Delhivery Limited — Q2 FY26 earnings call

Call held 5 Nov 2025

Management summary

Delhivery reported a strong Q2 FY26, driven by robust growth in express parcel volumes and significant margin expansion across core businesses, particularly in Supply Chain Services. The integration of Ecom Express proceeded smoothly and under budget, contributing to market share gains. The company maintained a healthy cash position and continued investments in new services and infrastructure, while improving working capital efficiency.

Highlights

  • Revenue from services reached ₹2,546 crores, marking a 16% YoY and 11% QoQ growth.

  • EBITDA stood at ₹150 crores, translating to a 5.9% EBITDA margin, a significant jump from the previous year.

  • Express parcel shipments grew 32.5% YoY and 18% QoQ to 246 million.

  • PTL freight tonnage showed stable growth at 477K tons, with revenue up 15% and tonnage up 12%.

  • Profit After Tax (PAT) was ₹59 crores, representing 2.2% of revenue, up from 0.4% last year.

  • Cash and cash equivalents were strong at ₹4,200 crores.

  • Ecom Express integration costs were ₹90 crores this quarter, well within the estimated envelope of ₹300 crores, which is now expected to be materially lower.

  • Net working capital days improved to under 20 days, the best ever.

Key financials

  1. Revenue from Services ₹2,546 Cr +16%YoY
  2. EBITDA ₹150 Cr
  3. EBITDA Margin 5.9%
  4. PAT ₹59 Cr
  5. PAT % of Revenue 2.2%
  6. Cash & Equivalents ₹4,200 Cr

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

Share of Revenue
₹2,515 Cr Total
  • Express Parcel ₹1,611 Cr 64.1%
  • PTL (Part Truck Load) ₹546 Cr 21.7%
  • Supply Chain Services ₹170 Cr 6.8%
  • FTL (Full Truck Load) ₹150 Cr 6.0%
  • Cross-border services ₹38 Cr 1.5%

Capital allocation

high confidence
  • Capex ₹15 Cr
    • Investments in new services (Rapid Commerce and Delhivery Direct) ₹15 Cr
    All in all, our adjusted EBITDA ends at about Rs. 83 crores for this quarter compared to Rs.10 crores in Q2 FY25. So, we've scaled it up from the same time last year from about 0.5% to 3.3% and we've good line of sight for similar expansion to continue. Also to be borne in mind is that this has been a unique year where some of the peak-related benefits will actually flow in October, given that the peak festive season actually started at the tail end of September. If we look at the profit after tax trajectory, our profit after tax has again shown consistent expansion. Overall, for Q2 FY26, we've clocked Rs. 59 crores of PAT compared to Rs. 10 crores in Q2 last year. So again, a significant movement. If you look at the overall trajectory from about minus 4.4% in Q1 FY24 and minus 5% in Q2 FY24, it has jumped last year to about 0.4% and again it has jumped this year to about 2.2%. So, the focus on profit expansion and the focus on scaling up business with the right levers have played well for us, and we are very well positioned for the upcoming quarters. Quick update on Ecom Express acquisition. As you know, acquisition was completed on July 18, 2025. We paid a final purchase consideration of about Rs. 1369 crores. Business-wise, the volume manifestation at Ecom ceased during the first quarter with non-express businesses exit being underway. Now the revenue transition largely completed, net Ecom revenue for this quarter was about Rs. 13 crores. Network rationalization plan has been completed. We've retained seven facilities with about 1.3 million square feet of area. There are unabsorbed facilities still leased at Ecom totaling to an area of just 1.1 million square feet, and they are primarily servicing Ecom's non-express businesses being exited. Financially, monthly corporate overheads at Ecom have reduced by 85% from deal announcement time till end of Q2 FY26. Assets worth Rs. 100 crores have been retained on Delhivery consolidated books for long-term usage and integration cost were about Rs. 90 crores in Q2 FY26. It's well within the original estimate. So overall on Ecom, we are quite happy on multiple counts. One is from a customer retention and a revenue retention point of view. We had indicated last time that our business case was based on having about 30% retention. We are well, well, well over that. So that's one. The integration has been seamless. We haven't had any issues from a service or a customer integration point of view, and the integration costs are also well within our original estimate. So, all in all, it's been a good seamless transition. Coming to the working capital, we've demonstrated continued improvement in working capital. In particular, there has been very disciplined management of collections. There has been increased tech usage in claims and dispute resolution, all of which is reflected in the numbers you see on the page. As of now, we are actually under 20 days, which has been the best ever in terms of net working capital days. And we've also been calibrated in our Capex spend and in our Capex intensity. So, if you look at H1FY26, we spent about 5.1% compared to 6.6% same time last year. And typically, we've seen that the investments are heavier in H1 compared to H2. So, we expect to end the year even better. And we are directionally trending in the right direction with our long-term goal of getting to about 4% capex intensity. So that's on the capital expenditure.
  • M&A Ecom Express Acquisition · Integrated · Consideration ₹1,369 Cr

