Ladies and gentlemen, good day and welcome to the Mahindra Logistics Ltd., Q1 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing STAR then 0 on your touchtone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Mandar Chawan. Thank you, and over to you, sir.
Thank you. Good evening, everyone, and thank you for joining us for Mahindra Logistics Ltd., Q1 FY 2026 earnings conference call. We are pleased to have with us today Mr. Hemant Sikka, Managing Director and CEO, Mr. Saurabh Taneja, Chief Financial Officer, along with the members of the senior management team. At the outset, I would like to extend a warm welcome to Hemant Sikka, as he joins us for his maiden earnings call in the capacity of Managing Director and the CEO of Mahindra Logistics. He has leadership experience across the Mahindra Group. As the President of the Farm Equipment Sector, he paired the business to the highest ever market share and led several transformative initiatives, including the Picking platform. His expertise spans sourcing, manufacturing, and international operations, including a leadership role at SsangYong Motors in South Korea.
He currently serves on the board of multiple Mahindra Group companies and in December 2024, was appointed Chairman of FICCI's National Agriculture Committee. Thank you once again for joining us. With us, you had the opportunity to review our Q1 FY 2026 financial results and investor presentation. Both are available on the company's website and the stock exchange. We will begin today's session with the opening remarks from the leadership team, following which we will open the floor for the question and answer. Before we proceed, please note that certain statements made during the call may be forward-looking in nature. These are subject to various risks and uncertainties and outlined in the disclaimer included in our earnings presentation. With that, I would like to invite Mr. Sikka to share his opening remarks.
Thank you so much, Mandar, and good evening, everyone. Absolutely a pleasure for me and a delight for me to interact with you. This is my first ever interaction with you, so I'm very happy to be part of this call. I'm also very deeply gratified and honored to take on this role as MD and CEO of Mahindra Logistics . I remain deeply optimistic about the strong runway of growth for both Mahindra Logistics Ltd. and the overall logistics industry in general. Since resuming office, I've done close to 75, 80 days now. I've spent time engaging with teams across our verticals. I've traveled very extensively, and I'm really encouraged by the high degree of alignment and commitment that our teams have with our strategic objectives.
I've also gone around and met many of our key customers, and I see that many of our customers are very happy with our services and products that we offer to them, and there is a lot of room to grow our business. The fundamentals of our business are sound, and the foundation for future growth is very well established. As we look ahead, my immediate focus will be on execution, execution, and execution, and I think that's where my team is aligning to it. We have to focus on operations, execution, unlocking productivity gains, and accelerating our efforts to create long-term value for our customers, partners, shareholders, and employees. Before we proceed on the business environment, I'd like to highlight three important internal updates that we have done, let's say, in the first 60 days of my joining.
First of all, clearly, many of you are already aware that using warehousing white space remains a very key strategic priority for us. In fact, I have taken this as one of my goals, as one of my personal goals, and each of my CLT members, which is our Company Leadership Team, have taken this as a joint CLT goal. This shows that at the topmost level, there is a very strong alignment to working on this strategic priority and making sure that we make the best use of the white space that we currently have. We are fully committed to optimizing the current capacity, given that phase I of our multi-client expansion is complete. No further white space expansion will take place until we put all the space that we have to good use. This is being addressed by very, very focused execution.
In fact, I have only one chart in front of me in my office, and that is the status of white space and as it evolves every week on week. We expect very meaningful progress to unfold this priority in the near term, and we are very confident that this problem will be solved in a very timely manner. Secondly, regarding how we manage our end markets, the consumer and manufacturing is a very key vertical, and it continues to represent high potential growth opportunities due to the whole India consumption growth story and the Make in India success that is unfolding right in front of us. Recognizing the unique characteristics and evolving needs of both our consumer and manufacturing verticals, we are transitioning this entire vertical into a more focused approach.
Going forward, each of these verticals, that is consumer separately and manufacturing separately, will now be led by independent vertical heads with dedicated leadership and support teams, enabling sharper execution, deeper customer engagement, and stronger long-term outcomes. We believe that at the stage in which the Indian economy is, both consumer and manufacturing have very large potential, and having a very dedicated, senior-level person leading independently these two verticals will add to a lot of value. Similarly, we have integrated Whizzard and LMD, which is the last mile delivery, into a very simplified, unified structure, and this will now also operate as one cohesive team and led by one single leader. This will also bring in a lot of synergy, bring our costs down, help better coordination, and also give a better customer experience.
