Ladies and gentlemen, good day, and welcome to the Mahindra Logistics Limited Q2 and H1 FY23 earnings conference call. We have with us from the management, Mr. Rampraveen Swaminathan, Managing Director and CEO, Mr. Yogesh Patel, Chief Financial Officer, and Mr. Shogun Jain, Strategic Growth Advisors. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shogun Jain. Thank you, and over to you, sir. Good morning, everyone, and thank you for joining us on the Mahindra Logistics Limited Q2 FY23 earnings conference call. We have with us Mr. Rampraveen Swaminathan, MD and CEO, and Mr. Yogesh Patel, CFO of the company. I hope everyone has 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 opening remarks from management, followed by an open forum for Q&A. Before we begin, I'd like to point out that some of the statements made during today's call may be forward-looking in nature, and a disclaimer to that effect has been included in the earnings presentation that was shared with you earlier. I now invite Rampraveen Swaminathan, MD and CEO of Mahindra Logistics Limited, to make preliminary remarks. Thank you, Shogun, and good morning, everyone. I hope you and your loved ones are doing well and safe. I trust you all have had a chance to view our presentation and financial results, which is available in the stock exchange and our company's website. Pursuant to queries in past earnings calls, we have expanded the information provided around our three business segments, the 3PL business, network services and mobility, as well as details around MLL standalone and subsidiary company performance. Before I share any specific commentary on our operations, order intake and key corporate developments in the quarter, I'll just share a quick update on the external environment and trends in our end markets and businesses. We'll then discuss our financial performance in Q2 and H1 of FY 2023 and our focus areas for the remainder of the year. Let me just quickly begin with the external environment in our end markets. Leading economic indicators such as transportation, warehousing, and inventory ideally indicate potential performance of the overall economy. Q2 of FY 2023 marked a cool off in key commodity prices, including those of base metals and crude oil, as against the Q1 and FY 2023 period, which reached elevation in commodity prices. To curb prevailing inflation, the RBI has adopted a path of aggressive policy tightening. In addition, demand situation has broadly been stable compared to previous quarter, with rural demand remaining muted due to inflation's impact on disposable income. Input costs, especially those connected to the price of crude oil and palm oil, have stabilized after a period of increase. Due to a stronger monsoon, the growing rural demand a bit is being viewed with optimism. We entered Q2 of FY 23 with an optimistic outlook on demand, with the advent of the festive season and some sector-level sales. Demand has remained muted across many categories, especially e-commerce. While the sector has seen higher value growth gaining momentum in terms of demand, underlying volume growth has been lower than anticipated or forecasted by our enterprise customers. The operating environment remained challenging in Q2 FY 23 for multiple factors. During the quarter, as auto demand went up, we did witness significant shortages in supply of car carriers in some parts of the country, which resulted in a tightening of purchase price and an inflationary trend there. Vehicle and driver shortages were also there in some other segments. During the quarter, we saw increase in costs related to our frontline workforce and outsourced manpower, which specifically impacted our 3PL contract logistics business. International cross-border movement continued to see downward pricing corrections, especially for ocean cargo on the Asian and European lanes. These factors have an impact on revenue and margin of our forwarding business. A key announcement or policy shift during the quarter was the announcement of the National Logistics Policy. The National Logistics Policy aims to promote seamless goods movement, but also increasing the competitiveness of Indian industries, through a better logistics infrastructure. While Gati Shakti is focused on the creation of physical infrastructure, the NLP will concentrate on logistics across shipping, storage, inventory, and investments in digital systems and processes. The NLP is all-encompassing, from a strategic view across the problems of high cost and low efficiency, and by focusing on building a broad, interdisciplinary, cross-sector and multi-jurisdictional framework, for improving the logistics ecosystem. The policy's stated objective are to increase the competitiveness of Indian manufacturing exports and export and accelerate the nation's economic growth by improving logistics infrastructure and reducing the overall cost of logistics. The goal is to build a world-class logistics, which is on par with, many other countries in the world. The NLP thus will aim to cut logistics spending from approximately 14%-16% of GDP today, gradually towards a worldwide average of around 8%, of GDP by 2030. In line with this, the value of the Indian logistics market is expected to reach rise significantly from its current value during the next two years. The new NLP initiative holds exciting prospects for providing new open services and infrastructure, especially in the last mile, and we are looking forward to be part of the same. Let me now move on and talk a little bit about our end markets and of course begin with the automotive industry. Since last year, the auto industry has been seeing an uptick in demand, with most categories showing encouraging traction. Since demand drivers are still functioning and channel pull was observed prior to the festival season, the longer-term outlook continues to remain optimistic. As chip shortages reduce, the ability to fulfill demand has increased across the board, and I think across broadly inventory has increased, leading up to the festive season. As a result of rising costs for raw materials, of course, many OEMs have raised their prices. Also there is a significant addition of new models which are creating greater pattern of demand across right across the industry both in terms of SUVs and other passenger vehicles and commercial vehicles. Demand in entry-level two-wheelers and three-wheels continue remaining weak, which has been offset by strong urban demand for SUVs. Commercial vehicle retail fell due to seasonality, but we expect that to be revived, especially given the high infrastructure spending and revival in freight movement. I think regional movements actually show a very positive trend in terms of broad freight carriage. The festive season and lower supply chain issues due to chips has resulted in broader availability and movement of products, as OEMs increase their volumes to fulfill demand. The consumer durable industry, after a robust summer, the consumer electronics industry traditionally experiences some slowing of activity in this quarter due to seasonal factors, as well as demand moderation because of higher prices and the subsequent reallocation spending towards other forms of recreation. Margin pressure has also been witnessed in the industry as a result of cost-related headwinds and increased competitive intensity. Our leading brands and distribution channels are still hopeful that festive season will see a strong return to healthy demand. Sales of durables on Amazon's Great Indian Festival and Flipkart's Big Billion Days has seen an uptick. However, demand for entry-level products has remained weak as inflation has had an impact. The demand for lighting products has not been significantly impacted, and the industry continues to see, you know, robust offtake. The broad softness has persisted in the last three months, and we estimate this to continue. Moving on to the e-commerce industry. The e-commerce industry growth has been fueled by multiple factors, including better logistics, higher level of awareness in greater technology-driven platforms, increased online shopping offers and a broader level of digital adoption post-COVID. In contrast, the modern Indian logistics sector comprises domestic and international elements with respect to service