Summary
Mahindra Logistics Limited - Q3 FY26 Earnings Call Summary Wednesday, January 28, 2026 4:00 PM
Event Participants
Executives 2 Hemant Sikka (MD & CEO), Isha Dalal (CFO)
Analysts 7 Achal Lohade, Alok Deora, Disha, Jinesh Joshi, Krupashankar, Navneet, Vikram Suryavanchy
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹1,898 crores | +19% YoY; driven by strong volume growth in Auto/Farm segments and Express/Mobility businesses. |
| 3PL Revenue | ₹1,502 crores | +20% YoY; led by AFS (Auto & Farm) segment followed by consumer business growth. |
| Express (MESPL) Revenue | ₹113.6 crores | +27.5% YoY; fueled by 19% YoY growth in delivered volumes with stable sequential yields. |
| Mobility Revenue | ₹110.7 crores | +42% YoY; driven by high momentum in the B2B segment and the premium ‘Alyte’ offering. |
| Warehousing Revenue | ₹345 crores | +15% YoY; reflects continued expansion of the warehousing footprint and utilization. |
| Consolidated EBITDA | ₹102.8 crores | +40% YoY; margin expansion to 5.4% from 4.6% in Q3FY25 due to pricing discipline. |
| Consolidated Gross Margin | 10.0% | +76 bps YoY; driven by 3PL segment profitability and turnaround in the Express business. |
| Operational PAT | ₹9.2 crores | Adjusted for ₹7.36 crore one-time impact of new Labour Code; reported PAT was ₹3.3 crores. |
| Consolidated Gross Debt | ₹64 crores | Significant reduction following the rights issue; standalone debt reduced to zero. |
| Revenue Mix (Auto/Non-Auto) | 62% / 38% | Auto includes tractors and trucks; high Mahindra growth keeping auto share elevated. |
Geographic & Segment Commentary
- Express Logistics (MESPL/Rivigo): Turned gross margin positive at ₹2.4 crores (vs ₹0.2 crore YoY) with a 19% volume increase. Management is focusing on lane utilization and better unit economics through backward lane consolidation with other MLL verticals.
- Mobility: Strong growth under the ‘Alyte’ brand for premium B2B offerings. The segment turned a profit of ₹1.3 crores, with management calibrating fleet expansion based on strict return thresholds.
- Last Mile Delivery: Revenue declined as the company strategically exited unviable sites and low-margin customer relationships. Management expects profitability to improve from Q4FY26 as rate renegotiations conclude.
- Freight Forwarding: Revenue grew 33% YoY to ₹94.8 crores despite global trade lane uncertainties. Growth was purely organic, driven by volume expansion across existing ocean and air customers.
Company-Specific & Strategic Commentary
- Profitability Turnaround: Achieved profitability after 11 consecutive quarters of losses through pricing discipline and exiting non-profitable relationships.
- “White Space” Elimination: On track to reduce 95% of operational “white spaces” (network inefficiencies) by September 2026; currently ahead of the projected glide path.
- Team Stability: Re-established execution rigor by stabilizing leadership and operating teams, leading to faster ground-level decision-making.
- Seino JV: Established the leadership team for the Japanese joint venture; while revenue is currently immaterial due to long Japanese sales cycles, active discussions are ongoing with large Japanese firms.
- Rights Issue Utilization: Used proceeds to pay down debt, materially reducing interest costs and strengthening the overall profitability profile.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| White Space Reduction | 95% reduction by Sep 2026 | Management confirms they are currently ahead of the glide path to eliminate inefficiencies. |
| Express Profitability | EBITDA Breakeven (Near-term) | Business is “very close” to breakeven following gross margin expansion to ₹2.4 crores. |
| Last Mile Performance | Improvement from Q4 FY26 | Based on ongoing rate renegotiations and operational excellence initiatives. |
| Pricing Correction | 50% completion (Ongoing) | Management stated they are halfway through correcting underpriced contracts across the portfolio. |
Risks & Constraints
| Risk | Context |
|---|---|
| Last Mile Economics | Low entry barriers lead to continuous pricing pressure; management is refusing unviable business to protect margins. |
| Global Uncertainty | Freight forwarding faces volatile trade flows and global macro shifts, though current volume growth remains organic and steady. |
| Segment Concentration | High reliance on the Auto/Farm sector (62%) makes the company a proxy for the cyclical performance of M&M’s core businesses. |
| New Labour Code | Estimated ₹7.36 crore incremental impact on retiral benefits taken as an exceptional item this quarter. |
Q&A Highlights
Express Business Turnaround
- Question: What led to the 19% volume growth in Express and when is EBITDA breakeven expected? (Alok Deora)
- Answer: Growth came from better execution, high service levels (NSL), and lane utilization rather than one-offs. The business is very close to EBITDA breakeven (Hemant Sikka).
Customer Selection Strategy
- Question: Is there a minimum margin threshold for letting go of business? (Disha)
- Answer: Thresholds are internal/confidential, but every contract is evaluated for economic and strategic sense. Exiting a customer is a last resort after multiple renegotiation rounds (Isha Dalal, Hemant Sikka).
Mahindra Group Synergy
- Question: What is the impact of the Mahindra-SML integration? (Vineet Khatri)
- Answer: MLL has started network planning and optimization work for this new entity. Pricing discussions will follow, with results expected in roughly a quarter (Hemant Sikka).
Price Corrections
- Question: Are we through with price corrections across the customer base? (Achal Lohade)
- Answer: Approximately halfway through the necessary price corrections; work remains for the other 50% of the portfolio (Hemant Sikka).
Key Takeaway
Mahindra Logistics achieved a significant milestone in Q3 FY26, turning profitable after 11 quarters of losses. Consolidated revenue grew 19% YoY to ₹1,898 crores, supported by a 40% jump in EBITDA to ₹102.8 crores. The turnaround was driven by aggressive pricing discipline, the successful stabilization of the Express (Rivigo) business—which is nearing EBITDA breakeven—and 20% growth in the core 3PL segment. While the company strategically exited some low-margin last-mile contracts, leading to a dip in that specific segment, the overall gross margin expanded by 76 bps to 10%. With standalone debt eliminated via a rights issue and a clear glide path to eliminate 95% of network “white spaces” by September 2026, management is shifting focus from stabilization to scaling profitable growth. The company remains a strong proxy for the Indian auto and farm sectors while gradually diversifying through e-commerce and its Seino JV. MLL is well-positioned to sustain this momentum into FY27 provided macro-consumption remains steady.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: