Thank you, Iqra. Good evening, everyone, and thank you for joining us for Mahindra Logistics Limited Q2 and H1 FY27 earnings conference call.

We are pleased to have with us today Mr. Hemant Sikka, our Managing Director and CEO, Ms.

Isha Dalal, CFO, along with the member of the senior management team. I hope everyone had a chance to view our financial results and investor presentation, which were recently posted on the company's website and stock exchanges.

We will begin the call with opening remarks from management, followed by an open forum for question and answer. Before we begin, I would like to point out that some of the statements made during today's call may be forward-looking.

A disclaimer to that effect was included in the earnings presentation. I would like to invite Mr.

Sikka to share his remarks.

Thank you, Mandar. Good afternoon, everyone, and thank you for joining us.

Over the past year, we have been deliberate in reshaping Mahindra Logistics into a more efficient, disciplined, and profitable enterprise. We have sharpened our operating model, improved unit economics, addressed structural inefficiency, and embedded greater accountability across the organization.

Today, the impact of these actions is clearly visible in our performance. The business is now moving from turnaround to acceleration, from fixing the past to building the future.

Our focus is increasingly on the quality of growth that we deliver, the depth of customer relationships we build, the length we go to to satisfy our customers, and our ability to consistently convert growth into sustainable shareholder value. Q2 reflects a business that is growing with greater quality, discipline, and profitability.

PAT has increased to ₹26 crore compared to a loss of ₹10 crore a year ago and ₹25 crore in the previous quarter, while revenue grew 24% Y-o-Y. Our focus on profitable growth is also reflected in improving capital efficiency.

ROCE increased to 12.9% in H1 of FY27 from 1.7% in H1 of FY26, demonstrating stronger capital productivity and our commitment to creating long-term stakeholder value. More importantly, these results demonstrate that we can grow faster while improving profitability and operating discipline.

This is exactly the outcome we have been working towards: profitable growth, stronger cash generation, and sustainable value creation. Three themes have defined this quarter.

Our express business, Rivigo, has crossed an important milestone. MSPL Rivigo turned EBITDA positive during the quarter and for H1 FY27 as a whole also, demonstrating that the business has reached a critical inflection point and is beginning to realize the benefits of scale, operating leverage, and disciplined execution.

Second, contract logistics continued to strengthen its leadership position. Growth was driven by new customer additions, deeper wallet share with existing customers, and a relentless focus on profitability and execution.

White space reduction, you would recall, has been an issue in the past few quarters, and we had committed in quarter one of last year that we would reduce our white space that time of 1.6 million by 95%. I'm happy to share that this has progressed in line with our commitments.

We have achieved our target reduction that we had committed in quarter one of last year. Having solved the white space problem, we will not be calling this out from now onwards, as it is business as usual now.

Third, operation excellence is increasingly becoming a competitive differentiator. Better service levels, higher asset productivity, and consistently positive customer feedback reflects the execution discipline we have built across the organization and provide a strong foundation for sustained growth.

Let me now take you through the business updates. Let me start with MSPL, which is our B2B express logistics business.

MSPL or Rivigo has turned a corner. The business delivered its first-ever EBITDA positive quarter and achieved EBITDA positivity for H1 FY27, making a significant milestone in our transformation journey.

Actually, this momentum is visible in the numbers. Q2 revenue grew 69% Y-o-Y, while EBITDA improved from a loss of ₹9.1 crores in quarter one of last year to a profit of ₹2.3 crores in quarter two of this year.

Higher volumes, improved yields, and disciplined execution are translating into stronger financial performance. Since June of this year, Ankur Bansal has taken over as the CEO of MSPL.

Under his passionate and hands-on leadership, the business has accentuated a relentless focus on improving business economics, execution discipline, and profitability. The progress is now visible in both operating and financial performance.

Very happy to state that the leadership team of MSPL has aligned to these targets and these challenges. The mandate ahead is clear for MSPL team: to convert EBITDA momentum into achieving PAT positivity.

With improving operating leverage and growing business momentum, we are increasingly confident about the path ahead and working excitedly to grow this business. Let me come to other business, contract logistics, which continues to compound strongly.

Quarter two revenue grew 28% Y-o-Y, while gross margins grew 20% Y-o-Y, demonstrating that the growth and profitability are improving together. White space reduction, as I called out, has been successfully executed, with vacant space now reduced to just 5% of the June 2025 levels, in line with our commitment.

