Summary
Allcargo Logistics Limited - Q3 FY 2026 Earnings Call Summary Friday, February 6, 2026 3:30 p.m. IST
Event Participants
Executives 3 Deepak Pareek (CFO), Ketan Kulkarni (MD & CEO), Sanjay Punjabi (Investor Relations)
Analysts 5 Aadarsh (Negen Capital), Rehan Saiyyed (Trinetra Asset Managers), Rushabh Shah (RBSA Investment Managers), Thomas (Individual Investor), Vedant S. (Individual Investor), Vikram Kotak (Crest Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Express Volume | 313,000 metric tonnes | Stable YoY; focus remains on maintaining market share in the organized sector. |
| Realization per Tonne | ₹11,610 | +2% YoY and +0.4% QoQ; driven by yield improvement and pricing discipline. |
| Consolidated Revenue | ₹516 crores | -0.6% YoY and -3.9% QoQ; impacted by muted expansion in e-commerce segments. |
| Gross Profit | ₹153 crores | Flat YoY/QoQ; reflects stable margins despite transitionary quarter. |
| Consolidated EBITDA | ₹61 crores | Flat YoY/QoQ; margin expansion in Express offset by muted Consultative Logistics. |
| Express Revenue | ₹364 crores | -2.1% YoY and -3.4% QoQ; transitionary period focused on quality over volume. |
| Express EBITDA | ₹18 crores | +19% YoY and +6% QoQ; profitability improved due to yield hikes and cost control. |
| Consultative Logistics Revenue | ₹153 crores | +5% YoY; growth moderated as e-commerce clients deferred expansion. |
| Consultative Logistics EBITDA | ₹46 crores | +2% YoY; impacted by lower than expected warehouse utilization in certain segments. |
| Warehouse Space Under Mgmt | 8.1 million sq. ft. | Consistent footprint as of Dec 2025; focus on efficiency over rapid expansion. |
| Net Cash | ₹88 crores | Maintained healthy liquidity position to support tech and deleveraging. |
Geographic & Segment Commentary
- Express Business: The segment reported improved profitability with vertical-specific focus on MSME and Retail. Management noted market share gains against large organized players since July 2025, supported by better service quality and tech-enabled tracking. Strategic focus remains on asset-light operations and yield-led growth.
- Consultative Logistics (CL): Growth was characterized as “muted” due to e-commerce clients delaying expansion, though relationship fundamentals in Auto and Chemical remain strong. The company is targeting “white spots” in Life Sciences and temperature-controlled solutions. Integration with the Express segment is being leveraged to offer end-to-end supply chain solutions to MNCs.
Company-Specific & Strategic Commentary
- Technology & AI Integration: Management deployed GenAI for automated docket generation and email classification, alongside a 24/7 control tower for vehicle tracking. These tools are credited with improving vehicle turnaround times and service reliability (Ketan Kulkarni).
- Asset-Light Strategy: The company maintains a strict asset-light model, leasing all trucks from third parties to minimize CAPEX and maintain agility. Capital deployment is prioritized toward technology (₹12 crore annual budget) and operating unit modernization (Deepak Pareek).
- Post-Merger Integration: Following the Oct 1st merger of Allcargo Gati into Allcargo Logistics, the focus has shifted to cross-selling synergies between CL and Express. One major multinational 3PL was recently signed as a dual-service customer (Ketan Kulkarni).
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA CAGR | 20% growth (FY25-FY28) | Driven by yield improvements, tech efficiencies, and cross-selling synergies. |
| Q4 FY26 Performance | Sequential Improvement | Management expects Q4 to be seasonally stronger with improved volumes and margins. |
| Debt Profile | Reduction by Q1 FY27 | Intent to use cash flows for phased deleveraging and pairing out debt. |
| Tech Investment | ₹12 crores (FY27) | Allocation for AI, control towers, and customer experience enhancements. |
Risks & Constraints
| Risk | Context |
|---|---|
| Volume Stagnation | Surface Express volumes have remained near 3 lakh tonnes for several quarters; management is balancing price hikes against potential volume leakage. |
| Client Concentration | Muted growth in CL was directly attributed to e-commerce clients deferring expansion plans, highlighting sensitivity to specific sector CAPEX cycles. |
| Competitive Pricing | While Allcargo implemented a ~10% price hike in Jan 2026, competitors like Delhivery pose a threat if they maintain aggressive pricing to gain volume. |
Q&A Highlights
Pricing & Yield Management
- Question: What is the strategy to prevent volume leakage to competitors like Delhivery following the 10.2% price hike? (Aadarsh)
- Answer: The company uses a Data Science team to monitor swings by geography/product. Realization is up 2% already, and the focus is on “profitable growth” where yield and volume are balanced (Ketan Kulkarni).
Segment Synergies
- Question: What are the qualitative and quantitative benefits of the Gati-Allcargo merger? (Vikram Kotak)
- Answer: Integrated teams now pitch both CL and Express services. A major automotive MNC recently moved from single-service to integrated usage (Ketan Kulkarni).
Capital Allocation
- Question: How is the company prioritizing capital deployment? (Vedant S.)
- Answer: Cash is used for three blocks: technology (₹12 Cr annual), OU modernization (₹10-15 Cr in FY27), and phased deleveraging (Deepak Pareek).
Contract Logistics Outlook
- Question: Why was there a QoQ dip in the CL business? (Vedant S.)
- Answer: Certain e-commerce clients deferred expansion, but the underlying sector relationships in Auto and Chemical remain strong; Q4 is expected to be better (Ketan Kulkarni).
Key Takeaway
Allcargo Logistics reported a transitionary Q3 FY26, characterized by a deliberate shift toward profitability and yield enhancement over pure volume growth. While consolidated revenue was slightly lower at ₹516 crores due to muted e-commerce expansion in the Consultative Logistics segment, the Express business showed resilience with an 19% YoY EBITDA growth. Management successfully integrated Allcargo Gati and is now leveraging cross-selling synergies to offer end-to-end solutions, supported by a ₹12 crore annual tech budget focused on GenAI and control towers. The company maintains an asset-light stance with ₹88 crores in net cash. Looking forward, management guided for a 20% EBITDA CAGR through FY28, anchored by a 10.2% price hike effective January 2026 and expected volume recovery in Q4. Success depends on maintaining service quality to prevent volume leakage to competitors while scaling temperature-controlled solutions in the Food and Pharma sectors.
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