Please note that this conference is being recorded. I now hand the conference over to Mr. Shogun Jain from SGA. Thank you, and over to you, sir. Thanks, Theo. Good afternoon, everyone, and thank you for joining us on the Mahindra Logistics Limited Q3 and 9M FY 2024 earnings conference call. We have with us Mr. Rampraveen Swaminathan, MD and CEO, Mr. Saurabh Taneja, CFO, and senior management team of the company. I hope everyone has had a chance to view our financial results and investor presentation 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. A disclaimer to that effect was included in the earnings presentation. I'd now like to invite Ram, the MD and CEO, to make some preliminary remarks. Thank you, Shogun. Good afternoon, everyone. I trust you all have had a chance to look at our presentation and the financial results, which are available on the stock exchange and our company's website. As is customary, I shall open with a quick update on our strategy, the external environment, and market performance, some operational highlights across our different businesses and some key corporate actions. I'll finally conclude by discussing our financial performance for the quarter, which went by, and for the nine months of FY 2024 and our focus areas for the remainder of the year. The Indian logistics sector remains a key catalyst for the overall growth story in the country, as our country aspires to meet a $5 trillion GDP. The quality of our logistics infrastructure and the maturity of logistics services are a key constituent of both ease of business and by extension of it for Make in India. In the past year, we have seen continued development and implementation of infrastructure and policy initiatives under the umbrella of Sagarmala, Gati Shakti, the Dedicated Freight Corridors, and now the National Logistics Policy. Three key drivers will continue to drive acceleration in the policy area, to get towards more multimodal transportation systems, rapid growth in road surface infrastructure with a higher emphasis on decarbonization and an increase in public digital assets such as ONDC and ULIP. These steps continue to drive enhanced acceleration and position the 3PL logistics industry in a particularly favorable manner, as improvements in infrastructure enable our customers to outsource at higher levels. In this backdrop, our company's strategic focus has been to enable enterprise customers to make their supply chains more productive by leveraging our integrations at a process and technology layer. To this end, we have been focused on developing solutions capability, adding new service lines such as freight forwarding and last mile delivery and B2B Express, which span the customer's value chain and leverage technology to drive productivity. This has also brought a higher focus on building a nationwide network in warehousing infrastructure, deepening our coverage across the pin codes of our country and developing integrated technology stacks, which we have now been engaged at over the last 3-4 years through our organic and inorganic programs. Today, more than 25% of our contract logistics revenues come from solutions, and 20% comes from new services such as freight forwarding, express, and last mile delivery. Moving on to our end markets, and I'll quickly cover the shape of our markets and some key highlights from the same with respect to our business, and let me begin with the automotive sector. India's automotive sector, as you all know, has been seeing a purple patch for the last couple of years. The market is undergoing a technological change, which will pave the way for the sector's next growth phase. The fundamental pillars of this change are innovation in reverse technology and the increasing emergence of electric vehicles. In addition to passenger vehicles, where EV adoption has been well discussed, EV is also increasingly a significant part of the three-wheeler cargo market and have established a strong platform there. Beyond this, these trends in the short term will continue to be focused on ICE technologies, especially in the cargo and freight segment. Last quarter was marked by the festive season, and we saw an impact of the same in the first half of the quarter with strong whole sales, driving increased demand for services and solutions for logistics as well. Commercial vehicle demand remained moderate, through the quarter. Overall, we saw positive traction of volumes in the first half, first half of this quarter, but these were offset by higher than expected no production days in December for multiple reasons, such as inventory management, upcoming new model changes, et cetera, by our OEMs. The Farm sector volumes were positive traction, with the festive season volume bumping in as expected, and the expectations of impending price hikes from January 2024. The consumer durable and FMCG industry has the important constituent of our demand. Government spending and private capital expenditure have continued to drive a positive trend across the overall sector. Unfortunately, the inflationary environment and cost increases have been passed on to our customers, have had a negative impact on demand. The fan industry is gradually picking up with a transition towards BLDC and higher-rated, higher star-rated fans, and the whole market will hopefully start seeing greater stability. Our competition across the durable industry remains intense, putting pressure on prices. Q3 FY 2024, a colder quarter in terms of temperature, witnessed some moderation in offtake, but was higher on a year-on-year basis due to the festive demand. Demand for electronics has been led by mobile phones, wearables, and televisions, while refrigeration as a whole has seen stronger festive demand, you know, in the, followed by washing machines and refrigerators. Similarly, in FMCG as well, there have been some green, green shoots, but these have been scattered in nature. From our business's perspective, we have seen a renewed focus of companies to start relooking at their distribution networks, post-COVID. You know, over the last few years, we've been talking about the impact of GST, and that has started in the recent past. This has resulted in a higher interest for integrated warehousing and distribution solutions, and we have seen a strong order intake on account of the same for the quarter. Moving on to e-commerce. The e-commerce segment has, in the last financial fiscal year or this fiscal year, seen a substantial increase in the level of insourcing as marketplace have been consolidating their capacity with a stronger focus on profitability. As a result, the share of 3PL companies in this space, in terms of first and mid-mile, have been impacted. This quarter is traditionally the festive peak season, and we saw a better peak this year than last year. Volume growth was positive and sequentially, on a Q3 versus Q2 basis, our volume grew by 21% during the peak period. However, there was a sharp, sharp tailoff post the peak in most categories other than grocery, which has remained robust, right through the period. From our perspective, several contracts which are closed by customers in Q1 and Q2, which we had reported on last earnings