E-commerce and quick-commerce businesses continue to be important growth engines, benefiting from favorable market tailwinds and our strong execution capabilities. We continue to win the right businesses.

New customer additions across sectors reflect the strength of our solutions, service delivery excellence, and trusted customer relationships. In our mobility business, we continue to deliver profitable growth.

Q2 revenue grew 33% Y-o-Y, with gross margins showing 19% Y-o-Y growth, underscoring the strength of our operating model. Our focus remains on quality over volume, expanding our customer base while ensuring that growth translates into sustainable profitability.

In our last-mile delivery business, LMD as we call it, the focus remains firmly on profitable growth. Revenue stood at ₹68 crore in quarter two of FY27, as we continue to prioritize business quality and margins over low-value volume.

The benefits are clearly visible in our profitability metrics for this business. Gross margins improved 18.8% Y-o-Y, supported by a superior customer mix, pricing discipline, excellent execution, and a very tight control on all the costs.

This excellent performance has given us the confidence that our last-mile business is now ready to pivot towards growth from our earlier articulated a no-loss strategy. You would recollect that in the previous communication, I had said that our strategy for LMD business is, while we continue to grow the business, but the main focus is no-loss strategy.

We are now pivoting this business from a no-loss strategy to a pivot towards growth, and we are feeling more excited and more confident about this business. In our freight forwarding business, we are rebuilding momentum.

Revenue for quarter two FY27 stood at ₹50.6 crores, growing 12% Q-on-Q. Our strengthened leadership team is driving sharper market engagement, broader commercial coverage, and a healthier pipeline, positioning the business for stronger growth while maintaining high service levels and operational discipline.

To conclude, quarter two FY27 was a quarter of execution and outcomes. We delivered a sharp improvement in profitability.

MSPL Rivigo achieved EBITDA positivity. White space in contract logistics reduced to our committed and targeted levels by September of this year.

Each of our businesses remained firmly focused on profitable growth. Most importantly, these improvements are broad-based and structural.

The turnaround journey we started is now evolving into a sustainable growth story. Importantly, the benefits are now visible across multiple businesses, giving us confidence in the durability of this performance.

Looking ahead, our path is clear. Our focus remains on three priorities: drive consistent growth in revenue, profitability, and cash generation; continuously raise the bar on operational excellence and productivity; and deepen our customer relationships by delivering differentiated value and superior service quality.

Our vision of becoming India's number one integrated logistics solution provider remains firmly intact. We have strengthened our foundations, built the right team, and created strong momentum across the business.

We are confident that these trends position us well to deliver sustainable growth, stronger earnings, and long-term value creation in the quarters ahead. With that, I will hand over to Isha, our CFO, who will take you through the financial performance in greater detail.

Over to you, Isha.

Thank you, Hemant. Let me now give a brief on the consolidated financial performance for quarter two FY27.

Our revenue for the quarter has increased by 24% on a year-on-year basis to ₹2,095 crores, largely driven by momentum in the M&M business as well as momentum in MESPL. Consolidated gross margin stands at 10.1% in Q2 FY27, sequentially up by 40 bps versus Q1 FY27, reflecting our ongoing commitment to improving operating performance.

Year-on-year, our gross margin remains flat in percentage terms, that is at 10.1%, and has improved by ₹41 crores in line with revenue growth. EBITDA for the quarter stands at ₹124 crore, up from ₹85 crores in Q2 FY26.

EBITDA margin has grown from 5% to 5.9%, which is an increase of 90 bps year-on-year. Our discipline on overheads cost and focus on judicious spendings is reflected in this year-on-year operating leverage.

This is also visible in our adjusted EBITDA, which is EBITDA after removing the accounting impact of Ind AS 116, which has increased by 110 bps year-on-year from 1.8% to 2.9% in quarter two FY27. We continue to have low leverage.

Our standalone balance sheet has been debt-free since September 2025. At a consolidated level, we have ₹55 crores of debt, largely comprising of loans for vehicles purchased as part of our asset-right strategy.

Overall, we have a consolidated cash balance of ₹363 crores and therefore net cash of ₹308 crore. Hemant spoke about Q2 FY27 being a quarter of both execution and outcomes.

The outcome of improving profitability, our asset-right model, and working capital discipline have together culminated in a steadily improving return profile. We generated free cash flow of ₹52 crores during H1 FY27 versus a free cash flow of -₹210 crores in H1 FY26.