supply chains and products. During the last few years, there has been a dramatic rise in online adoption, and this trend is predicted to continue. Companies that specialize in providing logistics services are directly impacted by the expansion of the industry. You know, many of the e-commerce companies are turning towards increased outsourcing as a way to rapidly expand network and accelerate order fulfillment. While our broad long-term macros are positive, demand has been subdued in you know during the festive peaks earlier in the quarter, and volume has only shown moderate growth with continuing pricing pressures. The significant expansions in the past few years, right, have added a lot of network capacity, and now the emphasis has shifted more towards consolidation, especially among marketplaces. Moving on to mobility. The enterprise mobility segment is showing a spike in demand due to increased work from office policy, and therefore we have seen a 20%-30% uptick in trip levels. However, work from home remains a norm for night shift operations, which are a significant use case for enterprise transportation, and that has impacted the scale and speed of the recovery. We remain optimistic. We remain committed to, you know, expanding in the segment through a focus on service quality, safety, and optimizing our journey towards electrification. The frequency of business travelers and personal travel in India has increased dramatically in the recent past, as we return to a post-COVID environment or post-COVID level of activity there. Overall, we have seen this slow to a modest growth in the enterprise part of our mobility business and a 40%-45% growth in airport transportation delivery services, provided by Meru. Right? If I sum this all up, I think across the quarter, we are in the midst of a strong auto recovery. Right? The farm environment is stable, and demand patterns across other markets are varying, with softening signs showing more muted. The operating environment on the supply and cost side has been impacted by inflationary trends, in parts of the transportation sector, and rising frontline and operating costs. As you can see, the 3PL and network services businesses continue to see growth in volume in the first half of the year, and the quarter just gone by. During the quarter, the 3PL business grew by 32% on a year-on-year basis, and for the first half it grew by 35%, driven by strong performance in auto and continued growth in our existing operating sites. We continue to see, you know, a volume growth in demand for our integrated solutions over the past few quarters. The farm sector continues to do well, positive atmosphere prevails as the current harvest approaches, and commodity prices remain stable, and we are optimistic about, you know, about growing performance there. Within the supply chain businesses, or the 3PL business specifically, the M&M business grew by 47%, with the best drivers especially in the auto side of the business. The non-M&M SCM business grew by 12%, driven by continued growth in commerce, consumer, and other markets. In the second quarter, compared to last year, last year was an exceptionally strong second quarter, driven by a recovery from the second wave of the pandemic. This year it's been more muted, right? Therefore, if you look at H1 growth year-on-year, the non-M&M businesses for the first half of the year grew by approximately 2%-20%. The share of solutions and warehousing grew 3% year-on-year. Sequentially compared to Q1 of FY 2023, we saw growth in 3PL volumes as well as growth in our network services businesses. Freight forwarding, last mile delivery, and B2B Express grew by 18% on consolidated revenues in the quarter. The freight forwarding business growth has slowed down because of pricing correction, and underlying volume growth remains robust and positive. Before I talk about consolidated financial performance, I'd like to spend a few minutes to also talk about recent corporate developments and as well as the performance of our subsidiaries. Let me just begin with the acquisition of the B2B express business from Rivigo. We recently entered into a business transfer agreement with Rivigo Services Private Limited and its promoters as of September 26, 2022, to acquire the B2B Express business of Rivigo, including all rights, titles, beneficial ownership, and interest thereof on a slump sale basis. The scope of the transaction also includes the complete technology stacks and the IP usage of the Rivigo brand. Rivigo, founded in 2014, pioneered the relay trucking model that relies heavily on strong technology and technological capabilities. The acquisition will strengthen our company's B2B Express business, you know, by leveraging and utilizing Rivigo's large network of 200+ processing centers and branches covering an area of more than 1.5 million sq ft, and more importantly, actively leveraging its strong technology capabilities. We believe that there are strong synergies across network, team, and customer service. Rivigo's operations network covers more than 19,000 zip codes across India, and it provides a significant opportunity for us to collectively grow the business. Over the last few years, you know, the Rivigo PTL truckload business has had challenges, right? Those especially got accelerated during the COVID period. However, despite the fluctuating revenue levels, we believe the quality of its services remain very strong, and the underlying network and technology architecture, you know, is top quartile. The revenues earned by Rivigo Express business in FY 2022 were INR 371 crores. The Express business EBITDA is currently negative, largely driven by the operating cost structure. You know, we have well-defined plans to drive synergy and combination of the businesses, and the focus around cost optimization in several levers. We are confident the company will begin to generate positive EBITDA in next two quarters, and of course we will share progress of that along the way. During the quarter, we also incorporated wholly owned subsidiaries. V-Link Freight Services Private Limited in Mumbai was established in September. The company has an authorized share capital of INR 5 crores and INR 1 crore in paid-up capital. VFSPL will engage in cross-border logistics, supply chain management, freight forwarding, and air charter businesses, right, for our customers in India and outside. Let me also quickly talk about some of the other important subsidiaries. Mainly the mobility business of Meru, as you all know, has been focused on B2C and airport movement across five major cities in India. While the segment was impacted by COVID and over the last few years by varying demand and supply patterns, since the acquisition, the operating rigor and the focus on cost control has started showing results. We can see levels of synergy at an operating level between the Meru and Allied businesses. Consequent to that, in the first half of the year, revenue was INR 44.6 crores as compared to INR 23.9 crores in H1 FY 2022, a significant growth level. Profit after taxes, our losses at a PAT level have narrowed down to INR 4.2 crores in H1 FY 2023, compared to a loss of INR 10.8 crores in the first half of FY 2022. Right. Significant reduction in in our losses as we drive those synergies and cost optimizations. The third, which is the last mile delivery business which we invested earlier this year, has been scaling up its operations as well. Revenue for H1 FY 2023 was INR 62.4 crores as compared to INR 52 crores in H1 of FY 2022. We continue to make investments or support investments in that business to expand the offerings around micro fulfillment and B2C and also invest in expanding the network and the technology infrastructure of the company. Right. As a result of those investments, the company continues to have an impact of that. PAT losses for H1 FY 2023 were up marginally from INR 1.9 crores in H1 FY 2022 to a loss of INR 2.8 crores in H1 FY 2023. 