Mahindra Logistics to focus on improving profitability

Mahindra Logistics has temporarily halted its acquisition-driven growth strategy for the next 12 months to focus on enhancing profitability, which has been affected by investments made in inorganic expansion over the past three years, said Mr Rampraveen Swaminathan, MD and CEO.

Its yearly profits fell 21 per cent to Rs 27.42 crore in FY23 from Rs 34.57 crore in FY22, while net revenues shot up 25.6 per cent to Rs 5,128.29 crore, as against Rs 4,083.03 crore a year before.

On the revenue front, the logistics player is confident of clocking a turnover of Rs 10,000 crore by FY26.”

The company plans to add close to 2 to 2.5 million square feet of warehousing space annually, and to develop around 30 million square feet by FY27, given that the existing level of growth is sustained, he said. Currently, it has 19 million square feet of warehouse space across the country.

Additionally, it will continue to expand its EV cargo fleet. “Probably around 20 per cent of our last mile is EV, and another 10 to 15 per cent is CNG; we intend to have a 40 per cent electric fleet by 2026 i.e., we plan to have 3,000-4,000 EVs.”

Currently, its electric cargo fleet has 1,300 EVs owned by the company; once it crosses the threshold of 2,000 EVs, the company will opt for a partner model, the MD noted.

Overall, the company estimates its annual capex to be around 2 per cent of its topline for the next four to five years. “We think our existing model doesn’t require more than our estimates.” While it continues to invest in EVs and CNGs, Mahindra Logistics is also piloting LNG, and is in the process of looking at some hydrogen-based platforms for line haul.