We will move now to our express business, and express represents a multi-decadal opportunity for growth for us and remains a key source of growth for the industry as a whole. With the improvement in infrastructure and the need for JITJIS and supply chain agility, B2B express enables businesses to optimize inventory, avoid stockholders, and lower warehousing costs. While the category offers meaningful headroom for growth, we are approaching it with a lot of thought, precision, and patience, deepening our execution, managing costs, and staying responsive to evolving market needs. As we move forward, our efforts continue to remain aligned to drive sustainable growth and strengthening our financial position. This is one of the very key important things for us. We are optimistic about the possibility in this space, and we remain attentive to how it aligns with our broader strategy.
Clearly, in line with this vision and the group level, we will be raising approximately INR INR 750 crore through a rights issue. This move is strategic, aimed at enhancing our financial flexibility and further consolidating our capital structure. As on June 30, 2025, our total outstanding borrowings stood at INR 604.06 crore. This includes a mix of term loans, working capital facilities, and intercompany deposits. These borrowings are part of our regular financing arrangements with banks and financial institutions undertaken in the normal course of business. We intend to utilize an estimated INR 556.3 crore from the net proceeds towards the partial or full repayment and/or prepayment of select borrowings availed by the company and its subsidiaries, Mahindra Logistics Electric Services Private Limited (MESPL) and V-Link Freight Services Private Limited.
This repayment initiative is expected to result in significant annual interest cost savings in the range of INR 40 crore-INR 45 crore, thereby improving our overall financial efficiency and strengthening future cash flow. The balance proceeds from the issue will be deployed towards general corporate purposes, and this will provide us with the necessary headroom to support our ongoing operational and strategic initiatives. This rights issue underscores our focused approach towards deleveraging, enhancing financial resilience, and building a strong foundation for the next phase of our growth journey. Let me now share some updates on the industry as a whole. Logistics has long been a silent backbone of both Indian and global economies. Though it often operates behind the scenes, it is the most critical part of a vibrant economy. I always feel that logistics is like breathing.
You don't see breathing, but if the breathing stops, that becomes the key point. Generally, you don't notice logistics, but if logistics stop, the whole country stops. It's critical it becomes immediately apparent during the times of disruption, be it the industrial slowdowns, natural disasters, or any of the geopolitical events. These moments serve as a powerful reminder of how deeply logistics is embedded in the flow of commerce and the functioning of everyday life. Actually, we are all very lucky to be part of this industry. The logistics sector has evolved from merely moving books to becoming a key enabler of business continuity, customer experience, and cost efficiency. The quarter one of the current financial year saw mixed trends, with headwinds like the muted industrial output, SME, medium, and small enterprise caution, and rising competition in B2B express and surface transport. Our plans of recovery are emerging.
I'm extremely buoyed by the good monsoons that we are facing currently. The port volumes are up, e-way bill generation is up, and fleet utilizations are all improving. In express logistics, the focus is shifting from rapid expansion to consolidation with efforts to optimize infrastructure, boost asset utilization, and drive operational efficiency. This is signaling a more mature and sustainable growth phase ahead of us. Let me talk about a very large sector of our economy, which is automotive and tractors, and this is an industry where I come from. Clearly, passenger vehicles have faced a soft growth in quarter one of the current financial year. Most of the OEMs have seen depression in their growth rates, and clearly, 2 OEMs stand out, Mahindra and Toyota, in that respect. Since we serve Mahindra in a very big way, that's a very good point for us.
Two-wheeler grew 1%, again, a very weak rural sentiment. Commercial vehicles declined due to reduced infra demand. Commercial vehicle segment has been under pressure for a long time. The good news is that the tractors grew by 8%, while Mahindra continued to gain market share, growing by 13%, where again we handle almost everything on the logistics side of things. On warehousing infrastructure, clearly demand driven by e-commerce, which is growing very, very fast. Omnichannel retail and consumption, government initiatives, and plug-and-play facilities are enabling faster turnaround times, higher throughput, and improved cost efficiency for medium and small enterprises and for manufacturers. We call this leading to changes of habits. Micro fulfillment hubs, which are like 2,000- 8,000 square feet, are growing in metro and tier one and tier two cities.