    Consolidation of market share, volume growth, and operational synergies.

    Integration costs of approximately Rs. 90 crores in Q2 FY26. Total integration costs expected to be materially lower than the original Rs. 300 crores estimate.

    Quick update on Ecom Express acquisition. As you know, acquisition was completed on July 18, 2025. We paid a final purchase consideration of about Rs. 1369 crores... integration cost were about Rs. 90 crores in Q2 FY26. It's well within the original estimate. So overall on Ecom, we are quite happy on multiple counts... The integration has been seamless... and the integration costs are also well within our original estimate. So, all in all, it's been a good seamless transition.
  • Liquidity Cash ₹4,200 Cr Cash and cash equivalents keep the company in a comfortable position.
    Our cash and cash equivalents keep us in a comfortable position. We are at about Rs. 4,200 crores of cash and cash equivalents as we end the quarter.

Guidance & targets

Margin

  • Express Business Normative Margins Margin · Ongoing · High confidence 16-18%
    In terms of margins, normative margins 16% to 18% in the express business, you know, we've maintained this for a while...

    — Sahil Barua

  • Express Business Margins (Long-term) Margin · Over time · Medium confidence Beyond 18%
    realistically, yes, in the express business over time, if we don't fully pass these benefits on, margins can inch up beyond the 18% range as well.

    — Sahil Barua

  • PTL Service EBITDA Margins Margin · Next 24 months · High confidence 16-18%
    for us to get to that 16% to 18% kind of Service EBITDA margins.

    — Sahil Barua

Volume

  • PTL Volume Growth Rate Volume · Overall FY26 · Medium confidence ~20%
    I think we'll be very close; we'll probably get to a 20% growth rate overall.

    — Sahil Barua

Integration Costs

  • Ecom Express Integration Costs Integration Costs · FY26 · High confidence Materially lower than Rs. 300 crores

    Previously Rs. 300 crores → Materially lower than Rs. 300 crores

    But as things currently stand, we believe that the total integration costs will be materially lower than the Rs. 300 crores that we had originally forecasted.

    — Sahil Barua

  • Ecom Express Integration Costs (Next Two Quarters) Integration Costs · Next two quarters · High confidence Rs. 100-110 crores
    We will have approximately Rs. 100 to Rs. 110 crores of integration costs over the next two quarters.

    — Sahil Barua

Revenue

  • Rapid Commerce Business Revenue Revenue · Immediate term · Medium confidence Rs. 80-100 crore
    But safe to say this will be an Rs. 80 to 100 crore business at the bare minimum.

    — Sahil Barua

  • Delhivery Direct Business Revenue Revenue · Next couple of years · Medium confidence Rs. 1,000-1,500 crore
    This is easily a Rs. 1,000-1,500 crore business in the next couple of years.

    — Sahil Barua

Efficiency

  • Net Working Capital Days Efficiency · Ongoing · High confidence Under 20 days
    As of now, we are actually under 20 days, which has been the best ever in terms of net working capital days.

    — Vani Venkatesh

Capex

  • Capex Intensity Capex · Long-term · High confidence 4%
    And we are directionally trending in the right direction with our long-term goal of getting to about 4% capex intensity.

    — Vani Venkatesh

What to watch in Q3 FY26

Ecom Express Integration Costs

Next two quarters (Q3 FY26, Q4 FY26)
Current Rs. 90 crores incurred in Q2 FY26
Target Progress towards Rs. 100-110 crores over next two quarters, total below Rs. 300 crores

Why it matters

Tracking the actual integration costs is crucial for assessing the financial success and efficiency of the Ecom Express acquisition.