Our ROCE for H1 stands at 12.9% versus 1.7% during the same period last year. Our ROE has improved from -5.3% to positive 8.7% in H1 FY27.

Before I move on to segment performance, there is one callout that I'd like to make regarding the standalone financials. We have declared a dividend of ₹15 crores in one of our wholly owned subsidiaries, which is reflected in the other income line in the MLL standalone financials.

This is a one-time dividend only and gets knocked off in the consolidated performance of MLL. Moving on to segment performance.

Our contract logistics revenue for Q2 FY27 is at ₹1,688 crores as compared to ₹1,317 crores in Q2 FY26, which is up by 28%. EBITDA has grown in line with revenue to ₹115 crores as compared to ₹89 crores in Q2 FY26.

In the last-mile delivery business, our revenue for Q2 is ₹68 crores compared to ₹88 crores in Q2 FY26, down by 23% as part of our conscious choice to move towards a more profitable portfolio. EBITDA has improved from ₹40 lakhs in Q1 FY26 to 1.

in Q2 FY26 to ₹1.6 crores in Q2 FY27. You may all recall that our strategic portfolio recalibration was largely done during Q3 of FY26.

Hence, we expect that as we enter the quarter three of this financial year, we will once again witness a year-on-year growth in the last-mile delivery business. Our freight forwarding revenue has grown by 12% quarter-on-quarter from ₹45 crores to ₹51 crores in Q2.

Year-on-year, this business has declined by 44%, reflecting the impact of external disruptions and customer attrition during the recent leadership transition period. As Hemant already mentioned, the new team is engaged in building a strong pipeline.

Despite the top-line decline, EBITDA is at ₹1.7 crores in Q2 FY27, which is only a decline of ₹50 lakhs year-on-year. This is a consequence of operating discipline and margin focus even in the adverse environment.

We have spoken in detail about the express business, which has grown by 69% year-on-year to a revenue of ₹169 crores in Q2 FY27. We are pleased to declare an EBITDA-positive quarter for this business for the first time since acquisition.

EBITDA for this quarter is ₹2.3 crores compared to -₹9 crores in Q2 FY26. You will all remember that we achieved gross margin breakeven for this business in the quarter two of last year and have now achieved this significant milestone as the business accelerates its turnaround journey.

Mobility revenue was ₹119 crores as compared to ₹90 crores in Q2 FY26, up by 33%. EBITDA is also up at ₹3.4 crores compared to ₹2.1 crores in Q2 last year.

This brings me to the end of the commentary on segment performance. Let me now open the floor for question and answer.

Thanks for the opportunity and congratulations on a good set of numbers. Sir, my first question is on our B2B express business, which has achieved an EBITDA breakeven in this quarter.

I believe that the network optimization and the repricing exercise is more or less over. Given the business is now on path to profitability, how should we think about the steady-state EBITDA margin in the business, given one of your peers is operating at about 10%-12% margin?

I'm not asking about an explicit guidance, but if you can just maybe highlight how the margins will evolve from here on, given the fact that you may also choose to invest in network expansion. Some color on that will definitely help.

Thank you, Jinesh. Let me just broadly share without giving any forward-looking guidance.

See, as Isha said, we had gross margin positive quarter few quarters back, and this quarter we have done the EBITDA positive. In the last quarter, we had said we are very close to EBITDA positive number.

Now I can tell you that from here, our next milestone is obviously to be PAT positive. I think we have all the elements and actions in place to achieve that number.

We have to execute for next few months and quarter, and we should be able to achieve a PAT positive. We have a full visibility and full control on achieving that number.

On the side, we are kicking off a very ambitious project on our new tech platform development for MSPL and MLL as a whole. I think that is a very strong ingredient and an input for us to scale this business up.

As for the last three years, while the business was making considerable losses, we were running the business in terms of our tech stack as kind of lights-on mode. Now, having achieved this milestone and a clear line of sight to PAT positivity, we now want to start investing back into the business.

Overall, at a strategic level, we think of MSPL as a big story that will play out for us in the next few years. It will improve the performance every quarter, but this is not a thing which will play out fully in next six months or one year.

This is a kind of a I would say a decade story. All the people who are our competition have built this business over several years.

We have taken now three years to reach this milestone. We will continue to invest into this business, and we believe that this business will be a very healthy business and will be a very strong differentiator for MLL, and also for our customers, because we want to be a full logistics player.

While we will continue to serve our FTL customers and all our warehousing customers, it's very important that we give them a full line of services that includes our PTL network business with Rivigo and our freight forwarding business. This is where we stand.

