Delhivery Limited — Q1 FY26 earnings call

Call held 1 Aug 2025

Management summary

Delhivery reported a strong Q1 FY26, characterized by robust revenue growth and significant margin expansion across its core businesses. The successful integration of Ecom Express, with better-than-expected volume retention, positions the company for continued growth. Profitability improved notably, driven by operational efficiencies and strategic adjustments in its Supply Chain Services.

Highlights

  • Revenue from services stood at ₹2,294 crores, marking a 6% YoY and 5% QoQ growth.

  • Total income reached ₹2,424 crores, up 6% YoY and 5% QoQ.

  • EBITDA margins improved significantly to ₹149 crores or 6.5%, expanding 200 bps YoY and 110 bps QoQ.

  • PAT came in at ₹91 crores, representing a 4% margin, an expansion of 140 bps YoY and 70 bps QoQ.

  • Express Parcel volumes grew 14% YoY and 17% QoQ to 208 million shipments.

  • PTL freight volumes increased 15% YoY to 458,000 tonnes, remaining broadly flat QoQ.

  • The Ecom Express acquisition was formally completed on July 18th, with a final purchase consideration of ₹1,369 crores.

  • Delhivery retained significantly more than the initially planned 30% of Ecom Express volumes, now closer to 55-65%.

Key financials

  1. Revenue from Services ₹2,294 Cr +6%YoY
  2. Total Income ₹2,424 Cr +6%YoY
  3. EBITDA ₹149 Cr
  4. EBITDA Margin 6.5%
  5. PAT ₹91 Cr
  6. PAT Margin 4%

What they filed

Q1 FY27: revenue up 28.3%, net profit down 31.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,020 2,204 2,040 2,128 2,382 +18%2,633 +19%2,672 +31%2,730 +28%
EBITDA52 109 122 159 154 +196%236 +117%238 +95%175 +10%
Net profit19 38 -20 114 61 +221%74 +95%80 +500%78 −32%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentRevenueService EBITDAService EBITDA Margin
Express Parcel₹1,403 Cr₹228 Cr16.3%
Part Truckload (PTL)₹508 Cr₹54 Cr10.7%
Supply Chain Services—₹15 Cr7.2%
Full Truckload (FTL)₹150 Cr——
Cross Border Services₹24 Cr——

Capital allocation

high confidence
  • Capex Capex disclosed
    With the acquisition of Ecom Express, nothing in this changes except the fact that we have front-loaded Capex by roughly about Rs. 300 crores. Now, this Rs. 300 crore rupee Capex is essentially not something we are going to put into active use from day one. Many of the sorting equipment will be warehoused and will be put into use as and when the long-term capacities need to be built in.
  • M&A Ecom Express Acquisition · Integrated · Consideration ₹[object Object] (cash)

    To expand network and absorb additional volumes, leveraging existing infrastructure.

    Financial consolidation effective July 18th, 2025. Expected to expand margins as volumes go up.

    The acquisition was formally completed on July 18th and financial consolidation of Ecom Express into Delhivery will be effective from this date. The final purchase consideration as guided previously after the adjustments will be at Rs. 1,369 crores.
  • Liquidity Liquidity disclosed Paid close to Rs. 1,400 crores to acquire Ecom Express on 18th of July, which will impact future other income.
    However, as you are aware, we have paid close to Rs. 1,400 crores to acquire Ecom Express on 18th of July. And hence, no further interest income is going to accrue on it.

Guidance & targets

Profitability

  • PAT Margin Profitability · rest of the year · Medium confidence Expansion
    PAT margin will continue to expand through the rest of the year as well.

    — Sahil Barua

  • Adjusted EBITDA (Express Parcel & PTL) Profitability · achieve 3x asset turns · High confidence 11%
    And we have guided it towards 6-6.5% and that will bring to an adjusted EBITDA of close to about 11 odd percent for us to do an asset turn of about 3x on that 11% odd adjusted EBITDA.

    — Amit Agarwal

Margin

  • Express Parcel Service EBITDA Margin Margin · going forward · High confidence 16-18%
    We will remain broadly within the normative range of 16 to 18% in the Express Parcel business as guided previously.

    — Sahil Barua

  • Part Truckload (PTL) Service EBITDA Margin Margin · going forward · Medium confidence Rise
    margins in the Part Truckload business will continue to rise with improvements in utilisation of the network.

    — Sahil Barua

  • Supply Chain Services EBITDA Margin Margin · as we scale · Medium confidence Expansion
    I think there's still margin expansion that will happen in the SCS business as we scale.

    — Sahil Barua

  • PTL Service EBITDA Margin Margin · going forward · High confidence 16-18%
    Your guidance that is there over the medium term about, let's say, close to high-teens margins in the Part Truckload business, does that take into account any material change in yields?