call, were actually decommissioned in Q3, resulting in a higher level of white space in warehousing. On the positive side, the stronger peak had, had a higher positive impact on our transportation and last mile business, for this segment. Our network transportation program with Flipkart has made positive strides, and we are now at peak utilization of the fleet. During the quarter, increasing deep penetration in e-com has also given a boost to the middle business, with higher demand from grocery and small pack last mile delivery. I'll now cover some operational highlights across all our businesses, and let me begin with the largest part, which of course is the 3PL business. The 3PL business operation remained robust through the quarter, and we had consistent operating metrics across all our 300+ sites. From a demand perspective, order intake was especially strong across all segments, with an annual contract value of over INR 150 crore, which is roughly a 50% increase compared to the previous quarter of this year. These included several new contracts, including new grocery FCs for leading marketplace, 3 new sort centers in the e-com space, and several integrated warehousing and distribution solutions for clients in the food and FMCG and engineering sectors. While volume was lower and volume for the quarter was lower than expected in the 3PL business, due to the offset of the contracts which were reduced last from last year, and the year-on-year elimination of the Bajaj contract. The labor environment across our businesses remains under pressure, with cost inflation impacting costs in both of our third-party contract resources and delivery resources. This particularly impacts our third-party logistics business and our last mile delivery business, and they were exaggerated during the festive peak, when we saw a significant cost surge, which had an unfavorable impact on margins. These were especially true in the last mile delivery business. In most of the other businesses, we were able to offset the impact of that through productivity. Our total warehousing in 3PL for the quarter was around 18.7 million sq ft. We have around 2.5 million sq ft of capacity under construction, including recent announcements. We have recently announced the addition of 6.5 lakh sq ft of capacity in Phaltan, 4 lakh sq ft in Nashik, and we are starting construction of 1.2 lakh sq ft multi-client facility in Agartala. The closure of some of the contracts, as I mentioned earlier in the e-com space, resulted in a higher white space cost for the quarter compared to trailing quarters, and as a result, we have seen an impact of the last financials for the quarter, which has just concluded. We have a healthy pipeline, and we do expect to close out new contracts, which should fill that white space over the next couple of quarters based on specific locations. The electric vehicle fleet, our total EV fleet for cargo is around 1,700 vehicles that now serve 19 cities. As a part of the last mile delivery business, we now have coverage for nearly up to nearly 4,000 pin codes across the country. The freight forwarding business continues to have headwinds, which it has historically been going through the last five quarters. On a positive note, during this quarter, we were able to break the back of the trend and its growth volume, especially on the air segments and sequential ocean imports. These have allowed us to register 11% growth sequentially on a quarter-over-quarter basis in the business. We continue to scale up our cross-border charter business, which is based in Dubai. In the medium term, we remain positive about our outlook to continue to grow volume, though we are a few quarters off from our historical peaks. Moving on to the B2B Express business, or Rivigo, as we generally call it. We have continued to be focused on driving the turnaround in Rivigo. We have invested in optimizing the network design and improving service levels, which now have recovered completely. Through this quarter, the integration of both the businesses has now been completed, and all our customers are now on a single technology platform and on a single physical network. During this quarter, order intake grew by 18% and delivered volume grew by around 10%. We also onboarded 23 new accounts for the Express business. However, despite these improvements, we were not able to see the full benefit of that from a cost perspective, as our fleet continued to operate at suboptimal utilization levels. We have continued to operate the fleet at high levels to ensure that service levels are being improved, and that has had a trailing impact on our results, which I'll cover a little bit later. Through that quarter, we also had some impact due to the Chennai rains, which impact our local operations for the Express business in the quarter. The mobility business was impacted sequentially by seasonal factors. The holiday season has impacted our ETMS business. and are not compensatively adequate, and the decline was not adequately compensated by the airport or the B2C business, which traditionally see an improvement during the quarter. We've also had some delays in our electric vehicle fleet program, and the other had an underlying impact on our costs. That said, our overall improvement plans are well in place, and we expect and anticipate further growth as a return to work trend accelerates across all our end customers. During the quarter, we opened nine new facilities in the third-party logistics business. These sites are opened in the second half of the quarter, and had a longer pre-construction period or pre-operational cost, and a higher level of pre-operational costs impacted with this. We were not able to complete monetization of these new sites, and therefore, the pre-operational costs had an impact on the financials for the quarter. I'll now move on to some corporate actions, which I think all of you may have tracked, but for your information. During this quarter, we completed the second tranche acquisition of our acquisition ZipZap Logistics, increasing our equity now to 60% on a fully diluted basis. The company will now be consolidated from, you know, along with MLL or the rest of the MLL results on a going-forward basis. As a result of this transaction, the company had an increase in transaction fees and a one-time cost related to employee benefits, which impacted the results of the company by roughly INR 2 crore during the quarter. I would like to highlight that these are not continuing costs and should not be there going forward. We have completed our divestment of our stake in Transtech Logistics. To remind you all, the investment in this company has already been written off in FY 2021-2022. We have since then divested our equity positions of approximately 38% to an independent group of investors. As a result of that transaction, we had to reverse a deferred tax asset that was created in 2018, which added in to the extent of INR 1 crore, which is reflected in our Q3 financials and impacted our reported PAT. The board of the company has approved an additional equity investment of INR 50 crores in an ASP to support operations and growth. This investment will be