MAHLOGNSEQ1 FY26July 22, 2025

Mahindra Logistics Limited

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Management on call

Hemant Sikka

MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER

Saurabh Taneja

CHIEF FINANCIAL OFFICER

Mandar Chavan

STRATEGIC GROWTH ADVISORS

Key numbers — 40 extracted

rs,

ur teams have with our strategic objectives. I've also gone around and met many of our key customers, and I see that many of our customers are very happy with our services and products that we offer t

INR 750 crore

ategy. And clearly, in line with this vision at the group level, we will be raising approximately INR 750 crores through a rights issue. This move is strategic, aimed at enhancing our financial flexibility and

INR 604.06 crore

nsolidating our capital structure. As on June 30, 2025, our total outstanding borrowings stood at INR 604.06 crores. This includes a mix of term loans, working capital facilities and intercorporate deposits. Thes

INR 556.3 crore

ial institutions undertaken in the normal course of business. We intend to utilize an estimated INR 556.3 crores from the net proceeds towards the partial or full repayment and/or prepayment of select borrowin

INR40 crore

ment initiative is expected to result in significant annual interest cost savings in the range of INR40 crores to INR45 crores, thereby improving our overall financial efficiency and strengthening future cas

INR45 crore

is expected to result in significant annual interest cost savings in the range of INR40 crores to INR45 crores, thereby improving our overall financial efficiency and strengthening future cash flows. The bal

And since we serve Mahindra in a very big way, that's a very good point for us. Two-wheelers grew 1%, again, a very weak rural sentiment. Commercial vehicles declined due to reduced infra demand.

e segment has been under pressure for a long time. And the good news is that the tractors grew by 8%, while Mahindra continued to gain market share, growing by 13%, where again, we handle almost e

13%

d news is that the tractors grew by 8%, while Mahindra continued to gain market share, growing by 13%, where again, we handle almost everything on the logistics side with them. On warehousing and i

135%

t the momentum we are building across the business. We recorded strong momentum this quarter with 135% quarter-on-quarter growth in 3PL wins, reflecting growing customer confidence across sectors. Our

10%

owing customer confidence across sectors. Our 2x2 business remained robust and MESPL volumes rose 10%, showing continued strength in specialized logistics. We also went live with 10 new projects acro

3.34 lakh

s. We also went live with 10 new projects across manufacturing and e-commerce and inaugurated a 3.34 lakh square feet facility in Phaltan for Cummins. And I'm very happy to share that Cummins this year i

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Guidance — 20 items

Hemant Sikka

opening

“As we look ahead, my immediate focus will be on execution, execution and execution.”

Hemant Sikka

opening

“We expect very meaningful progress to unfold this priority in the near term.”

Hemant Sikka

opening

“And we are very confident that this problem will be solved in a very timely manner.”

Hemant Sikka

opening

“Going forward, each of these verticals, that is consumer separately and manufacturing separately, will now be led by independent vertical heads with dedicated leadership and support teams, enabling sharper execution, deeper customer engagement and stronger long-term outcomes.”

Hemant Sikka

opening

“And clearly, in line with this vision at the group level, we will be raising approximately INR 750 crores through a rights issue.”

Hemant Sikka

opening

“We intend to utilize an estimated INR 556.3 crores from the net proceeds towards the partial or full repayment and/or prepayment of select borrowings availed by the company and its subsidiaries, MLL Express Services Private Limited (MESPL) and V-Link Freight Services Private Limited.”

Hemant Sikka

opening

“The balance proceeds from the issue will be deployed through our general corporate purposes, and this will provide us with the necessary headroom to support our ongoing operational and strategic initiatives.”

Hemant Sikka

“So at some point -- and that's the key target for the team to achieve now that getting volume at any rate is not the game forward.”

Alok Deora

“So just wanted to understand, I mean, by when do we expect this breakeven to happen now because if we see the market is still a little competitive and increasing the prices -is kind of difficult and while maintaining the volumes as well.”

Hemant Sikka

“And if India, as we genuinely believe will continue to grow at 6.5%, 7%, then obviously, the Express business will grow -- continue to grow very well, and this is where the pool of money is.”

Risks & concerns — 12 flagged

Two-wheelers grew 1%, again, a very weak rural sentiment.

— Hemant Sikka

Commercial vehicle segment has been under pressure for a long time.

— Hemant Sikka

Gross margin without the impact of MESPL business was 11.6%.

— Saurabh Taneja

So while we have seen that our volumes have gone up, but our yield continues to be under pressure.

— Hemant Sikka

So just wanted to understand, I mean, by when do we expect this breakeven to happen now because if we see the market is still a little competitive and increasing the prices -is kind of difficult and while maintaining the volumes as well.