I would like you to think about this business as a multi-year growth story and not like achieving some milestone which would happen in next two, three, four quarters. This is a business that will require huge amount of hard work, huge amount of passion and commitment from our leadership team, and also investments.

As we achieve PAT profit, we will continue to put money back into the business and make sure that our network grows. Right now, we are not serving all the pin codes that our competition is serving.

We need to grow this business, go to areas where we currently don't serve. Please, Jinesh and others, think about this business that this is a growth driver for MLL and it will require few more years of work.

We clearly understand it's a very profitable business. Every network business, if run well, is very profitable.

Think of this like an airline business, right? A airline well-run is highly profitable, a airline poorly run is not profitable at all.

Similarly, this business is same. A well-networked business which is well-run is very profitable, otherwise it can really sink the ship.

We want to run this business in a very mature and in a very competent way, while we will build our teams, we build our capabilities, we build our network, we build our technology. We want to keep a very strong focus on profitability and customer satisfaction.

Sorry, Jinesh, for a long answer, but because there is no short answer to your question.

No, sir. Understood.

Pretty well explained. Sir, one last question from my side, and that pertains to our gross margin performance in the contract logistics business.

Now, if I recollect properly, in the previous quarter, the margin was at about 10.2% and it was impacted by certain temporary factors like the startup costs that we had incurred with respect to rapid site additions, and I think there were some manpower shortages as well, apart from that, some wage revisions as well as fuel cost pass-through challenge. If I think from this quarter's perspective, we must have seen some kind of customer onboarding that must have happened, and also the fuel pass-through clauses must have been activated.

Given this scenario, ideally our gross margin improvement on sequential basis should be higher than 30 bps that we have reported. Maybe if you can just talk a bit about that.

Yeah. Jinesh, yeah.

Just to completely align with you that our fuel pass-through has happened in toto. Whatever was the fuel stress in the previous quarter, that has been completely passed on.

There is nothing, and you can see that effect coming in the 30 bps improvement that we have seen. Apart from that, there was a big issue last quarter on the manpower cost, which is still playing out.

That has not been passed out fully. In certain areas we could pass, but new things have come in.

For example, I'm sure you are aware of the new rule that the government has brought in in terms of provident fund the slab has been changed from ₹15,000 to ₹25,000, and there are a few more changes happening. Some minimum wages are still under pressure.

Manpower cost is still not fully passed through, and it's difficult to pass through that because there are no written contracts on those side, except the minimum wages get passed on. Like in fuel, there are clear contracts that if beyond a certain X percentage here and there, it gets passed through.

The fuel cost was a very high increase of ₹8.10. That was not a very difficult thing.

Manpower, while we are working on improving the productivity of our manpower, but I think manpower will take a little bit longer to pass through. That is what is playing out in our gross margin improvement.

However, as Isha called out in the previous comments in the last quarter and the quarter before that, we are looking overall for a 100 bps improvement in our gross margin, and we stay committed to that.

Understood, sir. Thank you.

Thank you so much and all the best.

Thank you, Jinesh.

Good evening, and thank you for the opportunity. Congrats on achieving the EBITDA profitability in MSPL, the express business.

Just wanted to get some sense around the Q-o-Q growth momentum which you have seen in this business, right? It's been double digits.

Qualitatively, if I'm not looking for exact numbers, but qualitatively, can you just share what would have been led by realization and volumes, or if you can just say what was a bigger driver amongst the two? Is it fair to assume that given that festive period is fairly delayed this year, this would result in a better growth or there will be a spillover of volumes to third quarter, which will continue to drive operating leverage?

That's my first question.

Yeah. Hi, Krupa.

Two comments to that. The improvement quarter-on-quarter in MSPL is driven by a mix of both volume and yield.

I would say that for this current quarter, it is more yield than it is volume, because we have taken selective calibration actions in line with our strategy to improve unit economics, and hence, like I said, it is more weighted towards yield than it is towards volume. As far as the festive momentum goes and the spillover into Q3, I am not going to sort of guide on it specifically for quarter three, but I can tell you that given the size of our business and all the actions that we are seeing in this business, we are continually seeing an improving trend in volumes, and we hope that that will continue through the next few quarters as well.

We will continue to work on all these levers as we move towards our target of PAT profitability.

Very clear. Second question is on the contract logistics business.

Just wanted to follow up on the previous one of the questions asked. Was there any capacity build-up for the festive period, especially towards the e-commerce festive sale, which has been a drag this time around, or there's no specific impact of that?

