After slipping into the red, can Mahindra Logistics execute a U turn?

livemint.com:

Mahindra Logistics Ltd (MLL), a 3PL provider, was one of the beneficiaries of the logistics boom. Between 2020-21 and 2023-24, the Mahindra group company’s revenue rose from ₹3,264 crore to ₹5,506 crore. With the outlook for the sector looking very positive, the Mumbai-based firm, which services around 19,000 pincodes, set a new milestone for itself: to become a ₹10,000 crore logistics services provider by 2025-26.

To this end, the company embarked on a massive expansion drive. It has built a 21 million sq ft of warehousing footprint spanning nearly 800 locations. The warehouses range from small affairs customized for individual clients to large multi-client gateways, of over a million sq ft each.

MLL’s gateway at Luhari, Haryana, for instance, is about 1.4 million sq ft. It also manages a 40,000 sq ft warehouse in Electronics City, a prominent tech hub in Bengaluru, handling domestic and export orders for a premium American watch, leather accessories and jewellery brand. MLL’s core business involves providing warehousing, delivery and logistics services to clients on a contract basis.

The rise in overall demand and growth in the core business gave it the confidence to widen its focus to three non-core segments: business-to-business (B2B) express (part-truckload delivery with a quick turnaround), freight forwarding and cross-border logistics (air and ocean freight forwarding services via a network of global partners), and last-mile delivery (direct-to-customer operations). Together, these four verticals have been driving MLL’s 3PL play. However, while the outlook looked rosy, reality has proved to be otherwise.