MAHLOGNSEQ2FY'26October 28, 2025

Mahindra Logistics Limited

8,950words
104turns
9analyst exchanges
3executives
Management on call
Hemant Sikka
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER
Isha Dalal
CHIEF FINANCIAL OFFICER
Mandar Chavan
STRATEGIC GROWTH ADVISORS
Key numbers — 40 extracted
rs,
gs and excellence in operational execution. Clearly, operational execution is one of our key pillars, very disciplined focus on cost optimization and also sharp focus on site level economics. mahind
20%
s. I'm pleased to share with you that we have, in the last quarter alone, achieved a reduction of 20% plus of our white space in the last quarter. And we remain committed to our target, which I had
95%
last time in the call that by September of next year we will reduce our white space cost by about 95%. So, we will still retain 5%, but that is just for any exigency, any customer comes, which is lik
5%
ptember of next year we will reduce our white space cost by about 95%. So, we will still retain 5%, but that is just for any exigency, any customer comes, which is like a great customer, we should
INR50 crore
sustainable profitability in the long-term. Further, MLL is infusing additional equity capital of INR50 crores in MESPL to support in its journey to become EBITDA positive. The third pressing issue that we
8.2 lakh
ulfilment center, I don't want to mahindra LOGISTICS share the name of our customer. We handled 8.2 lakh units in a single day. This is our best ever, 8.2 lakh units in a single day from one site. And a
13 lakh
t ever, 8.2 lakh units in a single day from one site. And another large fulfilment center handled 13 lakh units in a single day. So I think our teams have really excelled very well on operational. The
7%
iness now. The Express business continues to build very strong momentum. Our tonnage has improved 7% Y-o-Y and our share of Value-Added Services, which we call VAS has also improved. The key drivers
9%
intaining consistent service levels. Let me come to freight forwarding. Overall volumes grew by 9% Y-o-Y despite, as we all know, there are very strong global challenges, headwinds because of glob
99%
us. We have taken feedback from hundreds and maybe now thousands of our customers, and we have a 99%, 5 on 5 rating on this service. Alyte offers seamless airport transfers, intracity rides and outs
3 lakh
re that we have operationalized 8 new projects across manufacturing and e-commerce and launched a 3 lakh square foot facility in Nashik. Also, repeat expansion projects from key customers such as Cummin
INR749 crore
nt priorities. To add, let me share an update on the successful completion of our rights issue of INR749 crores in August 2025. The proceeds have been prudently utilized towards the repayment of debt, resulti
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Guidance — 20 items
Hemant Sikka
opening
“Overall, our focus continues to remain on a very good foundation for margin growth across our business, and that we plan to achieve by the three things and excellence in operational execution.”
Hemant Sikka
opening
“And we remain committed to our target, which I had shared last time in the call that by September of next year we will reduce our white space cost by about 95%.”
Hemant Sikka
opening
“So, but most of the white space will be gone by September 2026.”
Hemant Sikka
opening
“There is a lot of growth that can be achieved in NCR, and we will keep the Prive focus on NCR for the whole of next year.”
Hemant Sikka
opening
“This marks the beginning of a new phase for Mahindra Logistics, where we aim to make MLL as the best integrated logistics company of India.”
Isha Dalal
opening
“Now let me share a brief update on the consolidated financial performance for Q2 FY26.”
Isha Dalal
opening
“Supply chain management, including our 3PL and network services business, which is Freight Forwarding, Express and Last-Mile Delivery, contributed 95% of our overall turnover and the Mobility business has contributed 5% of revenue for Q2 FY26.”
Isha Dalal
opening
“Revenue from the warehousing segment stands at INR333 crores as compared to INR278 crores in Q2 FY25.”
Isha Dalal
opening
“Consolidated gross margin is at 10.1% in Q2 FY26 compared to 9.2% in Q2 FY25, driven by more favorable business mix, customer mix as well as volume leverage.”
Isha Dalal
opening
“EBITDA for the quarter stands at INR85.1 crores, up from INR66.4 crores in Q2 FY26.”
Risks & concerns — 11 flagged
However, customer-driven pricing pressure continues to be a concern in last-mile delivery, and this has led to a few strategic decisions taken by us on our customer mix.
— Hemant Sikka
Without the impact of the MESPL business, our consolidated gross margin is at 10.8%, and that as well has expanded by about 70 bips year-on-year.
— Isha Dalal
Excluding the impact of this exceptional item, our underlying business performance has improved, sequentially improved in line with our expectations, supported by continuing mahindra LOGISTICS operating discipline, cost optimization and stable demand trends across our core segments.
