Mahindra Logistics tanks 6%, hits 52-week low; here's why

Mahindra Logistics Ltd shares declined as much as 5.8% on Wednesday to hit a 52-week low of ₹347.15 apiece on the BSE after the company's loss widened to ₹16 crore in the July to September period of FY24.

During the session on Wednesday, the share price of the company opened at ₹351 as against the previous closing price of ₹368.70. At the time of reporting, the share price of the Mahindra Group's subsidiary was, however, trading 1.22% higher at ₹373.20. The company touched a 52-week high of ₹558.85 on November 3 last year. During the session, the company's market capitalisation stood at ₹2,689.47 crore, with 27,563 shares exchanging hands on the BSE, against the two-week average of 0.32 lakh shares.

During the quarter under review, the company's revenue stood at ₹1,365 crore, up 0.22%, against ₹1,326 crore in the corresponding period of the previous year. In the 3PL contract logistics segment, the company's revenue stood at ₹1,090 crore owing to a significant churn in the e-commerce and consumer segments. The company is focusing on increasing order intake and speed of execution in FY24, says Mahindra Logistics in investors presentation.

In the B2B (business-to-business) segment, the company's revenue from operations stood at ₹87 crore, with service levels being back on track, according to the company.

Its EBITDA (earnings before interest, tax, depreciation and amortisation), however, declined 20.5% to ₹54 crore in the September quarter, against ₹68 crore in the same period last year.

"The overall logistics industry is well poised driven by long-term focus on infrastructure, manufacturing, consumption growth and positive regulatory trajectory. Overall new order intake remained robust across our business segments and we continued to consolidate our business operations in Q2, 2024. Our organic growth in 3PL remained positive driven by our end market diversification programs, despite headwinds in the e-commerce segment," says Rampraveen Swaminathan, MD & CEO, Mahindra Logistics.

"Margin improvements remained on track driven by operating cost reduction and product mix improvements in 3PL, last-mile delivery and mobility businesses. We have implemented appropriate actions to strengthen the network, customer service and volume enhancements in MLL Express and cross-border logistics businesses. With the upcoming festive season, we hope to see a positive demand uptick and we remain focused on accelerating margins driven by synergies in the network business and other cost reduction programs," he adds.

The company aims to be a ₹10,000 crore logistics service provider by FY26. The company aims to become carbon-neutral by 2040.

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