Just taking that one thing forward, you did mention, Hemant, about the tech platform development and how you're going to make investments towards both the businesses, right? Can you quantify and probably speak a little bit more about these businesses, how it will benefit both the segments like your contract logistics and express business?

Let me answer the first question first. We have built up scale, especially to target the peak.

That's the nature of the industry, and we play quite aggressively in that. We have come up with quite a few flex sites on our e-commerce and last-mile delivery business.

These always come at higher cost because we need to hire people, train people, and then they are put to use. This time, again, season got little bit here and there, and we don't get much visibility till the season is actually on our heads.

We just get three, four days' notice before we have to prepare. We take calls on our side on manpower to bring them earlier and train them.

Those costs, Krupa, are still there, which play out in every quarter three in the festive, will play out again this year. This is the nature of the industry, and if you are a serious player there, and since we need to keep our customers happy, we take such calls and we have to play this game.

That is still playing out this year. Krupa, what was your second question?

Tech spend. Just more on tech platform, yeah.

I can just say, in fact, our capex spend has got approved today in the board meeting. I will just leave it there and say that we are not treating this as a tech platform, we are treating this as a business transformation project.

Won't like to share any numbers because we believe that we have come up with a solution which is very frugal, and don't want to share in the public forum what we will invest into this. I can tell you that this will be a very good, very simple to use, and very frugal tech transformation that we are trying to achieve.

We are just trying to work on few things in terms of timelines, but we believe that this will add significant value to our contract logistics business, especially initially on the transportation side, because we are doing the program in phases, and then MSPL, and later on the warehousing side. This will completely change the company's way of working, simplify the company, automate our processes, reduce our cost, and improve our customer satisfaction.

The customers will get full end-to-end visibility on their loads, and we will be able to use quite a few of AI use cases so that there's a lot of manual intervention that we currently do, that can be done by agents. We have conceived the project in a lot of detail.

However, I would like to share more details once we start the execution of the project. That will still be somewhere like quarter four of this year.

Got it. What I wanted to actually touch upon was that this is more towards existing operations, making it better, enhancing it, rather than this tech as a front-end solution for the clients, right?

That's where I was probably coming at.

What we believe, Krupa, is that with our current tech stack, we are scaling up the business as you can see every quarter, but it is being done with huge amount of effort. Manual effort cannot continue at this pace.

We have to leverage technology, and that is what we are trying to bring, that this technology will simplify our processes, help us scale better. Right now, many of our tech packages are working in silos.

This will bring everything on one platform. Currently, suppose you are my customer for PTL and FTL, I serve you through two different platforms.

Going forward, I will serve you through a single platform, even if you are giving me a full truckload or a part truckload, one parcel, you can still see it end-to-end where your loads are and how we are doing against our commitments. I think it will be a really good customer experience and a very good experience for our own teams while using this tech platform and executing better.

Understood. Thank you for the detailed answers to my questions.

Yeah.

Thanks, Krupa.

Good evening, team. Thank you for the opportunity.

Congratulations for excellent show once again. Sir, I wanted to check first on the contract logistics.

Given the monsoon challenges we've had in this year, how do you see that impacting in terms of our customers? If you could call out what is the mix of the tractor business or M&M within the entire portfolio, if you could call out that.

That's my first question, sir.

Achal, we all know the monsoon has been, I think, 14% below the LPA number as a country as a whole. However, it has been not similarly distributed across states.

There are some states which have done extremely well, and some states have done extremely bad in terms of receiving the monsoon rains. It will play out differently in different regions.

On any callout on specific industry, you may need to approach those people there. From our side, we can say that whatever variations we may have from state to state, region to region, product category to project category, or customer to customer, at an overall MLL level, we will be achieving what we have set out at the beginning of the year.

If one pedal slows down, we will start pushing the other pedal to make sure that we are able to do what we kind of committed to our board.

Got it. The other question I had for the contract logistics, you mentioned that compared to the gross margins up about 11% in FY26, we are running at about 10.2% and we have seen improvement Q-o-Q to 10.5%.

That 100 basis point what you called out was at gross margins or the EBITDA margins for the contract logistics, huh?

We didn't specify any number. We had specified that we are looking at improving our gross margins by about 100 bps, but we didn't call out 11% or any number like that.

No, I'm just looking at the reported numbers, sir. FY26 was 11%, so that 100 basis point, should I look at from the current level of 10.2%, 10.5% or to the full year last year?

