MAHINDRA LOGISTICS LTD (NSE: MAHLOG) Q4 2026 Earnings Call dated Apr. 24, 2026
Corporate Participants:
Hemant Sikka — Managing Director and Chief Executive Officer
Isha Dalal — Chief Financial Officer
Analysts:
Mandar Chavan — Analyst
Krupashankar NJ — Analyst
Alok Deora — Analyst
Jinesh Joshi — Analyst
Khushi Soni — Analyst
Chirag Maroo — Analyst
Rehan Syed — Analyst
Sumukh U — Analyst
Sonal Minhas — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Mahindra Logistics Limited Q4 and FY26 earning conference call. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation. Conclude should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Mandar Chavan from SGA. Thank you. And over to you sir.
Mandar Chavan — Analyst
Thank you. Danish Good afternoon everyone. Thank you for joining us for Mahindra Logistics Limited Q4FY26 earnings conference call. We are pleased to have with us today Mr. Hemant Sikka, our Managing Director and CEO. Ms. Isha Dharal, CFO along with Member of the senior management team. I hope everyone had a chance to view our financial results and investor presentation which were recently posted on the company’s website and stock exchanges. We will begin the call with the opening remarks from management followed by an open forum for question and answer.
Before we begin, I would like to point out that some of the statements made during today’s call may be forward looking. A disclaimer to that effect was included in the funding’s presentation. I would like to invite Mr. Sikka to share his remarks.
Hemant Sikka — Managing Director and Chief Executive Officer
Thank you Mandar. Good afternoon and thank you all for joining us today. F26 has been a defining year for Mahindra Logistics. After two years of losses, our return to pat profitability marks more than a milestone. It signals the successful reset of organization’s operating engine. This transformation has been driven by deliberate choices, disciplined execution and rebuilding of fundamentals that will sustain performance over the long term. Over the past year, sharper leadership focus has re energized the organization, strengthened strategic clarity and raised the bar on operational rigor.
Together, we have embedded accountability across levels and cultivated a performance culture anchored in measurable outcomes and delivery excellence. What began as a structural shift has now translated into visible measurable improvement on the ground. Three defining themes capture our progress this quarter and throughout the last year. A stronger high quality contract logistic portfolio with multiple wins across segments and steadily improving customer level economics. Number two, clear traction in express business turnaround which is built on tighter execution discipline and an unwavering focus on margin improvement.
Number three, a sustained push on operational excellence reflected in consistently positive customer feedback on service, reliability, responsiveness and operating standards. In parallel, our E commerce and quick commerce business has scaled meaningfully reaching more than 1,000 crore in annual revenue and reinforcing our position in a fast growing future ready segments of the logistics ecosystem. This phase of the journey has strengthened our conviction that Mahindra Logistics is now structurally better, operationally sharper and culturally more execution driven.
The transformation underway is real, embedded and is gaining momentum positioning us to create lasting value for our customers, employees and shareholders alike. We take pride in the progress made but we are not at all slowing down. This is just the beginning of what lies ahead of us. The benefits of margin expansion initiatives and operating leverage will continue to accrue in future as well. Let me now turn to few specific business Updates starting with MSPL. Our B2B Express Logistics Services Quarter 4 revenue grew 49% year on year and the business continues its turnaround journey with positive gross margin and tangible improvements in service quality, network utilization and unit economics.
There is a meaningful uptick in both volumes and yield. With disciplined cost control now firmly embedded across the organization. Our focus continues to remain on EBITDA improvement with PAT progression to follow in a calibrated manner. The foundation of the business today is far stronger than what it was in the previous period and we are confident about its long term potential for our contract logistics business quarter four revenue grew by 12% year on year and our gross margins grew by 19%, a clear indication that our focus on operational efficiencies and profitable customers is working.
We continue to see new wins across business segments reflecting stronger solution capability, improved service delivery and deeper customer engagement. Our seamless handling of the operations at the scale of Mahindra and Mahindra, which by the way is the second largest automotive company in India and it is also the world’s largest tractor company in terms of tractor produced, moved and sold has helped establish a clear right to win in managing large and very complex high velocity networks which today serve as a clear competitive advantage for us.
On the White House. We achieved a reduction of 3 lakh square feet in the last quarter and 9 lakh square feet in FY26. We remain committed to our glide path on reducing our white space. By September 26th in our freight forwarding business quarter four revenue grew by 17% yoy and our gross margins grew by 50% yoy. Driven primarily by improved trade flows, operating leverage and a diversified customer base. This segment is currently facing headwinds due to evolving geopolitical conditions. We expect these challenges to persist in the near term and we are closely monitoring the situation while maintaining operational discipline in our mobility.
