Ladies and gentlemen, good day and welcome to the Mahindra Logistics Limited Q1 FY 2027 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involves risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the 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 and zero on your touch-tone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Mandar Chavan from SGA. Thank you, and over to you. Thanks, Mano. Good afternoon, everyone, and thank you for joining us for Mahindra Logistics Limited Q1 FY 2027 Earnings Conference Call. We are pleased to have with us today Mr. Hemant Sikka, our Managing Director and CEO, Ms. Isha Dalal, CFO, along with the member of the senior management team. I hope everyone 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 the opening remarks from management, followed by an open forum for question and answer. Before we begin, I would 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 would like to invite Mr. Sikka to share his remarks. Thank you, Mandar. Good afternoon, everyone, and thank you for joining us today. We have started FY 2027 on a very strong note, building on the momentum created over the last few quarters. The improvements that we are seeing reinforces a simple but very important fact. The actions we took to strengthen our operating model, sharpen our execution skills, bring in lot of discipline and rigor, very strong focus on our customers, and improve the quality of our growth are delivering tangible results. You can see that in our results. We delivered a significant step-up in profitability this quarter, moving from a PAT loss of INR 10.8 crores in quarter one of FY 2026 to a PAT profit of INR 25.4 crore in Q1 of FY 2027. Alongside this, our consolidated revenue grew by 23% YoY, reflecting broad-based strength of our businesses. These results validate the effectiveness of our transformation efforts and demonstrate the power of disciplined execution, strong customer focus, improved customer-level economics, and a relentless focus on profitable growth. If I have to see, there are four themes which capture our progress in this quarter, and I will take some time to go through each one of them. We are clearly entering our next phase with confidence and purpose. Anchored by four strategic pillars, we will drive profitable growth, build differentiated capabilities, and cement Mahindra Logistics leadership in the logistics ecosystem of tomorrow. Let me talk about 3PL scale-up. Expanding the core, this is our core business, so expanding the core with higher quality growth remains a key strategic priority. Contract logistics continues to be the cornerstone of our business as we strengthen our 3PL franchise through deeper customer partnerships, sector-focused solutions, and efforts on high-growth consumption sectors while maintaining discipline on margins, return on capital, and operational excellence. B2B express turnaround continues to be a very key focus area for us. We continue to drive a disciplined turnaround through network optimization, rigorous cost management, and enhanced service reliability. This is laying the foundation for a very sustainable long-term value creation in our B2B express business. We clearly want to be leaders in operational excellence. Operational excellence is embedded across our organization. This is not a flavor of the month or a quarter for us. This is embedded across our organization. Through disciplined execution, process standardization, and continuous productivity improvements, we are enhancing the customer experience while consistently delivering superior service levels. Technology as a differentiator is again a key strategic lever for us. Technology continues to be a strategic differentiator for Mahindra Logistics. LOGIONE, our digital ecosystem, provides greater visibility, faster decision-making, and data-driven insights, enabling us to build smarter and future-ready supply chain for our customers. Our e-commerce and quick commerce business continues its momentum, reinforcing our position in the fast-growing segments of the logistics ecosystem. As we have articulated previously, our objective is not to scale for the sake of scale only. Let me repeat this. Our objective is not to scale for the sake of scale only, but go for intelligent scale, where every customer, every contract, and every investment contribute meaningfully to our long-term profitable growth. Let me now turn to a few specific business updates. Starting with our express business, which is MESPL, or Rivigo as we call it, our B2B express logistics business. In Q1, revenue grew by 58% YoY, and the gross margin improved from negative INR 3.6 crores in quarter one of FY 2026 to a positive of INR 9.2 crores in FY 2027. The business continues its turnaround journey with uptick in volume and yield, and disciplined cost control now firmly embedded in our system. Our focus remains on EBITDA breakeven, with PAT progression to follow in a calibrated manner. The foundation of the business is far stronger today, and we are confident that this is a long-term business for us, and it will create long-term value for our stakeholders. In our contract logistics business, Q1 revenue grew by 26% YoY, and our gross margins grew by 21% YoY, a clear indication that our focus on operational efficiencies and profitable customers is working. We continue to see new wins across business segments, reflecting stronger customer solutioning capability, very strong customer focus, improved service delivery, and deeper customer engagement. We have been speaking about our white space for the last few quarters. So, on white space, I'm very happy to inform you that we are firmly on our track to achieve our glide path on reducing our white space by 95% by September 2026, to the point where we started in quarter one of last year. In quarter one of last year, we had said that whatever white space we had at that point in time, which was 1.6 million sq ft, we will reduce it by 95%. We are firmly on track to achieve that. In our mobility business, Q1 revenue grew by 38% YoY, and our gross margins grew by 2% YoY. Our focus is on acquiring new customers on the B2B side of the business. On the B2C side, we are focusing on stabilizing and building on the recently launched airport taxi business at the Noida International Airport. In our last mile delivery business, LMD as we call it, revenue moderation, we had a degrowth of 16% YoY, was a conscious strategic choice. We had called that out in our earlier communication, that this is a conscious strategic choice to prioritize profitable business over low-margin business amid sustained