These are manifested by trends like rising trends for compliant urban spaces and preference for shared automation-based facilities with flexible leases. Before I close, I want to highlight a few key wins for the quarter that reflect the momentum we are building across the business. We recorded strong momentum this quarter with 135% quarter-on-quarter growth in 3PL wins, reflecting growing customer confidence across sectors. Our 2x2 business remained robust, and MESPL volumes rose 10%, showing continued strength in specialized logistics. We also went live with 10 new projects across manufacturing and e-commerce and inaugurated a 3.34 lakh square foot facility in Phaltan for Cummins. I'm very happy to share that Cummins this year in the supplier conference awarded Mahindra Logistics as the supplier of the year for indirect sourcing, and that shows their faith in Mahindra. Let me talk about volume details for the express business.
The express business continues to demonstrate solid momentum. Over the past two quarters, we have seen a consistent upswing in tonnage, rising nearly 10% sequentially. Building on this performance of our quarter four, the Q1 for the current financial has seen sustained progress, and that momentum has carried into this quarter. Now, let me invite Saurabh Taneja, our CFO, to update you on the financial section for our overview.
Thank you, Hemant. Good evening, everyone. Let me give a brief on the consolidated financial performance for Q1 FY 2026. Revenue for Q1 FY 2026 increased by 14% on a year-on-year basis to INR 1,625 crore. Revenue from our warehousing segment stood at INR 306 crore in Q1 FY 2026 as compared to INR 259 crore in Q1 FY 2025, demonstrating a strong 18% growth on YoY basis. Supply chain management, including our 3PL and network services business, contributed 95% of our overall revenue, and the mobility business contributed 5% of overall revenues for Q1 FY 2026. Gross margin at a fully consolidated basis stood at 9.4% in Q1 FY 2026 compared to 9.5% in Q1 FY 2025. Gross margin without the impact of any STL business was 11.6%.
EBITDA for the quarter stood at INR 76.3 crore, up from INR 66.3 crore in Q1 FY 2025, a growth of INR 10 crore on a YoY basis due to volumes and cost efficiency. Loss for Q1 FY 2026 stood at INR 10.8 crore. Let's talk about our leader entity performance. MLL Standalone , which is our flagship entity, the revenue for Q1 FY 2026 was INR 1,346 crore as compared to INR 1,157 crore in Q1 FY 2025. PAT for Q1 FY 2026 was INR 6.4 crore as compared to INR 10.2 crore in FY 2025, same quarter. Lords Freight, which is our freight forwarding entity, revenue for Q1 FY 2026 was INR 74 crore as compared to INR 71 crore in Q1 FY 2025. PAT for Q1 FY 2026 was INR 0.9 crore as compared to INR 1.9 crore in Q1 FY 2025.
Coming to express business, our express business Q1 FY 2026 revenue was INR 101 crore, so the business crossed the INR 100 crore mark for the first time as compared to INR 89 crore in Q1 FY 2025. The PAT loss stood at INR 23.9 crore in Q1 FY 2026. Coming to our mobility entity, revenue for Q1 FY 2026 was INR 82 crore as compared to INR 81 crore in Q1 FY 2025. PAT for Q1 FY 2026 stood at INR 4.6 crore. Moving on to Whizzard, the revenue for Q1 FY 2026 was INR 43 crore as compared to INR 38 crore in Q1 FY 2025. PAT for Q1 FY 2026 was -INR 0.1 crore, which is a INR 10 lakh loss as compared to INR 0.3 crore profit in Q1 FY 2025. 2x2 Logistics, revenue for Q1 FY 2026 was INR 24 crore as compared to INR 15 crore in Q1 FY 2025.
PAT for Q1 FY 2026 was INR 3.1 crore as compared to INR 3 crore in Q1 FY 2025. Just giving a split of our revenue for Q1 FY 2026, 63% of our total revenue came from auto sector, 37% from non-auto sectors. Mahindra revenue stood at 56% and non-Mahindra at 44%. With this, I open the floor for questions and answers.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Alok Deora from Motilal Oswal. Please proceed.
Hi. Good evening, and firstly, congratulations on your new role. I had a few questions. First is on the express business. I wanted to understand, we saw some volume growth coming in the fourth as against the fourth quarter as well as YoY basis. We don't see any material improvement in the profitability or rather the reduction in the losses. Can you highlight because what we were understanding is that once the volume comes in, the loss reduction will start happening. First question on that.