2x2 Logistics, the asset-light car business has obviously been seeing disruptions for some time now, right. Over the last year, due to retrofitting and rebuild reasons, we have had a substantial amount of fleet off road. We have completed retrofitting for several parts of the fleet and operations have resumed. At the end of the quarter, more than two-thirds of the fleet had been redeployed in operations. We continue to make an investment to complete the retrofitment and redeployment of the assets. Overall, the car carrier industry is seeing a rather positive outlook in terms of demand, and we believe on completion of the rebuild of retrofitment, the business will be well positioned to show a strong recovery in revenue and in mix. For the quarter gone by, the business has made a loss of INR 1.1 crore in Q2 FY 2023, which is marginally better than a loss of INR 1.2 crore in Q2 FY 2022. Let me now share, you know, consolidated financial performance for the quarter. Revenue for Q2 FY 2023 increased by 28% on a year-on-year basis to INR 1,326 crore. Sequentially compared to the first quarter of FY 2023, revenue increased by 11%. Revenue from supply chain management, including our 3PL and network services businesses, contributed 95% of overall revenue, and the mobility businesses contributed to 5% of overall revenue. Gross margin at a fully consolidated basis stood at 9.7% in Q2 FY 2023 compared to 9.8% in Q2 FY 2022. While gross margin was impacted favorably by volumes and underlying cost movements, it was impacted unfavorably due to 2x2 operations, so a drop in margins of the forwarding business, and an increased shift toward in terms of product mix towards full truckload transportation in our 3PL business. EBITDA for the quarter stood at INR 70.9 crores, up from INR 49.2 crores in Q2 of FY 2022, and PBT on a fully consolidated basis was up 118% from INR 7.7 crores in the prior year's Q2 to INR 16.7 crores in Q2 of FY 2023. PAT was up by 145% to 11.3 crores in the quarter. These are on a consolidated basis. Prior to consolidation of Maersk and the share of the third, PAT grew by 42% year-on-year from 9.3 crores to 14 crores. The proportion of revenue from the Mahindra Group comprised 53% in Q2 FY 2023. Let me just also share a few more details around the segment-level performance. Revenue from supply chain, it increased from INR 978 crores to INR 1,263 crores up by 29%. The mobility segment grew by 15% to a quarterly revenue level of INR 62.8 crores. It seems that we have seen an uptick in the growth across our 3PL business and continued growth in our network services businesses. Our revenue from the Mahindra Group supply chain businesses grew from INR 484 crores to INR 708 crore in Q2 FY 2023. Our non-M&M SCM businesses, which include the 3PL and network services businesses, grew from around INR 495 croress in Q2 FY 2022 to INR 555 crores in Q2 FY 2023. Our warehousing and value-added businesses for the non-M&M business have grown from INR 201 crores to around INR 223 crores, registering a growth of 11%. Share of warehousing and value-added services in non-M&M businesses has reached 40.2%. As we move forward, we remain committed to our long-term focus on growth, consistently laid out our vision for the business, which is a combination of strengthening, expanding our core 3PL business, diversifying in, you know, service lines around freight forwarding, B2B express and last mile, and remaining focused on building a diversified market mix across automakers, e-commerce, consumer durables, pharma and other sectors. We also remain focused on enhancing capital efficiency, right, with a focus on driving down operating costs and increasing the productivity of our business. As we keep investing in some of our newer businesses, right, we are seeing impact of that from a margin perspective. But those businesses, we remain confident, will turn around in the coming quarters, as we see increased scale and margin expansion. Those should, you know, accelerate the earnings of the company. In the short term, we are anticipating increased demand from our existing accounts despite softer demand, like, and growth in our global forwarding industry, right, and we remain focused on, you know, cost reductions and continuing to invest in technology to drive differentiation for our customers, right, and value for our customers. With this, I will open the floor for question and answers. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is on the line of Mukesh Saraf from Spark Capital. Please go ahead. Yes, sir. Good morning, and thank you for the opportunity. First question is on the express business within your network services. We see that Year-over-Year, obviously, the gross margins have declined significantly. It was 0.8% positive last year same time, and now it's negative, while revenue growth is about 18%. Could you give some kind of trends on what I mean, what has led to the margins decline? Because peers, when in your peers that we see the numbers, the B2B express business, they're all at mid around the mid-teens margins. While your scale is still lower, could you give some kind of an update there? Also, in relation to this, you know, in terms of the fleet, in terms of the sorting centers, do we have dedicated fleet separately for this business and sorting centers as well? Or we're able to kind of utilize the existing fleet and sorting centers, you know, for this business? Yeah, sure. Mukesh, first, hi. Yes, I think the express business, I mean, from an operating model perspective, Yeah. We obviously run a collection of hubs serving around 8,000 pin codes directly, and obviously a set of extended pin codes across the country. From an M&O perspective right now, those hubs are serviced through scheduled line hauls, right. Mm-hmm. which operate between them. These are vehicles dedicated to that business. Right? We don't own the vehicles. We obviously- Sure. you know, source them. But these are. This is a network which operates on a time-defined basis, and therefore is dedicated to that end of the business. Mm-hmm. Now, what has changed, obviously our margins year-on-year, as you have seen. We already pointed out right now already we are in the process of expanding the network, right, and you know, scaling that up, right? Therefore, through the quarter, we have obviously added new locations, new geographies, right, to serve them. As you scale up. Mm-hmm. We're investing in the network ahead of the demand because customers come up after you have an operating offering. I think it is therefore one. Sure. Because most of the express businesses through their scale-up period, right, they obviously do have a reinvestment cycle, right? Sure. At the same time, I think it's pertinent to note that if you look at the express business at quarterly level, while we have seen a swing in terms of margins. If you compare H1 versus H2, right, we've actually seen you would actually see the margins have improved. Right? Sure. That's just an additional data point. Sure. Of course, as we complete the Rivigo acquisition, we will drive the integration of our existing express business and that business together. As you know, that's been strategically driven by the drive to build scale, right, and the path of strong operating systems and expanding network and really create technology, right? Therefore, I think the combination of these businesses will obviously, I think, allow us to change the slope of not only the expansion of the network, but also the movement of margins. We do obviously expect that in the medium term, margins will, you know, be similar to comps, right, from a margin perspective. Okay. Just in continuation, I mean, we are at INR 200 crores annual kind of run rate here for this express business. Rivigo is about INR 370 crores business that we have acquired. Are we looking at, say, INR 600 crores kind of a number on a annual number sometime next year? Mukesh, we are actually at around last twelve months, we were at INR 170 crores-INR 180 crores revenue. Yeah. This year is actually INR 97 crores. Yeah. Annually INR 200 crores is what I was looking at. Yeah. Roughly around INR 200 crore. When we deal with M&M as the last year numbers, 180 + 370, adding up to INR 550 crore. Yeah, yeah. Right? Number for the last financial year. Right. are looking at, you know, fairly strong growth there. But the immediate and the short-term focus is to actually drive very strong service quality, ensure that we protect yield, right. Sure. We are minimizing costs. Right? Because I think if you look at this, you know, this is, I mean, if you get the integration wrong, you can actually