pricing and cost pressures. This strategy has actually worked very well for us. It has driven our gross margin in quarter one up by 62% YoY, supported by improved business mix and disciplined cost management. In our freight forwarding business, revenue for quarter one FY 2027 stood at INR 45 crore, reflecting the impact of customer attrition experienced during the recent transition phase of the business and the geopolitical crisis that we are currently facing. We have since strengthened the leadership team and are focused on expanding commercial coverage, rebuilding the customer pipeline, and driving growth while maintaining strong service level and operational discipline. As we look ahead, our priorities remain unchanged. We will continue to scale our core business profitably, strengthen the express logistics network, improve asset utilization, and leverage technology to drive productivity and customer experience. Operational excellence will remain the foundation of everything that we do. In conclusion, the transformation journey we embarked on a year ago has now evolved into a growth journey. Our focus is firmly on building a stronger, more agile, and future-ready Mahindra Logistics, one that consistently delivers profitable growth, superior customer experience, and sustainable value creation. In this journey, we will continue to see, number one, revenue and PAT growth, two, improved operational efficiency and excellence, and three, a growing base of highly satisfied customers who clearly see tangible value from our services. Friends, our vision is clear. We want to be India's number one logistics service provider, delivering superior customer experience through technology-led solutions and led by a very passionate team. With that, I will now hand over to Isha, our CFO, to take you through the financials. Isha, over to you. Thank you, Hemant. Good afternoon, everyone. Let me now give you a brief on the consolidated financial performance for Q1 FY 2027. Our revenue has increased by 23% year-on-year to INR 2,003 crore. As you will see in our segment results, supply chain management, which includes our 3PL and network services business, including freight forwarding, express, and last mile, contributed 94% of overall revenue. The mobility business contributes 6% of our overall revenue. This revenue split remains more or less consistent with previous quarters. Gross margin on a fully consolidated basis stood at 9.7% in Q1 of 2027, compared to 9.4% in Q1 of 2026, which is an improvement of approximately 28 basis points year-on-year. Our reported EBITDA for the quarter is INR 115 crore, up from INR 76 crore in Q1 FY 2026. As we have done starting last quarter, we will now also share the pre-Ind AS 116 or adjusted EBITDA numbers, which factor in the full impact of lease cost in EBITDA. At this adjusted EBITDA level, as you would have seen in our investor deck, EBITDA for the quarter stands at INR 57 crore, up 76% versus INR 32 crore in the same quarter last year. Our adjusted EBITDA% is at 2.8%, improved by 85 basis points year-on-year. Our PAT for this quarter is at INR 25.4 crore, which is INR 36 crore better versus Q1 FY 2026. In the same quarter last year, just to remind, our consolidated loss was INR 10.8 crore. I do want to call out that our PAT in this quarter includes INR 4 crore of interest on income tax refund. You will see that in the other income line, which is not expected to be recurring income in the subsequent quarters. If you remove that number, our operating PAT is approximately INR 21.4 crore. As Hemant has already mentioned, we will work towards continuing our trajectory of PAT positivity and improvement in operating performance. I will now move on to segment-wise performance. In the contract logistics business, our Q1 FY 2027 revenue was INR 1,623 crore as compared to INR 1,289 crore in Q1 FY 2026, up by 26%. One of the key drivers for this growth has been continued strong momentum in the M&M Auto and Farm businesses, as well as growth in our other 3PL verticals, including e-commerce. In this segment, gross margin has diluted by 46 basis points year-on-year. While efficiency and intrinsic operating performance improvement across the contract logistics business continues, bases all the levers we have deployed and which Hemant spoke about a few minutes ago, the business has faced some headwinds driven by manpower shortages, site ramp-up, and minimum wage revisions, resulting in some margin compression. These have been offset via overhead efficiencies and operating leverage, leading to an EBITDA growth of 31% year-on-year and margin expansion from 6.6%-6.9%. In the last mile delivery business, the network recalibration and focus on profitable sites has led to a 16% year-on-year revenue decline. However, in line with our strategy, this business has witnessed GM expansion from 5%-9% year-on-year and continues to be EBITDA profitable. In the freight forwarding business, the business has faced challenges due to a combination of macro-led disruptions and the impact of customer attrition experienced during the recent transition period of the business. This has led to decline in volume from some key customers. Revenue for the quarter was INR 45 crore as compared to INR 74 crore in Q1 FY 2026, down by 39%. Despite these challenges, the freight forwarding business has continued to maintain healthy gross margin of 10%, in line with historical trends, and witnessed efficiency in fixed cost. It has continued to remain positive at the EBITDA level. In our express business, Q1 FY 2027 revenue was INR 152 crore as compared to INR 97 crore in Q1 FY 2026, up by 58%. Year-on-year improvement in both volume and yield has driven this revenue growth. Our gross margin stood at 6% compared to -3.8% in Q1 FY 2026. We continue to expand gross margin year-on-year and quarter-on-quarter, in line with our commitment to improved operating performance. EBITDA performance in this business also continues to improve, with an EBITDA loss of INR 1.6 crore in this quarter versus an INR 11.8 crore loss in the corresponding quarter last year. I will come to the last segment, which is mobility, where the revenue for this quarter is INR 111 crore as compared to INR 80 crore in Q1 FY 2026, up by 38% year-on-year. The revenue growth in this vertical was largely contributed by expansion of client base in the B2B vertical. That brings me to the end of the commentary on segment results. With this, I will now open the floor for question and answer. 