Alok, thank you for your wishes. Clearly, express business has multiple variables which play together to finally lead into a profit or a loss situation. You have highlighted the volume, and volume alone will not cut the game for us. Volume along with the good yield is very critical. While we have seen that our volumes have gone up, our yield continues to be under pressure, and that's what we are focusing on now in the quarters to come. We are giving away business where our yield is not good and trying to get customers which give us a better, let's say, rupee per kg kind of a yield. You may see while we are endeavoring to grow the volume significantly from here, if we have to give 1,000 or 2,000 ton material away, load away, and go for a higher yield, we will make those calls.
At some point, and that's the key target for the team to achieve now, getting volume at any rate is not the game forward. Getting volume with good clients where we make good yield is the game going ahead. That's what you are seeing. In quarter one, this interplay was in play in the second half of the quarter. In the first half, this was not in play. Going ahead in quarter two, quarter three, we will focus very hard on getting the right kind of customer and getting the right kind of load. While we will continue to push very hard for the load, we will also have a very strong focus on the rupee per kg kind of a metric. I hope I have been able to answer.
Sure. Thanks for that. I think since the volume growth has still been pretty solid, I think it maybe started from the later part of the quarter. I just wanted to understand, by when do we expect this break even to happen now? Because you know if the market is still a little competitive and increasing the prices is kind of difficult, you know, while maintaining the volumes as well. Could we see a situation where even by the end of this year, we would be just under a marginal loss at the EBITDA level? That would be my second question.
Yeah. Clearly, Alok, let me take a step back and share with you my overall perspective. Alok, please, I'm going to come up with a disclaimer. I'm still kind of two and a half months into this industry, so I'm kind of learning every day. Okay. Broadly, what I have learned, and I've traveled very extensively, I've met a lot of our customers and our teams on the express side of the line I'm talking about. I genuinely believe in the long-term potential of the B2B express segment in India. Alok, even if you look at globally, the growth of logistics is very closely tied to the sense of the B2B express business in that country. I genuinely believe that India is no exception.
There was a time when we would take that everything India will follow what is happening in the West, and then we had these examples where some of our habits didn't change, let's say, from breakfast in the morning and all, and then we started saying, "Oh, India will not follow the West." Let me tell you, my view is that on logistics, especially the B2B part of the game, India will follow what has happened in the Western countries and, let's say, the developed countries. This is a business which has actually the maximum profit pool globally. This business is not built in a couple of years. This business takes a lot of patience to build because this is kind of a chicken and egg business where if you don't have hub and spoke model, the business doesn't come to you.
If the business doesn't come to you, how do you invest into a hub and spoke model? This is a business where you have to take those tough calls and start investing into the business. If you see any of the other companies that you track, all the express companies have been built over years with a lot of investments to be done. We are still very young. We acquired this company about two years back, and we are still in the building phase. What gives me confidence is that we have built a very strong foundation in this business. Now the focus is on monetizing this foundation. To support this, we have to create financial headroom to invest into this kind of business. That's why I think if you see our business as a standalone express entity, I think that is not a fair way to look at it.
You should look at MLL portfolio as a whole. In that 3PL, LMD , mobility business, our freight cargo business, I think all of that plays a key role in making sure express does well. As we build more headroom, as we turn around all these other segments of the business and start making good profit, I think none of our investors will mind us investing more money and more capital into an express business because this is a business for the future. It's a multi-decadal opportunity. If India, as we genuinely believe, will continue to grow at 6.5%, 7%, then obviously the express business will grow, continue to grow very well. This is where the pool of money is. There is no money to be made in a commodity trade business. This is a coal truck business.
That is a commodity play, and it will finally settle at the lowest price point. B2B business is something where we add a lot of value. If you have to send a packet out and we charge you only partially, but I can sell that truck for you and make sure that your package reaches right on time, I think that's a good value that we can add. It's a very tech-dependent business, and Rivigo has one of the best tech in the industry. I think this is a business where I would suggest and I would think and I would seek our investors' understanding that this is a business for the future, but we need to create in MLL the headroom to invest into this business. That's why all other businesses or all other verticals in MLL .
have to turn around and start making profit so that we invest into this business. There are a lot of things that we have done right over the last few quarters. First of all, this is not a business which is like a contract logistics business. I'm sorry, it's a little longer answer, but I know there may be many questions on it. Maybe I'll answer you, Alok, but maybe many other questions will get answered in this reply. The B2B business is not like a contract logistics business where you sign a three-year deal or a five-year deal. In B2B business, every month you have to sit in front of the customer and understand his load and give a kind of a discussion with him. That means it's a very sales-focused role. There is an operation and sales. In sales, you need feet on ground. We have expanded that.
