Mahindra Logistics Q2 PAT jumps 73% to Rs 19 crore

Mahindra Logistics Ltd. (MLL) reported a 73% year-on-year growth in its standalone profit after tax (PAT) to Rs 19 crore in the September quarter of this fiscal. The company had posted a standalone PAT of Rs 11 crore in the July-September period of FY23, MLL said in a statement.

Revenue Declines

However, revenue during the quarter under review declined 5% to Rs 1,136 crore from Rs 1,195 crore in the period a year ago. The company attributed the decline in revenue to headwinds in the e-commerce segment and lower freight prices in the global freight forwarding industry.

Growth in Supply Chain Business

MLL said that continuing growth and consolidation across the supply chain businesses, with growth in some markets, is offsetting headwinds. The company said it remains focused on margin improvement, which resulted in earnings growth across businesses other than the MLL Express business.

Outlook

Rampraveen Swaminathan, Managing Director and CEO at Mahindra Logistics Ltd., said the overall logistics industry is well-positioned, driven by a long-term focus on infrastructure, manufacturing, consumption growth, and a positive regulatory trajectory. He added that the company remains focused on accelerating margins driven by synergies in the network business and other cost reduction programs.

MLL Express Business

Volumes in the MLL Express business increased by 4% during the quarter. Despite positive momentum on customer additions, volume uptick from these customers mainly happened at the end of the quarter. The company remains focused on expanding network coverage and service levels. Lower volumes and higher transport costs during the quarter continued to drag the improvement plan.

Third-Party Logistic Supply Chain Services

The third-party logistic supply chain services grew 4% year-on-year, driven by growth in automotive and engineering, consumer, and durables. Ecom volumes remained weak during the quarter and softness continued to roll over. However, activity levels picked up towards the end of the quarter to prepare for a peak during the festive season in Q3.

Mobility Business

The Mobility business continues to see an uptick on account of growth in existing customers and the acquisition of new clients. The PAT has seen 133% YOY growth and the business is now PAT positive.

Mahindra Logistics Ltd. reported a strong growth in its PAT for the September quarter, driven by growth in its supply chain business and improved margins. However, revenue declined due to headwinds in the e-commerce segment and lower freight prices in the global freight forwarding industry. The company remains focused on expanding its network, improving service levels, and reducing costs to drive future growth.