Effective April 1, 2019 the company/group has adopted Ind AS 116 ‘Leases' and applied the standard to all lease contracts existing on April 1, 2019 using the modified retrospective method on the date of initial application. Consequently, the group recorded the lease liability and right of use assets at the present value of the lease payments discounted at the incremental borrowing as on date of initial application. Resultantly, the figures for the current period are not comparable with the previous period.

• Downside in Operating income is attributable to lower revenue from both supply chain management (SCM) business as well as Enterprise Mobility Services (EMS).
• The segment revenue of EMS was down by 17% to Rs 81.33 crore (or 10% of sales). However the segment revenue of SCM was down by 20% to Rs 730.43 crore (or 90% of sales) hit largely by sustained weakness in auto sector as well as impact of Covid related lockdown. Reflecting this while the auto sector revenue of SCM decline by sharp 26% to Rs 456.3 crore that of non-auto down by 8% to Rs 274.1 crore.
• In SCM while the M&M business registered a fall of 28% (to Rs 392.5 crore) that of non M&M revenue was down by 9% to Rs 337.9 crore. The warehousing and other value added services reported a growth of 10% to Rs 105.1 crore in non M&M business thus the drag coming from transport which was down by 16% to Rs 232.8 crore. On splitting the non M&M SCM revenue in terms of auto and non-auto both declined with former register a fall of 19% (to Rs 69.4 crore) and non-auto down by 7% to Rs 268.5 crore.

• EBIT was down by 23% to Rs 64.35 crore with the segment profit of both SCM and EMS stand decline sharply. EBIT of SCM was down by 23% to Rs 57.09 crore hit by sharp fall in sales as well as 20 bps contraction in segment margin to 7.8%. Similarly hit by both lower sales and strong 140 bps contraction in segment margin to 8.9%, the segment profit of EMS was down by sharp 28% to Rs 7.26 crore.

• OPM expanded by 70 bps to 4.7% and that was largely due to lower Opex. Opex as proportion to sales was down by 340 bps to 83.8%. However the staff cost was higher by 230 bps to 9.3%. Similarly the OE was up by 50 bps to 2.2%. Lower Opex was partly due to adoption of Ind AS 116 'Leases' under which the lease expenses recognized earlier as direct cost is now bifurcated between amortization of Right to Use Asset and finance cost of lease rent payable. Due to Ind AS 116, the Opex was lower by Rs 17.31 crore and other expenses was down by Rs 1.17 crore from comparable basis. On the other hand the depreciation and finance cost was up by Rs 14.14 crore and Rs 4.89 crore. The net impact at PBT level, the profit was lower by Rs 0.45 crore.

Consolidated sales was down by 10% to Rs 3471.14 crore. But a 70 bps rise in OPM to 4.6% saw the operating profit up by 5% to Rs 158.27 crore. Spurred further by 83% jump in OI to Rs 13.98 crore, the PBIDT was up by 8% to Rs 172.25 crore. After accounting for higher interest and depreciation the PBT was down by 39% to Rs 81.19 crore. With taxation stand lower by 45% to Rs 46.79 crore, the PAT was down by 36% to Rs 55.45 crore. After accounting for higher share of loss from associate (jump 144% to Rs 0.61 crore) and lower minority interest (a swing of Rs 1.04 crore to a share of loss of Rs 0.28 crore) the net profit was down by 36% to Rs 55.12 crore.

Segment profit of SCM was down by 5% to Rs 252.92 hit largely by lower sales (down 10% to Rs 3103.53 crore) as its segment margin expanded by 50 bps to 8.1%. However hit by lower sales (down 5% to Rs 367.61 crore) and lower segment margin (130 bps contraction to 9.2%) the segment profit of EMS was down by 17% to Rs 33.81 crore.

The Company has adopted Ind AS 116 'Leases' with the date of initial application being April 1, 2019 using the modified retrospective approach. The Company has-applied the standard to its leases with the cumulative impact recognized on the date of initial application. Accordingly, previous period information has not been restated. In the profit and loss for the current year, the lease rent which was hitherto accounted under "Operating Expenses" and "Other Expenses" in previous periods has now been accounted as depreciation cost for "right — of — use" of asset and finance cost for the interest accrued on lease liability. Accordingly, reported profit before tax for the fiscal ended Mar 2020 is lower by Rs 5.47 crore from comparable basis.

Commenting on the performance, Rampraveen Swaminathan, Managing Director and CEO of Mahindra Logistics, said, "Q4 2019-20 was a challenging period, with continued softness in auto sector and the onset of the Covid-19. The nation-wide shutdown of industries, facilities and movement of goods has had an impact on logistics, transportation & mobility. Our priority has been the safety of our customers, employees and vendors, and strict adherence to government norms. We have initiated several practices including work from home, social distancing, sanitization and digital communication. We have also launched programs to support our ecosystem though measures such as driver helpline, emergency cab services and other relief programs. During the quarter, we continued to execute our strategy and delivered strong growth in Ecommerce, Consumer and Freight forwarding. Our Non-M&M warehousing and value-added business grew by 24% during the year. We remain focused on delivering value through customized solutions, operational excellence and enhanced digitization. We are closely tracking the impact of Covid-19 on the economy. As things continue to evolve, we are working along with our customers and partners to ensure safety and ramp up of operations."

Other developments

During the quarter ended 31st March, 2020 the Company has allotted 52,852 equity shares of Rs. 10 each fully paid-up, on exercise of Restricted Stock Units (RSU's) by employees under the Mahindra Logistics Restricted Stock Unit Plan 2018.

During the quarter ended 31st March, 2020 the Company has granted 52,000 Restricted Stock Units (RSU's) under the Mahindra Logistics Employee Restricted Stock Unit Plan 2018.

The Board has recommended a dividend of Rs. 1.50 per share on equity share of Rs. 10 each (15%) subject to approval of members of the company at the forthcoming Annual General Meeting.