Business quarter four revenue grew by 39% YoY and our gross margins grew by 17% YoYo. Our focus here is on improving the utilization level for the asset heavy part of the business which is alight prevey our premium B2B offering that we offer right now in Delhi and on the B2B side is on acquiring new customers. In our last mile delivery business, revenue declined due to strategic choices that we made and at certain sites in quarter four in bio y however our gross margins have increased by 7% in quarter four.
Our focus on operational excellence continues to be recognized with accolades from leading e commerce players. While we are encouraged by the improvement trajectory, the global environment continues to be uncertain. In such a backdrop we believe it is critical to remain prudent, selective and cautious in the coming year. Our focus is on building for the long term that is improving the quality and sustainability of our earnings rather than chasing short term outcomes. So in conclusion I would like to emphasize that Mahindra Logistics today is a very different organization compared to where we were just a year back.
We have restored profitability, improved execution discipline, strengthened customer level economics, built a sharper, more accountable leadership and operating structure and a growing base of highly satisfied customers who clearly see tangible value from us. We remain committed to becoming the number one logistics services provider in India, delivering superior customer experience through technology led solutions along with a very passionate team. With that I will now hand over to Esha, our CFO to take you through the financials.
Isha Dalal — Chief Financial Officer
Thank you Hemant. Let me now give you all a brief on the consolidated financial performance for Q4 and F26. Our revenue for Q4 F26 has grown by 14% year on year to 1,791 crores and by 15% in the full year to 6,999 crores. Our anchor customer M and M has grown very well on the back of higher volumes and in addition we have seen strong growth across all our subsidiaries led by the express business, Supply chain management including our three PL and network services business which is Freight forwarding, Express and Last Mile contributed 94% of our overall revenue and the mobility business has contributed 6% of revenue for Q4 and for F26.
This is broadly in line with historical segments mix on the back of many initiatives that Hemant referred to including operational discipline and financial rigor. We have seen a year on year expansion in consolidated gross margin to 10.5% in Q4F 26 compared to 9.5% in Q4F 25. For the full year the gross margin stood at 10% compared to 9.4% in financial year 25. The standalone business has expanded gross margin by 80bps with gross margin expansion across most verticals. In addition, the improving trajectory in the MESPL or express business has substantively contributed to gross margin expansion at a consolidated level.
Before I move on to ebitda, I want to take a moment to explain how we will henceforth be depicting EBITDA as requested by several of you. This is detailed out in the new slide in our Investor Deck titled Adjusted EBITDA where you will see our reported EBITDA adjusted for the Rent Expense of long term leases. To explain further, under NDS 116 the cost of long term leases is accounted under interest and depreciation lines and therefore does not Reflect under reported EBITDA. On this page, 55 crores of rent in Q4F 26 and 218 crores in the full year which is actual rent paid out for our long term leases has been deducted from reported EBITDA to arrive at what we are calling the adjusted EBITDA number.
In that context, reported EBITDA for the quarter stood at 112 crores up from 78 crore rupees in Q4F 25. Adjusted EBITDA is at 57 crores up from 37 crores in Q4F 25. This is an adjusted EBITDA margin expansion from 2.3% to 3.2% in Q4F 26. For the full year, reported EBITDA stood at 377 crores against 284 crores and adjusted EBITDA for the year is at 158 crores up from 121 crores in financial year 25 which is 31% growth. Moving on to PAT, consolidated PAT for Q4F 26 is at 20.2 crores versus 6.7 crores of losses in Q4F 25.
The reported PAT for the full year is at 2.3 crores as against a loss of 35.8 crore rupees in financial year 25. However, MLL has delivered consolidated operational PAT of 8.2 crore rupees. To reiterate, the operational PAT is grossed up for the tax adjusted impact of the exceptional item we took in quarter three F26 towards the past gratuity service cost under the new labor codes. With this at both a reported and operational level, MLL has turned profitable after two consecutive financial years.
Let me now move on to segment performance. Another change you would have noticed in our Investor deck is that we are now reporting numbers at a segment level, not at an entity level to simplify the understanding of our business verticals in this new construct. Contract Logistics our revenue for Q4F 26 was 1381 crores as compared to 1233 crores in Q4 up 2512% and the full year revenue is 5490 crores which is up by 16%. The reported EBITDA in this segment is at 389 crore rupees for the year compared to 314 crore rupees last year which is up by 24%.