— Alok Deora

It's very difficult to answer this because the capacity is very diversified.

— Hemant Sikka

I mean, as I told you, auto industry overall, I'm sure you are also tracking, is feeling a slowdown, whereas the tractor industry continues to grow double digit.

— Hemant Sikka

So very difficult to give that answer to you.

— Hemant Sikka

And as Hemant shared earlier, this rights issue and the debt repayment also has a positive impact of about INR40 crores to INR45 crores on the finance costs annually.

— Saurabh Taneja

Or is there any traction it is -- which you are witnessing given that recently, there have been a lot of slowdown per se in the overall macroeconomic environment.

— Krupashankar NJ

On the second part, yes, we want to grow our nonautomotive business because that gives a diversification in terms of any industry risk that we carry in our business.

— Hemant Sikka

But given how the last 2 quarters have shaped up where our volume growth is slightly better, but yields have come under pressure, which effectively means that our revenue run rate on a quarterly basis remains in the band of about INR90 crores to INR100 crores.

— Jinesh Joshi

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Q&A — 7 exchanges

Hi good evening and firstly, congratulations on your new role. So just had a few questions. First is on the Express business. So just wanted to understand, we saw some volume growth coming in the fourth -- as against the fourth quarter as well as Y-o-Y basis. But still, we don't see any material improvement in the profitability or rather the reduction in the losses. So can you just highlight because what we were understanding that once the volume comes in, the loss reduction would start happening. So just first question on that.

Hemant Sikka

Alok, thank you for your wishes. So clearly, Express business has multiple variables which play together to finally lead into a profit or a loss situation. Clearly, you have highlighted the volume, and volume alone will not cut the game for us. Volume along with a good yield is very critical. So while we have seen that our volumes have gone up, but our yield continues to be under pressure. And that's what we are focusing now in the quarters to come. We are giving away business where our yield is not good and trying to get customers which give us a better, let's say, rupee per kg kind of a yiel

Thank You. Firstly, congratulations, Mr. Sikka on taking the new role. And my question is on the B2B Express side. Sir, firstly, would it be possible to provide the volume number actually done during the quarter?

Hemant Sikka

We have, Ankita, not shared this number in the past. All I can tell you is that the number in quarter 1 was higher than the number in quarter 4. And honestly, it won't serve you to know this number because we can still improve the yield at the same tonnage. So if you track only tonnage, you won't get any estimate. So I'm just thinking through from your point of view that if you start tracking us only on load, I can actually go for load 3x of what I'm doing, but still not make money. In logistics, you have to get one thing right, which I have learned very quickly in the first 3 months, and that

Hello Sir, my question is the rights issue aims to raise up to INR750 crores approx. So what are the primary planned uses of these funds? And how will this capital injection specifically contribute to improving the profitability and achieving the long-term strategic goal?

Hemant Sikka

Jayshree, thank you for asking this question because I'm sure this is on the mind of many people. So this will cover a lot of queries on this. So I would request Saurabh, who is our CFO, to please address this. Yes. Thanks, Jayshree, for your question. As you know that we've launched this rights issue value INR749.27 crores. About INR560 crores out of this, we are looking to utilize, as Hemant shared earlier, to repay the debt that we have. And these debts are across entities. We have debts in MLL Standalone, MLL Express as well as V-Link entity. So we'll be using INR560 crores to repay these

Congrats, sir, on taking up the new role. My first question is on the Contract Logistics business. I just wanted to get a sense on what is the current prospects with respect to the Contract Logistics business going -- how does it shape up right now, given that there are a lot of churn, which was witnessed over the last 1 year or so? And how do you see e-commerce shaping up our Contract Logistics business for the next 2, 3 years? If you can throw some light around that business, it will be really helpful.

Hemant Sikka

Yes. So Contract logistics is a key part of our business. We run 21 million square feet of warehousing space. And we have some, as I discussed in my earlier comments, some white space where we are very strongly focused to put that white space to good use. Contract Logistics is actually a very good part of our business because here, you run into clients with multiyear contracts, and we do see stickiness with the clients like -- it's not easy to make the switch in these things, whereas if you go for a B2B Express business, as I said, it's a month- on-month game where you need to be in front of t

Thanks for the opportunity. Sir, if I heard you right, in the opening remarks, you mentioned that you intend to reduce the white space in warehousing. But sir, if I remember right, since the last 2 quarters, this figure is approximately 1.5 million square feet. So just wanted your thoughts with respect to what are we planning to do differently this time around to kind of basically fill up this space? And also, if you can share what is the approximate cost that is hitting us due to this unabsorbed white space? So yes, your thoughts on that?

