Mahindra Logistics (MAHLOG) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue grew 10% year-over-year to INR 1,420 crore, with warehousing and 3PL contributing INR 259 crore and mobility at 6% of total revenue; revenue was down 2% sequentially.

• PAT declined 54% year-over-year to INR 10.2 crore standalone, while consolidated net loss was INR 9.3 crore, impacted by higher labor costs, pre-operating expenses, and delayed order conversion.

• The logistics sector saw mixed demand, with automotive, consumer durables, and FMCG showing growth, while farm and B2B express faced headwinds.

• New contracts worth over INR 210 crore were secured, including key wins in 3PL, e-commerce, and freight forwarding.

• A joint venture with SENKO/Seino Holdings was announced to target Japanese automotive OEMs.

Financial highlights

• Consolidated gross margin declined to 9.5% from 10.5% year-over-year, mainly due to labor cost inflation and pre-operating costs; EBITDA for the quarter was INR 66.3 crore, up 17% sequentially.

• Net loss for Q1 FY25 was INR 9.3 crore, an improvement from a loss of INR 13 crore in the previous quarter; basic EPS was -1.29.

• Contract Logistics revenue was INR 1,093 crore (up 9% YoY, down 3% QoQ); B2B Express revenue was INR 87 crore (up 2% YoY, down 11% QoQ).

• Mobility business revenue was stable at INR 80-81.3 crore, with PAT at INR 1.7 crore.

• Freight Forwarding revenue was INR 71 crore (up 12% QoQ); Last Mile Delivery revenue was INR 89 crore (up 10% QoQ).

Outlook and guidance

• Management targets EBITDA breakeven for the express business by end of Q2 FY25, with risk of slippage to Q3.

• Warehousing yield is expected to recover to INR 7 per sq ft by Q3, after being impacted by pre-operating and labor costs.

• E-commerce contract logistics expected to rebound to 15-16% of revenue, with last-mile delivery continuing strong growth.

• Focus remains on margin expansion, productivity improvement, and leveraging technology and automation.

• Targeting 18% ROE by FY26 through core growth, Rivigo turnaround, and integrated solutions.