In our freight forwarding business the revenue for Q4F 26 is at 89 crores as compared to 76 crores in Q4F 25 which is up by 17%. For the full year this business has grown at 14% driven by both volume growth and rate expansion. The business has grown GM and EBITDA both in Q4 and in the full year, with the full year ebitda moving from 6.8 crores in F25 to 10.1 crores in F26. Coming to the express business, this has witnessed tangible improvement during F26 with 25% revenue growth and F26 revenues of 449 crores.
As you will all recall, we have seen sequential GM improvement in this business for three consecutive quarters from 20 lakh rupees in Q2 F26 to 2.7 crores in Q3 F26 and 6.6 crore rupees in Q4. At a full year level me SPL is GM positive with a gross margin of 1.3%. The business continues to be loss making at an ebitda level with Rs. 31 crore rupees of EBITDA loss. The losses however have substantially reduced versus F25 during which period we made 51 crore rupees of EBITDA Loss. Coming to the mobility business, revenue for F26 was at 386 crore rupees as compared to 316 crores in F25 up by 22%.
Significant scale up in large B2B accounts has driven this growth in the business. In our last mile delivery business Q4F 26 Revenue stands at 72 crore rupees compared to 89 crores in Q4F 25 which is down by 18%. As we have alluded to in previous quarters and as Hemant also mentioned, we have consolidated our business in this segment and taken strategic decisions at certain sites in order to improve profitability. This is reflecting in sequential gross margin improvement and EBITDA performance of the business gross margin has improved from 2.7 crores in Q3F26 to 6.5 crores in Q4F26 and EBITDA has moved from a 1 crore EBITDA loss to a 2.2 crore EBITDA profit in Q4F26.
Overall, we are pleased by the progress in the numbers. At the same time we remain mindful that the near term environment continues to be dynamic, shaped by evolving geopolitical developments and inflationary pressures. As Hemant mentioned, we are closely monitoring the situation with an agile approach to enable timely and well calibrated decisions. With this, I hand it back to Mandar to open the floor for Q and A.
Questions and Answers:
Operator
Thank you ladies and gentlemen, we will now begin with 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 handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Our first question comes from the line of Krupa Shankar NJ from Avendee Spark. Please go ahead.
Krupashankar NJ
Good afternoon and thank you for the opportunity and congrats on a great set of numbers especially across express business as well as your 3 PL business. My first question would be on the express side of things. Just wanted to get a sense around what would have been the volume growth for the quarter and for the year and just an add on question to that is that given that the custom exercise is behind us can one expect sort of a growth over the medium term in this business?
Hemant Sikka
So let me Krupa thank you so much for your question and for your compliments to our team. Let me answer the second question better that a mid team kind of growth is possible in this business and that’s what our team would be driving at. Coming to your first question, not right for us to only look at volume because any volume growth will not give you much insight into into the business overall because as we have previously stated in our conference calls that just looking at volume will not give us key insights.
We have to look at volume and yield together because sometimes you can get as much volume as you want but that is not a profitable decision for you. So we are being very mindful of this and in fact in the last one year we have cleaned up a lot of the volume which was not yielding positive results. So us and we have taken that out. So all the growth that you see in our Revenue in MSPL is irrespective of such tough calls that we have taken. So just looking at volume will not help. And earlier we used to share that number but since the last quarter we have stopped sharing that number.
Krupashankar NJ
Appreciate that him and just want to know what is the growth per se because I completely get your point that you have to look at it holistically and I agree with you that is that is the best way ahead. But just wanted to get a sense around given the fact that the underlying automotive piece has done quite well. If any broad direction also is available, it will help us see how the yields are also shaping up in the space.
Hemant Sikka
So Prabhavar, we can certainly share this that our volume growth. You can think about this like a mid high teens kind of volume growth.
Krupashankar NJ
Understood. Thank you. Thank you. Second question on the recent disclosure on adjusted EBITDA bridge right. And appreciate this disclosure just throws a good light around your actual profitability. Now while I can look at the fourth quarter numbers and we can see that now EBITDA margins have definitely improved. Adjusted EBITDA has improved over 3.2% in FY18 19 levels we were at on a pre in basis we were close to about 3.6 to 3.9 sort of EBITDA margins and that was a business which was fairly skewed towards supply chain and less of warehousing and so on.
Is it very fair to assume that directionally as you see your 3 PL business stabilizing further with E Commerce gaining traction and automotive being a core pillar as well as network driven businesses like your Express, this number should surpass your FY18 19 levels by material sense when business normalizes by over the medium term. Is that understanding correct?
Hemant Sikka
Without giving you any forward looking guidance? Directionally I would agree with every word that you said because this is. I mean I would be very disappointed if everybody has a view that this is our best case analysis. I mean we have just started this turnaround and I think there are a lot of work still left to be done for us. So directionally I would completely agree with you.
