With its operations in supply chain management and enterprise mobility services, the company has undertaken a technology-enabled, asset-light approach that enables scalability of services. It also offers flexibility to develop and offer customised logistics solutions across a diverse set of industries
Mahindra Logistics Limited (MLL) is one of India’s largest third-party logistics (3PL) solution providers. The company provides a wide range of customised, technology-enabled integrated logistics solutions and corporate mobility services. Its strength lies in the wide bouquet of offerings enabled by the extensive network of strategically located warehouses and its pan-India transportation network. As MLL operates an asset-light business model, the assets (vehicles and warehouses) necessary for its operations are owned or provided by a large network of business associates.
This technology-enabled, asset-light approach enables scalability of services. It also offers flexibility to develop and offer customised logistics solutions across a diverse set of industries. MLL operates in two distinct business segments: supply chain management (SCM) and enterprise mobility services (EMS).
Commenting on the company’s performance and its eDEL (electric last-mile delivery service in India) initiative, Dr. Anish Shah, Chairman and Non-Executive Director, said, “We continuously worked towards reimagining a sustainable future for logistics and our role in it. We secured ourselves a firm foothold in that future by launching one of India’s largest EV-based last mile delivery services, eDEL by Mahindra Logistics.”
“This is already operational across six major cities in India and will be expanded to a total of 14 cities in the next 12 months. It not only ensures a net zero carbon footprint delivery system in urban and semi-urban areas, but also does so by optimising economics with EVs better than conventional vehicles. Our long-term association with the largest e-commerce and consumer products companies in India ensures that our fleet expansion plans and average utilisation are industry-leading as always. The new EV initiative is enabled by proprietary technology and control systems that are bound to enhance customer experience while ensuring safety and carbon neutrality,” he added.
Segment Performance
The performance highlights of the company’s segments during the financial year FY 2020-21 are stated below:
Supply Chain Management (SCM)
“The scalability and flexibility of our asset-light business model has allowed us to continue growing even in such challenging times. We have seen 28% growth in the core segments of supply chain and freight forwarding, achieved revenue of Rs 3,264 crore and profit after tax (PAT) of Rs 31 crore for FY21. A large part of the growth has been driven by integrated solutions and our innovative approach to serving our customers despite disruption and uncertainty. We have further pushed this envelope and have been able to successfully execute end-to-end integration of solutions while taking over planning and operating all logistics activities for customers,” Shah informed. Despite the headwinds, the financial year 2020-21 brought several green shoots and emerging opportunities with gradual easing of the lockdown.
The warehousing, transportation and supply chain business bounced back and recovered to more consistent near pre-pandemic levels with changes in consumption patterns, growing digital channels and adoption of omnichannel distribution models driving the growth. The SCM segment revenues stood at Rs 2,840.03 crore for the financial year under review as compared to Rs 2,893.29 crore for the previous year. At a consolidated level, the warehousing and value-added services revenue continued to grow strongly with revenue from non-Mahindra Group warehousing and value-added services recording a year-on-year growth of 15.98% during the financial year under review.
Enterprise Mobility Services (EMS)
The EMS segment of Mahindra Logistics continues to be severely impacted due to most companies following the ‘work from home’ policy in the wake of the pandemic. Further, with the second wave of the corona virus many states have imposed restrictions which have dampened recovery in the segment. The EMS segment reported a de-growth of 67.61% in its total revenue during the financial year 2020-21, amounting to Rs 119.08 crore as compared to Rs 367.61 crore for the previous year.
Standalone Performance
During the financial year under review, MLL’s revenue from operations was Rs 2,959.11 crore as compared to Rs 3,260.90 crore for the previous year. The profit after tax stood at Rs 23.99 crore for the financial year under review as against Rs 55.14 crore for the financial year 2019-20.
Consolidated Performance
The consolidated revenue from operations for the financial year under review was Rs 3,263.72 crore as compared to Rs 3,471.14 crore in the previous year, implying a de-growth of 5.97% year-on-year. The non-Mahindra Group consolidated supply chain revenue grew by 12.62% year-on-year to Rs 1,547.47 crore for the financial year under review in comparison to Rs 1,374.10 crore for the previous year. The consolidated EBITDA for the financial year under review stood at Rs 151.69 crore over the previous year of Rs 172.25 crore.
