# 1. Financial Performance ## A. Key Figures * **Revenue:** **₹1,685 Cr** Q2 FY26 (+11% YoY) * Gross Margin: 10.1% consolidated (+90 bps YoY) · 10.8% excluding MESPL (+70 bps) * EBITDA: **₹85.1 Cr** Q2 FY26 (vs. ₹66.4 Cr prior year) * **PAT:** **Loss of ₹10.4 Cr** Q2 FY26 (vs. prior loss, impacted by **₹4.8 Cr** one-off provision) * **Debt:** **₹73 Cr** consolidated gross debt post-rights issue (from ₹601 Cr) · **₹749 Cr** rights issue completed * **Rights Issue Proceeds Remaining:** **₹187 Cr** for general corporate purposes ## B. Revenue Growth * **Resilient Top-Line Expansion:** Double-digit revenue growth driven by strong momentum in **Auto and Farm** and **e-commerce** segments, supported by volume recovery and pricing discipline. * **Operating Leverage Visible:** Sequential revenue uptick of **INR3-4 Cr** translated directly into equivalent gross margin and EBITDA improvement, signaling efficient cost structure. ## C. Gross Margin * **Significant Margin Rebound:** Gross margin expanded sharply on favorable customer and business mix, with volume leverage contributing to an **INR5 Cr** improvement in gross profit. * **Express Segment Turning Point:** Express business achieved positive gross margins, though EBITDA remains under pressure due to continued strategic investments. ## D. EBITDA & PAT * **Profitability Impact from One-Off:** PAT loss of ₹4 Cr reflects a **₹8 Cr provision** linked to a 3PL customer bankruptcy, masking underlying operational improvement. * **EBITDA Flow-Through Strong:** Despite lower EBITDA year-on-year, **INR3 Cr** of gross margin gains flowed through to EBITDA, indicating disciplined cost management. ## E. Balance Sheet * **Debt Reduction Achieved:** Rights issue of ₹749 Cr successfully retired most debt, cutting consolidated debt from ₹601 Cr to ₹73 Cr and saving **₹40–45 Cr annually** in interest. * **Liquidity Position Strengthened:** **₹187 Cr** in unutilized rights issue proceeds remain available, providing dry powder for strategic initiatives. * **ROU Assets Surge:** Right-of-Use assets increased by **₹157 Cr**, primarily due to significant warehouse capacity additions, reflecting ongoing network expansion. --- # 2. Segment & Product Performance ## A. Key Figures * **Express Revenue:** ₹104.4 Cr Q2 FY26 (+14%) · **Gross Margin:** 0.2% (vs. -5.2% YoY) * **3PL & Warehousing Revenue:** ₹333 Cr Q2 FY26 (+20%) * Whizzard (Last-Mile) Revenue: ₹68.4 Cr Q2 FY26 (vs. ₹51 Cr YoY) · PAT: ₹1.07 Cr (vs. ₹0.2 Cr) * Mobility Revenue: ₹93.8 Cr Q2 FY26 (+16%) · PAT: ₹1.6 Cr * **2x2 Logistics Revenue:** ₹23.4 Cr Q2 FY26 (vs. ₹20.2 Cr YoY) · **PAT:** ₹1.7 Cr (vs. ₹1.2 Cr) * Freight Forwarding Revenue: ₹90.2 Cr Q2 FY26 (+4%) · PAT: ₹1.7 Cr (vs. ₹2.1 Cr) ## B. Express Business * **Gross Margin Positive:** Express Logistics achieved first-time gross margin positivity driven by cost discipline, optimized lanes, and improved yield, despite flat market share. * **Volume-Yield Expansion:** Strong double-digit revenue growth on back of **7% tonnage increase** and yield improvement, supported by short-term contracts and high service reliability. * **Strategic Inflection:** Business transitioning from expansion to consolidation, with MLL infusing ₹50 Cr into MESPL to accelerate path to EBITDA breakeven. * **Competitive Positioning:** Gaining ground in B2B Express via Mahindra brand strength and operational governance, though sector concentration and competition remain elevated. ## C. 3PL & Warehousing * **Robust Growth Resilience:** 3PL and warehousing delivered healthy revenue and profit growth, with **8 new projects operationalized** and **3 lakh sq ft added in Nashik**, boosting capacity. * **Client-Led Expansion:** Repeat wins from **Cummins, Bosch, Amazon, Flipkart, and Mahindra** reflect deep client integration and execution trust. * **Global Volume Growth:** Freight forwarding volumes rose **9% YoY** despite geopolitical