concluded in the coming current quarter. Moving on to financial performance, and let me begin with the component performance first, before I talk about consolidated performance. Revenue for Q3 FY 2024 in MLL, our Logistics, was INR 1,160 crores as compared to INR 1,139 crores in the corresponding quarter of the previous year. PAT for the quarter was INR 13 crores as compared to INR 17 crores for the corresponding quarter last year. Earnings were impacted by multiple operational and one-off issues. Some of these have been highlighted before, but I will repeat them again. Operationally, we had higher startup costs in NPDs in December. Higher startup costs, which, as I said earlier, we could not complete and fully bill our customers for that. Those increased startup costs in NPDs have impacted earnings by approximately INR 3 crore for the quarter. We also had a further seasonal impact of labor costs in the last mile delivery business of MLL. This was by cost of driver associates and actions, which really, especially in October, were a significant surge, and these unfavorably impacted earnings of approximately INR 1.2 crore. Additionally, as I mentioned earlier, we needed to have the reversal for deferred tax asset created for Transtech in 2018, which amounted to INR 1 crore. Barring these one-offs and specific events, you know, our underlying performance in the business was stable. We expect most of these costs to not be recurring in the fourth quarter onwards. Lords Freight Revenue for Q3 FY 2024 was INR 55 crore, as compared to INR 78 crore for the same quarter last year, a decline of 24% on a year-on-year basis. PAT for the quarter was INR 0.44 crore as compared to INR 1.8 crore, which was impacted positively by some one-off, one-time gains as well. On a positive side, as I mentioned earlier, sequentially, revenues are up 10%, and our margins remain in moderation through the quarter. You know, we remain positive about the long-term value of and opportunity around the business. As I said, you know, we have seen volume growth in air imports and exports, as well as ocean imports, and we hope to see stronger volume growth in the coming quarters in this business. The Express business, or Rivigo, Q3 FY 2024 revenue was INR 296 crore, up 5% YOY and up 10% sequentially. Overall gross margin improved by INR 2 crore in the quarter. That is, while overall gross margin was still -14%, for the quarter, we did see an improvement in the quarter, and our PAT loss was reduced to INR 34 crore, in Q3 FY 2024. We remain focused on driving improvements in the business, and we'll talk about the levers for those improvements, in later sections. Mobility revenue for Q3 FY 2024 was INR 84 crore, as compared to INR 65 crore in the corresponding quarter last year. And PAT for the quarter stood at INR 37 lakh. Whizzard ZipZap Logistics, revenue for Q3 FY 2024 was INR 35 crore, as compared to INR 31 crore in Q3 FY 2023, and the PAT loss for the quarter was INR 2 crore, as compared to INR 1.5 crore for the corresponding quarter of last year. As I mentioned earlier, that 2 crore of losses included the one-time charges of INR 2.2 crore. Excluding those, the business actually was breakeven, or actually slightly profitable. The 2x2 Logistics business continues to see an improvement in its operating returns. For the quarter, the division made a profit of INR 74 lakh, as compared to a loss of 65 lakh for the same quarter last year. Our entire fleet now is almost completely operational, and we are in the process of augmenting this fleet in the coming quarter. Moving on to the consolidated financial performance of Q3 FY 2024. Q3 revenue for the quarter increased by 5% on a year-on-year basis to INR 1,397 crore. Revenue from the warehousing segment for the quarter stood at, actually, solutions segment, stood at INR 276 crore for the quarter, up 8% from the pre- for the same time last year. Supply chain management, including third-party logistics, freight forwarding, last mile delivery, and B2B express, contributed 94% of the overall revenue, and the mobility business contributed 6% of overall revenue for the quarter. Gross margin on a fully diluted basis stood at 9% in Q3 FY 2024, compared to 10% for the same period last year. Gross margin, without the impact of the Express business, was at 10.7%, an improvement of 70 basis points on a like-to-like basis. EBITDA for the quarter stood at INR 52 crore, down 17%, largely due to the consolidation impact of the Express business. Excluding the Express business, impact of the Express business, EBITDA was down 6%. Our consolidated tax for the quarter stood at INR -17.1 crore. From a cash and receivables perspective, the company continues to trend positively, with no substantive change on that as we continue to focus on working capital management. With this, I now open up the floor for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Alok Deora from Motilal Oswal. Please go ahead. Yes, sir. Good afternoon. Good afternoon, Alok. How are you? Good, sir. How are you? Sir, just a couple of questions. Firstly, on this express business, so, Rivigo, unfortunately, the losses are still elevated. So, how are we looking at this now? Because, at the end, I mean, even at the industry level, the volumes in the express side has been kind of muted, and, and I think that's what also reflected in our numbers, as well. So, earlier we were targeting a breakeven of breakeven by end of this year. So any, any changes there and how we see the trajectory here? Sure. Alok, do you want to ask a second question as well? I'll answer both of them together. Yeah, yeah, yeah. Yeah, please. So, sir, second question: even in the latest presentation, we are talking about, you know, INR 10,000 crore sort of, it's a broader question, INR 10,000 crore revenue by FY 2026. But even if we take a kind of a 20% growth rate for the next couple of years, we will be ending up at close to INR 8,200 crore or roughly around INR 8,000 crore. So any... Are we really looking at even higher growth than this? Because, you know, whatever numbers we essentially are getting on the outlook for the industry, even 20% would be quite a, you know, a task to achieve. So just your thoughts on that. Sure. So let me, let me answer the first one first, Alok, because I think that's probably a question on a lot of people's minds. So, so I think, I, I think we had, just to baseline all of you, I think when we acquired the Rivigo business, we essentially said we'd be EBITDA positive by the end of this calendar-financial year and PAT positive through, the next, through FY 2024, 2025. And as I mentioned earlier on, earlier time, in, you know, calls, we have had integration issues on that asset, and that has obviously had a trailing impact on our earnings for those quarters, as well as the time to breakeven from an EBITDA perspective. As we stand today, I think we expect to be able to be, we are consistent with what we said in the last earnings call, which is that we expect to be EBITDA breakeven through the first half of next financial year, and on runway basis, we hope to be back breakeven by the, by the end of the next financial year. Now, that's a... And obviously, as