We have invested in the last quarter in that side. That further investment, a little bit of people will continue. These are not senior-level resources. They are feet on ground. We will continue to put some more people on the ground so that we are able to get loads in and loads with good yield in. That requires face-to-face meetings with people. That we have done. SLA has improved. We are among the best line SLAs in the industry. Because we are adding and putting a lot of effort on new wins, our new wins continue to rise. We used to do about 3,000 tons of new wins every quarter. For the last two quarters, we have hit 5,000 tons of wins. That's a plus for us. We are opening many more logos.
There are many more companies in this quarter, and especially in the last six weeks that we have approached, and they have been very, very open to doing business with us. In the next three to five months, even these new businesses that we are targeting will start to give us revenue. Our network utilization has increased to almost 80%. That means we are operating at a very good efficiency level. Wherever we see choke points, we will start adding space and people into these things. Broadly, this is how I see this business. I think we have a very good foundation. We have a good tech stack. We have a good team. We have certain gaps in our team and sales which we have filled, which we are in the process of filling. Some positions have been filled. Some will get filled in the next few weeks.
I think we have to keep doing a very good execution job. On the other side, create turnaround all our other verticals so that we generate enough money to invest into this business. If you are an investor in MLL , I think you have to look at that the profit pool for the future lies here. Should we cut corners and go for a very fast EBITDA breakeven or like a good business for the future, we invest a little bit more and make sure that we do create a very solid business which will serve us for many, many years to come? I'm sorry for the long answer, but I hope I've been able to assist.
Thank you so much and all the best. I look forward to the performance for you.
Thank you, Alok.
Thank you. The next question is from the line of Ankita Shah from Elara Capital. Please proceed.
Yes, thank you. Firstly, congratulations, Mr. Sikka, on taking the new roles. My question is on the B2B express side. Would it be possible to provide the volume number actually done during the quarter?
We have, Ankita, not shared this number in the past. All I can tell you is that the number in quarter one was higher than the number in quarter four. Honestly, it won't serve you to know this number because we can still improve the yield at the same tonnage. If you track only tonnage, you won't get any estimate. I'm just thinking through from your point of view that if you start tracking us only on load, I can actually go for load three times of what I'm doing, but still not make money. In logistics, you have to get one thing right, which I have learned very quickly in the first three months. That is that logistics is a business where there are notions of revenue and islands of profit.
We can get any kind of load, but if it is like INR 7 or INR 8 a kg, it doesn't help us. I would suggest don't track us solely on loads.
Got it. Okay. Is this kind of a growth that has come sustainable going forward, or you know, you think we can do better than this given?
I would really like to sustain this kind of growth. This is a very big focus area for us. As I spoke in the key priorities areas, the warehousing white space and B2B express, these are very critical strategic areas, priorities for us, and we would like to sustain the growth.
What has led to this kind of a growth suddenly versus our previous noted growth in the past? What has changed in terms of which drove the volume?
I would suggest that we are, I think we have only 3% of the market share in the B2B express segment. It is actually not that if the industry slows down we have to slow down. There is so much more that we can still do. The growth that we are seeing is, I think, because of better execution by our teams and going and meeting more customers, being able to connect with more customers. I think now that we are putting more feet on ground, this performance will also improve from here. We are still building this business, and with our current market share, I think the growth can be there for this.
Okay. Last one, on the contract logistics side, with the existing capacities that we have, how much more can we scale up from the current levels?
It's just very difficult to answer because the capacity is very diversified. It is spread across geographies. It is spread across verticals. I mean, as I told you, auto industry overall, I'm sure you are also tracking, is feeling a slowdown, whereas the tractor industry continues to grow double digit. E-commerce is doing exceptionally well. Consumer is a little slowed down. It depends whether the demand that we are seeing in areas there we have capacity. If our capacity is mismatched in terms of geography and in terms of verticals, it doesn't help. It is very difficult to give that answer to you, but we continue to remain bullish on the growth of the logistics industry.
Okay, that's from my side. Thank you. If you all want to.
Thank you. The next question is from the line of Jayshree Bajaj from Trinet ra Asset Managers. Please proceed.
Hello, sir. My question is the rights issue intends to raise up to INR 750 crore at the top. What are the primary planned uses of these funds? How will this capital injection specifically contribute to improving the profitability and achieving the long-term strategic goals?