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'll wait for a moment while the question queue assembles. We have our first question from the line of Alok Deora from Motilal Oswal Financial Services. Please go ahead. Good afternoon. Congratulations on pretty decent numbers. Just had couple of questions. First is on the express business. If you can just indicate what has been the volumes for this particular quarter in tons terms. Also, this improvement in the EBITDA, which we have seen in this quarter, also that we should be kind of breakeven now in the first quarter. By the second quarter, is that the understanding, correct? We are on that path. If you can just highlight on the express business first. Hi, Alok. Alok, we don't really disclose the volumes in the express business. As I mentioned, we are continuing our trajectory of improvement in both volumes and yield. That journey is well underway, and we are satisfied with the progress. We have been indicating that just as we turned gross margin positive in this business last year, we will seek to be EBITDA positive or EBITDA breakeven this year. Again, we are well on the way to achieving that target. We will continue to work towards that milestone. I would not like to indicate whether it would be in quarter two or three or four. I think we have still a lot of work to do in this business, but I can tell you that that continues to be our objective for this year. Got it. Second question is on the mobility business. Now we are clocking almost INR 100 crore-INR 110 crore per quarter of revenue. The EBITDA margin is in the range of 2%-3%, which has been there even when we were doing very smallish number like INR 80 crore. Where can the margins go here in this business? Suppose if we continue to see this kind of run rate in revenue, is there any scope of margin improvement here or this would be like a 2%-3% kind of a margin business? Yeah. Alok, I think from a gross margin perspective, we have historically been between a 9%-10% kind of gross margin business in the mobility segment, we will continue to work towards that kind of gross margin profile. As the business expands in top line, we will continue to see some operating leverage in this business. We also will make some commensurate investments in B2B and so on, which you will see. Eventually, as the business grows in scale, we should see some improvement in the percentage EBITDA profile of the business. Got it. Just some clarification here. This is almost entirely B2B? We don't disclose the specific percentages, Alok, the B2B business, which is employee transport services, as well as the B2C business, which is now branded Alyte, are both within this segment. Yeah, but Majority, Alok, is the B2B. A large majority. Got it. Just last question related to this only. I'm not directly comparing it in that sense, but we have another listed player who is into this sort of business. There, the margins we see are in the range of 10%-12%, which is again, mainly B2B and into the transportation services. Yes. I just wanted to understand, is this the margin because the mix is different or the customer profile is different? If you would just spend a minute on this, it would be helpful. Thanks. Sure, Alok. Alok, there are various types of model even in the B2B business of mobility. One of them is the employee transport services business, which I was mentioning, and the other one is a kind of an on-call business or a shopper car service business. Which essentially, just to kind of explain, it means when you go to another city, the car kind of is with you for the entire day, and you get charged on that basis. That is a significantly more lucrative business from a margin profile perspective, than the first business I mentioned, which is the employee transport services business. The relative margin profile or the latter, I should say, the blended margin profile of the business will depend on the relative mix of these two segments. As MLL Mobility, we are heavily weighted towards the employee transport services business, and hence, our margin profile will be therefore slightly lower even from a gross margin perspective. Secondly, there is the question of scale and size of the business. Like I mentioned, from an operating leverage perspective, we probably don't have the kind of leverage yet that one would expect at two or three times the scale. Got it. Thanks for that pretty good explanation. Thank you so much. All the best. Thank you. Thank you. We have our next question from the line of Krupa Shankar from Avendus Spark. Please go ahead. Good evening and thank you for the opportunity. Congrats on great set of results. My first question is on the contract logistics business. Just want to get an indication on, first, emphasis on what would be Mahindra Logistics' wallet share with M&M this year, then what is it in comparison to last year. In continuation to that, just wanted to get a sense around the growth. What would be the contribution of new clients this year to your overall growth? Because the growth has been quite solid in the contract logistics. If you can give some color around that. Thank you, Krupa. On how much are we as a wallet share for Mahindra, we have a significant part of their business, clearly. It's not that we are a preferred partner for them. We have a significant part of their business. That would be our comment. We continue to win a large part of their business, which comes on stream. We are pretty large with Mahindra. On the new customers, we don't share that ratio of new customers, but I can only tell you that with our focus on customers a lot, bringing in technology, a very strong focus on an operational excellence, we are winning a lot of new customers. In fact, compared to our internal plan, which was a very aggressive plan, in quarter one, we have surprised ourselves with wins more than what we had even planned as part of our stretch goal. That means our customers are appreciating the kind of solutioning that we are doing, the kind of benefits we are bringing to them, and that gives us a lot of confidence that the kind of growth that we want for this business is looking good for us. Understood. The reason why I'm further questioning on this aspect is that the momentum of growth, what you're seeing on the contract logistics business, is it going to be primarily a reflection of the underlying automotive growth which is there at this point? Or do you also see that the segments like e-commerce, which we are talking about, continuing to keep this growth rate at north of 20% for the near term. You are absolutely right, Krupa. Since we are a very significant part of Mahindra Logistics game, when Mahindra's auto and tractor business