you look at the numbers, it's a fairly significant gap, or if you all would think it is a significant gap. And, and a large part of the impact in our profit this quarter was really, we have seen volume growth. We are around 20% off compared to, 20%-25% off compared to the volume we need to have. You know, we had strong order intake in the quarter, though it did not completely convert into sales, and therefore we are fairly confident of the order runway. That order runway should obviously translate into an improvement on line-haul costs through better vehicle utilization. So the three basic, three or four levers which are focused on, the first one is increasing order intake and volume. The second one is, you know, improving the efficiency of our line-haul costs, both through purchasing price efficiencies and through line-haul optimization. The third one is improving the pickup and delivery costs. We are doing some technology and interventions in that space to accelerate that. And last one is obviously operation and operational efficiency in our processing centers and our conversion centers. We do have a specific plan on each of them. So we did expect this quarter to have 15% revenue growth, which even trailing a little bit on that. But as I mentioned earlier, Alok, we have run the fleet, almost at full, full-fledged capacity this quarter. And that obviously has meant that the line-haul utilization was lower than we anticipated. Lower volume than expected and higher fleet, fleet lane operations meant that, we had an unfavorable impact, compared to our expectations. On the positive side, I think we have turned the curve.... gross margin and EBITDA, and that all showed improvements in the quarter. As I stated in January, we have continued to see that volume growth and some of our cost improvement initiatives are starting to really come into play. So we expect that we do expect largely to be on track with the program or the direction I had said earlier. To your second question, which is, you know, the INR 10,000 crore number. I think we are right now close to between INR 5,800-6,000 crores on a running basis, and you can cut the numbers whichever way you want, right? And now, if you look at the INR 10,000 crore number, what we essentially said is we expect around INR 9,000 crores of that to be supply chain and around INR 1,000 crores of that to be mobility. Right, from where we stand today, there is obviously the accelerated growth aspect on the supply chain side. But we still feel that those, those growth estimates are well warranted, given the size of the market. We obviously have to execute in terms of, winning those orders and, and monetizing and delivering on them. But the, but the market, the demand is there. We are continuing to see, as I said earlier, on favorable, the macroeconomic factors. So, we still pretty much believe that that, is very much possible on that, on the, on the supply chain side of the business. The freight forwarding and the express business and the last mile delivery businesses need to scale up, to the potential which those businesses hold as well over the next three years. But we do believe that that is very much in range, right? Though it is an aggressive growth plan. The mobility business is surely under stress. We had expected, you know, we've made these kind of aspirational targets pre-COVID. And we, you know, and we do have a high assumption on more faster return to work, for that volume to grow. And I do suspect that there is some measure of risk on that, Alok, in terms of our ability to hit the INR 1,000 crore. At this stage, you know, at an overall level, we are somewhere in the 5%-6% range, whatever you call it, so we don't have, we've not seen a compelling urge to change the INR 10,000 crore vision. We still remain pretty much focused on that, and we will see how close we get there. Okay. I hope that answered both your questions, Alok. Yeah, it does. Just one small follow-up. So on the first question, actually, so, now, you know, you mentioned about volumes not being so much. I mean, you have improved or maybe on a QoQ basis, but still some room left. So where do we actually see this EBITDA go, you know, breakeven happening? Because we have already now pumped in INR 50 crore into that business, particularly to kind of loss funding this unit. So do you think some more funding could actually happen here? And where do we realistically see the breakeven happening? That's, that would be the last question. Thanks. Sure. So I think they're all basically one question, because they're all linked in some way, Alok. Yeah. I think, I think the EBITDA breakeven as we stand today, we are forecasting EBITDA breakeven at the end of the second quarter of next fiscal. And we feel, we remain by that position. We've not, you know, we feel comfortable about able to hit that, so a combination of volume and cost. And I don't have any basis to change it. I'm pretty confident it'll happen. I'd be, you know, we are, we had expected to have a 15% volume, but as I said, we did build... Order intake was higher than 15%. We just did not have enough conversion of the orders. So we, we have to keep work on accelerating some of the elements and just execute better. But we do have the window and quite a clear plan to get there by the end of Q2. Sure. If I have more questions, I'll come back in. Thank you. Thank you. All the best. Thank you. Before we take the next question, we'd like to request participants to please limit your questions to two per participant and ask both questions together. We take the next question from the line of Amit Dixit from ICICI Securities. Go ahead. Amit, actually, we can't hear you very clearly. If you're in a hands-free, we request you to use the handset mode with me down. Yes, it is. So is it clear now? Yes, please go ahead. Yeah. So I have a couple of questions. The first one is on Rivigo only. If you could let us know the cash loss that you are incurring at Rivigo, I mean, the cash loss this quarter. And also, little bit attention on Alok's question again, that INR 50 crore funding we have done, but you indicated that, you know, INR 64 crore was kind of PAT loss that we made at Rivigo. So just wondering, because the EBITDA breakeven is expected in H1 FY 2025, with that breakeven maybe by end of FY 2025, so where are we going with this? Can we expect more tranches of funding? That was the first question. The second one, essentially, if you could just, you know, highlight the volume growth in 3PL of business, ex of Bajaj effect. These are my two questions. Thanks, Amit. I'll answer, I'll go to the Rivigo one first because it's an extension of Alok's question. So EBITDA losses for the quarter were INR 22.7 crores, right? In twenty-three point- EBITDA was 22.4. Yeah, 22.4 crores of EBITDA losses for this quarter, right? Just as a data point. To your question about the funding, the funding obviously partially is to support the burn rate. We don't expect this burn rate to be at the same level it was in Q4, in Q3. We expect obviously an improvement in Q4, and Q1 and Q2 to get to that EBITDA breakeven. But I'm not in a position to give specific estimates to do. As I said, the