Krupashankar NJ
Got it. Last question from my side on the last mile consolidation part. What is the further impact expected? Are we done with the pruning size or are we anticipating further decline at least over the near term until business stabilizers?
Hemant Sikka
All the pruning of the last mile has been done in FY26. We don’t expect any more pruning to be done. Our profit making clients should grow with us. So I would expect this to be growing business as Isha said in remarks that the business actually on the profit metrics has improved significantly over what it was just couple of quarters back.
Krupashankar NJ
Got it. Fantastic. Thanks a lot for the response. All the best.
Hemant Sikka
Thank you.
Operator
Thank you. Our next question comes from the line of Alok Deora from Motilal OSWALD Financial Service Ltd. Please go ahead.
Alok Deora
Good evening and congratulations on improved performance. Just had some you know, question on express business. So you know going at the good run rate of improvement which we have seen over the last several quarters now, when do we expect, you know the break even kicking in and you know the profitability also when where it could reach once we kind of turn profitable. Some insights on that. And also in that business are we you know, at the operation levels using significant amount of technology for like sorting belts and so on.
If you can just highlight that.
Hemant Sikka
Alok, thank you for your compliments to our team in mspl. I mean I can’t share any forward guidance with you but I can tell you that we have stated this that becoming a bit positive is our immediate goal. In the last year, for the full year as a whole, we have become gross margin positive. And I can share with you that we are very, very close to an EBITDA positive number. I can’t commit a timeline to you but I can just tell you that we are very close to that kind of profitable metric reach. On the tech side, we do employ very strong tech in this company and we will also do a little bit of investment investment in our tech in FY27 because we believe that in the last two years we have not invested into that and I think there is some requirement now coming up which we shall do whether we are doing a sorting belt kind of thing and all that would be too much of a granular detail to share.
But all I can tell you is that this is a very tech focused company and we have a very strong tech backbone which supports this business.
Alok Deora
Sure. And you mentioned about the volume growth being around in the mid teens or so that was. You were referring to the QOQ revenue growth or the volume growth.
Hemant Sikka
Just hold.
Alok Deora
Sure.
Hemant Sikka
That was the YOY look.
Alok Deora
Okay.
Hemant Sikka
Quarter on quarter is. It is much, much higher.
Alok Deora
Okay. Because revenue growth in express business is showing around. Mean it’s a quite a big jump in the, in the YoY revenue. So that means the pricing has improved, is it?
Hemant Sikka
Yes, we did speak about that. We have a very strong focus on our yield improvements and there we are finding that we are able to get better pricing.
Alok Deora
Okay. Okay. So have we taken any price increase or it’s also that the mix has also been little more favorable which has led to improved realization because is the market really taking or accepting the price increases in the current scheme of things where you know the other costs have actually gone up at the client’s end?
Hemant Sikka
Alok, I would say that mix is also helping us. Our mix is favorable and I don’t think we have taken any blanket price increase but we have taken very specific price corrections with certain of our clients.
Alok Deora
Got it, got it. Just last question. So now we are at around 450 crore kind of a revenue in express. So you know could add this kind of base where we are still a kind of a smaller player in this segment. We could, we could do a 20 25% sort of a growth. You might not split in terms of volume or pricing but as a overall level in terms of revenue 2025% growth trajectory could be kind of worked on for FY27 and 28.
Hemant Sikka
Alok, I would like to think about like we are driving towards a mid to high teen kind of growth for this business.
Alok Deora
Okay. That in terms of revenue.
Hemant Sikka
Yeah, that’s for the revenue and we will continue to improve our yields and. And the mix.
Alok Deora
Got it. Okay. Yeah, that’s all from. I said thank you sir. All the best.
Hemant Sikka
Thanks a lot.
Operator
Thank you. A next question come from the line of Jines Joshi from PL Capital. Please go ahead.
Jinesh Joshi
Yeah, congratulations on good set of numbers. Sir, just one observation. I mean in 3Q of FY26 our warehousing space in the contract logistic business was about 20.4 million square feet. And in this quarter we are at about 19 million square feet. So just wanted to get some sense. I mean the margin improvement that we have seen in the business, has it got to do with the relinquishment of area and consequent fall in the rental cost or has it got to do with some kind of other benefits which you would want to highlight.
Hemant Sikka
So Dinesh, thank you for your compliments to the team. So these are all business decisions we have taken over the last four four quarters now where some of the leases we have relinquished and some of the leases also have got over. So while we have run a lot of business, this is always a pipe in and a pipe out kind of a situation which will keep happening. So I think broadly we are very invested into our three PL business, contract logistics business and we are looking at growth here. But just think about that.