and tariff headwinds, underpinned by diversified client base. * **Disclosure Policy Shift:** Company will no longer disclose warehousing realization rates due to competitive sensitivity. ## D. Last-Mile Delivery * **Operational Recognition:** Whizzard and Lords received multiple awards from **Amazon, Flipkart, and Cold Chain Excellence Awards**, validating service quality. * **Revenue Reporting Clarity:** Total last-mile revenue (₹89 Cr) includes both standalone and Whizzard operations (₹68 Cr), resolving apparent discrepancy in segment reporting. ## E. Mobility Services * **Premium B2C Launch:** New brand **Alyte Prive** launched in Delhi NCR for airport, intracity, and outstation premium rides, combining tech, comfort, and sustainability. * **Strong Segment Growth:** Mobility revenue and profit rose meaningfully, driven by B2B client wins and B2C brand rollout, now contributing **5% of total revenue**. --- # 3. Capacity & Utilization ## A. Key Figures * Space Under Management: 21.5 Mn sq. ft. → 20.5 Mn sq. ft. (YoY decline) * **White Space Reduction:** **>20%** (QoQ) * Single-Day Throughput: **8.2 Lakh units** (one site) · **13 Lakh units** (fulfillment center) ## B. Warehouse Expansion * **New Hubs Driving Costs:** Expansion into **eastern India**, including Guwahati and Agartala, has led to higher rental expenses despite lower managed space, driven by large-scale ROU additions. * **No New BTS Pipeline:** All recent warehouse additions are pre-announced, pre-committed projects; **no new Built-To-Suit developments planned**, marking a shift to demand-led capacity growth. * **Stable Property Mix:** Decline in managed space not attributable to shifts in rental property composition, which remains consistent YoY. ## C. White Space Reduction * **Aggressive Cost Optimization:** >20% reduction in white space achieved in one quarter, with **95% elimination target by September 2026** on track and slightly ahead of schedule. * **BTS Rollout Complete:** All committed BTS projects from the past 1–5 years are now operational, with full rental costs embedded in Q2 results, resolving prior overhang. * **Pricing Discipline Maintained:** Management declined to confirm impact on **realization per sq. ft.**, but emphasized cost savings did not come at the expense of pricing power. ## D. Network Utilization * **Peak Operational Efficiency:** Record single-day throughput across key sites reflects strong execution and scalability of expanded network. * **Utilization Set to Improve:** Revenue-generating utilization expected to rise as white space declines, aligning capacity with demand. --- # 4. Customer & Pricing Strategy ## A. Key Figures * **Auto Business Revenue Mix:** **58%** of total revenue * **Mahindra Business Revenue Mix:** **54%** of total revenue * **Yield Improvement:** **₹90/kg** increase year-to-date ## B. Customer Mix Shift * **Strategic Mix Optimization:** Express segment actively enhancing margin profile by prioritizing higher-yield contracts and exiting low-margin business. * **Concentration Dynamics:** Auto and Mahindra businesses jointly represent a majority share of revenue, indicating high customer concentration with strategic importance. ## C. Yield Improvement * **Unit Economics Enhancement:** Meaningful improvement in profitability per unit driven by customer and contract mix shifts, not volume growth. * **Analytical Discipline:** Customer-wise profitability assessments and yield management frameworks now embedded in commercial strategy to sustain margin gains. ## D. Service Level Metrics * **Premium Service Validation:** Alyte Prive achieves **99% 5-star ratings** at scale, reinforcing brand premium and customer satisfaction. * **Operational Excellence:** Net Service Levels exceed **90%**, a benchmark reflecting strong execution and underpinning pricing leverage. --- # 5. Cost & Efficiency Initiatives ## A. Key Figures * **Cost