does so well, obviously that has a very big tailwind for us, so we will benefit from that, and hopefully that will continue through the year. Apart from that, let me also tell you that we are winning lot of business from e-commerce customers. We don't share that wise, but I can broadly tell you that we have done very good work on e-commerce. Thirdly, I want to call out our manufacturing and telecom vertical, which is again doing exceptionally well. Since we have this core competence working with Mahindra as a large client on working with manufacturing clients, I think we are also a preferred kind of a logistic partner for all manufacturing companies, whether they are MSMEs or they are large companies. We have also won lot of business on that side. Again, we don't want to share our customer names here, but I can tell you that in the last quarter, we have won couple of very large marquee clients in the manufacturing space also. We are feeling good about that. Understood. One last question on express segment business. While I do appreciate that you don't want to share any incremental information on absolute volumes, can you break up the growth between what would have been the volume growth and what would have been the yield growth this quarter? Just gives us a reflection of. Krupa, I'll give you more color, but let me tell you why we are not calling the number. We used to share that number, if you see our previous communication, and then we stopped doing it a couple of quarters back, which was a very conscious decision because it is not the volume alone which will drive our turnaround story. Let me tell you, I can pick up the volume as much as I want if I don't care about the yield. If you remember in some of the calls with investors, we had shared that, especially that there are certain lanes across the country where it is as much volume that you want to pick up, you can pick up if you don't care about the per kg rates. That is not our objective. Our objective is not to maximize volume and make losses. Our objective is to turn around this business, so we are very focused on volume as well as yield. That is why we said that we will not declare the volume because it doesn't give you any picture. A lot of the analysts were asking us, "At what volume will you become EBITDA positive?" Let me tell you, there is no right answer for that. Because we can take as much volume and can never break EBITDA if we don't care about the rupee per kg. It is especially important for us that we focus on both, which is yield as well as volume. Now, just to tell you a better color on it, as Isha said in her remarks, but I will add more weight to what Isha said, that our target is to become EBITDA positive in this year. Let me tell you that we are very confident of achieving this. I think that should give you some indication on where we are. Got it. Okay. I get your point. Thanks a lot for answering my questions. Thanks, Krupa. Thank you. We have our next question from the line of Rehan Saiyyed from Trinetra Asset Managers. Please go ahead. Hello, good afternoon, the team, and thanks for taking my question. My first question is around your current understanding regarding the customer addition and economic value. Could you help us understand the economics of the new customer addition during the quarter? Are these customers being onboarded at margin above the portfolio average? And how long does it typically take for a new contract to reach registered established profitability? Rehan, I didn't understand very clearly, just let me repeat what I understood as you asking. What is the margin profile of the new customers that we are adding? Is that what you want to know? Yeah. How long does it typically take for a new contract to reach registered profitability level? Okay. Fair point. Obviously, Rehan, we can't share you what is our margin profile for new customers. I can only tell you that we are very competitive. All these new wins that we are getting are very hard-fought win. These are won against national RFQs that our customers come up with. You know that we have a very competitive logistics industry in the country. All these wins that we are getting are very hard-fought and these are done not only on pricing basis, but also on the quality, the solutioning that we bring for our customers, our reputation in terms of our execution ability, and the governance which the Mahindra Group brings for the customers. This is a combination of several things that we are judged by our customers, and it's not only a pricing call that the customer will make for us. Having said that, I can only broadly tell you that we are very focused on making sure that while our teams work so hard, we don't want to work very hard and at the end of the month give a check to our customers. That is not our objective. We want our teams to work very hard and then be also making profit for our company and also for our stakeholders. That is our game plan here. Can't share you the profit profile of our customers. Only I can tell you that these are very hard-fought wins and we compete very aggressively in the marketplace for any good customer that is available in the market. On your second question on how quickly it becomes, generally, we have seen that when you are coming up with a new site, if the site is small, it is a matter of couple of weeks. We are also winning some very large sites where it takes almost three to four months for a site to come fully normalized in operations. We have recently opened a very large site for a very marquee customer in Luhari, near Gurgaon. Just to give you an idea, it's almost like a 2-lakh square foot site. There, we are expecting that our operations will become normalized in about three to four months time. This is the general timeline, but we also have, for last mile, very small sites, like less than 1,000 square feet, where the sites become normalized within the first 10 days. Depending on 10 days to, let's say, four months, that's the kind of window that you can keep in mind. Got it, sir. Sir, like in the last, right now you have mentioned about the Mahindra & Mahindra group company. Sir, Mahindra Group, just wanted a clarification. Mahindra continues to remain a meaningful contributor to revenue. Could you indicate where this share stands today versus three years ago? When you would ideally like this concentration to settle over from the current time? Yeah. We are very proud of our association with both the large businesses of Mahindra, which is automotive, a very large business in the country, as well as their tractor business, which is the world's