Indian company Mahindra Logistics is making losses due to higher costs and weak demand

Indian company Mahindra Logistics posted a first-quarter loss on Monday, weighed down by higher spending and lukewarm demand.

The carrier posted a consolidated net loss after tax of Rs.85.5 million (US$1.04 million) for the three months ended June 30, compared to a profit of Rs.135.2 million a year earlier.

The consolidated total spending rose nearly 10% to Rs.12.99 billion.

The company had previously noted that the slowdown in network rollout in the e-commerce and consumer markets was impacting its business, which analysts said led to a slowdown in demand and a subdued quarter with limited volume growth.

It also warned of a spillover of major events such as global financial turmoil and unusual rainfall in some parts of the country.

The last time the company posted an after-tax loss was in the quarter ended June 2020, during the COVID-19 pandemic, which hit the freight transportation industry as economic activities around the world ground to a halt.

Consolidated operating revenue rose about 8% to Rs.12.93 billion, driven by more than 6% growth in the company’s main supply chain management business.

In a stock exchange release, the company said demand is expected to improve in fiscal 2024 as the return to the office normalizes.

The enterprise mobility services segment rose 39% to Rs.794.6 million.

The logistics arm of Mahindra Group, which competes with Delhivery, provides services such as freight and cargo movement, human resource management and warehousing facilities to multiple industries.

Shares of Mahindra Logistics closed down 2.7% after the results.

Related Articles

Back to top button