I was more curious to know that.

You can, Achal, this is Isha. We talked about it when we were exiting last year.

You can look at it from last year exit. As Hemant mentioned, in the current period, we have had a lot of pressure from a labor cost perspective and other factors, including pre-festive build-up, that cause some ups and downs in gross margin through the year, but directionally we will continue to look at 100 bps improvement from exit of last year.

That's at gross level, just to clarify. Sorry, I'm pestering on that.

No, you're right, Achal. That would be at the gross level.

Understood. Just if you could, sir, talk about the capex, what is the capex plan for the current year and which all segments we should look at the capex spending?

Capex spending will be as per our guidance that we gave. It will be closer to like ₹100 crore kind of a number, plus minus ₹10 crore here and there.

You can almost take it like ₹110 crore kind of a number. We are on track.

In H1, we have spent almost half the amount. We should be on track to do that.

We have established a very strong approval process internally in terms of our capex spending and what kind of return metrics we are targeting there. No project is going below that, and we are very judiciously tracking once the project is implemented, how the project is doing as per the business case approvals.

That process is working very well, we are looking at good growth coming from capex and looking at improving our profitability in that sense from those projects.

Got it. If you could call out which divisions it's largely oriented towards?

Mostly in contract logistics we have put capex, and also in our 2x2 joint venture, where we do car carriers for our auto and tractor business for Mahindra, we have added capex. Mostly on contract logistics and 2x2.

Got it. Thank you and wish you all the best.

Thank you, Achal.

Hi. Thank you for the opportunity.

Just two questions. First was with now MLL operating at a higher base and express showing significant signs of a turnaround, what would be the key growth drivers, if you could call out, for the next two, three years?

For contract logistics, our key drivers would be the new clients that we add and getting higher share of wallet from our current customers. We are seeing very strong tractions in our e-commerce business, in our manufacturing and telecom vertical, in our last-mile delivery, as I just said, that till two quarters back, I was myself saying that this business is kind of a no-loss strategy business, whereas now I have called out that this is a growth business for us going forward.

These are the verticals where we are seeing. In certain verticals, we are still building up that kind of capability.

We have called out freight forwarding is one such business where we have a new leadership team which is driving the business now very hard and building this business up for further growth. Overall, we know that overall the geopolitical situation is also challenging for this business.

As things settle down and as our team kind of transitions into this new role, I think even freight forwarding business going forward will be a very good vertical for us. Broadly, we are seeing growth across our verticals and we should continue to see that.

Our execution has improved. We are getting very high scores from our customers.

We are winning best supplier awards from many of our customers every quarter. This is giving us confidence that once the customers are happy with us, there is no reason that why we will not win more business from the same customers, and while we will keep adding more logos to it.

On MSPL side, clearly, like Isha called out, in the last quarter we did a lot of work on improving our yield. Going forward, we have still some more work to do on that side, but mostly now the growth will be volume-led, as we start expanding our network and add more hubs and increase our current hubs capacity.

We are adding a lot of real estate also in that sense because we need to handle higher capacities there. These are broadly the growth drivers which will happen, but we are basically seeing a good growth across all our verticals.

Got it. Second was, are there still any low-hanging fruits in terms of cost optimization across businesses, like you have mentioned that we have cut down all the loss-making contracts, anything other than that that can still help in the margin expansion?

Now I think is mostly played out. Whatever we wanted to do, we have achieved.

I think now the business is running a very tight ship, and now the focus has shifted from cost control more, cost control will always remain a focus, but as a key lever, I think now it's business growth that will drive us in for the next few quarters. We are focusing more on that side.

We are winning a lot of new businesses. Over the last year, we took up a challenge of winning new businesses by 3.5 times.

I won't share the exact numbers, but suppose we achieved ₹X crore of new business last year, this year we took up an internal target to grow it by 3.5 times. In H1, we are doing better than that, and this is what is giving us confidence that if we are winning businesses like that, then the growth momentum will continue to shape our trajectory forward.

To precise answer to your cost thing is, I think that has played out. Little bit here and there, more will happen in next two, three months, but we are not counting much on that.

Mostly it will be now growth-led.

Okay. Thank you.

Thank you, and congratulations, sir, on a good performance in the express logistics focus. Sir, my question is on the last-mile business, freight forwarding, and mobility, all of them doing low single-digit margins.

What is the thought on this business? What is the capital employed in the business?