lose customers in this industry as well. Just my second question again on the network services. We've also kind of highlighted the last mile number there. Also just wondering, this last mile is a dedicated service that we provide aside from the last mile we might be doing as a part of our SCM or our integrated service. This is just a dedicated last mile service that we provide. Yeah. This is just this part of the business, the last mile gets sold as a service, right? Right. This is not anything which we do at an integrated solution level that normally will get rolled up under the 3PL part of the business. Right. This delivery stations, delivery associates, electric, you know, EV cargo based, you know, delivery services. Right. Right. Right. The network which is around across over 120 cities in our country, right? Right. For services. This also, if I may add, excludes revenues of the JV, right? Okay. Whizzard revenues are not consolidated. Combining, as you would see, Whizzard was around INR 52 crores in the first half of the year. If you combine both of those, the total last mile delivery business. The total magnitude of that would be around INR 160 crores on a run-rate basis, right? Okay. Growing at roughly that 20-25% level. Our own last mile delivery business actually grew 55% last quarter. Okay. As we penetrated some newer segments like groceries and so on. Got that. My last one is, I mean, the gross margins for various segments. Could you kind of give an indicator on the gross margins between, say, Mahindra and non-Mahindra and, say, transportation warehousing as well? It will just be helpful in understanding how the mix changes because we're seeing a strong growth in automobile and hence Mahindra is growing very well. I think transportation also is linked to that. Some sense there will help. Sure. I'd say I think as we mentioned before in prior earnings calls as well, this case Mm-hmm. Mm-hmm. We don't differentiate from a Mahindra versus non-Mahindra account. The margin profiles are driven more by the kind of service one distributes, right? Right. Right. The Mahindra business is largely full truckload transportation, right? Yeah. Yeah. Also network, it's right, with the cross docks and Sure Multiple levels of, you know, of postponement in the supply chain. Right? As opposed to non-M&M businesses which of course actually have a larger share of warehousing solutions of around 40% of the business, right? Sure. It is. It's a bit unfair to actually view them from a comparative perspective. Mm-hmm. What I can say, as we have said earlier on, is that our transportation businesses generally have a gross margin around the high single-digit level%, right? Right. Our warehousing solutions businesses generally have something in the mid-teens, right? Sure. Sure. Therefore that is roughly what carries the weightage of the margins. Sure. Sure. A couple of things I do want to add here, which I think will be relevant is, one, obviously, you know, we've seen, as I mentioned in my opening comments, a fairly significant inflationary impact from a car carrier perspective, right? Our car carrier shortages have been significant. That has obviously had a trailing impact on margins in the second quarter, right? Right. will probably flow through a little bit in the third quarter, but we expect that to get rebalanced as our partners add more capacity in the coming months, right? Right. Right, so that's one thing. Of course, you know, we do with the Mahindra business actually operate through a fair amount of, you know, through a combination of management fees or service fees. Mm-hmm, mm-hmm Plus, a fair share of savings. We try to build- Of course. a level of profitability in the network. That's the level of savings in the second quarter, had been impacted. That's something again which we believe will catch up for the rest of the year. Right. Got that. Thanks for this, Rampraveen. I'll get back in the queue. Thank you. Thank you. The next question is from the line of Damodaran from Equirus Capital. Please go ahead. Yeah. Thanks for the opportunity. I hope I'm audible. Absolutely. Thank you. Yes, you are audible. Firstly, thanks for the better disclosures that you have come out with this time. A few questions around that. I mean, firstly, between the network services business and the 3PL business, what is the customer overlap between all the businesses, 3PL, freight forwarding, express and last mile? And a related question to that is, what is the internal management structure to sort of ensure that there is sufficient management bandwidth that can be given to all these different businesses? Given that you have, you know, dedicated competitors in each segment and there'll be different metrics, and you are a challenger. Just wanted to hear your thoughts on that. It's a great question, Damodaran, and thank you for that. Let me, I need to take them in some sequence. If I don't follow your order, you know, please bear with that. I think just from a customer overlap perspective and even a customer count perspective, there's probably a 25%-30% overlap of our customers, right? Obviously we do cross-sell outside to our clients across the board, right? What I think differentiates these businesses is that we are customers by these services and what drives value creation in the businesses. In the network services businesses, a lot of times the customers just buy the plain, the basic service itself. It's not a multi-service. Our integrated solutions. Normally, a customer wants to move load across countries, right? Wants to actually move packages across geographies by surface, right? Or wants to do last mile delivery in a specific part of the city itself, even a specific state. They tend to buy services on a service level basis and don't buy a bouquet of integrated offerings, right. The same customer therefore buys it very differently at times, and that's why we actually keep them the way they are. The second part of it is the way we create value in the TPL business through integration and solution design and domain-level capability, right? In the network services business is really around having the infrastructure and driving utilization and service quality, right? Therefore, these businesses are kept differently and measured differently because of that. I think the other question was around management structure, and obviously, the TPL, each of these businesses essentially has an independent or a clear P&L owner, right? Each of those P&L owners essentially, most of our P&L owners are part of our company leadership team, right? We have individual P&Ls which we have kind of end-to-end accountability to drive. We have, obviously, programs inside the company which are enabled and driving synergy, both in terms of demand and supply, right. For example, maybe procurement essentially often it happens through a central group which supports all parts of the business, right. We do obviously work on customer account management across multiple service lines. Individual businesses actually have specific P&L managers or leaders, and they manage the operations, the demand generation operations, and service quality of the respective business. Sure. I hope that answered the question. Yeah, yeah. That's I think fairly elaborate. The other question that I had was your, I mean, disclosures on Rivigo. Can you just give some more color on the profitability metrics? I mean, what sort of EBITDA loss is it making right now and what's the plan to sort of turn it profitable? I mean, where will you generate the cost savings from, basically for Rivigo when you launch? Yeah. I think, you know, I think from the past perspective, obviously, you know, the group has always reported numbers on an integrated basis between FTL and PTL. Therefore, you know, the blended numbers are not fully reflective, Damodaran, of the carve out of the business. The way we have done the BTAs, we have specifically carved out sections of the business or parts of business which constitute what we would like to cover in the transaction. Therefore, the blended earnings are not very reflective, right? That said, obviously, today the business is probably at a -7%-8% EBITDA level, right, on a point of time basis. Now what's going to drive that value creation in the business, right, on the