largest tractor company by volume. We are very proud of our association, and obviously, Mahindra & Mahindra is our lead marquee customer. Three years back, this ratio was pretty high, closer to the range of almost 70%. These over years came down to less than 50%, but again, because of happy news that both Mahindra business of auto and tractor have done better than the overall industry growth. Since they are doing so well, obviously their share of our business has gone up. We are now closer to 60% with them. We don't have a target to reduce that ratio at all. Our target is that we should win as much business from Mahindra and as much business from non-Mahindra clients. We will keep giving our best foot forward. We don't want to lose any business from Mahindra, and we have won a lot of business in the last 12 months from Mahindra. Similarly, we are winning businesses for non-Mahindra clients, and that is, again, our very strong focus area. We'll continue to do well on both sides. Got it, sir. Thank you for the quick clarification. Sir, one more last question if you can allow me to ask. Sir, your warehouse utilization level, I just wanted to know. Sir, your warehouse capacity has expanded meaningfully over the last few years. Sir, could you disclose the current utilization level of your warehouse portfolio and at what utilization level, you have any tracking metric, at what utilization level does operating leverage becomes meaningful? Broadly, we had shared two numbers earlier, which we stopped stating in every quarter, but I can still quote that number. In the quarter one, we had shared that we had 1.6 million sq ft in quarter one of last year, okay? Yes We had set a target that we will reduce this 1.6 million sq ft of white space by 95%. Okay. I can share with you that we are on track for that. That target was to reduce it by 95% by September of this year. We are on target. Okay. That's what we will share. We will not share what is our overall utilization. They are very high utilization levels currently. We don't want to share that number because it is not good for when we are pitching for new businesses. Okay, sir. No worries. Thank you. Thank you. We have our next question from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead. Yeah. Good evening. Thank you so much for the opportunity, sir. First question is, with respect to contract logistics, 26% revenue growth, obviously you attributed this to the M&M group as well as the non-M&M. The margins, despite such a strong growth, we have seen that actually the margins kind of seen a contraction on both year-over-year, quarter-over-quarter. If you could clarify how much of that could get reversed, like, I think, it was called out with respect to wage revisions, et cetera. If you could call out, A, part of this can get reversed. B, if we're looking at a structurally lower margin, like we were 7.7% in Q4 FY 2026, is it fair to say that the new normal is 7% and that's the starting point from here on? Achal, I'll come in first, Isha will then come in to give you more color. Broadly, I can tell you that there were three areas which led to margin contraction. A very big one was that we have a sales target for this year. Thankfully, again, happy to share that with the good work done by our teams, we have over exceeded our target in quarter one. That had led to lot of new starting up cost because we were opening a site almost every week, a new site every week kind of run rate. Since we were opening so many new sites, there are always start-up costs. As I said in my previous answer, it takes three to four months for the site to normalize and then the profits to come back at the level where we had won the business. First three, four months are always more cost and revenues follows later. Some of that margin, Isha will share with you some numbers on that, there is some start-up cost in this, which obviously, since it is the first few months of the start-up cost, this will normalize. The other cost was that you know that all over the country, there was an issue of manpower availability in quarter one because of the various factors which were playing out in terms of LPG shortage, and there was some reverse migration happening to villages. That led to us hiring some ad hoc manpower, which has more or less streamlined again. I think we are back to our normal labor thing, but that led to some cost pressures. The third was on the fuel price increase. Even though for us the fuel is a pass-through, we have been able to pass it down to our customers. It doesn't happen on the same day because all these costs are actually to be discussed with the customers, the POs have to be amended, it also takes some lag. These were broadly the three factors, and Isha can share more details on it in her remarks. Yeah. Thanks, Hemant. Achal, nothing much to add from what Hemant has said. Just to give you sort of a broad sense, the startup cost that Hemant spoke about, I would say about half of the year-on-year dilution, et cetera, should have come from the startup cost or the ramp-up cost that Hemant talked about. That, of course, is a temporary sort of bunching up of cost in one quarter that should normalize as the year goes on, we will seek to recover it. The rest is on account of some of these other operational challenges, disruptions, cost escalations that we have faced. I think you are aware that there is a lot of work ongoing on the ground to be able to sort of recover some of those efficiencies. I will also say that while there has been a gross margin dilution, it is also very noticeable that there has been work done on the overhead side through other cost efficiencies and optimization to try and recover some of that cost hit at an EBITDA level. Right. That work is ongoing, we will continue to do that. Thank you. Just to clarify, when you mentioned half of that was on account of the startup cost, you're talking at the gross margin, which is 40 basis points? Yeah down year-over-year? Right. Okay. Got it. The second question I had was with respect to the B2B Express. With a 57% revenue growth, we've seen the EBITDA margins improving. How do you see, is this the run rate we should work with? Is there any significant seasonality out here which we should bake in? C, if you could clarify with respect to particular sector which is driving this Express business. No particular sector. I think we are doing well on a cross-section of sectors, so I won't be able to call out a particular sector. I'll just repeat our confidence that we are working very hard towards an EBITDA breakeven in this financial year, we are very