Hemant Sikka

So Jinesh, clearly, you have your numbers right. 1.5 million is approximate space that we currently carry. Our view is with the kind of focus that we have put, and you would have noted in my opening comments, I said this is a key goal in my own Goal sheet that I have kept for myself, and this goal carries to all of the CLT members. So obviously, there is a renewed focus on getting the white space off our table. We are working it every day and every week, there is a review at my level, which happens without fail. And we believe that with all the focus that our senior leaders are themselves putt

Good evening team, thank you for the opportunity, Sir, while most of the questions got answered, I wanted to understand from a medium-term perspective, how do we see this in terms of the capex, in terms of capital allocation? How do you look at this? I understand your near-term goals. But if I were to ask you in terms of capex for next 3, 5 years, do you see spending INR500 crores, INR600 crores over the next 3, 4 years? Any number, any direction, any qualitative input on the particular segments that you would like to spend or invest?

Saurabh Taneja

Yes. Hi Achal, Saurabh here. So in the past, we've generally been in the range of 1.5% of revenue when it comes to our capex. You would have seen numbers like INR60 crores to INR70 crores that MLL has historically spent on capex every year. Last year, which was FY '25 was an exception. We did about INR180 crores, and that was done to expand the fleet, and there are certain strategic projects that we got on the 3PL warehousing side where we spent a significant amount of capex. Our strategy going forward is that we look at the returns from each of these capex. We have a very rigorous capital all

Thank you all for joining us today. I'm really, really happy to be here with all of you. This is my first interaction with you, and I look forward to many more over the coming quarters. We hope that we have been able to address your questions and provided you with insights into our performance and the strategy going forward. If you have any further queries or need any other additional information, please feel free to reach out to our team or our Investor Relations Advisors, SGA. Your support for all our investors, I mean, it means a lot to us as we navigate this evolving landscape together. We

Management

Speaking time

Hemant Sikka

Moderator

Saurabh Taneja

Ankita Shah

Achal Lohade

Jinesh Joshi

Alok Deora

Jayshree Bajaj

Krupashankar NJ

Mandar Chavan

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Opening remarks

Mandar Chavan

Thank you. Good evening, everyone, and thank you for joining us for Mahindra Logistics Limited Q1 FY '26 Earnings Conference Call. We are pleased to have with us today Mr. Hemant Sikka, Managing Director and CEO; Mr. Saurabh Taneja, Chief Financial Officer, along with the members of the senior management team. At the outset, I would like to extend a warm welcome to Hemant Sikka as he joined us for his maiden earnings call in the capacity of Managing Director and the CEO of Mahindra Logistics Mr. Sikka brings with him over 25 years of leadership experience across the Mahindra Group. As the President of Farm Equipment sector, he steered the business to the highest ever market share and led several transformative initiatives, including the Krish-e platform. His expertise spans sourcing, manufacturing and international operations, including a leadership role at SsangYong Motors in South Korea. He currently serves on the Boards of multiple Mahindra Group companies and in December 2024 was a

Hemant Sikka

Thank you so much, Mandar, and good evening, everyone. It's absolutely a pleasure for me and a delight for me to interact with you. This is my first ever interaction with you. So I'm very happy to be part of this call. I'm also very deeply gratified and honored to take on this role as MD and CEO of Mahindra Logistics. I remain deeply optimistic about the strong runway of growth for both Mahindra Logistics and overall logistics industry in general. Since resuming office, I have done close to like 75, 80 days now. I've spent time engaging with teams across our verticals. I have traveled very extensively. And I'm really encouraged by the high degree of alignment and commitment that our teams have with our strategic objectives. I've also gone around and met many of our key customers, and I see that many of our customers are very happy with our services and products that we offer to them, and there is a lot of room to grow our business. The fundamentals of our business are sound and the fou

Saurabh Taneja

Thank you, Hemant. Good evening, everyone. Let me give a brief on the consolidated financial performance for Q1 FY '26. So revenue for Q1 FY '26 increased by 14% on a year-on-year basis to INR 1,625 crores. Revenue from our warehousing segment stood at INR 306 crores in Q1 FY '26 as compared to INR259 crores in Q1 FY '25, demonstrating a strong 18% growth on Y-o-Y basis. Supply chain management, including our 3PL and network services business, contributed 95% of our overall revenue, and the mobility business contributed 5% of overall revenues for Q1 FY '26. Gross margin at a fully consolidated basis stood at 9.4% in Q1 FY '26 compared to 9.5% in Q1 FY '25. Gross margin without the impact of MESPL business was 11.6%. EBITDA for the quarter stood at INR 76.3 crores, up from INR 66.3 crores in Q1 FY '25, so a growth of INR 10 crores on a Y-o-Y basis due to volumes and cost efficiencies. Loss for Q1 FY '26 stood at INR 10.8 crores. Let's talk about our legal entity performance. MLL Standal

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