combined business? First of all, I think it's, as I think Mukesh asked earlier, the combined express business is around INR 550-INR 560 crore. Instead of operating two networks, we'll obviously synergize that network. Increasing higher volume throughput through a combined network is one thing which is actually going to drive you know obviously lower operating cost, right, at a network operating level. The second thing obviously is that route optimization and lane optimization across geographies and customer bands those are focus areas to drive asset utilization or trip utilization across vehicles. We expect that utilization of all the vehicles will improve, and that will drive down costs. The third thing, of course, is that you know we are looking obviously at higher purchasing leverage. At MLL, we acquire and buy significantly higher level of FTL transport capacity, and that synergy is something which will bring to bear, right, in the combined business, and that should give it significant. It should give it leverage. Lastly, the management or the operating structure model. I think, you know, just building on what I already commented to Mukesh, Damodaran, is that we operate on a shared services model. Individual businesses are responsible for demand generation, operation, service quality. We don't really have. The overheads are shared across multiple segments, right, on much lesser revenue base. That should allow us to optimize the overhead structures for the business. Combined to these three or four broad levers, Damodaran, is what, along with volume growth, right, as we combine go-to-markets, we expect to be able to get the combined business into a positive EBITDA zone in the coming quarters. Sure. Thanks for that. Just one last question from my side. We saw some working capital deterioration this time around. I mean, could you comment on the levels of sustainability of working capital and what's the reason for the deterioration? Damodaran, Yogesh will take that. Sure. Damodaran, our working capital days, as of end of September stood at 13 days, which is in fact, you know, a change of two days from what we were earlier when we started this financial year. The main reason, I mean, this is the period of time, usually, middle of the year, it kind of balloons up a bit given the customers usually, I mean, during the festival seasons, the payouts towards bonuses, et cetera, are higher. There is a little bit stretch on the days sales outstanding or the receivables per se. So that's the primary reason for this 2-day delta what you see in working capital deployed in the company, which by, you know, as we come towards end of Q3 and then, you know, Q4 is always an improving trend from that perspective. But usually this is kind of, I would say, a little bit of cyclicity and middle of the year phenomenon. Even if I look at September to September, it's deteriorated fairly. I mean, it's almost halved. Even these seasonal issues would have impacted last H1 results as well? No, Damodaran. I think if you're looking at an absolute value perspective, absolute value would have gone up because of the size of business which has gone up itself. What I was trying to do is, you know, trying to explain to you saying that, you know, one is the absolute working capital deployed because, you know, we are an asset-light company. From that perspective, our predominant deployment, I mean, in terms of investment in the business will be from a working capital perspective. As your business volume grows, your commensurate deployment of working capital would be, you know, higher. Yep. Yogesh, I'm just looking at the cash flow generated. I mean, that's like INR 30 crores for this half year versus INR 97 crores for the last half. I mean, H1 FY 2022. Right. I mean, there's a sharp jump in trade receivables around INR 35 crore. That's I mean, if you're saying that it's just seasonal, that impact should have been there in the last September, I mean, last September results as well, September FY 2022. That's where the question was coming from. Right, Damodaran. That last September, with last September's quantum of, you know, business which we were doing, this September, I'm saying from if you convert that back to days, right? I mean, I did come back in the beginning itself to say that how does this work, you know, with receivables, and that's the real reason there. I you know, confirm to you that, yes, that has been the thing. The reason why this is you know, cyclicity, and be sure of that this would, you know, rationalize. I mean, this is the peak season, as well as, you know, festival season, both leads to this particular, delta. Sure. You're saying that, I mean, working capital you should not expect any sizable movement in terms of number of days or on an annual basis with that. This is just seasonal. That's correct. Okay. Sure. Thanks. Thanks, Yogesh. Thanks, Ram. Thank you. Anyone who wishes to ask a question at this time, they may please press star and one. We have the next question from the line of Pranjal Chatterjee from BCMPL. Please go ahead. Hi, Rampraveen. Hi, Yogesh. Good afternoon. Can you hear me? Hi, Pranay. Good afternoon. Hi. Hi. I just had one quick question on the same working capital cash generation. If I look at the free cash generation in H1 2023, it has been negative and largely because of working capital outflow, which Yogesh mentioned is because of elevated DSOs in the H1 of the year. Right? If I compare versus last year, it's correct that the DSOs when you include accrued sales is elevated, and then it sort of comes down as the year goes by. What I also see that your DPOs are forty. You were able to leverage your DPOs to a large extent, you know, in the last two, three halves, but that has sort of normalized right now. Any comment on whether any vendor efficiencies have changed in terms of contractual DPO numbers? Anything that has happened on that front? Number two, any comment on free cash generation going ahead? Like should we able to see a positive outflow, or due to the new businesses normalizing we should expect a negative flow for a few quarters? Pranay, you're right. From a number perspective itself, cash generating from operating activities so far it has been negative for close to INR 25 crores. Right. On that, the payables piece, I mean, I think what I mentioned probably from a, you know, two, three things happened from a macroeconomic factor itself around Diwali in terms of our operational metric itself, right? One is the whole inflationary effect which has gone through, which has kind of, you know, from a vendor ecosystem perspective, obviously there is a little bit more cash burn from their perspective as they operate. While there is no change in terms from our perspective, our, you know, again, you know, the seasonality. You know, during this time, even our vendors would expect us to, you know, clear this off, firstly. Second is our share of business towards warehousing and value-added services has a larger deployment of manpower and rental fees, which again is, you know, goes in ahead of the cycle from, you know, from manpower cost that get paid out every month, you know, from a calendarized perspective. These couple of things, but from again, as I mentioned in your question from Damodaran and as well, that if you were to look at our asset-light business, you know, which we is or are the terms what we engage with our customers and vendors both combined is structured towards a particular number of days of working capital which we steer our business with, and we should get back there. The reasons I think is common here, from the inflationary or availability aspect of supply, be it on the auto sector or car carrier side, which Ram mentioned earlier with the seasonality, you know, into the festival season where the payables also, you know, does get paid out from that perspective. These couple of things on the table side. Got it. Okay. My second and last question is more strategic in nature. Over the last couple of years, Mahindra Logistics as a business has shown an increased focus on the network services side of things, which obviously all of them are in investment phase and have limited scale. Right now we have the express business which is at about 0% GM. Your last mile is also at a 0% GM. JJC is going