In this year we did take some calls on certain non profitable businesses, non profitable customers I would say and that may be reflective of this
Jinesh Joshi
For that. And in the contract logistic business we have stated in the PPT that we plan to enter into some new segments. So can you just talk a bit about that and any specific timeline which you would want to share?
Hemant Sikka
Yeah, so we are currently evaluating a couple of segments which are, which we believe will improve our mix and improve our profitability. So right now we are doing a lot of market study in these areas and in this year we will certainly enter into one of those segments.
Jinesh Joshi
Would you want to call out which that segments are?
Hemant Sikka
No, we have not made the decision. We are still evaluating both those segments. But one of those segments will go ahead in this year.
Jinesh Joshi
And sir, on the. On the white space side, in the initial remarks you mentioned that for FY26 the reduction that we have achieved is roughly about 9 lakh square feet. And I believe our overall white space that we had with us was somewhere around 1.5 million square feet. So with respect to the reduction timeline do we stick to that earlier guidance of September 26th? So any specific insights on that?
Hemant Sikka
Yeah, so your numbers are right. When we started the year we were at 1.6 million square feet. To be precise, we ended the year at 0.7 million. And our commitment in my first call was that we will reduce our white space by 95%. So we have still some more work to do by September of this year. So by September of this year we will achieve that glide path and we are currently at that stage and maybe slightly better than that on a glide path.
Jinesh Joshi
Got that sir, got that. Thank you so much and all
Hemant Sikka
The best. Thanks. Thanks.
Operator
Thank you. Ladies and gentlemen, anyone who wishes to ask a question, press star and one on the touchdown telephone. Next question comes from the line of Khushi Soni from Noama Institutional Equities. Please go ahead.
Khushi Soni
Hello, good afternoon and congratulations for the excellent show. Particularly the standout performance on the express business. I had a question regarding certain items visible in a cash flow. So particularly you can see a ROU reversal and a private credit provisional provision for trade receivables which seems to be a fairly large amount of 14 crore and some 28 crores. So I just want to understand is it netted off against other expenses and is this a one off? What has driven this like for the credit provision, is it a particular customer or are there more to come?
So we can just give some idea on what this. Where is this figure exactly adjusted?
Isha Dalal
Yeah Khushi, I’ll take that. Thanks for the question. I’ll answer your question on the unrealized gain on reversal of RoU first, this is again in line with India’s 116 accounting. As you know that when we get in a lease and when we capitalize our lease, the way India’s 116 accounting works is the curve impact ensures that there is a higher hit to the P and L in the initial few years of the lease. Therefore when you terminate a lease before the contracted end period or you pre close a property, there is a reversal that happens on that property.
Heman spoke about it earlier as well. These are business decisions as in when you open and close sites you keep getting these pluses and minuses in the P and l. And this 14.38 crores that I think you’re looking at are cash statement refers to that number. So that’s the answer to your first question on your second question on expected credit loss. This is in line with accounting prudence. We have taken some action on age receivables based on our assessment of recoverability or lack thereof. And you see that reflected in our numbers as well.
You know again this is a part of the ongoing business and like I said, we have provided in prudence and management judgment.
Khushi Soni
So just to clarify, is there anything that you see of a similar nature in the short term at least or. It will come as it comes.
Isha Dalal
Khushi Nothing that I would like to call out for the moment. Like I said, you know, this is business. There are always issues under discussion, under negotiation but nothing that warrants provisioning at this moment in our assessment. So nothing that I would like to call out for now.
Khushi Soni
Okay. And another question I would have is if the diesel prices go up by let’s say 10 or 12 per liter, how would that impact you? Like does it reverse the good work that we have been doing or will it be able to be passed on to the as a cost inflation to the customer?
Hemant Sikka
Yeah. So an increase of this magnitude that you spoke about will be passed on 100% to our customers. That shouldn’t be a problem. And I can. But let me express my concern that if this kind of diesel increase happens then it will certainly have an inflationary impact on the overall economy of the country and that may impact certain sectors that we play in. But that’s anybody’s call. I mean you would know in fact more than me on how to how the economy will get impacted if that kind of a price increase happens in D.C.
However from our point of view this will be passed off.
Khushi Soni
Okay, thank you so much and wish the team, all the rest of luck.
Hemant Sikka
Thank you Krishna.
Operator
Thank you. Reminder, anyone who wishes to ask a question, I press star and 1. Our next question comes from the line of Chirag from keynote. Please go ahead.