confident that target should be achieved by us. Got it. With respect to the run rate, is that one should work with the seasonality. Could you put clarity on that? There will be some seasonality. I have seen that if the rains are very heavy, then it leads to some kind of business operating issues. That can lead to some kind of a small here and there in quarter two. Generally, that gets covered in quarter three because the festive demand starts to kick in. There is always some seasonality, but nothing to call out. Got it. Just a clarification, if I may ask. Isha, if I add up all the segments, the numbers what you have given in terms of gross profit, there is some difference between the reported gross profit and this. Is there any classification difference? The EBITDA tallies exactly. Just the gross profit. If you could clarify on that. You are talking about the numbers in the segment-wise breakup versus the overall gross profit? Yes. There shouldn't be. There could be some intercompany elimination, et cetera, I will check on that and come back to you, Achal. There shouldn't be. The INR 194.5 is the gross profit for the quarter. Got it. Thank you so much. I'll fall back in the queue for follow-up. Thank you. Sure. Thank you, Achal. Thank you. We have our next question from the line of Jinesh Joshi from PL Capital. Please go ahead. Thanks for the opportunity. Sir, I have two, three business-specific questions, not directly relating to numbers. First is that, typically, when do the yield negotiations happen with our anchor client, M&M? Historically in the past, what kind of escalations have we seen? I understand the growth in contract logistics is driven by M&M, and their volume growth has been really good, which is helping us. If you can help us understand how yield negotiations happen and how have they been in the past. Not understood the question, because if M&M is coming up with any new, let's say, warehouse in this month, that warehouse will get negotiated in that particular month. There is a process that if there is a fuel escalation beyond 5%, then with M&M, it happens within the first 24, 48 hours. It keeps on going. There is no particular quarter or particular month where we bunch it together. Okay. Sir, let me put it this way. As volumes increase of M&M, you need more warehousing space to house the components. Yeah. In that sense, the revenue increases, but that is the volume-led growth. I was talking about any price-led growth that we typically negotiate with this. Those happen at the end of the contract period. There is no fixed particular contract. With M&M, we have multiple contracts. For example, let's say after-market spare part, there are separate contracts. For their in-plant logistics, there is a separate contract. For their outbound, there is a separate contract. For their part truckload that we handle through Rivigo, there is a separate contract. There are multiple contracts, and there is a cycle of contracts. Some contracts are done for one year, some contracts are done for three years, some for five years. It depends. It's very difficult to give you a. This is an ongoing activity, keeps happening through the year. For example, now we had a INR 8.10 increase on fuel, which was impacting all the segments that we had with M&M, and we got a price adjustment done within the 48 hours. There is no particular time. All I can tell you is that these are continuous discussions that any supplier or any partner has with the customer across the industry, and we continue to follow the same practices. Understood. Sir, secondly, can you highlight what kind of customer overlap do we have in the 3PL and the B2B Express business? Have you exploited this customer overlap advantage to the fullest, and is that the reason why we are doing really well in our B2B Express business? It has also got to do with multiple client wins that you have been talking about? Great question, Jinesh. This is one of my objectives also, that if we have a customer on the 3PL side, make sure that all verticals within MLL try and pitch to that customer. A lot of work has happened. But if you ask me, have we done fully? No. I think there is still a lot of work to be done in terms of cross-pitching of various products to a 3PL customer. A lot of improvement done, lot of wins we have got, but I think there is still a lot of work to be done. Understood. Sir, one last question on the numbers side. If I look at our B2B Express business, while the gross margin has improved on a sequential basis from about, say, 4.8% in the previous quarter to about 6%. The extent of EBITDA loss reduction is just INR 1 crore on a sequential basis, and given the fact that the business has a very high operating leverage, ideally, the benefit of GM improvement should flow through to EBITDA, right? I know the numbers are very small at this point in time. But is there anything specific that you would want to highlight which has led to slightly lower EBITDA loss reduction when you compare that with your sequential gross margin expansion? As I said in answer to my previous question, that we had three, four levers which were like a headwind for us. I had narrated three headwinds for the contract logistics business. Out of that, one headwind was also for the B2B Express, which is the manpower cost. Since there were lot of concerns in Q1 on manpower availability across industries across the country, we also faced the same issue in contract logistics as well as B2B Express. In many of our hubs, we had to hire ad hoc manpower to make sure that our customers are not inconvenienced in any way. Whenever you hire ad hoc manpower, that is at a higher cost to a long-term manpower that we have. That has since stabilized. There was a headwind in quarter one, which we hope that will not be there in quarter two. Okay, sir. Okay, got it. Thank you so much, and all the best. Jinesh Yeah The fuel price increase for contract logistics, which are large contracts, for example, M&M, I said, happened in 48 hours. Where in B2B Express, we have a huge tail of customers, hundreds of them. There it takes a negotiation with each one of them. It takes time to pass down the fuel cost increase in B2B. That process is still on. Broadly, we have got the fuel escalation passed on for 80% of the customer, even in B2B. That also was a little headwind, if you see at the blended gross margin level for B2B Express. That also as we fully pass on, that goodness will come. That means that the sequential expansion that we have seen on the gross margin side, despite the fuel price headwind, we have seen a 120 basis points