Jayasri, thank you for asking this question because I'm sure this is on the mind of many people. This will cover a lot of queries on this. I would request Saurabh, who is our CFO, to please answer the question.
Yeah. Thanks, Jayshree for your question. As you know, that we've launched the rights issue valued at INR 749.27 crore. About INR 560 crore out of this, we are looking to utilize, as Hemant shared earlier, to repay the debts that we have. These debts are across entities. We have debts in MLL S tandalone, MLL E xpress, as well as V-Link entity. We'll be using INR 560 crore to repay these debts. We still are left with a large pool of about INR 187 crore, which has been attributed to general corporate purpose. That is something that we intend to utilize to fuel growth. Obviously, we have a detailed capital allocation process, and we will be going through that and investing this money in the areas where we see profitable growth. That's the plan.
Can we expect a profit in the quarter two, or it will be affected by the things?
Jayasri, we don't give any forward-looking guidance, as you are aware. As you can see, the sequential performance, there are a lot of positives this quarter, and we intend to maintain that growth story going forward as well. As Hemant shared earlier, this rights issue and the debt repayment also has a positive impact of about INR 40 crores-INR 45 crore on the finance costs annually. You know we will see improving quarterly results going forward, but we don't give any specific guidance for our staff here. The company will become debt-free.
Okay. That's all from my side. Thank you.
Thank you, Jayshree
Thank you. The next question is from the line of Krupas hankar NJ from Avendus Spark. Please proceed.
Yeah. Good evening, and thanks for the opportunity. I'm very excited on taking up the new role. My first question is on the Contract Logistics business. I just wanted to get a sense on what is the current profit with respect to the Contract Logistics business going? How does it shape up right now, given that there are a lot of churn which was witnessed over the last one year or so? How do you see e-commerce shaping up our Contract Logistics business for the next two to three years? If you can throw some light around that business, it would be really helpful.
Yeah. Contract Logistics is a key part of our business. We run 21 million square feet of warehousing space, and as I discussed in my earlier comments, some white space where we are very strongly focused to put that white space to good use. Contract Logistics is actually a very good part of our business because here you run into clients with multi-year contracts, and we do see stickiness with the clients. It's not easy to make the switch in these things, whereas if you go for a B2B Express business, as I said, it's a month-on-month game where you need to be in front of the customer and tie up on the load. It's a very good business. I think we have good scale. 21 million square feet of warehousing space is not a small scale by any standard, and we have very good deeper clients.
If you see our client list, we have some of the marquee names in the country, and we continue to reach out to more and more people to open doors and try and align the gents. Overall, I think it's shaping up very well. We are expanding into the e-commerce space very well. We are seeing that I don't know whether in earlier calls we have spoken about Phaltan, where we have half a million square feet of one single box where we do complete logistics, warehousing, and transportation for Zepto. Like that, we have some very marquee clients. Clearly, overall, I think the business is shooting well for us. We are seeing that with the festive season coming in, especially in quarter three, there will be a lot of growth coming in from e-com. That happens every year, and this year, again, we are expecting the same thing.
We are seeing that both e-com and Q-commerce customers are showing capacity increase. Everybody is growing into that segment. Since we engage very well with all the big names that are in this space, we are with everybody here, and we are repeatedly getting contacted to come and meet there for more business. Overall, I think we are very well placed. Does that answer Krupa, your question?
It's more of trying to talk about, you know, you've also given chat about automotive and non-automotive contribution, revenue contribution, non-automotive being close to about 63%. We have seen that historically, automotive has been a bigger chunk of it. Our warehousing space has continued to expand quite rapidly in anticipation for getting new opportunities in other sectors of non-automotive, right? I just wanted to get some sense around the non-automotive space. For example, do we have any white space, any opportunities in there within the Mahindra group itself? Given that Mahindra Logistics holds the key position in the entire group, is there any opportunity with this? Is it a little bit over there, or is there any traction which you are witnessing?
Given that recently there have been a lot of slowdowns, per se, in the overall macroeconomic environment, just wanted to get more sense around those lines, if you can teach any thoughts around that.
Yeah, Krupa, so clearly, with Mahindra, we have a very deep relationship. We have recently won new warehousing space contracts with Mahindra & Mahindra. We have recently tied. We are going to start a 300,000 square feet warehouse, which will go live in the month of August. In September, another 80,000 will go live in Pune. The 300,000 one is coming up in Nashik. About 100,000 square feet will start in Haridwar. These are the new wins with M&M Limited that we have done: 300,000, 100,000, and 80,000. These are the kind of new wins we have got, and we will continue to pitch very strongly with Mahindra & Mahindra. I mean, we have a great relationship with them, and we will continue to serve them very well. That is one part of your question.