Chirag Maroo
Yes, thank you for the opportunity. I Most of my questions are answered. I just have one broad question. Could you just highlight how the express elastic industry is standing out in terms of growth? There are two types of clients. One are corporate and second one are MSME or SME set of clients which avails the service in this industry. Just wanted to understand how the dynamics have been changing that is leading to the volume growth that we are having or it is completely the company level call that we are taking which is leading to volume growth.
Hemant Sikka
So actually Chirag, this express business or the whole industry is shaping up very well. And this is following the kind of trajectory which any developed society when it progresses follows. If you see the western world, a lot of the cargo moves by express logistics because people just are not in the habits of not getting their stuff on time or getting it only in the full truckloads. So people would move the stuff. Even if like this one packet to be moved or two packets to be moved or half a truck is to be moved, they will not wait for the truck to move.
So the time element of the whole cargo chain becomes very critical. And this cycle we have seen in any developed country. So as India becomes more developed, it becomes more prosperous. People have more discretionary income and spending grows. We believe that express logistic business will continue to grow and this is what we are seeing. If you see after every two, three years there is a distinct change in the industry trajectory. That’s why we are very bullish on this business and we believe that this is business for the long term to be made.
MSPL is not any regular freight forwarding or any freight movement business. This is a network business which takes years to build. Please think about this like an airline business. Why is it that we don’t have so many new airlines in India? Because these are very difficult businesses to build and the costs come up front and the revenues and profit follow a lot. So. So this is a business which has very high entry barriers and we believe that Minder Logistics is now very well positioned. We have done a lot of the hard work in the last two to three years and now that we are we have become GM positive at the full year basis and I said that we are very close to an EBITDA breakeven.
I believe we are in a very good position here to build a very long term sustainable and profitable business in our express logistics. So we are shaping the industry. We are seeing the industry shape up like it has shaped up in any other western or developed economy and we believe that we are on a very good trajectory. So this is where we believe. But overall if I have to give you a very near term answer on this, clearly in the last couple of quarters we have seen retail is doing better than B2B.
However these things can change quarter to quarter and how it happens, I mean we have to play tactically also but as at a strategic level I want to think about this is a very good business for any logistics company but it needs years to build and it has very high entry barriers.
Chirag Maroo
Correct. If my thinking is wrong over here, B2B business generally brings significant volumes and retail business would help you to earn higher margins like 400, 500 which higher margin than what we can pass to a B2B client. Second thing I wanted to understand within this was that are we serving any E commerce industry client in our express business and what quantum of our revenue is coming from that. And lastly currently as we said that we are focusing on improvising yield with volumes. If I take a mark that industry level yield are 100 rupees per kv, what kind of yield we are having currently and how are we focusing it to bridge to an industry standard level.
Hemant Sikka
So Jiral, you are right that the retail segment brings in better yield. So that your first point is absolutely right. That helps us also and I mean every company works like that with a mix of Both retail and B2B. B2B as you know are longer term kind of relationships and also they are more predictable. Business retail is not predictable but has higher yield. That’s true. Your second question was related to. Sorry, can you repeat your second question?
Chirag Maroo
Second was related to the E commerce client. If yeah. So if my understanding is correct today express logistic industry is growing at a pace and E commerce as a mix and express loyalty is going as much faster pace. So just wanted to understand if we are serving any E commerce client and what kind of percentage of revenue would be coming. We
Hemant Sikka
Do serve E commerce clients also at an overall MLL level. I spoke about in my opening comments that we have more than a thousand crore of revenue coming from E commerce at MLL level. However at express logistics we do serve some E commerce companies.
Chirag Maroo
The quantum of quantum would be around
Hemant Sikka
That we will not like to share industry wise.
Chirag Maroo
And the third question sir,
Hemant Sikka
What was the third question? Chirag?
Chirag Maroo
It was related to understanding if the yield in express Business of the industry level, for example, it is 100 per time.
Hemant Sikka
That’s not right for us to share because that would give too much of information to our competition. Thank you.
Operator
Thank you. Reminder, anyone who wishes to ask a question may press Star and one on their touchstone telephone. Our next question comes from the line of Rehan Syed from three major asset managers. Please go ahead.
Rehan Syed
Hello, good afternoon. Thanks for taking my question. My first question around your basis that you have, I think you have mentioned earlier also. So like while cross margins have improved very well in the system, so what are the key levers that really drive the express segment break even and subsequently profitability. Could you please explain a bit around this because your voice is kind of for lag.
Hemant Sikka
Rehan, you are specifically asking for MLL as a whole or only for our express business?
Rehan Syed
Both.
