Mahindra Logistics reports 11.5% revenue growth in Q2 FY25, reducing losses amid strategic expansion

Mahindra Logistics Limited (MLL), a key player in India’s integrated logistics and mobility solutions sector, has reported an 11.5% year-on-year revenue increase for the second quarter of FY25, reaching ₹1,521 crores, as disclosed in its latest financial results. Despite ongoing challenges, the company achieved a reduction in losses, signalling the effectiveness of its strategic investments and expansion initiatives.

Performance Overview

MLL’s consolidated results for Q2 FY25 highlight a steady performance compared to the same quarter last year. Revenue climbed from ₹1,365 crores in Q2 FY24 to ₹1,521 crores in Q2 FY25. EBITDA also saw a rise, from ₹54 crores to ₹66 crores. The company recorded a pre-tax loss (PBT) of ₹5 crores, an improvement over the ₹8.2 crores loss reported in the previous year. Additionally, the net loss (PAT) reduced significantly, shrinking from ₹15.9 crores in Q2 FY24 to ₹10.7 crores in Q2 FY25. Diluted EPS also showed improvement, moving from ₹(2.21) to ₹(1.50).

For the half-year period ending 30 September 2024, MLL’s consolidated revenue surged to ₹2,941 crores, an increase from the ₹2,658 crores recorded in the first half of FY24. EBITDA for H1 FY25 reached ₹133 crores, compared to ₹120 crores in H1 FY24. Pre-tax and net losses also showed improvements, while diluted EPS moved from ₹(3.40) to ₹(2.79).

Strategic Investments and Growth Drivers

MLL’s success is attributed to its aggressive expansion and diversification strategies. The company has focused on increasing its footprint in the eastern and northeastern regions of India, with substantial investments in warehouses, delivery stations, and express logistics services. These moves are expected to further boost MLL’s growth in the upcoming quarters.

The company’s freight forwarding business saw impressive growth, with revenues rising by 65% year-on-year, driven by improved ocean freight pricing. The express logistics segment also displayed positive trends, with losses narrowing by 32% year-on-year due to continuous cost optimization measures. MLL aims for an EBITDA breakeven in this segment, highlighting growth in volumes as a priority.

Challenges and Outlook

Geopolitical conflicts remain a concern for MLL’s cross-border business, impacting market dynamics. Despite these headwinds, the company is optimistic about the latter half of FY25, expecting seasonal demand during the festive period to boost revenues. MLL is enhancing its capacity and resources to handle the anticipated surge in demand, particularly in the 3PL contract logistics and last-mile delivery segments.

Expert Commentary

Rampraveen Swaminathan, Managing Director and CEO of Mahindra Logistics, commented that the company witnessed robust revenue growth, supported by expansions in transportation and green logistics offerings. He noted that investments in infrastructure in the eastern region are expected to yield positive returns. Despite the current challenges in the express business, Swaminathan expressed confidence in achieving improved margins in H2 FY25 due to strategic margin improvement initiatives.