expansion. Had that not been the case, the gross margin would have been even better. Adjusting for that one-off manpower cost, your EBITDA losses would have been even lower. Yeah. Broadly, that's why we are saying we are very confident that we should be able to achieve our target of EBITDA breakeven in this year. Thank you, sir. Thank you so much. Thank you. We have our next question from the line of Ankita Shah from Elara Capital. Please go ahead. Yeah. Thank you, and congratulations on the good quarter. Sir, on contract losses again, the margins are coming again on this. How do you think, once these one-off costs are behind, up to what level do you see in the near term that these margins can be scaled up to from 6%-7% that we are reporting right now? Yeah. Hi, Ankita. Like I said, some of these are sort of one-time cost impacts. I wouldn't call them one time, but I would say they are bunched up in one particular quarter, which is why they are extremely visible and seemingly adverse in Q1 FY 2027. Some of these are sort of overall more macro headwinds that we will have to work through and counter with the help of our execution excellence and cost efficiencies across various parts of the business. We continue to expect that the gross margin across the business will expand. We have said that 150-200 basis points is kind of the expansion that we are looking at in the gross margin from a medium-term perspective, and we will continue to maintain that view overall. This 150-200 is only for contract logistics segment, right? For the overall business, Ankita. For the overall business you mentioned. Okay. Although warehousing space has come off on a YoY basis, why has the depreciation gone up? Sorry, can you repeat your question? Although the warehousing space has gone down on a YoY basis, why has the depreciation gone up? The warehousing space has not gone down on a YoY basis, Ankita. White space has gone down on a YoY basis. Overall warehousing space has gone up. If you remember, a very similar sort of question had come up in the second quarter of last year when we have lot of new warehouses sort of capitalized at one time, which causes an impact in depreciation as well due to the curve impact of Ind AS 116. That continues. If you look at it sequentially, there has not been a substantial increase in depreciation at all. In fact, it is more or less sort of in line. If you look at the standalone financials, it is more or less in line, and I think broadly in line at a consolidated level as well. The year-on-year increase is because of overall increase in space. 21 million sq ft is the warehousing space? I'm sorry. Is the warehousing space 21 million sq ft? Approximately, yeah. Okay, fine. Lastly, on contract logistics side, how much growth you would attribute-- You said both are contributing for you, M&M growth as well, and your new initiative to scale up e-commerce, manufacturing, telecom vertical. Would you be able to quantify which segment has shown a higher growth? Is it M&M or the non-M&M other businesses like e-commerce, telecom? Yeah. That's it. No, Ankita, we will not be able to quantify that growth. I will say both M&M and non-M&M businesses are very important growth levers for us going forward from a topline and profitability perspective. Okay. That's it from my side. Thank you, Anvita. Thank you. We have our next question from the line of Raman from Sequent Investments. Please go ahead. Hello sir, can you hear me? Hello. Yes, we can hear you. Sir, I just have two questions. One is, what percentage of your total business is from Mahindra? We have close to 60% business from Mahindra. Do you plan to maintain this? Is this a sustainable percentage where the management sees for the long term, around 60% of the entire business will be Mahindra for a longer picture? Are you planning to bring this down a little? Actually, this is not even a target for me. Okay. Basically, I want to win every possible business of Mahindra, I want to win every possible business that we can win from non-Mahindra customers. The ratio is an outcome of the work that we are doing. In my working, honestly, I don't even monitor this number. I would like to win 100% business from Mahindra and 100% business from all other non-customers. Understood, sir. Sir, my second question is with respect to the airport taxi business under your mobility business. I think from the presentation, you started a airport taxi business or relaunched the airport taxi business at Noida Airport. I just want to understand what the management's view on this particular area is, line of business. Are we planning to launch this airport taxi services to other airports as well? How are you planning to scale this business? Is there any plan? Raman, I would say that we are being very cautious in our scale-up. As I said, one of our key objective is not to scale business for the sake of scale. We want to scale the business profitably. Our current strategy is to focus on airports where it is a profitable business for us. In fact, we are withdrawing from Mumbai Airport. If you would have noticed, if you were transiting through Mumbai Airport. we had Alyte service available. As I speak to you, we are withdrawing from that airport, we are doubling down on the Delhi Airport, we have started with the Noida Airport. Noida Airport will scale up at their own pace, we will scale up that business along with the Noida Airport. As they keep adding flights, we will keep adding fleet. Very happy to share with you that in Noida Airport, we are the preferred taxi partner of the Noida Airport. Similarly, in Delhi Airport, we have the best lane. If you were to come out of the gate number 2 of Delhi Airport, you will see our counter as the most prominent counter. There also, we have the preferred lane. Wherever we are able to secure these kinds of rides, we will scale up, and wherever we don't have any preference on these rides, we will withdraw. That is a reason for us to actually withdraw from Mumbai Airport. If my understanding is correct, were you making loss at Mumbai Airport from this business? I can only tell you that that was not meeting our internal threshold. Okay. Understood, sir. Sir, with respect to, again, the contract logistics as well as the express. Contract logistics has grown 26% and express has grown 58%. I know you said you won't disclose the volume and yield figures, but can you just give a split between how much was the contribution from volume aspect and how much was the contribution from the yield aspect out of the entire 25% growth? I'm sorry, we won't be able to share that number because if