Detailed Narrative
Strong Q1 FY26 Financial Performance
Delhivery commenced FY26 with an excellent first quarter, reporting ₹2,294 crores in revenue from services, a 6% year-on-year and 5% quarter-on-quarter increase. Total income stood at ₹2,424 crores, mirroring the same growth rates. Profitability saw significant improvement, with EBITDA margins reaching ₹149 crores or 6.5%, an expansion of 200 basis points YoY and 110 basis points QoQ. PAT was ₹91 crores, representing a 4% margin, marking a 140 basis point expansion from Q1 FY25 and 70 basis points from Q4 FY25.
Express Parcel Business Growth and Yield Dynamics
The Express Parcel business demonstrated strong growth, with volumes reaching 208 million shipments in Q1, a 14% YoY and 17% QoQ increase. Revenues for this segment were ₹1,403 crores, growing 10% YoY and 12% QoQ. The yield decline observed was attributed to an organic shift in package mix towards smaller, lighter parcels, rather than pricing pressure. Management expects margins to remain within the normative range of 16-18% and continue to improve as volumes scale, especially with the full integration of Ecom Express volumes in Q2.
Part Truckload (PTL) Business Performance and Outlook
The PTL business closed Q1 with 458,000 tonnes of freight, a 15% YoY growth, remaining broadly flat QoQ. Revenues for PTL freight grew 17% YoY to ₹508 crores. Q1 is typically the lowest quarter for PTL, and the business was also impacted by Q1 disruptions like rains and Operation Sindoor. Management is confident of achieving 20% PTL tonnage growth for the full year and expects margins to rise with improved network utilization, targeting 16-18% margins at a monthly load of 200,000-215,000 tonnes.
Supply Chain Services Turnaround and Pipeline
The Supply Chain Services business, while de-growing QoQ and YoY, saw significant margin improvement, with Service EBITDA margin rising from 2.2% in FY25 to 7.2% in Q1 FY26, generating ₹15 crores EBITDA. This turnaround is a result of renegotiating unprofitable contracts and exiting non-strategic mother warehousing services. Delhivery has a healthy pipeline of over ₹1,000 crores in broad supply chain mandates, with an expectation to convert ₹600-700 crores over a three-year period, aiming for ₹1,800-2,000 crores in SCS revenue long-term.
Ecom Express Acquisition and Integration Progress
The acquisition of Ecom Express was formally completed on July 18th, 2025, with a final purchase consideration of ₹1,369 crores. The integration is progressing ahead of schedule, with Delhivery retaining significantly more than the anticipated 30% of Ecom Express volumes, now closer to 55-65%. The full impact of volume transition is expected to be visible in Q2. Network rationalization is underway, with plans to retain seven facilities and exit non-express businesses by Q3 FY26, which is expected to be margin-accretive.
New Services Investment and Early Results
Delhivery invested ₹14 crores in new services during Q1, including 'Rapid Commerce' (sub two-hour delivery from 20 dark stores in three cities) and 'Delhivery Direct' (on-demand intracity service in Ahmedabad, Delhi NCR, and Bengaluru). Ahmedabad, the first city for Delhivery Direct, achieved contribution margin break-even in about four months. These new services are seen as significant growth drivers, with investment levels expected to vary as operations stabilize.
Market Dynamics and Asset Efficiency Targets
Management noted a 'flight to quality' in the market, with volumes consolidating towards more disciplined and higher-quality players, especially given inflationary costs and market disruption🌐s. Delhivery aims to achieve 3x asset turns for its Express Parcel and PTL businesses, up from the current 2x, supported by an adjusted EBITDA of around 11% for these segments. The aspirational return on capital for these core businesses is targeted to be above 24%.