Mahindra Logistics has registered 15% growth in consolidated sales to Rs 1046.75 crore for the quarter ended Dec 2020. With OPM expand by 40 bps to 5.1%, the operating profit was up by sharp 25% to Rs 52.96 crore. After accounting for lower other income (down 12% to Rs 1.76 crore), higher interest (up 28% to Rs 5.46 crore) and higher depreciation (up 29% to Rs 24.30 crore), the PBT before EO was up by 17% to Rs 24.96 crore. With taxation stand higher by 16% to Rs 6.56 crore, the PAT was up by 17% to Rs 18.40 crore. The share of loss from associate was down by 18% to Rs 0.14 crore and the minority interest was a share of profit of Rs 0.01 crore (as swing of Rs 0.06 crore) and thus the net profit (after MI) was up by 17% to Rs 18.25 crore.
- Upside in Operating income is attributable to higher SCM revenue as revenue of Enterprise Mobility Services (EMS) continue to be impacted by pandemic effect. While the revenue of supply chain management (SCM) business was up by 24% to Rs 1009.84 crore (or 96% of sales) with recovery in key user industries. However with major part of the ITTS workforce still working from home, the segment revenue of EMS was down by 59% to Rs 36.91 crore (or 4% of sales).
- Growth in SCM was largely due to sustained efforts of the company to ramp up operations by expanding industry diversification and new customer additions as well as significant recovery in operations despite ongoing pandemic, driven by growth across all supply chain end-markets including Farm, E-commerce, Consumer and Pharma verticals. While Mahindra segment of SCM revenue was up by 20% to Rs 508.4 crore, the non Mahindra portion of SCM business registered a revenue growth of 28% to Rs 501.5 crore driven by 32% growth in non-auto (up 32% to Rs 412.4 crore) and 10% growth in auto (up 10% to Rs 89.1 crore).
- EBIT was up by 6% to Rs 81.67 crore driven largely by 17% growth in EBIT of SCM business to Rs 80.47 crore. The segment revenue of EMS was down by 86% to Rs 1.20 crore.
Nine month performance
Consolidated sales was down by 29% to Rs 2289.72 crore. Lower sales together with 70 bps decline in OPM to 3.8% saw the operating profit down by 27% to Rs 88.06 crore. The PBT was down by 66% to Rs 22.82 crore after accounting for higher OI, higher interest and higher depreciation. With taxation stand lower by 73% to Rs 6.05 crore, the fall in PAT was restricted at 63% to Rs 16.77 crore. Eventually the net profit after MI was down by 62% to Rs 17.42 crore.
Segment profit of SCM was down by 14% to Rs 167.64 with its revenue down by 7% to Rs 2206.33 crore and 70 bps contraction in segment margin to 7.6%. However the EMS segment reported a profit of Rs 1.14 crore, a fall of 96% as its segment revenue down by sharp 71% to Rs 83.39 crore and segment margin crash by 790 bps to 1.4%.
Management comment
Commenting on the performance, Rampraveen Swaminathan, Managing Director and CEO of Mahindra Logistics, said, "We continue to see improving performance, driven by market recovery and execution of our strategy of providing customized, integrated solutions to our customers. In Q3, FY20-21 we delivered our highest-ever quarterly revenue, with significant contribution from E-commerce, Automotive and Freight Forwarding businesses. Strong momentum in Supply Chain has offset the continuing softness in the Enterprise Mobility segment, which remains impacted by the Covid-19 pandemic. We continue to expand and grow our service lines. During the quarter, we launched our Last mile delivery service, ‘Edel' which uses 100% electric powered vehicles. The service has been launched in 6 cites; to be expanded to 14 cities in coming 12 months. The business environment is improving and evolving at the same time. We look forward to stronger revival in economic environment and with it, the improving demand across end-markets will create more opportunities for growth."
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