we share that number, then there can be a reverse calculation to look at a more granular, our margin profile, which we don't want to share like that. I can only tell you that we are winning new businesses at a threshold yield, which is higher than our internal target, and we are very confident that we should be achieving EBITDA breakeven in this financial year. Okay, sir. Thank you, sir. Thank you. We have our next question from the line of Sonal Minhas from PTF Capital. Please go ahead. Hi there, this is Sonal Minhas from PTF Capita l, thanks for taking my question. I have two questions. First is with regard to the express mobility business. I wanted to understand what is our value prop to horizontal aggregators or let's say B2C banks, given the fact that there are two dominant number 1, number 2 players that exist in the market. The second question was that on the KPI side for the SCM business, what is a near term, one year out, two years out target that the company has on return on capital employed? If you could share that would be great. On the second part, clearly, Sonal, we don't share forward-looking guidance on ROCs and all. All I can tell you that our ROC metric has been improving, and at the end of H1, when we share our balance sheet, we will also share that number with you at the end of quarter two, half yearly. We will share that number with you, which is looking much healthier than what it was a year back. Got it. Coming to what is our pitch to our customers, our pitch is very strong. We run a very strong operating metrics. Our customer service levels are very respectable. We are very competitive in terms of our quotes to our customers, so pricing-wise, we are very competitive, very responsive to our customers. Each one of us is available to our customers 24 by 7 if something happens. Plus, we are from Mahindra Group, so we bring the best of corporate governance to our business. Many of our customers value these things a lot, and that is why that we are winning so much business, even on the B2B side. Got it, sir. There is an overlap between the last mile delivery and the express mobility customers, sir, if I may understand that a little bit more. Not so much. I would agree that this is our internal target that we need to have synergies between our various verticals, and we are working very hard to it. As I said in my earlier response, I think there is still a lot of work to be done by our leaders in this. Sure, sir. Thanks for taking my question. Thank you, sir. Thank you. Thank you. The last question will be from the line of Shaurya Yadav from Growthsquare Ventures. Please go ahead. Am I audible? Yes, Shaurya, we can hear you. Sure. Sir, my first question is related to the express business turnaround. If you can tell how we are improving the lane utilization. I just want to understand how we are improving the density of our lane or density per volume or order. What exact strategy we are implementing on that front? If you can explain it with some example, that'd be great. Difficult for me, Shaurya, to explain you that. These are very operational metrics. Let me tell you how I review the business. I do review lane-wise profitability. I also review what is our forward lane and return lane utilization. If any of our lanes, either on the forward or reverse are not utilized fully, obviously that is a target for our teams to make sure that we win more businesses or optimize the loads in a way that either the vehicle is optimized, because you can always change the vehicle for a smaller or a larger vehicle, or we are able to then give some incremental loads from that particular lane and do that. There are multiple levers. There is no single answer to it. This is a core job. We have people who are specialized in this area who do this data analysis 24 by 7, and we are looking at how do we optimize each lane, forward, reverse, whether we can optimize the customers, whether we can optimize volumetric load to heavier load, whether we can optimize the vehicle size, single axle, multi-axle, this many sq ft, that many sq ft. This is like a very strong operational rigor that we have in our business, and there is no one-line answer that I can give you. These are multiple, so many hundreds of factors being played at a game, and then at some point, with lot of use of technology, we are able to evolve the one fine balance, which will give us the best results. Got it, sir. No issue. Sir, second question is on the front of the 3PL industry. This is related to the B2C mode. There is so much debate going on regarding the industry consolidation on a 3PL side. Do you feel the consolidation which is going on in the 3PL logistics industry, it will stay, or there will be a room for more two, three players to enter? Do you feel the 3PL industry is getting the pricing power back post this consolidation and all? I can tell you my view overall, and I will not go into details whether it is B2B or B2C, but broadly as a logistics, I'm very bullish on this industry. I believe that the logistics industry in India has been a very unorganized sector. Anybody with two trucks is a logistics company, and that is now how any country's GDP works. Since we are a very large GDP now as a country and we have very strong aspiration to grow our GDP, logistics will play an outsized role in the growth of the country and the unorganized sector as we become more richer, as people have more disposable income and companies value sustainability and companies value their own time and their own effort, and business goes to people who can deliver that business the best, that means to the experts. I think there will be lot of consolidation in this industry which will happen, and also the industry will become more organized. I remain very bullish to it, and that is why we are kind of seeing the growth that you have seen in our quarter one results. Got it. Understood, sir, all the best. Thank you, Shaurya. Thank you. Ladies and gentlemen, that was the last question of the day, I now hand the conference over to the management for closing comments. Over to you, sir. Thank you so much all the participants for joining us today. We hope that we have been able to address all your questions and provided you insights into our performance and strategy. If you have any further queries or need any further information, we'll be very happy to reply to you. Please feel free to reach out to our team or our investor relations advisors at SGA. Thank you all very much. Good evening to you. Thank you. Thank you. On behalf of Mahindra Logistics Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.