On the second part, yes, we want to grow our non-automotive business because that gives a diversification in terms of any industry risks that we carry in our business. That's why I spoke about the whole e-commerce story. E-commerce is a totally different game from manufacturing. People have to get their grocery delivered to their house. They have to make sure that all the routine stuff comes, which is part of the FMCG play. We are pretty big in that, and that continues to grow for us. This will also, in the festive season, you will see that while the auto and tractor will do very well, even the e-commerce will continue to do very well. Broadly, I agree with you that we have to diversify into non-auto, and that is our endeavor.
We are every day trying to do that and make sure that our customers get the best of service from us, and we continue to grow our business with them.
Understood. Thank you very much for answering their questions. Thanks.
Thanks, Krupa.
Thank you. The next question is from the line of Jinesh Joshi from PL Capital. Please proceed.
Yeah. Thanks for the opportunity. Sir, if I heard you right, in the opening remarks, you mentioned that you intend to reduce the white space in warehousing. If I remember right, in the last two quarters, this figure is approximately 1.5 million square feet. I just wanted your thoughts with respect to what are we planning to do differently this time around to kind of digitally fill up this space? Also, if you can share what is the approximate cost that is hitting us due to this unabsorbed white space? Yeah, your thoughts on that.
Sure. Jinesh, clearly, you have your numbers right. 1.5 million is the approximate space that we currently carry. Our view is with the kind of focus that we have put, and you would have noted in my opening comments, I said this is a key goal in my own goal sheet that I have kept for myself. This goal carries to all of the CLT members. Obviously, there is a renewed focus on getting the white space off our tables. We are working it every day and every week. There is a review at my level, which happens without fail. We believe that with all the focus that our senior leaders have themselves putting into this field, I'm very optimistic that the white space will continue to go down.
The quarter two will kind of remain the same because whenever we are upputting customers, the decisions for white space decisions don't happen in one, two weeks. It takes at least a few months for the customer to commit and get all the contracts done. I'm expecting that whatever work we have done in the last six weeks, plus whatever work we will continue to do in the next three months, you will start seeing results quarter three onwards. Now, without giving you any particular number quarter on quarter, because we may do better than that and maybe a little slower than that, but broadly, we are going to solve this problem come what may. That is one target that we have taken. You will start seeing post-quarter two results in every quarter call that we have with you, that the number will continue to go down.
It can vary from quarter to quarter, but the trend will certainly be downwards on this. We want to put this white space to very good use because one is that you are incurring cost in this. Once you start using it, the revenue will come and profit will come from here. That's our objective that we want to do. That was on white space. What was your second question, Jinesh?
Sir, it is only express business. I did not call that out separately earlier. What I want to understand is that, historically, what you have stated is that in order to achieve EBITDA breakeven, we need incremental volumes of approximately 6,000 tons per month. Given how the last three quarters have shaped up, where our volume growth is slightly better, but deals have come under pressure, which effectively means that our revenue run rate on a quarterly basis remains in the band of about INR 90 crore-INR 100 crore. As you pointed out in response to an earlier question, tonnage is perhaps not the right way to look at it from a breakeven timeline standpoint. From a revenue standpoint, not from the tonnage standpoint, what kind of quarterly number should we be building in to think that, okay, at this number, we should be at EBITDA breakeven?
Yeah. Saurabh here. I think building on what was said about tonnage, I would say the same for revenue. I think it's the quality of revenue that matters. What we realized this quarter is that while there has been a 10% growth, there are certainly a set of customers. You know, our order pipeline, as Hemant shared earlier, is about 5,000 tons per quarter. It has been consistently strong. The yield from some of these newer customers has been low, which means the revenue also is a derivation of the yield itself. We wouldn't sort of call out any number in terms of revenue. I think it'll be a quarter or two where we will start seeing the quality of revenue that we have, where we have a better clarity on what number would be the right number to get to EBITDA breakeven.
That's where I will stop for this time.
Sure. Sir, one last question from my side pertaining to the rights issue. Now, I believe a promoter in about 57%. I'm not mistaken. Now, for instance, while I know that the rights issue price is at a substantial discount to the market price, but say, for instance, we balance a 43% shareholders. Out of that, some of them choose not to participate. In that case, will that gap be plugged in by the promoter?