SCM Business
The company’s SCM business offers customised, end-to-end logistics solutions and services including transportation and distribution, warehousing, in-factory logistics and value-added services to its clients. It operates through a pan-India network comprising 16 offices and 500+ clients and operating locations. The business has a large network of 1,450+ active long-standing business associates who supply vehicles, warehouses and other assets and services to the company. This division serves 300+ domestic and multinational companies operating in several industry verticals in India, including automotive, engineering, telecom, consumer goods, pharmaceuticals, e-commerce and commodities. It has developed expertise in providing scalable and customised solutions in various spheres.
This includes fulfilment, cross-border logistics, warehousing, stores and linefeed, yard management, contractual workforce management, just-in-time services, aftermarket logistics, layout, and process design support, returns processing and distribution. The segment manages 17+ million sq. feet of warehousing space spanning pan-India network of multiuser warehouses, built-to-suit warehouses, stockyards, network hubs and cross-docks. It operates in-factory stores and line feed at 50+ manufacturing locations. The express network serves 21,000+ pin codes through 50+ hubs located pan-India. SCM business has sourced and developed customised technology systems to provide innovative and cost-efficient solutions to improve transparency and visibility for its clients.
With a deep understanding of customer needs gained from serving customers across diverse markets, it has established solution design and development processes to specifically cater to complex requirements of its customers’ supply chain. To manage the company’s affairs in a fair and transparent manner, MLL has adopted detailed and comprehensive governance practices and has established policies related to whistle blower, nomination and remuneration, related party transactions, etc. Through its portfolio of offerings across sectors, the company has emerged as a one-stop shop for its customers, having capabilities to design, execute, improve and optimise logistics-related activities throughout the value chain.
EMS Business
MLL provides technology-enabled people transportation solutions and services across India to 100+ domestic and multinational companies operating in the information technology, information technology-enabled services, business process outsourcing, financial services, consulting and manufacturing industries. The spectrum of its services also includes on-call services, green-fleet solutions, and event transportation and subscription services. It offers services through a fleet of small and mid-sized vehicles, sports utility vehicles, electric vehicles (EVs) and buses provided by a large network of 350+ business associates across 12 cities.
MLL has rolled out a nationwide brand for its mobility service called Alyte. An integrated service platform, Alyte supports multiple offerings such as employee transport management along with customer and network management and utilising a common asset pool to drive efficiency. MLL offers fully integrated technology services such as application-based interactions for optimised routes, route planning and optimisation engine, and round-the-clock control tower operations (CTO) for tracking all vehicles and passengers and electric vehicle telematics.
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Mahindra Logistics acquires Meru Cabs
MD & CEO, Mahindra Logistics
The addition of Meru Cabs under its brand will further strengthen MLL’s mobility business
Mahindra Logistics Ltd. (MLL), one of India’s largest third-party logistics solution providers, has announced its acquisition of Meru Cabs. The acquisition is a strategic move to consolidate and expand MLL’s business in the enterprise mobility space. The move will see MLL take 100% equity share capital of Meru Mobility Tech Private Limited, V-Link Fleet Solutions Private Limited and V-Link Automotive Services Private Limited from Meru Travel Solutions Private Limited (MTSPL) and 100% equity share capital of MTSPL from Mahindra & Mahindra Limited (M&M).
A ridesharing company founded in 2006, Meru Cabs revolutionised the way people travelled in cabs by offering AC cabs at their doorstep with a single call. Today, Meru Cabs has a significant presence in the airport ride hailing segment and provides on-call and employee mobility services to the corporate sector in India. It also has a large number of electric vehicles in their fleet.
The addition of Meru Cabs under its brand will further strengthen MLL’s mobility business. MLL is already a leader in the enterprise mobility service (ETMS) business, which operates under the ‘Alyte’ brand. With this acquisition, MLL will enhance its range of mobility solutions with strategic focus on enterprise customers and electric mobility. Speaking on the occasion, Rampraveen Swaminathan, Managing Director and CEO, Mahindra Logistics, said, “I am pleased to welcome Meru Cabs, a pioneering brand in the shared mobility space in India, to the Mahindra Logistics’ family. The acquisition complements our mobility services portfolio with an expansion in airport ride hailing and on-call services.”
“We anticipate significant synergies by leveraging the combined capabilities in supply, technology management and electric mobility. The combined capabilities of Meru Cabs and Alyte will enable us to better serve our B2C and enterprise customers with an expanded portfolio of services delivering on a promise of safety, customer excellence and sustainability,” he added. MLL specialises in supply chain management and enterprise mobility i.e. people transport solutions. Founded more than a decade ago, MLL serves over 400+ corporate customers across various industries like automobile, engineering, consumer goods and e-commerce. It pursues an asset-light business model, providing customised and technology enabled solutions that span across the supply chain and people transport operations.