— Isha Dalal
This includes the impact of the provision mentioned earlier.
— Isha Dalal
We have seen good progress in volumes, as Hemant has called out earlier, but rates have been under some pressure and the PAT for Q2 FY26 has marginally dipped to INR1.7 crores as compared to INR2.1 crores in Q2 FY25.
— Isha Dalal
And most of the year-on-year increase of the INR18 crores that you see also belongs to the impact of leases under Ind AS 116.
— Isha Dalal
Very difficult to give that number, but I can only broadly share some nuggets of information with you.
— Hemant Sikka
So to that extent, there may be something, but very difficult to pinpoint whether if Diwali was in November to October, how it can affect because the quarter still remains the same.
— Hemant Sikka
Difficult to point out because our peak actually doesn't happen exactly with the festival.
— Hemant Sikka
While we have seen a Y-o-Y decline in space under management, so it's come down from about 21.5 million to about 20.5 million square feet.
— Krupashankar Nj
So, I think, I am very happy to share that usually, these festival Diwali times are very difficult time for logistics industry.
— Hemant Sikka
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Q&A — 9 exchanges
Q
Hello. Thanks for the opportunity. The first question is a kind of bookkeeping question. So the provision that we have created for the INR4.8 crores in this quarter, is there any amount remaining or have we just provided it for the full in this quarter only?
Isha Dalal
Sorry, can you repeat your question, Jainam? I didn't quite catch that. Yes. So, the provision which has been created during this quarter of INR4.8 crores, is there any outstanding amount after this provision from the same client or are we done with the entire provision? So, Jainam, we have taken a call and an assessment on recoverability based on our assessment of the client history and the current status of the client in their bankruptcy filings, and we have appropriately provided for it. Okay. So fully has not yet been provided. The full provision is not provided for the same. Got it. This
Q
Yeah, thanks for the opportunity. Sir, I just wanted one clarification on the white space reduction that we have managed to achieve in this quarter of about 20% plus. Just wanted to check, I mean, has it come at the cost of realization? Because historically, we used to share what is our warehousing realization per square feet per month. And if I'm not wrong, I think in the base quarter, that figure was about INR55. But this time around, we have not given out this number explicitly. So can you share what this number is for the quarter?
Hemant Sikka
We won't be able to share that number. I think that information will be deliberately not shared this time. We will not be sharing that number. I think that gives out too much information to our competition also. So we will not share that information. However, I can tell you that in this white space reduction, there is no reduction which has happened. I mean, let me rephrase it a little bit. All the reduction has happened with revenue increase. That means we have got clients to take the spaces from us. But at what per square feet realization we have done, that information we'd like to keep with
Q
Yeah. Good afternoon, team. Thank you for the opportunity. Sir, just a couple of questions. First, with respect to the Express business, I think congratulations for the good number. But just wanted to clarify, if I look at the gross margins, you said we've turned positive. Our EBITDA is similar loss, almost similar loss. is there any investment we are making in terms of employees, etcetera, aggressively, which is kind of having the impact offsetting the gross margin improvement? mahindra LOGISTICS
Isha Dalal
So , you will see that, we have improved our gross margin by about INR5-odd crores. And we are seeing in the EBITDA corresponding improvement of almost INR3.3-odd crores. So one of the largest offsetting impacts is, you know, as we infused money into this entity and there was an increase in share capital, there are some one-off expenses in the entity pertaining to share capital increase. That's largely the only one-off. But otherwise, as gross margin continues to strengthen, you will see most of that benefit flow down to the EBITDA and therefore, the PAT level. Understood. Secondly, I just wan
Q
Yes. All right.
Management
Q
Yes.
Management
Q
Yes. Good evening and thank you for the opportunity. My first question would be on the financing cost. I just wanted to check couple of data points. While we have seen a Y-o-Y decline in space under management, so it's come down from about 21.5 million to about 20.5 million square feet. But the lease expenses have gone up by almost 18% on a Y-o-Y basis. If I look at the first half numbers, just wanted to get a sense that has there been any escalation in the underlying rental cost of our facilities or is there any other reason why this has happened?
Isha Dalal
Yes, you might have missed the first part of the call and we have answered this question, but I'll just repeat. We have added facilities during the year, right? We've talked about facilities in the East, which we publicly disclosed in a press release as well a few weeks ago as well as other facilities in Nashik, etcetera. That have added to rental costs during the year and therefore, because of Ind AS 116 accounting shows up in both depreciation and interest. With the addition of these, our warehouse network is fully built out. And therefore, we believe that the lease cost has now peaked in ou
Q
Yeah. Hi. So, we've seen warehouse space additions during the first half of the year during the quarter, and in the past as well. But this ROU addition has been very sharp. What is the reason for the same?