Yeah, Jinesh, while we are very positive, I think the price of INR 277 is quite attractive. The stock was at INR 410 today. That's a substantial discount, and we are very positive that we'll not be in that situation. Just in case we are in that situation, we have support from our parent where the remaining shares will be subscribed.
Got it, sir. Thank you in all the respect.
Thanks.
Thank you. Before we proceed with the next question, I would like to remind participants that you may press star and one to ask a question. The next question is from the line of Achal Lohade from Nuvama Institutional Equities. Please proceed.
Good evening, team. Thank you for the opportunity. Sir, while most of the questions got answered, I wanted to understand from a medium-term perspective, how do we see this in terms of CapEx, in terms of capital allocation? How do you look at this? I understand your near-term goals. If I were to ask you, in terms of CapEx for the next three to five years, do you see spending INR 500 crores-INR 600 crore for the next three to four years? Any number, any direction, any qualitative input on the particular segment that you would like to spend or invest?
Yeah. Hi, I'm Saurabh here. In the past, we've generally been in the range of 1.5% of revenue when it comes to our CapEx. You would have seen numbers like INR 60 crore-INR 70 crore that MLL has historically spent on CapEx every year. Last year, we said FY 2025 was an exception. We did about INR 180 crore, and that was done to expand the fleet. There are certain strategic projects that we bought on the 3PL warehousing side where we spent a significant amount of CapEx. Our strategy going forward is that we look at the return from each of these CapEx. We have a very rigorous capital allocation process. There is no guidance that I can give, but we expect to be in the normalized range of 1.5% that we used to be earlier.
In fact, our idea will be to even optimize further on that and invest only where the returns are solid.
Okay. Understood. Any threshold, Saurabh, you would look at when you're talking about the data exercise on the capital allocation part?
Yeah, that's internal to us. There are various factors that are looked at: the sector, the strategic intent, the customer. I don't think I'll be able to put a number to that.
Also, in the phase, what phase of the business currently is, we believe that we are in a growth phase of business. We will continue to invest, but be very prudent. The number what Saurabh has shared, that is the number that we are internally working with. For a scale of that operation and one less than 1%, not even 1.5%, less than 1.5% is our target.
Understood. Is it possible to get some more clarity in terms of, you know, the capital deployed in each of these verticals as of now or as of March 2025?
We don't have that handy right now, but you know, you can reach out to us separately, and we'll share those details.
Sure. Just last question with respect to the pricing scenario. Sir, if I hear you out there, you're saying, you know, B2B express, you have to really work on a monthly basis with the customers. How has been the pricing scenario? Are you saying, yes, I understood the yield part of it, but in general, because some of the peers have taken size hikes, I'm just curious, how is the pricing scenario? How has been the increase or decrease in the last, let's say, four quarters on a whatever basis? Have they gone down? Have they remained stable? And the cost?
We are currently working on improving the quality of our loads. We are currently not in a very strong pricing game here because we feel that there are certain, we have a mix of clients where we are below market. These are the businesses we are renegotiating with clients to bring it up to speed with market. If that is not possible, to give these loads away and utilize our space because we are running at almost 80%, 85% utilization. Why not use that space and go for a higher order of client? That kind of stabilization is happening. I think we have significantly improved in the last two months, and it will maybe take three, four months to get our loads with the right yield.
Once we achieve that, obviously, if our competitors are taking a price increase, that creates a headroom for us also to go back to the customers and ask for more. We will continue to be price competitive and in line with what is happening with the market.
Got it. Thank you, and wish you all the best.
Thanks, Alok.
Thank you. Ladies and gentlemen, due to time constraints, we take that as the last question and would now like to hand the conference over to the management for closing comments.
Thank you all for joining us today. I'm really, really happy to be here with all of you. This is my first interaction with you, and I look forward to many more over the coming quarter. We hope that we have been able to address your questions and provided you with insights into our performance and the strategy going forward. If you have any further queries or need any other additional information, please feel free to reach out to our team or our investor relations advisor, SGA. Your support for all our investors means a lot to us as we navigate this evolving landscape together. We genuinely appreciate your time, interest, and continued support and look forward to staying connected with all of you. Thank you all so much. Thanks.
On behalf of Mahindra Logistics Ltd, that concludes this conference. Thank you for joining us, and you may now disconnect your line.