How are we trying to take this forward? We understand that there are macro challenges, geopolitical issues, which is impacting businesses.

I more want to understand from your thought process on things which are in our control, which we are doing to grow the business. At least in mobility, there is revenue growth, but there's no margin expansion there.

Given that the company's focus is more on the profitability side, what are we trying or what are we thinking on these three business verticals? That's the first question.

Ankita, thank you. As I've shared earlier, LMD business, we are pivoting from this quarter onwards from a no-loss strategy.

We are saying that this will be a growth strategy. This business doesn't require much capex.

It's a very frugally run business. Just to share, in this business, it is in rupee, ₹1,000 that we control, not even in lakhs.

It is a very tightly run ship with very little capex requirement. We are seeing that this business can be a very major growth driver for us, profitable growth driver for us going forward.

Why we have changed the pivot is clearly that we have run some pilots internally in the last six months, and that is giving us confidence that this business can really grow very well for us. Our teams are highly charged, very motivated, and really working very hard round the clock to make sure that our LMD business can actually scale up very well, and not in the long term, I'm saying even in the medium term.

You will start seeing growth in LMD at a profitable level very soon. On freight forwarding, as I said, we had some kind of a leadership change two quarters back, and a new leadership has come in, and they are transitioning into it, they are building the whole team again.

The nature of this business is such that a new team has to now build the business again. The geopolitical situation is not helping at all.

If you track the container prices, you will see that the spot rates are totally prohibitive, and nobody is willing to sign long-term contracts in these times when nobody knows what is going to happen tomorrow. The business challenges on geopolitical side are not helping at all.

As things settle down, and I don't know when they will settle down, that's anybody's call, but I would like you to think that our H2 will be a build phase for freight forwarding. We want to give our team time to execute very well, operationalize the business, win new businesses, and build the whole business in H2.

The real kind of work will happen in FY28 on freight forwarding. LMD is part of our contract logistics business, and freight forwarding, we believe, helps us serve the same customers from end-to-end.

As we said, our aim is to become the number one logistics service provider. When we go and pitch the business for our PTL or pitch the business for our full truckload or any warehousing, the same team can pitch the business for freight forwarding as well.

It is part of our offering, and it consumes zero capex. Freight forwarding doesn't take any capex at all.

This is a business that you build, and our customers feel happy that we are a single-point kind of shop for them where they can take it. Coming to mobility, we have to think about business in two ways: one is the B2B business and the B2C business.

B2B business is a large part of our overall business here, and B2C is much smaller compared to the B2B part of our business. B2B, we have long-term contracts, again there is a lot of visibility on our revenue and our gross margin side, because these are all marquee customers that we have across the country.

Most of the big brands we serve. This is again, since part of long-term contracts, it's a very good business for us.

On B2C, we are running a few sites, but here our strategy is a very concentrated strategy, focused only on very few cities. That Alyte brand that we launched, we are doing only in Delhi.

We have not even launched that brand in Mumbai or any other city. We continue to focus B2C in few cities, and do those cities very well.

As we gain more confidence, as we get more process orientation, execution well there, we will then start adding cities as the business demands. This is how, Ankita, we are thinking about it.

Clearly, LMD is moved from a no-loss strategy to a growth strategy. Freight forwarding is a business in the build stage, and I think next year it will start delivering the results.

In mobility, we continue to drive very hard on the B2B part of the business, and B2C, we focus on a city or two, and then as we scale up, we will keep adding cities. This is broadly we are thinking about it.

Got it. I think

Isha wants to add.

Ankita, I'll just add one thing, sorry, before you ask your next question. You also asked about sort of ROCE and return profile on these businesses.

I want to add that for all three businesses that you mentioned, capital employed generally is quite low, because these are low from a capex commitment and working capital investment perspective. Therefore, as long as these businesses are profitable, which they are, and they continue to deliver on profitability, the return profile remains pretty good.

Right, it clears our threshold, and therefore from a ROCE perspective, they do continue to stack up for us. I just wanted to add that color.

Got it. Just to follow up on what Hemant was mentioning on mobility side, what would be the rough mix between B2B and B2C in mobility segment?

We don't really disclose that mix, Ankita, but it is quite weighted towards B2B. B2C is a very small part of our overall business.

Got it. Okay.

My next question is on the express segment. What would be the segments or sectors or industries which are contributing to the B2B express volume growth?

We are very big in automotive and manufacturing side. We are over-indexed on that industry.