losses-... The EBITDA losses are INR 22.4 crore for the quarter, and we expect the loss and the funding of INR 50 crore, which we are doing right now, is to support both the volume, the working capital increases in the business and obviously to support some level of burn. We do believe that we, at this point, do not plan any additional investments. The board of the company has reviewed our estimates, and we expect that this should be adequate, right, in the near term or the mid-term for the business till we get into a larger growth phase in the company. Okay, in terms of the other question, which was on the growth, yeah, the growth of Bajaj, the third-party logistics business grew at 5%, excluding the Bajaj shutdown and the growth was around 9%. Exclude all the e-commerce consolidation, that shutdowns we had, growth was around 13%. On the other- Yeah, just a clarification. When you say that the EBITDA level loss was INR 22.4 crore, is it same as cash loss or cash loss would be little bit higher? It'll be a little bit higher, Amit, and you, if you can contact us, if you contact us separately, we'll give you that number. Yeah, sure, sure. No problem. Okay. Thanks and all the best. Write to our investor relations team, we'll give you a specific number. Yeah, yeah, I'll, I'll do that separately. No problem. Thank you. Thank you very much. Thank you. The next question is from Aditya Mongia, from Kotak Securities. Please go ahead. Hi, hi, Rampraveen. Thanks for the opportunity. I'll just go ahead with my questions. As in, in your opening remarks, you were suggesting something to the extent of a meaningful increase in order inflows for the standalone business and similar kind of thought process even for the B2B Express business. I wanted to get a sense of, on an annual basis, how the numbers compare? And this surge in order inflows, is it more of a market phenomenon, and should we expect similar margins that you have always been earning to continue, or has there been a re-jig on pricing from your side? So any rejig on pricing, I can tell you, is there's not any rejig on pricing. I'm assuming you meant unfavorable rejig on pricing. So we don't have any unfavorable rejigs on pricing, but I'll... So that's something across the business, let me just clarify that. In terms of more specific detail, I think in the 3PL business, we had order intakes with an annual contract value of approximately INR 150 crores. And that, a large part of that was some new customers, right, and some existing customers, you know, putting on new contracts as well. I would say a lot of that is, it's a combination of two things, Aditya. Some amount of network expansion, clients actually launching new businesses on new locations. For example, the e-com side, we had a market, in some marketplaces, we're actually doing geographical expansions and putting new sortation facilities there. In some other cases, in the, it's really been rebid of contracts, which we have now, which we didn't have earlier, and in the rebid, we are winning the contracts. Right, so, so that is a combination of different things. In terms of do I expect this trend line to continue, I'd say, I think order intake, we feel confident that we are well positioned. It may not be exactly INR 150 crore, in every quarter, but, if you just timestamp this, the last two quarters, Q1, Q4, and Q1 order intake was... Sorry, Q1 and Q2, order intake was north of INR 100 crore a quarter. In Q3, order intake has been around INR 150 crore a quarter. So we think that's generally a very healthy trend line, and it kind of, to some extent, gives us the team confidence in terms of our growth estimates, to the questions that Alok asked, at the beginning, right? Right. And, in terms of the express business, obviously, we've added new logos in. We've added around 23 new logos in. I won't get into specifics how much of business is contracted with them, but we do think that, as I said, overall order intake grew around 18% for the quarter, 16%-18% for the quarter. We're not able to monetize all of that because it comes in different months, and there's a conversion process to get the orders in, but we should be able to see the trailing impact of that in the coming periods as well. Right, so let me stop there and see. From a margin profile perspective, therefore, I would just say it's more or less worse. I think your question, Aditya, was linked to pricing, and the impact lower pricing might have on margins, and we've really kept our prices high, at the same level, including in the express business. The yields remain pretty much unchanged when you adjust it for segments. Understood. And just a second question: It's been the second or third quarter, wherein, the company has been talking about certain kind of businesses that are moving out. I think this is the first time in the press release that you've seen, like, you kind of mentioned this, this issue kind of cropping up for the past two, three quarters. Are we behind this phase, and should we be assuming that that's, that's broadly a done exercise, or do you think it's in the midst of some kind of course correction from a customer perspective? Actually, Aditya, I think, I think we are by and large, we are actually by and large done with that since the end of last quarter. So if you remember what I said at the end of last quarter, I actually said is that we are kind of pretty much done with it. It's just that customers don't... When we announce, we, when we get, we agree with customers on a closure of a contract, and then it typically does not close overnight. The contract runs for a period of time. So what you've seen in Q3 is just the cleaning impact of the closures that are in Q1 and Q2. In Q3, there is no meaningful closure there, right? So from an agreement termination or agreement closure perspective, sites which we had agreed to close in Q1 and Q2 did go down in Q3, and that's kind of the impact we're seeing. I don't expect anything going forward on that. The challenge, of course, for us is it's created white space, which we have been trying to get filled. But on a going forward basis, we've actually not. In fact, for the quarter, as I said, despite some of those reductions which have happened through the last two quarters and Q3 as well, we've still, in the 3PL business, shown year-over-year growth in revenue. Understood. And just a last clarification, not a question, but when you give gross margins per square feet for the warehousing business, is the rental cost included inside this number, or is it something taken below gross margins? Well, it's confirmed to Ind AS 116. Let me just say that because not all our contracts basically, you know, some of the contracts as per Ind AS 116 would go into the right-to-use asset line, and some of our contracts, which are less than one year, tend to go above the, above the RTU line. So it's hard for me to give you an exact number. If you contact us, we can tell you what is the number or give you a range of numbers and rentals. Right? But as you know, the rental account on Ind AS is not just a change in line. It's not a line adjustment alone. You know, we do knock rentals off, and the rental we knock