Allcargo Logistics: A New Era of Domestic Dominance and Digital Transformation

Allcargo Logistics Limited, a prominent player in India's integrated logistics sector, has embarked on a transformative journey, culminating in a strategic restructuring that promises enhanced synergies and operational efficiencies. The company recently announced its consolidated financial results for the quarter and half year ended September 30, 2025, showcasing robust performance driven by its newly streamlined domestic supply chain businesses.

The restructuring, which received approval from the Hon'ble National Company Law Tribunal (NCLT) and became effective on November 1, 2025, involved the demerger of its International Supply Chain (ISC) business into Allcargo Global Limited. Concurrently, its domestic express distribution (formerly under Allcargo Gati and GESCPL) and contract logistics (formerly under ASCPL) businesses were consolidated under Allcargo Logistics Limited. This strategic move aims to create a unified, technology-driven, and customer-focused logistics enterprise, setting the stage for a new era of growth and value creation.

For Q2 FY26, Allcargo Logistics reported a consolidated revenue from operations of INR 537 crore, marking an impressive 11% year-on-year growth and a 9% quarter-on-quarter increase. The company's gross profit stood at INR 154 crore, up 3% year-on-year. Notably, EBITDA (excluding other income) surged by 27% year-on-year and 22% quarter-on-quarter to INR 62 crore, reflecting strong operational leverage. The company also turned profitable at the PBT level from operating activities, reporting INR 9 crore for the quarter, a significant turnaround from previous losses.

Segmental Performance Highlights

The domestic business segments were the stars of the quarter. The express business delivered its highest-ever quarter in both revenue and volume, demonstrating strong market traction. Similarly, the consultative logistics business achieved its highest-ever quarterly and monthly revenue, underscoring its robust performance.

Express Logistics (Q2 FY26 Revenue: INR 377 crore):

• KEA (Key Account): Contributed 80% of express revenue, amounting to INR 301.6 crore.
• MSME: Accounted for 2% of express revenue, totaling INR 7.54 crore.
• Retail: Generated 18% of express revenue, reaching INR 67.86 crore.

Consultative Logistics (Q2 FY26 Revenue: INR 160 crore):

• Auto & Engineering: Contributed 18% of consultative revenue, or INR 28.8 crore.
• Chemical: Accounted for 20% of consultative revenue, totaling INR 32 crore.
• E-Commerce: Was the largest contributor at 54%, generating INR 86.4 crore.
• Food & Pharma: Represented 6% of consultative revenue, amounting to INR 9.6 crore.
• Others: Contributed 2% of consultative revenue, amounting to INR 3.2 crore.

Financial Summary Table (Q2 FY26)

Strategic Vision and Growth Accelerators

Allcargo Logistics is not merely resting on its laurels; it is actively pursuing a vision for sustained, profitable growth through strategic initiatives and a strong focus on technology. The company's 'Vision/Strategy 2030' outlines ambitious targets, including a 12% CAGR in revenue and gross margin, a 21% CAGR in EBITDA, and a ~2000+ bps increase in ROCE over FY25 by FY30. These targets are underpinned by an accelerated focus on yield management, an asset-light flexible network, and continuous cost reduction.

Digital transformation is at the core of this strategy. The company is building a robust digital ecosystem with strategic pivots like mobile-first platforms, cloud-native solutions, and AI enablers. Key implementation pivots include a new booking app, an enhanced last-mile delivery app, a 'Control Tower' for 24/7 truck monitoring, 'Hub Eye' for optimizing hub efficiency, and 'Gate Scan'. The finance ERP system has also been transformed with Oracle, ensuring agile and efficient financial operations. The ongoing revamp of the Warehouse Management System (WMS) for consultative logistics, expected to go live within 90 days, will further enable the company to penetrate new verticals like retail and FMCG.

Sustainability and Future Outlook

Beyond financial performance, Allcargo Logistics is deeply committed to Environmental, Social, and Governance (ESG) initiatives. The company aims to become carbon neutral by 2040, supported by efforts like fleet conversion to alternative fuels, including over 400 AFVs and 125+ EVs. A pilot project is underway to assess the feasibility and profitability of EVs and CNGs on various routes. Additionally, the 'Hub Solarization' initiative seeks to install solar panels across Gati warehouses and other facilities to achieve environmental and financial benefits.

Management's outlook remains confident, with strong express performance expected to continue through Q3 and Q4 FY26. The consultative logistics segment is also poised for further ramp-up as new contracts scale up and customer mandates are executed. The strategic restructuring has empowered the company to operate with clearer strategic focus, dedicated management oversight, and efficient capital allocation, positioning Allcargo Logistics for a robust growth trajectory in the coming quarters and years.

Allcargo Logistics: Charting a Course for Integrated Growth

Allcargo Logistics is clearly charting a course for integrated growth, leveraging its restructured domestic operations, digital prowess, and commitment to sustainability. The company's ability to deliver record-breaking performance in its core segments, coupled with a clear strategic roadmap and disciplined execution, positions it as a compelling player in India's dynamic logistics sector. As the company continues to unlock synergies and expand its market reach, it aims to solidify its position as the preferred logistics partner for its customers' evolving needs, driving sustainable value for all stakeholders.