Mahindra Logistics (MAHLOG) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue grew 10% year-over-year to INR 1,420 crore, with supply chain management contributing 94% and mobility 6% of total revenue; revenue was down 2% sequentially.

• PAT declined 54% year-over-year to INR 10.2 crore on a standalone basis, while consolidated net loss after tax was INR 7.84 crore; losses were impacted by higher labor costs, pre-operating expenses, and delayed order conversion.

• The company launched a 300,000 sq ft renewable-powered facility in Guwahati and formed a JV with SENKO/Seino Holdings to target Japanese automotive OEMs.

• Healthy order booking in 3PL and cross-border business, with growth in inbound ocean cargo and improved performance in Mobility, Last Mile Delivery, and auto outbound logistics.

• Earnings were impacted by extended start-up costs, higher manpower and warehousing lease costs, though cost optimization initiatives partially offset lower Express business volumes.

Financial highlights

• 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 sequentially.

• PAT: INR 10.2 crore (standalone, down 54% YoY); consolidated net loss: INR 7.84 crore; basic EPS: -1.29 (consolidated).

• Contract Logistics revenue: INR 1,093 crore (up 9% YoY); B2B Express: INR 87 crore (up 2% YoY, down 11% QoQ); Freight Forwarding: INR 71 crore (up 12% QoQ); Last Mile Delivery: INR 89 crore (up 10% QoQ).

• Mobility business revenue was stable at INR 81.3 crore; PAT at INR 1.7 crore.

• Warehousing yield: INR 6.2 per sq ft, with a target to return to INR 7.

Outlook and guidance

• Management expects order conversion to improve in H2 FY25 as construction delays and pre-operating costs normalize.

• Express business targets EBITDA breakeven by end of Q2 FY25, though risks of delay to Q3 remain due to muted market conditions.

• Warehousing yield is expected to recover to INR 7 per sq ft by Q3 FY25 as labor costs stabilize and optimization efforts continue.

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

• E-commerce and last-mile delivery segments are expected to rebound, with e-commerce contract logistics returning to 15-16% of revenue.