Management
Q
Sir, what was the warehousing revenue for this fourth quarter and full year?
Rampraveen S.
I think, I said earlier on, our warehousing revenue So INR297 crores for the quarter, up from INR249 crores for the same quarter last year. For the full year, I think, warehousing was around INR1,133 crores. And I think, you'll find more detail of that, Vikram, in the extracts in the investor deck, which has been shared. Yes. So there has been a growth of 15% in the warehousing revenue. It was INR984 crores last financial year. It has increased to INR1,133 crores this year. And between quarters, fourth quarter of last year, it was INR249 crores. It has gone up to INR297 crores, which is approx
Q
Am I audible?
Rampraveen S.
Yes, Krupa. Go ahead. Yes. Thank you for the opportunity. Just wanted to check one part on the warehousing piece. You did mention that there is a mixed demand environment relating to the overall warehousing structure?
Q
Let Krupa continue. Krupa, why don't you just continue? We'll answer it to the best I can.
Krupashankar
Sure. Thank you, Ram. So with respect to the warehousing division, just wanted to see your confidence with respect to whitespace fulfillment. I wanted to check, given the mixed demand environment, how confident are we with respect to that? Do you want to take it a little bit slower on the expansion going ahead in account of muted environment in the industry? Yes, Krupa, it's a great question. And I think, to be honest, we've already done some of that. I think since our white space, as you know, warehousing construction is a 12- to 18-month cycle if you go from and probably even longer based on
Q
Yes. Thanks for the opportunity. Hope I am audible clearly.
Rampraveen S.
Yes Jainam. So congratulations, Hemant sir, for joining in Mahindra Logistics. This question is mainly to him. So basically, of course, it's very early stage to say anything. But as we see that over the last 2, 2.5 years, the major pain for the company has been the Express logistics business. So any view of him like how he will be going ahead with that business and how overall profitability will be coming in probably in, let's say, medium term over next 2 to 3 years' time, if he can comment on anything on that part? Thank you very much, Jainam. I think it would not be appropriate for me to com
Q
Good evening to the entire management and thank you for taking the last question. I hope my voice is not breaking and it's clear.
Rampraveen S.
Yes, Mayur, please carry on. So firstly, so congratulations to the new management and wishing all the best to Ram in terms of that. It's been a while since I've been looking at Mahindra Logistics in the sense of earlier we were invested, and we looked, but it's been a while post the -- whatever is happening at the company level. So just wanted to understand two, three basic things in terms of, so that we can pick it up from where we left. In the discussion I followed, I still get the understanding that the warehousing revenues around INR300 crores for the quarter or INR1,100 crores for the yea
Speaking time
Rampraveen S.
30
Moderator
11
Krupashankar
6
Mayur Parkeria
6
Jainam Shah
5
Vikram Suryavanshi
4
Amit Dixit
3
Alok Deora
3
Saurabh Taneja
3
Hemant Sikka
2
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Opening remarks
Shogun Jain
Thank you. Good evening, everyone and thank you for joining us on the Mahindra Logistics Limited's Q4 and FY '25 Earnings Conference Call. I hope everyone has had a chance to view our financial results and investor presentation, which were posted on the company's website and stock exchanges today. We will begin the call with opening remarks from management, followed by an open forum for Q&A. Before we begin, I'd like to point out that some of the statements made during today's call may be forward-looking. A disclaimer to that effect was included in the earnings presentation. I'd now like to invite Ram to introduce the speakers and thereafter make some preliminary remarks. Over to you, Ram.
Rampraveen S.
Thank you, Shogun. Good afternoon, everyone and I hope you all have had a chance to see our earnings release some time ago and also an important organization announcement we made about leadership transitions in the company. I'm joined today by Dr. Anish Shah, the Chairman of Mahindra Logistics; Mr. Hemant Sikka, who currently serves as President of the Farm sector at Mahindra & Mahindra and other members of our management team, including Saurabh Taneja, CFO and Jignesh Parikh, who is the Company Secretary of the company. Before I get to the operating commentary of the business, let me quickly hand it over to Dr. Shah to start us off with some opening comments at his end.
Dr. Anish Shah
Thank you, Ram and good evening, everyone. I wanted to share a few thoughts and therefore, have joined this call for the first 10 minutes or so. And you may have seen the announcement today that Ram has decided to step down from the CEO role and pursue other professional interests. The Mahindra Logistics Board has accepted his resignation and the Mahindra Logistics Board has also appointed Hemant Sikka as the CEO of the company. Hemant is a veteran and a strong leader, currently runs the Farm business or Farm Equipment Sector at Mahindra & Mahindra, has done exceedingly well in that role over the last 5 years. And you've seen the farm business gain a significant market share even from a very high base and more than double its profits over that time period, while going through a fairly tough environment at multiple points in that time. Before that, Hemant was the Chief Purchase Officer for M&M and has had a very stellar career. He's one of the top leaders at M&M. And Hemant has been app
Rampraveen S.
Thank you, Anish before we ahead for the operating commentary, let me just first quickly welcome Hemant. Hemant has joined us today on the call. And to the Q&A, probably he might jump in. There are things that he knows far better than I would ever know. So there's great stuff. I just want to echo a lot of things Anish said. I have had the chance to be a colleague of Hemant now for 5 years in the Mahindra Group Executive Board and the Mahindra leadership and Hemant is, I think a phenomenal person. In addition to all his business achievements, I think he has great insights from his supply chain leadership role into the building blocks of our industry as well. And therefore, I wish him the very best.
Rampraveen S.
I welcome him on board. So with that, let me quickly just jump into a bit of an update about our strategy and the external environment, just operations, highlights and update on where we are with the Express business and any other important highlights for the quarter. In the interest of time, I'm going to keep my opening comments this time really short and open it up early for Q&A from all of you. So let's jump into the industry. I think FY '25 was a year that tested the strength and flexibility of the entire sector. All the players from carriers to freight brokers, to logistics start-ups, infrastructure providers, all of us felt the weight of economic headwinds, the regulatory uncertainties and, of course, global disruptions. As the year has progressed, many of us forecasted or expected an anticipated turning point, but that relief has really not come in and challenges have continued through the year in terms of headwinds. The year also saw some major elections at both Central and Sta
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