Hemant Sikka
ROU? mahindra LOGISTICS Ankita, can you repeat because we couldn't quite hear you well. Okay. Is this better? Much better, yes. Yes. I'm seeing there is a very sharp jump in the Right-Of-Use of asset on the balance sheet versus the actual space addition that we've done on the warehouse side. So what explains this? Because we've seen space addition happening in the past as well, but we haven't seen a similar quantum of jump in ROU in the past. So, if you could explain that? So, Ankita, as we mentioned, this pertains to the warehouses that have come into the system over the course of the last ye
Q
Hello?
Isha Dalal
Yes. Please go ahead. Yes. Yeah. So, I just -- I just had a question. It's a clarification on a statement you made before. It's on the depreciation. You mentioned that the depreciation is going to stay stable. So is it to assume that it's going to stay stable on a quarterly run rate of INR72 crores? That's correct. That's what I mentioned. So, I'll again clarify. The depreciation largely pertains to the cost of our leases under Ind AS 116. Given that our warehouse cost is largely fully built out, we expect the depreciation component of that to stay more or less constant for corresponding quart
Q
Thank you all very much for joining us today. We hope we have addressed your questions and provided valuable insights into our performance and strategy. If you have any further questions and queries, please feel free to reach out to us or SGA our Investor Relations Advisors. Your support means a lot to us as we navigate this transformation together. We genuinely appreciate your time, interest and continued support and look forward to staying connected with all of you. Thank you so much. I appreciate your time. Thanks so much.
Management
Speaking time
Isha Dalal
25
Hemant Sikka
23
Achal
13
Moderator
11
Jinesh Joshi
8
Jainam Shah
7
Krupashankar Nj
7
Ankita Shah
6
Nishita
3
Mandar Chavan
1
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Opening remarks
Mandar Chavan
Thank you. Good afternoon, everyone, and thank you for joining us for Mahindra Logistics Limited Q2 FY '26 Earnings Conference Call. We are pleased to have with us today Mr. Hemant Sikka, our Managing Director and CEO; Ms. Isha Dalal, CFO; along with members of the senior management team. At the outset, I would like to extend a warm welcome to Ms. Isha Dalal as she joined us for her maiden earnings call in the capacity of Chief Financial Officer of Mahindra Logistics Limited. Ms. Isha has over 15 years of diverse experience spanning media, investment banking, private equity and corporate finance. She previously served as a Senior VP and Head - Group FP&A at the Mahindra Group, where she was a part of the group's finance leadership. Prior to that, she was a member of the finance leadership at HUL. Earlier in her career, Isha was an investor in consumer and consumer technology businesses at multiple private equity an India-focused private equity fund. I hope everyone had a chance to view
Hemant Sikka
Thank you, Mandar, and good afternoon, everybody. I hope everybody had a very good Diwali. Wishing you all a very happy belated Diwali. Friends, over the past five months, we have invested significant time and effort doing the 360-degree review of our businesses. We have evaluated every aspect of our operations, processes, structure, the way we work, the way we interact with our customers. And I think this introspection has allowed us to identify a lot of areas of improvement and also take decisive steps to strengthen the business for the long- term. Overall, our focus continues to remain on a very good foundation for margin growth across our business, and that we plan to achieve by the three things and excellence in operational execution. Clearly, operational execution is one of our key pillars, very disciplined focus on cost optimization and also sharp focus on site level economics. mahindra LOGISTICS Before I talk about the business performance and the broader business environment,
Isha Dalal
Thank you, Hemant. It is a pleasure to be here speaking to all of you today, and I'm looking forward to the journey of transformation that lies ahead. Hemant detailed out our progress during the quarter on several important priorities. To add, let me share an update on the successful completion of our rights issue of INR749 crores in August 2025. The proceeds have been prudently utilized towards the repayment of debt, resulting in a stronger balance sheet. As a result, we have reduced our consolidated debt obligation from INR601 crores at the end of quarter 1 to INR73 crores at the end of quarter 2. This will help us realize interest cost savings of INR40 crores to INR45 crores per annum. The rights issue has helped strengthen our financial foundation and our focus now is squarely on enhancing operational performance to drive long-term profitability. In addition, INR187 crores remains available from rights issue proceeds for general corporate purposes aligned with the objects of the of
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