to get integrated, and your Meru Cabs is also scaling up at this point of time. My question is internally, when you discuss at a consolidated level, do you have a broad firstly a revenue target and a broad PBT target in mind? I understand, it's going to be very difficult to predict, bottom line profitability for the next, let's say, three, four quarters. At a management level, do you have targets in mind in terms of, look, this is what we would like to achieve, out of all entities once, you know, they sort of normalize? Especially in terms of cash generation, do you have any internal targets of, you know, turning cash profitable, you know, let's say next year or, you know, in two years' time? If you could just discuss these high-level management targets. I think, I mean, I wouldn't necessarily say the cash metrics we have seen in the first half are a continuing metric. You know, just go and look back in the recent past. I think as Yogesh has already said, we don't expect the working capital metrics, right, to fundamentally change through this year. There are a few parameters which happen, especially as demand patterns move across asset classes, right? Broadly, those should be in play. That said, I think that's a working capital factor. I think there is a broader portfolio element here of course, right? As you know, we have been adding more detail around for all your benefit. The core 3PL business has also grown quite significantly over the last three years, especially in non-M&M share, I mean, non-automotive share, as we have built strong positions in consumer and e-commerce, right? That business, from a margin level, is also, you know, at a pre-investment level in terms of margin, right? Clearly, the network services business is a very important focus for us. We are investing in it. There is a scale point at which these businesses, you know, have an inflection point in terms of earnings. If you actually look at our three network services businesses, the freight forwarding business has kind of pretty much already been there. It's at a 9%-10% gross margin level. It's steady across quarters, it is kind of been growing and now has achieved scale. That's kind of what our businesses should look like at scale in the network services piece. Clearly, the express business is an investment curve. The last mile delivery business also investment curves, both organically and inorganically. Scale is important in this business, Manish, so we do obviously focus on driving that scale up. You know, add it all up, I think we've always said that we believe that what is critical for us as a company, what we think makes us, you know, unique, is our focus on being a multi-service business and a multi-market business, right? In the last 2 years, when automotive was softer, our non-automotive businesses actually grew at a much faster pace. Today, as you have seen some impact or softness in some of our non-automotive markets, it's automotive which is driving growth, right? It is balanced across sectors which we have continued to invest in, which we think is very important. Similarly, balance across service lines is very important. While we focus on 3PL, sometimes 3PL will grow faster. At a mature level, as you get the right scale across these businesses, we think the combination of those businesses is what makes us create more value for our shareholders as well as for our customers, because we can provide integrated solutions. Now in terms of targets, I think each business actually has targets. Obviously, the 3PL business is a more mature business. It has separate cash and profitability targets compared to a network service business. The overall portfolio is headed towards a broader direction, which we have said before as well, that we can hope to become an INR 10,000 crore company. That's the aspiration. We put it out there fairly in the public world, right? We expect that, you know, secularly across segments, we should be able to, you know, to continue to grow profit, you know, to pre-COVID levels, right? I think our pre-COVID level margins have been around 2% at a PAT level, and we expect to be, and our aspirations are to be better than that as the portfolio matures over the next two-three years, right? Most of the network services businesses should actually look like the freight forwarding business, right? Right at a maturity and scale. You know, we don't give guidance, Manish, but that's the closest level of detail I could probably share with you. Thank you. Mr. Chatterjee, request you to join the queue for any follow-up as we have several participants waiting for their turn. Thank you. The next question is from the line of Sachin Trivedi from UTI AMC. Please go ahead. Hi, sir. Yeah, just from 1- 3-year perspective, again, not looking for a margin guidance per se, but the warehousing business or the supply chain business that we operate in, how should we think about, let's say if I don't want to go into specific margin number, but. What kind of potential that this business will have in terms of profitability? Just because we have scaled our non-M&M warehousing business substantially, but yet to see the results of that in the numbers. Just if you can help us understand that side of it, because that's our core of the business and if you can help us with that. Sure. I think, if you actually look at the business, I mean, we actually divide this, I think, into three parts. Because the margin when you see them is a consolidation of all three. The drivers of the margin are quite different. If you look at our core 3PL business, right, and to see the results, I think you will see that we are at a gross margin of around 11% in the second quarter, right? That business, you know, that actually means that, you know, if it was at 10%-11%, now it's probably in the high tens. You know, we expect to continue to focus on driving margin improvement at, you know, at the 30-50 basis points there at an annual level, right? Now we're not... That business, because of Ind AS 116, we have obviously invested a lot in expanding the warehousing network. There has been a flow-through impact because of the Ind AS 116 get accounted. Most of warehousing network actually services that business. Okay? If you look at the trade, the network services businesses, they are roughly now around 20% of our revenue. Those businesses at a segment level are around 5% gross margin because they are an investment curve, right? As I said earlier on, at peak, at scale, those businesses should also be at 10%+ in terms of gross margin with lower capital intensity, because we are not investing in the same level warehouses, etc., which we would do in the, you know, in the warehousing part of our business, right? Therefore, that business should be at that level, right? As you look at this, the going forward margin profile, I think the ramp ups in different segments are different, right? The 3PL business is a business which is more core to us. It's a more established business model, and there we expect to continue to drive improvement-based margin, you know, accretion. The network businesses are where we are building scale. The growth will also be faster there, right? There'll be two factors, revenue faster, and the higher revenue growth will also drive better margin performance, right? But that's kind of the way we drive our 2-3-year view on these businesses in such an Obviously, we break those two- to three-year views into more specific, you know, targets which are there for the individual businesses' short-term perspective. Sure. That's helpful. Thank you. I'll fall back into queue. Thank you. Thank you. The next question is from the line of Vikram Suryavanshi from PhillipCapital India Private Limited. Please go ahead. Yeah, good afternoon, sir. Sir, you talked about, I think, network services and growth and our focus of being a multi-service business. Just to try and to understand within that framework, getting outlook on particularly non-M&M 3PL side of a business in terms of our focus on client addition and traction with existing customers in terms of get slightly better growth outlook for that kind of a business. How do we are looking at there? Interesting. I think our growth outlook is. I think we as we said earlier on, I think the goal is to grow the non-Mahindra