Hemant Sikka
Both. Okay, so Rehan at the overall ML level, let me tell you that get this kind of gross margin improvement, we have pretty well pressed all the levers. Okay, it’s difficult to narrate all of that, but whatever you can think of business, I mean we have looked at pricing renegotiation with some of our clients. We have looked at all our cost elements, A to Z, whatever. I mean even if we spend like 10,000 rupees in our business, we have relooked at whether we need to spend that. So we have looked at every cost element that builds up our total cost structure and we have looked at client wise profitability for all our clients on an adjusted EBITDA basis, whether this business makes sense for us or it doesn’t make sense.
So we have brought in a lot of focus of EBIT level profitability for each of our clients and each of our vertical lines. And our leaders are very well now aligned with this level of thinking and this kind of working. So that’s what is happening at the MSPN level. We have done a very strong focus on improving our yields in the last one year. The team is very focused to delivering a better customer experience. And if you deliver a better customer experience, of course you are in a position to demand a better pricing for them.
So our next network service levels that we track very closely on a monthly basis, they have been improving over the last 12 months on a consistent basis. And of course with that kind of customer satisfaction, we always have a better position to go and ask customers for some price correction. So that has played out very well for us. So these are the, they are again very strong focus by the team on our overall cost, whether it is the pickup cost, whether it is your line haul cost, whether it is your warehouse housing costing.
So all of that have been looked at very, very closely.
Rehan Syed
And just if you want to specify more around this express business. So what kind of like if I were to ask what kind of customer mix shift like SME vs Enterprise vs E Commerce are you targeting any express to improve unit economics?
Hemant Sikka
So every, every customer. I mean we are a full. As I said, we are an integrated logistics company. So we look at every customer to target. There is no specific preference of course within our customers. We can tell you that our E commerce business is growing more than other businesses. We have very strong growth in E Commerce because that industry itself is doing very well and we have some very marquee customers that we serve and we have great relationship with these customers. So that segment is growing faster than other segments.
But all segments are growing for us.
Rehan Syed
Okay, and just one last question on the mobility segment that we given the focus on improving utilization assets heavy B2C mobility. So what is the current utilization level versus target that you are targeting for going forward?
Hemant Sikka
That’s an internal metric, Rehan. We won’t be able to share that.
Rehan Syed
You do you want to give any range? It’s possible
Hemant Sikka
Range would not help because I’m just thinking through range will not help in. In your getting any insight because these metrics keep changing with that. So just. I mean this is an internal metric. We drive it very hard. All I can tell you is and difficult to share.
Rehan Syed
Okay, okay, I understand. Thank you.
Hemant Sikka
Thanks man.
Operator
Thank you. The next question comes from the line of Sumuk from Corman Capital. Please go ahead.
Sumukh U
Hey team, am I audible?
Hemant Sikka
Yes, please go ahead.
Sumukh U
Yeah. So sir, my question was do you see any impact currently from the West Asia war on domestic or international logistic movement? So so far and also you also alluded to the fact that the fuel prices if the magnitude is higher will be passed on. So how do you see this? If there is a sudden spike in the fuel prices in India, how do you see this impacting the industry in the near term? Sir,
Hemant Sikka
Look on West Asia we are clearly seeing some headwinds in a freight forwarding business. That’s a business as you know has done very well in quarter four and overall full FY26, we did very good business with that. But in the last few weeks we are beginning to see impact of the West Asia war on the global trade and obviously that would impact our freight forwarding business. There are a lot of issues on the shipping lines. There are a lot of issues in container getting jammed up in certain ports so they are not moving.
And also our customers with that kind of freight premiums that are there, the insurance premiums have gone up, freight rates have gone up, fuel surcharges on ships have gone up. With that kind of cost inflation even our customers tend to wait to see how the geopolitical situation changes and you know how volatile that is and it kind of changes every day. So people also tend to wait. So that is impacting our freight forwarding business. Clearly on all other segments we have not seen any impact to the West Asia world so far.
I think most of our clients are doing pretty well. However, we don’t know what is the level of inventories they have in their system. So if right now all the production lines and all the e commerce industries working on consuming inventory then I don’t know at a customer wise level how much inventory they still have. So if this disruption continues for a very long time, of course some kind of inventories will get kind of consumed and they will need to be replenished. That’s my overall view on the West Asia crisis Coming to the fuel price.
If the fuel price is in the range of let’s say 10 to 15% it will immediately get passed on. I don’t say there will be any lag effect of it. If it is a reality, customers would accept it. However, my bigger worry is that if that kind of inflation happens, you know, diesel price impacts every segment of the economy whether it is rural or urban and how that will slow down is anybody’s assessment. I don’t have a view on that currently but maybe other economists can have a better view than than my view.
