Mahindra Logistics Limited (MLL), one of India’s major integrated logistics providers, recently released its financial results for the second quarter (Q2 FY26) ending September 30, 2025. While the company achieved robust overall revenue growth, its profitability continues to be weighed down by specific accounting hurdles and ongoing losses in some of its businesses.
Here is a breakdown of MLL’s Q2 performance, the factors behind its net loss, and the significance of a small but critical operational turnaround.
The Bottom Line: Deeper Losses and Tax Headaches
- The consolidated Profit Before Tax (PBT) loss was Rs 5.4 crore. This was 8% higher (worse) than the PBT loss reported in the same quarter last year.
- The overall Net Loss (Profit After Tax, or PAT) stood at Rs 10.4 crore for Q2 FY26.
- The revenue for Q2FY26 stood at Rs. 1,685 crores as compared to Rs. 1,521 crores in Q2FY25.
Two Key Factors Driving the Net Loss:
The Tax Mismatch: A significant contributing factor to the consolidated net loss was a mandatory tax expense of Rs 3 crore. In large, diversified companies like MLL, which own several subsidiaries (including the loss-making Express unit), tax is calculated on the profitable entities. These tax liabilities cannot always be fully offset by the losses generated by the struggling business segments, thus creating a tax expense even when the consolidated result is a loss. For instance, the MLL Standalone entity (which handles the core logistics business) reported a PAT of Rs 3.8 crore in Q2 FY26, while the Express entity reported a PAT loss of Rs -20 crore in the same period
The Accounting Provision: The company’s core supply chain management (SCM) segment took a hit from a specific accounting adjustment: a Provision for Doubtful Debt (PDD) of Rs 4.8 crore. This provision was necessary due to a customer bankruptcy. This charge directly impacted the margins of the supply chain segment and, subsequently, the company’s overall profitability
The Operational Breakthrough: Express Segment Turns a Corner
While the Express business (which deals with fast, scheduled freight) remained the largest drag on profitability, posting a PAT loss of INR 20.0 crore, it achieved a crucial operational milestone:
Positive Gross Margin: The Express business delivered a positive gross margin (GM) for the first time since its acquisition. The gross margin, which measures revenue minus the direct cost of operations, was a small but symbolic Rs 0.2 crore.
Drivers of Improvement: Management attributed this turnaround to disciplined pricing strategy, referred to as “yield discipline,” and a 7.2% year-over-year increase in delivered volumes.
Leadership Change and Strategic Realignment
MLL has been actively focused on strategic transformation to overcome persistent financial challenges and integrate recent acquisitions, such as Rivigo.
Transformation Focus: Hemant Sikka, the Managing Director and CEO, who took over the new position in May this year, stated that the past few months have been a “period of transformation and strategic realignment”.
Core Strategy: MLL has been working on the recalibration of its operating model across various business units and strengthening the balance sheet through measures like a rights issue.
• Efficiency Gains: Management reported “tangible improvements,” including a 20%+ reduction in “whitespace” (unused capacity or inefficiency) and focused cost optimization on overheads.
• Future Outlook: The company’s goal moving into the second half of the fiscal year is to ensure stronger execution through operational improvement, optimizing its network, and focusing on customer retention to deliver sustainable value