Mahindra Logistics reports significant impact of Covid on Apr-May business

June 22, 2021: Mahindra Logistics saw a significant impact on its business in the last two months due to lockdowns in various states, but now it is back on a stronger recovery path and expecting this momentum to further consolidate during the second half of this fiscal.

“With Covid-19 lockdowns and restrictions being eased in various states, the company is optimistic of carrying on the positivity in the business outlook gathered in June to the third and fourth quarter of FY2022,” reported PTI.

Mahindra Logistics is a logistics provider which offers solutions in two distinct business segments – supply chain management and enterprise mobility. It offers supply chain solutions to diverse industry verticals such as engineering, consumer goods, pharmaceuticals, telecom, commodities, and e-commerce.

Rampraveen Swaminathan, MD, and CEO of Mahindra Logistics said, ''Even now as we talk today, I think as lockdowns have eased, we have seen a surge in demand both in terms of physical distribution networks as well as online marketplaces. So hopefully we will be optimistic that we will come back to that sharper, growth in the second quarter onwards and therefore we will be able to recover between the second and fourth quarter.'

Explaining challenges in recent months, he said that the company saw an impact because of lockdowns in terms of demand beyond many geographies. He further said that e-commerce for example was restricted to only essential services.

''So non-essential categories like television or cell phones etc were highly controlled and therefore we did see a very difficult, strong drop in April and May, a significant impact in April and May, but I think now we are coming back. June is obviously coming back to a stronger recovery trend,'' Swaminathan said.

From the second quarter onwards at least, the situation will improve with the second pandemic wave coming under control, according to Swaminathan.

Mahindra Logistics has redesigned many of its operating processes and warehouses to drive productivity up and to offset lower availability of manpower to lessen the impact of the probable third wave.

''We will probably see wave three impact, but with the higher level of preparedness across the country, the impact we are hoping will not be as widespread or as limiting as wave two was,'' he said.

''So given that context of a broad recovery from the second quarter onwards, we are fairly confident that we will come back, we are coming back to that strong run rate,'' he added.

''We have returned some of our network planning tools, so we can actually give higher availability with the lesser fleet. So we have done that kind of things, which we think will help us, will put us in a better position to fulfil demand, even (when) we have more volatility in our operations,'' he said.
The company, however, cannot fully mitigate the broader set of regulatory actions, Swaminathan said.

If the country goes into a large lockdown as a whole, the company cannot really mitigate that impact and that's something which is outside its direct control, he explained.

''So what we can and what we are focusing on is remodelling our business for internal disruptions and then kind of trying to be agile to respond to different categories of demand,'' he explained.