    — Aditya Suresh (referencing management)

Business Operations

  • Ecom Express Non-Express Business Exits Business Operations · Q3 of this financial year · High confidence Completion
    We have also begun the process to exit the non-express businesses of Ecom Express and anticipate that we will complete these exits by Q3 of this financial year.

    — Sahil Barua

Volume

  • Ecom Express Volume Retention Volume · ongoing · High confidence 55-65%

    Previously 30% → 55-65%

    we will be close to perhaps somewhere in the 55% to 65% retained volume already. And this continues to rise month on month.

    — Sahil Barua

  • PTL Tonnage Growth Volume · for the year · High confidence 20%
    So the growth in terms of getting about a 20% growth for the year, it's not going to be linear, first of all.

    — Varun Bakshi

  • PTL Monthly Load for 16-18% Margins Volume · achieve 16-18% margins · High confidence 200,000-215,000 tonnes

    From 150,000 tonnes today

    Roughly at close to about 600,000 to 640,000 tonnes of quarterly load which translates to about 200,000 to 215,000 tonnes of monthly load whereas currently we are posting an average of about 150,000 tonnes of monthly load, three things will kick in.

    — Amit Agarwal

Capacity

  • Express Delivery Centres Capacity · end of the year · High confidence 4,750-4,800

    From 4,500 today

    My sense is you should see this number at probably close to about 4,750 to 4,800 by the end of the year.

    — Sahil Barua

  • Pin Code Reach Capacity · next quarter · Medium confidence 19,200

    From 18,857 today

    I don't know exactly what it'll reach but let's call it maybe 19,200 or thereabouts.

    — Sahil Barua

Revenue

  • Supply Chain Services Revenue Revenue · long term · High confidence 1,800-2,000 crores
    So fairly confident that we'll get to the Rs. 1,800 - 2,000 crores in SCS.

    — Sahil Barua

Order Book

  • Supply Chain Services Pipeline Conversion Order Book · over a three-year period · High confidence 600-700 crores
    Now over a three-year period we can convert six-seven hundred crores of that.

    — Sahil Barua

Asset Efficiency

  • Asset Turns (Express Parcel & PTL) Asset Efficiency · long term · High confidence 3x

    From 2x today

    The target would be to get to roughly about 3x of asset turns for us in Express Parcel and PTL business, both of them, which form close to 85% of our revenues.

    — Amit Agarwal

Return on Capital

  • Return on Capital (Express Parcel & PTL) Return on Capital · aspirational · Medium confidence above 24%
    So, the aspirational return on capital for Express Parcel and PTL business is well above 24% which we aspire to do.

    — Amit Agarwal

Other Income

  • Other Income Other Income · subsequent quarters · High confidence Normalise and slightly go down
    In the subsequent quarters, we expect this to normalise to our earlier level and maybe slightly go down because the yield curves have gone down. However, as you are aware, we have paid close to Rs. 1,400 crores to acquire Ecom Express on 18th of July. And hence, no further interest income is going to accrue on it.

    — Amit Agarwal

What to watch in Q2 FY26

Ecom Express Volume Integration Impact

Q2 FY26
Current Minimal impact in Q1, significant uptake in July.
Target Full impact visible in Q2 standalone volumes and revenue.

Why it matters

Crucial for assessing the success of the largest acquisition and its contribution to overall volume and profitability.

The full impact of the acquisition of course will begin to show more in Q2.

Risks & concerns

  • Inflationary Costs (Wages, Rentals, Fleet)

    medium

    Wages, rentals, and fleet costs are inflating predictably (7-8% annually for wages, 5-8% for rentals), but management believes their productivity gains can outstrip these.

    Wages in logistics, for example, will typically inflate 7% to 8% a year. You know, rentals will inflate anywhere between 5% and 8% a year. And fleet costs also inflate at a fairly predictable rate.

    Management acknowledged

  • Irrational Pricing in Logistics

    low

    Irrational pricing that led to yield compression in the past two years is now a materially lower risk due to market consolidation and financial constraints on other 3PLs.

    I believe, as I've discussed previously, that irrational pricing led compression of yield that previously was a risk factor in the last two years is a materially lower risk going forward.

    Management downplayed

  • Seasonality and Q1 Disruptions

    low

    Q1 is typically the lowest quarter for PTL, and this Q1 saw additional disruptions from rains and Operation Sindoor, impacting volumes.

    Do bear in mind that Q1 typically is the lowest quarter of the year from a PTL standpoint... there was a material impact because of Operation Sindoor, there was some impact because of the rains in certain places.

    Management acknowledged

Q&A highlights

8 direct
Express Parcel Yield Decline Direct
So fundamentally, yield is a function of volume mix, which is a function of clients, which is a function of the weights of packages and the distances that they travel. When I look at the overall weight per package across our Express Parcel business, consolidating both small parcels as well as heavy, there is a double digit decline in the average weight per parcel, which is not surprising because obviously, there's been growth in the small parcel business. And so as a consequence of that, yield has shrunk. So it's just an organic shrinkage in yield and has nothing to do with pricing.