But broadly my concern is that if that kind of diesel price has heckman it will have some impact on economy. Difficult for me to quantify that.
Sumukh U
Okay, yeah, that’s, that’s it from my side. Thank you.
Hemant Sikka
Thank you. So
Operator
Thank you. Next question comes from the line of Sonal Minhas from Please sign. Please go ahead.
Sonal Minhas
I hope I’m audible and thank you for taking my question. So my question was with regard to the express logistics business over the last 12, 18 months one of the competitors was absorbed by delivery. One of the competitors is not financially healthy and I think we’ve seen some rationality in terms of pricing realization basically coming in the market. Just wanted to take your subjective comments on do you see more of realization improvement in the coming quarters and in the coming year? Direction speaking, that’s one.
And secondly, the market leader has a gross margin or something equivalent of their unit at a margin of around 18 19%. I’m assuming they’re much larger than you in a particular category. But I’m just assuming directionally as you scale and as you invest in capacity, your margins should also be inching towards double digits as we grow from here. These are multiple issues.
Hemant Sikka
Yeah. So on pricing I would agree with your observation that there is some consolidation of the industry has happened. And as I said, express business is a difficult business to build. It has very high entry barriers and it is very good to note that the industry maturity is settling in and people are not only driving volumes at any price but folks are kind of understanding that profitability is a very key part of running any business. So that kind of maturity even we are seeing in the market. So I would totally agree with your observation on the second observation of what kind of margin trajectory do we see?
We can’t give any forward guidance and it’s difficult to compare us with some very large companies which are in this business for decades older than us. Everybody has to go through their journey. Right now we are in the very early stage stage of building this business. This business takes a longer time to build because this is like a network business. As you expand your networks, your costs come earlier and then these are followed by revenue and profit. So we have to go through our journey. All I can tell you a very positive news is we are very close to an EBITDA break even.
Without giving a concrete timeline I can say with lot of confidence we are very close to ebitda.
Sonal Minhas
Great to hear that. Thank you.
Hemant Sikka
Thanks.
Operator
Thank you. My next question come from the line of CM Anish Vas from Gopal Consultancy. Please go ahead.
Unidentified Participant
Am I audible? Sir? Sir, are you comfortable in Hindi? Actually I’m from Gujarat.
Hemant Sikka
Target, ham share, nikara and maniji mapku logistics business. Hum. Revenue, Strong commitment. Logistics business. Johan Business. Company.
Unidentified Participant
Good luck.
Hemant Sikka
Number one logistics services company Banana.
Unidentified Participant
Excellent. Thank you so much sir for my question.
Hemant Sikka
Thank you.
Operator
Thank you. Next question comes from the line of Khushi Soni from Normal Institutional Equities. Please go ahead.
Khushi Soni
Hello again. I just wanted to understand if gives idea on the volume momentum in the express business. In April you mentioned that you have seen some headwinds in the freight forwarding business and not in any other segments but any specific guidance on the express business.
Hemant Sikka
Khushi, I would like to think about in this express business or any logistics business per se that we operate in that quarter four is our best quarter of the year. So it will not be fair to compare quarter one in your calculations with quarter Four. That’s the first thing. Secondly, on the express side we are not getting so much impact impacted by the West Asia crisis. Freight forwarding is purely related to and I want to emphasize that purely related to the West Asia crisis. Otherwise that business is actually doing very well for us.
But because there is choking of trade lanes there are freight premiums which have gone up, there are insurance costs which have gone up. So as a result that business is under pressure. However to extrapolate that to any of our three PL business or express business is not fair. I think other business businesses currently are going as per our plan.
Khushi Soni
All right. Thank you sir.
Hemant Sikka
Thank you. Khushi.
Operator
Thank you. As there’s no further question from the participant I would like to hand the conference over to the management for the closing remarks. Thank you. And over to you team.
Hemant Sikka
Yeah. Thank you all for joining and really want to thank each of our investors. You guys have helped us on a rights issue. I think that was a very significant milestone for Mahindra Logistics. So we are very happy with all the support that you have provided. All I can assure you on behalf of my entire senior leadership team and everybody is here with me while I speak. We are very committed to making sure that all our stakeholders benefit from the turnaround that we are trying to execute in mll. Thank you all for joining us today.
We hope we have addressed your questions and provided valuable insights into our performance and strategy. If you have any further queries or need any other information please feel free to reach out to our team or to our investor relations advisors at AS sga. With this we close this call. Thank you all very much.
Operator
Thank you so much sir. Ladies and gentlemen, on behalf of Mahindra Logistics Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.