Mahindra Logistics Limited (MLL) has reaffirmed its commitment to optimize warehouse efficiency, targeting a 95% reduction in whitespace by September 2026. This strategic move underscores the company's focus on enhancing operational productivity and resource utilization.

Warehouse Optimization Strategy

The company's management has set an ambitious goal to significantly reduce unused warehouse space over the next three years. This initiative is expected to improve overall logistics efficiency and potentially reduce operational costs.

Express Business Profitability

While Mahindra Logistics remains committed to improving its express business segment, the management did not provide a specific timeline for achieving EBITDA profitability in this area. The company described it as an "upcoming goal," indicating ongoing efforts to enhance the performance of this division.

Financial Outlook

Mahindra Logistics has provided insights into its financial projections:

The company expects lease and depreciation costs to stabilize around INR 72.00 crores on a quarterly basis going forward. This projection suggests that MLL anticipates a consistent cost structure in these areas, which may contribute to more predictable financial planning.

Recent Financial Performance

According to the company's latest financial results for the quarter ended September 30, 2025:

The company reported a total income from operations of INR 1,685.27 crores for Q2 FY2026, showing an increase from INR 1,521.10 crores in the same quarter of the previous year. However, Mahindra Logistics continued to face challenges, recording a net loss attributable to shareholders of INR 10.35 crores, slightly improved from a loss of INR 10.75 crores in Q2 FY2025.

Mahindra Logistics' focus on warehouse optimization and ongoing efforts to improve its express business segment indicate a strategic approach to enhancing operational efficiency and financial performance. As the company works towards its 2026 warehouse whitespace reduction goal, investors and industry observers will likely keep a close eye on MLL's progress and its impact on overall business performance.

Mahindra Logistics Limited (MLL), a leading third-party logistics solutions provider, has announced ambitious growth plans alongside a significant capital allocation decision. The company has projected revenue of ₹14,000 crore and an EBITDA margin of 8-9 percent by FY27, while its board of directors has approved an investment of up to ₹50 crore in its wholly-owned subsidiary, MLL Express Services Private Limited (MESPL).

Growth Strategy

To achieve its FY27 targets, Mahindra Logistics plans to:

1. Expand its 3PL warehousing capacity to 30 million square feet
2. Scale its EV fleet to 3,500 vehicles
3. Establish new multimodal hubs

Investment Details

The ₹50 crore investment in MESPL will be made through a subscription to a rights issue, comprising up to 5,00,00,000 equity shares with a face value of ₹10 each. The full amount of the issue price will be payable in cash upon application.

Purpose of Investment

According to the company's disclosure, the primary objectives of this capital infusion are:

1. Meeting working capital requirements
2. Supporting continuing operations
3. Addressing general corporate purposes of MESPL

Subsidiary Overview

MESPL, which operates under the brand name "Rivigo by Mahindra Logistics", provides B2B Express logistics services across the value chain. The subsidiary has a significant presence in India, covering over 19,000 pin codes and operating 260+ processing centers and branches nationwide. MESPL utilizes tech-differentiated solutions to enhance its service offerings.

Financial Performance

The turnover of MESPL for the financial year ended March 31, 2023, stood at ₹363.83 crore, indicating the substantial scale of its operations within the Mahindra Logistics ecosystem.

Strategic Implications

This investment decision underscores Mahindra Logistics' commitment to strengthening its express delivery segment and aligns with its broader growth strategy. By injecting additional capital into MESPL and expanding its warehousing and EV fleet capabilities, MLL aims to enhance its operational capabilities and potentially expand its market presence in the logistics sector.

Regulatory Compliance

The company has stated that this transaction falls within the ambit of related party transactions but is conducted at arm's length. As MESPL is a wholly-owned subsidiary, the transaction is exempt under Regulation 23(5) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Conclusion

The ₹50 crore investment in MLL Express Services, coupled with Mahindra Logistics' growth targets, reflects the company's strategic focus on bolstering its express delivery capabilities and overall market position. This move may enhance the company's competitive position in the logistics landscape, particularly in the B2B express segment.