off is not necessarily the adjustment on the Ind AS 116 line, on the RTU line. So that's one factor. The second part is, several of our contracts do not qualify for the restatement as per Ind AS, right? So that's why we actually tried to give you a trend line on the gross margin or the yield per sq ft. I think we added that, I think, partially on request from the analysts, so we kind of called it out. And, so let me stop there and see if you, if that helps you, or you want some more detail. No, the only issue is that, as in, If we divide it to numbers or revenue per square feet and gross margins and come to a gross margin percentage, warehousing, even though kind of rentals is kind of below in some cases, warehousing is still comparable in margins to the entire contract logistics business at about 12% or so. Okay, and so as in, one would have thought through that warehousing is probably a higher margin business, but it seems as if it's kind of lower if we adjust for rentals that are below. So just thought I'd kind of pick your brains on that. Yeah, it's a fair point. Let me just come back to you on this. Let me just come back to you. I think, however, yeah, it's a good question, and I think it's a fair point. Let me just, I'll, we'll get you an answer back and a clarification. Sure. Thanks. Those are my questions, sir, and thanks for your response. Thank you. Thank you. The next question is from the line of Abhishek from Dolat Capital. Please go ahead. Thanks for the opportunity, sir. Sir, the EBITDA loss is around INR 98 crore in nine months versus the standalone profit of INR 54 crore. And you are talking about the freight PAT breakeven at the end of quarter four, FY 2025. So, there will be another PAT loss of around INR 45 crore-INR 50 crore in FY 2025. So are you not looking to close down or sell off this business, as the leakage is quite big, and a standalone business is not able to compensate it? So do you have any such plans? Hi, Abhishek. Yeah. Yeah, it's a interesting question. I think that there are two different lenses here. One, obviously, is the short-term impact, which you've raised, Abhishek, and I want to completely confirm with the estimates, right? Because we assume that, you know, the run rate will continue for two more quarters and suddenly become zero, which you know is not the way it'll happen. It will... There's an underlying improvement curve. But the... And therefore, it's not going to be the INR 45 crore number which you could have referred. But that doesn't take away your broader question, I think, saying that, you know, when you, you know, the investment and its carry on the rest of the results is quite significant, and does it require us to relook in as part of the portfolio? I and I give our position on it right now. You know, the board and I obviously review the businesses and the portfolio at a periodic basis across the entire company. But as far as this specific business is concerned, I think when we acquired the company, you know, we do most of our investments on a 7-year business plan. And we acquired this business assuming there would... knowing very well that there would be a burn for a period of time. You know, we acquired the company at what we thought was a fairly attractive valuation, adjusting for that burn. So we acquired the company at INR 220 crore. We have a INR 140-ish crore consolidated cumulative loss till now, around INR 100 crore. And therefore, you know, we and we've invested INR 50 crore or INR 60 crore of equity till now. So overall, INR 30 crore equity. So overall, I think we are in the 350-ish, 360 crore investment level for the entire business. And when we look at the valuation, we still feel that when we look at the business case, we still think the business case on a standalone basis actually remains quite attractive. The part truckload business is an interesting long-term bet. We think the business has a high growth potential on a standalone basis. And we should, with profit improvement, with improvement and expansion in network, get to more comparable margins with the rest of the industry, which, as you know, are better than your conventional 3PL margins. So in that sense, I think our business case, every time we've tested it, still remains, fairly consistent. Obviously, the result of the losses or the extension losses meant our IRRs have come down a little bit, on the investment case, but we still feel very positive about the overall investment, on a standalone basis. In addition to that, I think it is, there is a significant synergy value for the rest of our business as we position with our customers to be an end-to-end solutions player. Obviously, on the fulfillment and distribution side, part truckload is a very important part of the business, right? And therefore, you know, it is something which, we, we remain very excited about. Obviously, given that it's an asset-light structure, you are seeing most of the cost of it in the P&L.... As opposed to being in the balance sheet, if we went and made, but typically any business does require investment curve to actually be funded, till it reaches peak levels of utilization and optimization. So it's still very much in line, though obviously delayed in terms of the broader business plan. Obviously, the core business, every time we get we try to grow any business, our core business has to support that growth. And that's something which we have been working on, right? In getting the core business' margins up. It's something which I explained in prior quarters, and at least on a nine-month year-to-date basis, the core business is up 28% at a profitability level, at a PAT level. So it is trending in the right direction, though this quarter was impacted by several factors, which I have outlined earlier. So I think from an overall portfolio perspective, we still believe there's a good balance. So these businesses which we think are individually strong and collectively synergistic, right? And so all these businesses have been built out with that intent. Obviously, you know, the way, the pace and the quality of the way we execute things on different businesses, both with the internal and external factors, have a carry on the quality of the results from a quarter-to-quarter basis. But from a long-term business plan perspective, we still remain very optimistic about the individual and the collective value which these businesses bring. Okay. I'm sure, you know, the proof of the pudding is in eating it, and you'll hopefully see it in the coming quarters. Okay. And sir, how much current quarterly volume of the Rivigo, and what volume is required to achieve EBITDA breakeven? So Abhishek, I think what we said earlier on, last quarter, we had said several times consistent with, are consistent about it. Last quarter, we had said we are around 40% of our EBITDA breakeven point, 35%-40% off. We have crossed on 11% of that from a delivered volume perspective this quarter, so we are around 20% to go. From an order intake perspective, we've done slightly better, but that's still not, it has still not come into our financials. So we have around 20-25% more volume to grow, which is why we will require the two quarters