We are delighted to present to you the first Annual Report of your Company - Mahindra Logistics Limited (MLL), since its Initial Public Offering (IPO). The financial year 2017-18 has been important and eventful for your Company as it successfully listed on the stock exchanges through its IPO. I am pleased to welcome all our new shareholders and thank them for their whole-hearted support to our IPO.
During the financial year, MLL continued its strong performance, reporting consolidated revenues of Rs. 3,416 crore for the financial year ended FY’18, a growth of 28% in comparison to the previous year Your Company also recorded its highest ever profits during the year under review. In FY’18, the profit after tax stood at Rs. 65 crore, registering a year-on-year increase of 42%. Our freight forwarding business has also seen a phenomenal growth during this period.
With the successful implementation of GST, your Company took possession of two multi-product, multi-user warehouses in Tauru Road, Gurgaon and Chakan, Pune. Keeping up with our continuous innovations in technology, during this period, we have developed a state-of-the-art last-mile optimisation software & account receivable management systems for high visibility, efficiency & responsiveness. Your Company strongly believes that its growth is directly linked to enhancing the skills of its workforce. We are happy to inform you that a total of 15000 man-days of training has been carried out during this period. In addition to this, we have started training both MLL and other drivers under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY). Our target is to train 10,000 drivers across India, in FY’19.
The Indian logistics sector is large, but fragmented. According to CRISIL, the share of organised Third Party Logistics companies is around 5% of the overall market. However, the year 2017-18 was a remarkable year for the logistics sector, as many key structural reforms were rolled out which are likely to have a very significant impact on the sector.
a. GST is a game changer for India’s economy and the logistics sector. Despite initial implementation challenges, this policy change will have a profound impact on the supply chain across industries.
b. The Logistics sector has been awarded Infrastructure status, which will prove very beneficial for the industry. In addition to this, the appointment of a Logistics Secretary and the launch of infrastructure projects like Bharat Mala, Sagar Mala, Udan, Multimodal logistics parks etc, will provide further impetus to the sector.
c. The implementation of e-way bill, a major procedural change being rolled out by the government and the initiative to set up a National Logistics Portal by the Department of Commerce will significantly enhance the efficiency and transparency within the logistics sector.
Your Company has been at the forefront when it comes to implementation of these initiatives which will provide momentum to the logistics industry. These will reduce the cost of logistics in the country and should also boost India’s rank in the Logistics Performance Index (LPI). At MLL, we believe that “Move in India” is a critical requirement for “Make in India” to succeed.
The past year has seen more reforms and positive changes for the logistics sector than the earlier decade. Looking ahead, the industry in general and your Company in particular, are both likely to undergo significant transformation.
a. Today the logistics industry in India is highly fragmented and unorganised. However, the share of 3PL companies in the sector is poised to expand substantially, and as one of India’s leading 3PL companies, we hope to play a transformational role in helping the industry become more organised.
b. Customers’ expectation from 3PL companies are also poised to increase further. As customers increasingly focus on their core activities and increasingly outsource their logistics services to subject-matter experts like MLL, they will seek comprehensive and efficient solutions. This trend offers MLL the opportunity to exploit the emerging potential, and further expand and deepen our service offerings to our customers.
c. In light of these industry tailwinds, the Company plans to continue its focus on increasing our acquisition of third party non-Mahindra Group clients, as also through increased penetration across the entire client portfolio.
d. We see technology as a major enabler in our plans for growth and going forward we will continue to enhance both internal operations and customer facing processes by effectively leveraging technology.
e. At MLL, we will continue to operate on an asset-light model and strengthen our relationship with our business partners to enable continuous growth.
Rise For Good
From our employees to the society at large, we see an incredible opportunity to drive positive change for all our stakeholders, re-affirming our commitment to create a better world. In everything we do, we consciously aim to Rise for Good, a fact that is clearly evident in our purpose statement - Accelerating Commerce, Empowering Communities to RISE.
As part of our Corporate Social Responsibility (CSR) initiatives, your Company has undertaken projects in the areas of Rural Development, Road Safety, Health and Environment, creating substantial benefit for stakeholders and communities.
I take this opportunity to acknowledge the efforts of every one of our employees for their contribution, dedication and commitment which has resulted in MLL emerging as a preferred name in this industry. My gratitude to our clients for continuing to repose their trust in our Company. The engagement and goodwill we enjoy with all our Business Partners is an invaluable ingredient of our continued growth, and requires our special acknowledgement.
The Government and various industry bodies have played a significant role in our success with their forward-thinking policies, which have also provided further momentum to the industry.
In closing, my thanks to all our stakeholders for their undivided interest, support, faith and encouragement over the past year. We look forward to continuing our strong and enduring partnership with them to help us achieve new milestones in the year ahead.