Mahindra Logistics Profit Down 26% in Q3 FY24

Mumbai, Jan 29 (PTI) Mahindra Logistics on Monday reported a 26 per cent year-on-year fall in standalone profit after tax to Rs 12.5 crore in three months to December.

The logistics arm of the Mahindra Group had in the October-December period of the previous fiscal had posted a standalone PAT of Rs 16.8 crore, according to a company statement.

Revenue during the quarter under review marginally rose to Rs 1,160 crore compared to Rs 1,140 crore achieved in the third quarter of FY2023, it said.

Mahindra Logistics Ltd (MLL) said that its third-party logistics supply chain services grew 5 per cent driven by growth in automotive and engineering, consumer, and durables, adding that it was a strong quarter of order intake across the 3PL supply chain business, driven by growth in FMCG, Engineering and Auto.

At the same time, warehouse space under management stood at 20-million sq ft in the 3PL business.

It also said that the current expansions in Chakan, Kolkata, Nasik, and Guwahati are on track and that during the previous quarter, it completed the second tranche of share purchase in the last-mile delivery firm Whizzard/Zip Zap Logistics.

MLL said it now owns a 60 per cent stake in the company and added that the acquisition will complement its existing last-mile delivery business and Edel and will help drive deeper penetration.

"Q3 was a period of moderate demand. Continuing growth in engineering and FMCG segments were offset by slow growth in other markets. The festive season was marked by volume growth but was offset by lower volumes due to capacity consolidation and increased shut downs, especially in ecommerce and some automotive OEM customers," said Rampraveen Swaminathan, Managing Director and CEO at Mahindra Logistics Ltd.

During the quarter, the 3PL supply chain business demonstrated stable growth, he said.

The freight forwarding business continued to demonstrate sequential growth, despite global headwinds, he stated and added, "we continued to make progress in the B2B express business with growth in volume and enhancements in service levels."

The company's multi-client warehousing expansion remain on track with new expansion announcements of 1.1 million square feet, according to him.

"We are optimistic of strong growth driven by order intake across our businesses and continued improvement of the express business and integration of the Rivigo acquisition, in coming quarters," he stated.

Mahindra Logistics, meanwhile, in a statement earlier announced the inauguration of a 1-lakh sq ft extension to its existing multi-client warehousing facility in Nashik as well as the development of a new 3- lakh sq ft warehousing facility.

The move would expand the company's overall warehousing footprint to 5-lakh sq ft in Nashik in Maharashtra, Mahindra Logistics Ltd (MLL) said in the statement.

The new facility is scheduled to become operational by the end of Q3 2024, it said, adding that these facilities will significantly enhance the company's pan-India network of multi-client warehousing network.

Mahindra Logistics manages the distribution of auto components for production plants located in Nashik, Igatpuri and Mumbai for an Auto OEM customer from its existing warehouse.

The new facilities will offer inbound logistics and distribution solutions for automotive, engineering goods, and consumer durables customers, MLL said.

Strategically located with easy access to key industrial and manufacturing clusters as well as consumption markets in Nashik city, Aurangabad, Satpur, Silvasa, and others, these facilities will help facilitate efficient logistics operations, the company said.