to do that at the current run rate. How you will get this much of volume, either of the network expansion or increase in volume from the existing network? It's a combination of both. You know, I think through the integration, the three levers, Abhishek, again, things which I said earlier, we'll repeat again. And the first one, obviously, is we saw some of our customers drop their share of business to us during the integration because we had some issues. We have been clawing that back, and that's, you know, that's some part of that volume. The second one, obviously, is just expanding out with new accounts. As I mentioned earlier, we've added 23 new accounts in this quarter, and we are trying to grow trading with those accounts. And the third one is cross-selling and synergy with the rest of, the rest of the MLL business. Obviously, through the third-party logistics business and other component freight forwarding, we have connections and, you know, and relations with a wide set of customers. Almost every customer uses some part of partner business, has similar partner business. So the cross-selling is the third big lever, which will drive that volume. Your Rivigo franchisee model is playing a better role versus your own network. What are your plan to expand this model? No, I think our franchise is, franchisees are around 30% of our volume, and that will remain broadly in that balance, Abhishek. You know, the franchisee model is both in yield and line balancing model. We use the franchisees largely. As you know, we have 270 branches, which then serve franchisees across, let's say, upmarket, largely upmarket and rural areas. And obviously, that demand comes with better yield. It also allows us to do better line balancing, right off volume, because sometimes we have forward lane shuttle, but we don't have reverse lanes, load the volume from large customers. So there is no. So that program is intact and it continues to add roughly 25%-30% of our volumes every month. Okay. Thank you. That's all from my side. Thank you, Abhishek. Thank you. Before we take- Sorry. Go on, sir. No, please go ahead. Before we take the next question, we request participants to please restrict their questions to two per participant and ask both questions together. For follow-up questions, you may rejoin the queue. We take the next question from the line of Krupa Shankar NJ from Avendus Spark. Please go ahead. Good afternoon, and thanks for the opportunity. My first question is on the freight forwarding operations. So just wanted to check, given the recent spike in the freight rates, given the Red Sea crisis, are we seeing traction with respect to yields on the freight forwarding operations in the fourth quarter? And furthermore, just wanted to understand the second. On the second question, I wanted to understand on the warehousing side. So you did state that, around that, there are some white space or because of e-commerce contracts concluding, and we are also planning to add close to about 1 million or plus sq ft space. So, is it, I mean, just wanted to check, because, you know, typically we are adding warehousing space based on the contract ramp up. And, does it make sense to grow, add more space at this particular pace, what you have set for yourself? And, given that the industry is not growing, or rather the adoption is not growing that fast as one would have anticipated earlier. Thank you. Krupa, I think the freight forwarding piece, to your question, is, I think we're not seeing too much of that. We did see it, in fact, obviously, in December. In January, we have seen an early term Red Sea impact on some of, obviously, the mails which go around the Atlantic lanes. There's been, obviously, a sharp increase in rates, so we can get capacity. Capacity has also contracted quite significantly. Therefore, in the month of January, we have seen an uptick in improvement. I think it's still an open question how long it will stay that way. As you know, this is kind of a, kind of an, this kind of post-mature event, which is an event which has happened. So, basis how geopolitics move in that area, the numbers that increase could tail off pretty quickly. But to your question, we have seen an improvement in January. Right? As you can see, in all global freight indexes, already reflect that, and our own business is quite consistent with those trends. I think your second question on warehousing. Yeah, so we, you know, as I said earlier on, we generally operate around 3%, 3.5% white space, which is around, you know, on a 20 million sq ft space. In our view, a reasonably healthy amount to keep, because everything is sold out, we have nothing to give a new customer, right? Due to the recent shutdowns, Krupa, and, you know, we've had these shutdowns over Q2 and Q3, announcements in Q1 and Q2, and shutdowns in Q2 and Q3, that white space has probably gone up to 6%-7%, right? And therefore we are in the works, in the process of filling up that white space. We have a reasonable pipeline in multiple locations. There are one or two locations which are stickier than the others, but we are obviously focused on in terms of filling those out. In terms of, the new capacity additions we have announced, or at least, we tend to look at the network in two parts. We look at the network in terms of standard gateways or locations, where we think, which are consistent and we think has long-term demand trends. So those places like Kolkata and Guwahati, for example, or Chennai or Hyderabad or Bengaluru, for example, will be parts of those. And in those cases, we are building capacity from a long-term perspective, right? There's a trade-off between the, the pace of the capacity you build and the, and the economics of it, uh, versus the price you pay for short-term spot capacity, right? And there's often a 15%-20% spread in that. Uh, and so there's a balance which has to be maintained there, and, uh, if I ensure that you build capacity and time the capacity in appropriate way, uh, so you are actually ensuring that you don't have too much of white space. We'll be able to do that through the first 4 million sq ft of build out. Uh, this is a bit of a blip which has happened. And we do have a pipeline which we are hoping to then, you know, obviously execute and get those filled out in faster measure. When we build out in smaller towns, which is like in tier two, tier three cities, and we build out multi-clients there, those typically, Krupa, are done with very specific anchor tenants, which are clearly signed up. And those anchor tenants are probably generally north of 60%-70% of volume. So when we announce 6.5 lakh sq ft in Phaltan, in Maharashtra, in two phases, a large part of that is already sold out, right? And therefore, we already have an anchor tenant who almost completely occupied. The same things to Nashik as well. We launched—we announced the launch of the 100,000 sq ft, which is, which is getting filled up. It's already been sold, and 300,000 sq ft, which we are building afresh, is also contracted out almost completely. So, so the idea is, when you go to tier one cities and large demand, demand clusters, Krupa, we do try to put capacity ahead of demand. We think