While I say that, we also serve many other industries and we want to diversify the business. That automotive can be a cyclic industry, we want to diversify from there, and we are doing that.

I would say we are very well diversified in that sense, but automotive and industrial, manufacturing, they are the big ones. E-commerce is playing out now for us, so that's how we look at that, yeah.

Automotive remains for both for contract logistics also and for B2B express also?

Automotive, manufacturing, and industrials.

Got it, got it. One last question.

Despite consistently double-digit growth in contract logistics business, do we have scope for margin improvement or EBITDA margin improvements beyond 7%, given that our mix continues to be skewed towards M&M and auto sector? What all levers do we have, if any, to improve the margin?

I'm interested to know more about the levers that we have for margin improvement. That's it from my side.

I genuinely believe that there is scope to improve margin, and this is what we will keep trying.

Despite keeping the same mix, will we be still able to improve the margin, or will it require a change in the mix to improve?

No, even within the same mix, we can improve the margin. I think there is still more work to be done.

There's several levers playing. This is not like one lever which will play out, but operating leverage obviously will help us.

We are trying to improve more warehousing compared to transportation, because warehousing has better margin than transportation. We want to improve our efficiency, as I called out, on manpower, because manpower costs have gone up, but they have not been fully passed on and difficult to pass on those kind of costs, we want to work on efficiency, where we have taken a lot of actions and we believe that the results should start showing going forward.

Similarly, within our 3PL business, I think the mix of certain segments can help, and we have full visibility customer-wise, segment-wise, which are more profitable, we will kind of pushing the pedal harder on those profitable customers where we will do. Clearly, there is a differentiation between customer to customer on that side.

As we work on our customer excellence and satisfaction of our customers, I think there is a better ability for us to charge a little bit higher price from our customers. As we already called out that all our new investments are now meeting a much higher threshold, so that also is helping us overall in getting a higher EBITDA and a higher IRR and ROCE to go with it.

I would say, Ankita, I totally agree with you that there is a opportunity for us to improve our margins in the contract logistics space. I don't think we are satisfied with the current margins.

100 bps improvement is for next year, right, from the year from 4Q to 4Q27? That's the

Ankita, you have been on our calls all the time. We have not given any timeline, but this we believe is our target and we should achieve this.

Let me reiterate what I have said in the past and again clarify, because this point keeps coming up, that margin improvement target that we have, I'm again repeating, is over the medium term. Medium term, and I've specifically clarified in the past, does not mean two quarters, four quarters.

It will take time. All the levers that Hemant mentioned, we are putting in play, but contract logistics is a thin-margin business and it does take time for all these levers to play out, you will not see that improvement within two quarters, within one year.

You will only see it over the medium term and there will be pluses and minuses along the way. Directionally, we are working on all these levers.

They will take time to play out.

Got it. Wish you all the very best.

Thank you.

Thank you, Ankita.

Hi. Congratulations on a good set of numbers.

I have joined the call a bit late, maybe I might have missed. I just wanted to understand the share of the M&M in the total revenue of the contract logistics.

Thank you, Meet. Isha will take this question.

Sure. Meet, we called out that in FY26, the share of M&M as total MLL consolidated was 58% for the last year.

It continues to be broadly in the 60% zone.

Okay. We have, I think, guided that the share of M&M will reduce and other customers' share will increase.

Are we on that track to achieve that number?

Meet, in the last few quarters, we have clarified this that there is no internal target to reduce M&M share of our pie. We believe that M&M is a great customer, anchor customer for us.

On auto side, they are beating the industry growth and they're doing so well, and tractor, they are the world's largest tractor company by volume. We are actually very happy with M&M being our anchor customer.

If their growth is more than the growth of the industry, their pie will keep on increasing. While we will continue to win new businesses with other customers and we will not leave any business if it meets our threshold on profitability, but there is no internal target to reduce M&M share of the pie.

If M&M does well, we do well with M&M. In fact, our target is to win 100% of M&M business.

Okay. Got it, got it.

Thank you. Thank you so much

and all the very best. It's a very good customer for us.

It's a very reputable company, it's a great brand to have. They pay us exactly on time, and we have great relationship.

Yeah. Sure, sure.

Thank you. Thank you so much and all the very best for the future.

Thank you, Meet.

Thank you all for joining us today. We hope we have addressed your questions and provided valuable insights into our performance and strategy.

If you have any further queries or need any additional information, please feel free to reach out to our team or our investor relations advisor at SGA. Thank you so much.