Reduction:** **>20%** in current quarter * Rental Costs: 15–20% increase YoY on a consistent basis * **Rental Revenue Growth:** **15–20%** sustained growth * **Depreciation Run Rate:** **₹72 Cr** quarterly (new normal) ## B. Cost Optimization * **Strategic Cost Discipline:** Aggressive cost optimization driven by contract exits, structural changes, and overhead control, resulting in **strong double-digit cost reduction**. * **Investment-Driven EBITDA Pressure:** EBITDA gains partially offset by **non-recurring expenses** from capital infusion and **intentional hiring spurt** in Express segment. ## C. Rental Cost Trends * **Favorable Rental Spread:** Rental income growth outpaces cost increases, with a widening gap signaling improving asset productivity. * **Peak Costs Ahead of Decline:** Rental expenses expected to trend downward as **white space absorption accelerates**, particularly in **eastern India**, enhancing future yield. ## D. Depreciation Run Rate * **Stable Depreciation Outlook:** Depreciation has reached a **sustained quarterly run rate** due to full commissioning of new facilities and Ind AS 116 impact, with **no material future increases expected**. * **Accounting-Driven Peak:** Current depreciation and interest levels reflect the **peak effect of Ind AS 116**, with prior lease structures differing in scale and duration. --- # 6. Risks & Operational Challenges ## A. GST Disruptions * **Headline:** **INR 8 Cr provision** taken for GST-related uncertainties amid client insolvencies, with no confirmation on adequacy or outstanding exposure. * **Headline:** GST disruptions until September 22 suppressed industry activity and created a one-off cost impact, offsetting pre-festival cost efficiencies. ## B. Pricing Pressure * **Headline:** Last-mile margins pressured in Q1 by aggressive customer pricing, partially reversed in Q2 as some clients restored rates. * **Headline:** Ongoing customer-driven pricing pressure prompting strategic reevaluation of customer mix to protect profitability. ## C. Peak Season Timing * **Headline:** Festive demand started earlier, but peak season onset was delayed, complicating cost absorption despite early temp staffing and operational readiness. * **Headline:** Exceptional execution during Diwali logistics peak resulted in **minimal escalations**, underscoring operational resilience despite timing misalignment with Navaratri and Diwali. --- # 7. Guidance & Outlook ## A. Profitability Path * **Improving Industry Dynamics:** Industry outlook has strengthened in the last quarter on the back of domestic resilience, supported by e-way bill growth, GST cuts, softening inflation, and strong festive demand. * **Underlying Recovery:** Excluding the one-off PDD charge, underlying performance showed sequential improvement, driven by operational enhancements. * **Path to Profitability:** Management has intensified focus on achieving **EBITDA positivity** through multiple levers, with confidence growing in sustained growth and yield improvement. * **No Formal Timeline:** Management refrained from providing forward-looking guidance on EBITDA positivity but committed to updating on progress as milestones are achieved. ## B. Strategic Focus * **Strategic Realignment:** H1 FY’26 marked a period of transformation, including a 360-degree review and recalibration of the operating model to build a stronger, more resilient foundation. * **Three-Pillar Strategy:** Margin growth is being driven by excellence in operational execution, disciplined cost optimization, and sharp focus on site-level economics. * **Growth with Discipline:** The company is prioritizing mature, sustainable growth, with H2 focus on yield improvement, operational excellence, customer retention, and network optimization. * **Alyte Prive Expansion:** Scaling to Noida International Airport underway, with NCR remaining the core market for the next 12 months.