that makes sense. It gives a significant economic benefit in doing that. But when it comes to tier two, tier three cities, we tend to align the capacity point more towards the anchor tenant who is there. So for example, Agartala, if you're building 120,000, at least 60%-70% of that will go to an anchor, and then you kind of build around that. So that's at least in terms of the way we are doing it. So at this stage, we don't have near-term, you know, we don't have near-term risks and exposures, but we do look at it very closely. And over the last six months, we have, you know, as you know, we have reduced making our building our programs unless we have strong anchor tenants, you know, positions in all of them in terms of the newer infrastructure which is coming up. On a related note, and I hope Aditya is still on the call, right? Just to clarify, I think I've got a new question, Aditya's question on page 40 of the deck, which is uploaded on the website. You will find the margins and yields of warehousing, and those numbers are pre-Ind AS numbers. I guess that's what Aditya was referring to, which is the 12% number. There's a footnote below, which actually alludes to the fact that the pre-Ind AS number, right? The post-Ind AS number will be obviously larger, and if you contact our investor relations team, you'll get the truer numbers. Got it. Thanks, Ram. If I can ask one more question, relating to what would be the contribution of Mahindra Group, and what would be the auto breakup, for this quarter? Yeah, sorry, the more specific number, but I think it's around 48%-49% of our third-party logistics business. So Krupa, 49% is standalone business. Mm-hmm. The split roughly is the same, 65%-69%, 65%-70% on automotive and 30%-35% on farm. Okay. Thank you, Ram. Thank you, and all the best. Thank you. The next question is from Alok Deshpande, from Nuvama Institutional Equities. Please go ahead. Hi, Alok. Hi, good afternoon, Ram. Two questions from my side, both on the express business, one short term and one long term. So Ram, first question, you know, this quarter, we did about INR 96 crore revenue on express and INR 22 crore of capital loss. Now, when you are referring to that, you are about 20% odd away from breakeven, so I'm guessing it's about INR 115-INR 120 crore of, ... quarterly revenue that you are targeting, where the breakeven can happen. But are we saying that when we go from 95 to 120, there will be absolutely zero escalation in the operating costs? Because that's the only way you can sort of break even at INR 120 crore, right? So, wouldn't the breakeven be a little bit more far out than INR 115-INR 120 crore? That was the first question. And secondly, longer term, when this business stabilizes, you know, I think maybe two, three, four years out, what sort of steady-state margins that one can look for for this business? Because, you know, where I'm coming from is by the time this business breaks even, probably cumulatively, we would have had net losses of maybe INR 200-INR 250 crore on top of the acquisition value that we paid. So on a overall sort of, you know, capital employed of maybe INR 450-INR 500 crore, what is the return on capital we should expect maybe three years out, four years out? Sorry, Alok, we are hypothesizing a little bit here, but let me do my best shot answering that. I think what I've said earlier on still holds. We do believe that between, after the INR 800 crore margin, INR 800 crore revenue level, we expect to be at 3%-4% PAT. Beyond INR 800 crores, we'll probably see a further expansion in profit after tax level. So that's an answer to the second question. And I think from where we stand today, we expect to be at INR 800 crores in the next three years or so, in terms of, of, of revenue uptick. In terms of the first part of your question, I think it's, it is obviously mathematically accurate what you said, that we are expecting around INR 30 crores. We are expecting around 15%-25% growth in volume, this is INR 122 crores. And at that level, how is the EBITDA going to get completely wiped out, eliminating every cent of some EBITDA. So kind of a fair question. But there are obviously puts and takes in that, Alok. It's not a straightforward thing, right? So because the inefficiency is in different lanes. So first of all, I think obviously we have contribution margins around 15%-16%. We expect that to be-- that to flow through completely to the bottom line. As I said earlier on, our line haul fleets are operating at fairly low utilization, and therefore, getting... It all depends on the demand comes on the right line haul lanes. But balancing that line haul utilization up to 85%-90% is a second big partner savings. And both of those should not come with significant cost accretion, if you may, right? In the operating environment, and both in pickup and delivery and in terms of the processing centers, we will probably see some level of cost increase in the processing centers, if they remain at the current levels of efficiency, but they are also going to be offset by improvements in the pickup and delivery. As the volume goes better, we should be able to optimize both the technology and doing better milk runs and so on, and be able to reduce our PUD costs. So, to that extent, I think you're right. We expect it to largely be accretive on contribution at a contribution and line haul level. There will be an interplay between pickup, delivery, and processing costs, which will kind of line, land us in that same range. Obviously, there are some moving parts here, obviously, Alok, but those, but that's kind of the high-level four big levers in terms of improvement. Sure. Understood, Ram. Ram, just one clarification. You said contribution margin of how much? I missed the number. It's on 13, I'm just checking. It's on 13%. 13%. 13%. And you said long-term margin of 2%-3% of 3%-4% on the PAT level, right? PAT level, yeah. Up to around INR 800 crore of revenue, and beyond that, we should be able to see an inflection because obviously, volumes will go up and we'll get a higher level of utilization. We can change regional classes to 40% and so on, so different play comes in. Understood. Yeah, if you see our bellwethers in the industry, they are probably who are above, probably 6.5-7 lakh tons. They are probably in that range or even higher in terms of margins. Sure, sure. Thanks, thanks a lot, Ram, and all the very best. Very useful. Thanks. Thank you very much. We'll take that as the last question. I would now like to hand the conference back to the management team for closing comments. Thank you all for joining us today. I hope we've been able to satisfactorily answer all your questions. If you have any other further questions, please contact SGA, our investor relations firm, or the office of the CFO, and we will be able to get back to you on specific queries. We have taken some follow-up queries from the call today, and we will reach out directly to those specific individuals and firms to provide them answers. Thank you all once again, and wish you all a good day ahead. Thank you. Thank you very much. On behalf of Mahindra Logistics Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.