businesses, especially the 3PL part of it, by, you know, 15%-20% every year. To grow the overall non-Mahindra business, including network services by north of 25%. If you look at this quarter, obviously it's been a bit lower. But if you look at H1 this year, I think combined up to a 20% year-on-year growth, despite some of the slightly softer trends from the recent months around some of our markets. Why I say H1 is important because last year Q1 was COVID impacted and Q2 was COVID recovery. Therefore it has you know, quarter to quarter is not as accurate as H1 to H2. Right? That growth is something which we are focused on sustaining. During the quarter, we have continued to add clients. This time, because we added a little bit more detail around our segment performance, I did not cover acquisition of accounts in my opening comments. I can share with you that we have continued to expand. Of course, we continue to have you know, strong retention rates at a client you know, number level across our business. During the quarter, we have actually added more accounts. I think given the nature of the economy right now and the macros, I think obviously this quarter we saw more additions in consumer and manufacturing business, right, where we have added work with both the different manufacturing clients. But we've added, you know, some contracts in the commerce space. I think the space of that has come down, has been lower than the past, there. Overall, for the quarter, I think we had, you know, quarterly order intake on the non-Mahindra side, mostly 3PL of around INR 90 crore-INR 100 crore of new contracts on annual contract value basis. Right. That's kind of roughly the runway we were on in the quarter in terms of order intake. Okay, got it. Just to get the feedback, like, the customers when you talk to the new segments, because we are seeing good response from consumer e-commerce or manufacturing. Customer's ability to go to 3PL partners, is it becoming more and more aggressive or it is still a slow process and people are taking their own time to migrate? How is that response in terms of different verticals and to what kind of the basically speed which is it like as anticipated or still we need to do a lot of work to really bring them on the table? I just wanted to get that sense and how fast we can see that migration in India, the broader opportunity for 3PL players. The auto industry I think has always been a higher outsourcing industry in terms of 3PL strength. I think since GST so I think that definitely led it. I think e-commerce has also as it was with scaling up networks and volumes actually has obviously used a partner model quite aggressively right to drive growth. I think adoption in both those markets is very very good. I think consumer durables FMCG FMCD pharma right and other categories there I think historically obviously those markets have been served through C&FA models. Post GST I think there has been a growth in traction quite significantly right in that space. Right. It's a very distributed network so companies continue to move that. You know, very few companies are doing a lift and shift of an entire network, right. In fact, in the last 2 years with all the variabilities of COVID, I think that has actually placed a challenge on companies in terms of redesigning their supply chain network because there are new considerations there. But I think the trend is overall healthy. I mean, our own estimates are, you know, in India right now the 3PL is around 6% of the industry, our estimate. We think that, you know, given the work and the trend around formalization, given customers' desire towards more integrated solutions and recent policy shifts like NLP, we think, you know, 3PL will probably become around 10%, over the next 4-5 years. Got it. Thank you very much. I hope that answered your question. Yes, sir. That was helpful. Thank you. Thank you. Thank you. The next question is from the line of Alok Deora from Motilal Oswal. Please go ahead. Good afternoon, sir. Sir, my question was more towards Rivigo. Just wanted to understand, you had recently put up a press release on the delay in the closure of that, your transaction. By when can we expect that coming in? Also, some color on what's the how much losses are there in that business and by when we can see a turnaround there? Yeah. I think, look, I mean, the delay, you know, in terms of what we listed out was mostly on account of procedural delays and procedural factors. Obviously from a governance perspective, we listed them out, right, clearly. We have planned a certain schedule around it, but given there has also been a festive season and in terms of Diwali and other vacations are coming, there's just been procedural delays in that. You know, I think as we stand right now, we probably expect in the next, you know, within the next couple of weeks we will be able to close the transaction subject to all conditions being met from all parties and obvious terms being adequately met. Now, I think from a profitability perspective, I think I indicated earlier on that the numbers have always been blended, so we don't actually are not really reflective what we think. What we have estimated right now is that probably on a run rate level the business is probably at a negative 7%-8% EBITDA, right? And that's what we are hoping. I think I already talked about the four levers which we are focused on to drive and you know get to a positive EBITDA level combining both our Express business which exists today and the business which we buy from Rivigo Services Private Limited. Sure. Overall when we see Rivigo financials, it's at around, you know, 45%-50% loss. Express business you are saying it's around 7%-8%. No, I think that's not. I'm not sure that's actually what I'm saying. What I'm actually saying is that because this is the Rivigo Services Pvt. Ltd. operated on a certain blended model in terms of the revenue markets and cost structures. Right? What we have done is we are essentially buying parts of that business. The parts of the business which we are buying right now, right, are at that kind of EBITDA level. As we buy the business, right, obviously we have plans on trying to kind of turn that around and restructure it. I mean, yeah, I hope that was clearer. Actually, I was just trying to understand how much losses the Express business has out of the total, because I think they have two businesses. One is the FT and one is Express. I think it's hard for me to comment on how their reported numbers were. I think that's probably best for the Rivigo management to respond to. I kind of avoid and I just would not like to, you know, answer that. As I said, we are giving you clarity about what we are buying and that's really the mandate associated with that. Sure. Sir, we are gonna pay around INR 225 crore for that business. How do we see the debt moving? Because I think some bit of debt will also come up for this, right? Because the operating cash flow might not be entirely sufficient to pay for this. Yeah. I think at this point, obviously, the business will be funded through internal accruals and debt. There will be a component of debt clearly, which is there in the short-term, Alok, right? At the same time, I think exactly how the overall debt table will work out, we are in the second or third quarter of the year. And, you know, we have sustained strong growth this year, right? I think obviously we have to look at a forward view over the next 12-15 months in terms of working capital requirements, organic capital investment, and investments in Rivigo. And we'll do the consolidated view of that. Right now, we don't have a specific set of numbers to share, right? What I would say, Alok, is directly that there will be debt on the table. Right, Alok? Cool. Just last question. You know, we are having these new businesses which are coming, which are at losses or you know, at lower profitability. For the next year or next couple of years, do we see the margins staying at near about current levels or slightly lower than these numbers? Any ballpark range we can work with? Because you know, one is Yeah. I think what I would say is that I think every business is in a slightly different frequency. First, I think the 3PL business, I think we kind of shared the margins with