Clarifies that the yield decline is due to an organic shift in package mix towards lighter, smaller parcels, not pricing pressure.

Asked by Sachin Salgaonkar

Ecom Express Volume Integration Timing and Impact Direct
what you're seeing in Q1 is actually a very minimal impact of volume transition from Ecom Express to Delhivery. Really, most of it was only towards the end of Q1, in the last parts of June. The real impact, as you can see in the chart, the real impact actually is in July, which you can see there's a very materially higher trend for July than there has been for June. And our view is that that's a more representative level of volume that we will be at going forward. So there's a very large uptake that you should see in Q2.

Provides crucial timing and magnitude details on when the full benefits of Ecom Express volume integration will be visible, primarily in Q2.

Asked by Sachin Salgaonkar

Ecom Express Integration Impact on Margins Direct
With the new volumes coming in from Ecom Express, I think there's no reason to believe there'll be any negative impact on margins. I think, again, as I mentioned, depending on client mix in any given quarter, there may be some impact on yields and there may be a marginal impact on margins here and there. But broadly speaking, we anticipate that margins will actually expand as volumes go up. And so we'll easily be in the 16 to 18% range.

Reassures investors that the Ecom Express integration is expected to be margin-accretive, with Express Parcel margins remaining within the guided range.

Asked by Sachin Salgaonkar

Quick Commerce Opportunity for PTL Direct
In terms of Quick Commerce's impact on PTL and the opportunity it creates, I think the main opportunity that it creates is brands who work with Quick Commerce companies, whether it's FMCG companies, packaged food companies, whether it's grocery, whatever it is. There's a large amount of B2B consignments that get shipped to both the mother warehouses of Quick Commerce companies as well as the dark stores of Quick Commerce companies. This is a complex delivery process because it involves, for example, taking appointments with the mother warehouse, making sure goods are delivered within that appointment on time and in full. This is a service that Delhivery already provides outside of Quick Commerce. It's not particularly different from what we would do for a seller trying to consign stock, for example, to an FBA warehouse or to a Reliance warehouse or a Flipkart warehouse. So it's fundamentally a similar kind of service. Now, what's interesting, of course, is that it's now a new channel that has been created and a new opportunity for us.

Highlights a significant new B2B opportunity for the PTL division driven by the growth of Quick Commerce, leveraging existing capabilities.

Asked by Sachin Salgaonkar

Ecom Express Volume Retention Rate Direct
What I can tell you, without disclosing specifics, is that we have retained significantly more than the 30% that was planned originally, which is reflected in the chart that Apar had shown previously. I think, broadly speaking, we will be close to perhaps somewhere in the 55% to 65% retained volume already. And this continues to rise month on month.

Indicates a much higher-than-expected volume retention from Ecom Express, signaling successful integration and market share gains.

Asked by Vijit Jain

Supply Chain Services Growth Confidence Direct
On Supply Chain services we had a number of things that we needed to do. One was really fundamentally renegotiating contracts that had not been priced the way they should have been. Get out of sectors that we wanted to explore but fundamentally have now reached a conclusion that we don't want to participate in and that's really the impact that you're seeing in the last financial year. We experimented with getting into fulfillment for Quick Commerce and then realised that the inventory issues in that business are fundamentally too large for a third-party logistics company to bear and we've exited that sector. So, I think what you're seeing now is a business which is starting to resemble what it will look like from a profitability standpoint. I think there's still margin expansion that will happen in the SCS business as we scale.

Explains the strategic shift and operational improvements driving the turnaround and future growth confidence in the Supply Chain Services segment.

Asked by Sachin Dixit

3PL Market Share and Consolidation Direct
Ecom Express was probably about 50-60 percent of our size so our market share has probably expanded by about 25 percent or so. Possibly higher but I'm not entirely sure. I think that I'll give you a much better answer maybe at the end of Q2, Q3 when things stabilize a bit more. Right now things are in flux, volumes continue to increase... market share should continue to consolidate towards more disciplined players and higher quality players.

Provides insight into Delhivery's increased market share post-Ecom Express and the ongoing consolidation trend in the 3PL market towards quality players.

Asked by Aditya Suresh

Ecom Express Incremental Margins Direct
So, the incremental margins that we've spoken about in the past are obviously based on a target service EBITDA margin of 16% to 18%, I think, here in this call, we were discussing this, as volumes go up, we will evaluate client by client, what kind of potential opportunities we have for share of wallet gain. And there is a possibility that service EBITDA may expand beyond as well.

Clarifies the potential for Ecom Express volumes to contribute to margin expansion beyond the previously guided range, depending on client mix and volume growth.

Asked by Kamlesh Ratadia

3 min read 7 chapters

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 disruptions. 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%.

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