you on that. We expect, you know, it's in a stable basis, and it will have organic kind of margin improvement focus. If you look within the network services businesses, there are actually three different businesses with three different stages. The freight forwarding business, Alok, is actually at that 10% in gross margin level, right? We are scaling that business up. The express business has obviously been where we are scaling it up now faster through the Rivigo acquisition of the business from Rivigo, right? The last mile delivery business is a business which is kind of breakeven. I think these businesses. They also have very different growth drivers to our portfolio. They compete with different businesses, right? We compete in last mile delivery businesses, in express with express companies. I won't call a specific number in terms of margin on the blended basis. I do believe that we will hold or improve at this stage our 3PL and freight forwarding margins. The other businesses obviously as we build scale, will have that multiplier effect from a margin perspective. Sure, sir. Thank you and all the best, sir. That's all from my end. Thank you. Thank you. The next question is from the line of Abhishek Ghosh from DSP. Please go ahead. Hi, Rampraveen. Thank you so much for the opportunity. A few questions for the SCM part of the business, non-M&M. What will be the average tenure for a typical contract? For the SCM part of the business, non-M&M, I think it's hard to tell you some bellwether numbers. I think that the warehousing integrated solutions contracts would probably be three years on average, plus on average, if I had to take an average representative number. I think the transportation contracts depends on how much network design we have on the FTL side and how integrated it is. Those contracts also range between, you know, up to around three years, in two to three years. If that is a standalone transportation contract. If it's integrated across the board, across transportation, warehousing, solutions, it will probably be around three years as an average. Okay. Why I ask this question, Ram, is because, you know, a lot of those contracts which were signed, you know, in that FY 19 levels or 2019 levels must be coming up for repricing now. How do you look at, you know, the margin profile of those contracts, what you were getting in 2019? Are you able to kind of get the same kind of margins, or has it improved, deteriorated because of the competitive scenario? My, you know, I wanted to kind of get some understanding around that. Good question. I think if you look at our past, at least from the warehousing and the solutions part, I think you'll see that business has grown significantly actually in the last three years. A substantial part of it is actually not coming from recontracting, Abhishek, right now. That said, I think, you know, the net numbers obviously show a net of any churn which might be there. Right now, I think on an apples to apples basis, we are able to by and large hold or even improve margins. Right. What I mean apples to apples is that if the customers do try and sometimes change the scope of the contract, they will change the number of plants covered, number of locations involved, right? Those kind of changes do happen. It's a very hard thing to perfectly predict. I would say that if I had to do an apple to apple comparison, we are definitely able to hold margins on renewals. Would it be fair to assume that you have productivity gains? Yes. -in these- Yes. There's a learning curve which are. Yes, that's why I said. Which you have been able to- Yeah. That's why I said we are able to hold and, you know, marginally expand margins. I mean, you know, some part of how that gets shared, you know, basis productivity benefits, how much we share and the outsource benefits to our clients, et cetera, is a very case to case kind of issue. Right? But by and large, I think directly we do, you know, we are focused on maintaining or expanding those margins. In fact, I would say the margin discipline is something which on the 3PL side of the business we are actively holding, especially in the current environment. Therefore, you know, we do not. If we don't meet margin hurdles, sometimes we probably not do contracts if we are not able to meet margin hurdles, whether they're renewals or new contracts. Okay. The other thing is you've spoken about this aspiration of this INR 10,000 crore of top line. Is it an aspirational margin cash flows ROEs as well, or is it just a top-line aspiration? No, I think at this stage, you know, we do obviously have aspirations. As you know, Abhishek, we don't have an aspiration top line without aspiration bottom line. But as a matter of policy, we don't essentially give guidance on that. Right? Okay. I think we've obviously shared the top-line aspiration. I think, you know, to help obviously share with everyone what, how, not just a number, but also a staircase to that aspiration, and the shape of the revenue, you know, in terms of, our vision of being not just a multi-service business and a multi-market business, which I think is very important to give long-term diversification. No, Ram. The reason I ask this question is if I just look at your current quarter's top line and broadly first half top line, and if I just compound with it by about 20%-25%, even without Rivigo, you'll be there at that, you know, revenue target. That is fairly achievable, and that is fairly visible when we kind of model it. If I look at your profits from the last peak cycle, what you had seen in FY 2019 of about INR 86 crores of PAT, the trajectory is still lot weaker. I was just trying to understand from that perspective, you know, because if I can just compound on its current level, you're there at that INR 10,000 crores of revenue. With Rivigo, I think that should be quite easy. How should we look at the on the PAT pieces? That was the whole. I think what we are, as you can see in our more detailed disclosure now, all our businesses are not exactly at the same level, right? Because we're investing in both. The growth will come with the investment. Right? If you go back to our prior peak number, at that time, we were almost completely growing at CPL and enterprise mobility business. There was no network service at that time. Right? And therefore, you know, today the CPL business is still in a pretty stable place, right? The network businesses, within them is a mix of businesses, some which are getting to the right level of margin, like freight forwarding is, and other businesses we're investing in, right? As an asset-light company, you know, most of our investments are actually on through the P&L, right? Because we're expanding networks and we're building networks, and we're putting capacity ahead of demand. Therefore, one has to, I think, you know, look at the business in terms of peak levels across the portfolio, right? Prior comparisons, I mean, are probably more relevant from the portfolio at that time versus the portfolio, right? I think two, three years ago, when we set INR 10,000 crores in aspiration, I think everybody was asking how we're gonna get to that revenue level. I think the appreciation was a part, is we have greater confidence today, given the expansion from the run rate we do over the next three, four years. I think, you know, we have similar aspirations from a margin perspective as well. We believe we are confident in our view that we can deliver that, as we build scale. Great, Ram. Thank you so much for this answer, and wish you all the best in this journey. Thank you so much. Sure. Thank you. Ladies and gentlemen, that would be our last question for today. I now hand the conference back to the management for the closing remarks. Thank you, and over to you. Thank you, everyone. I hope we have been able to answer all your questions satisfactorily. However, if you need any further clarifications or would want to know more about the company, please contact our team or SGA Investor Relations advisors. Thank you. Thank you once again for taking the time to join us for the call, and wish you and your family and your colleagues the very best. Thank you. Thank you very much. Ladies and gentlemen, on behalf of Mahindra Logistics Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.