We will have approximately Rs. 100 to Rs. 110 crores of integration costs over the next two quarters. But as things currently stand, we believe that the total integration costs will be materially lower than the Rs. 300 crores that we had originally forecasted.

Risks & concerns

  • Regulatory changes impacting volumes and costs

    medium

    The announcement on the change in GST rates pushed out volumes by about seven days, resulting in an additional cost of approximately Rs. 7 crores incurred in September.

    Management acknowledged

  • Seasonal cost fluctuations due to peak-related investments

    low

    Q2 is a quarter where the company makes peak-related investments, which can impact margins.

    Management acknowledged

Q&A highlights

8 direct
Express Parcel Margins and Ecom Express Synergies Direct
In terms of margins, normative margins 16% to 18% in the express business, you know, we've maintained this for a while, which has always been based on the idea that beyond 18%, if the company feels it is necessary, and if basis our client conversations, we believe there is additional share of wallet for us to be gained, we typically tend to pass a certain amount of pricing benefits back.

Clarifies the company's strategy on express parcel margins, indicating that the 16-18% range is a baseline and potential for higher margins exists with scale and reduced competition, also explaining the Q2 margin not showing full uptick due to volume shift to October and GST changes.

Asked by Sachin Salgaonkar, Bank of America

Ecom Express Integration Costs Direct
Rs. 90 crores of the integration cost have already been incurred. We will have approximately Rs. 100 to Rs. 110 crores of integration costs over the next two quarters. But as things currently stand, we believe that the total integration costs will be materially lower than the Rs. 300 crores that we had originally forecasted.

Provides clarity on the financial impact and timeline of the Ecom Express integration, indicating better-than-expected cost control and faster network consolidation.

Asked by Sachin Salgaonkar, Bank of America

Supply Chain Services Margin Improvement Direct
This has resulted from significant improvements in operational processes and the warehouse management systems. Our technology and product advantages are now starting to show. Also, the launch of our transport management systems, tighter integration with our express transportation, PTL transportation, and FTL transportation businesses have led to improved transportation margins for the SCS business as well.

Explains the drivers behind the significant margin expansion in a key segment, suggesting sustainable improvements through operational and technological advancements.

Asked by Sachin Salgaonkar, Bank of America

Employee Expenses and Integration Costs Direct
You're referring to the P&L column, right? The management estimate, and you're subtracting the 426 minus 386, the 40 crores? Yes. Yeah. So, that corresponds to the integration cost. So, that cost will go down. It's not a permanent cost.

Clarifies that a portion of increased employee expenses is temporary and linked to integration, implying future normalization and not a permanent cost increase.

Asked by Abhishek Banerjee

Ecom Express Residual Revenue Direct
It's just that Rs. 13 crore is just standalone revenue for some contracts, which need to be exited. So Ecom was in certain businesses that Delhivery doesn't want to service. That will also just wash out and go to zero.

Provides context on a small revenue figure from Ecom Express, indicating it's temporary and not representative of core express parcel integration benefits or ongoing business.

Asked by Sachin Dixit

PTL Growth and Industry Consolidation Direct
PTL is different versus let's say express business is probably we have extremely low market share at this point in time versus the organized market as a whole. And then there is a big unorganized market where there is a lot of share with the local players, which is basically getting more and more formalized with every passing month... Delhivery is not particularly interested in buying those kinds of assets. There's sort of no price at which that asset makes sense for us.

Offers insights into Delhivery's PTL strategy, emphasizing organic growth by formalizing the unorganized market and a selective approach to M&A, avoiding loss-making volumetric cargo businesses.

Asked by Krupashankar

Financial Services Subsidiary Strategy Direct
First up, of course, is the fact that we already have a large network of truckers who work with us as part of our express network, our PTL network in Line haul... The objective will be to provide services to these truckers via the financial services arm.

Reveals a new strategic initiative to leverage their existing network for financial services, potentially creating new revenue streams and strengthening ecosystem ties with truckers and partners.

Asked by Jainam Shah

Cross-border Business and FedEx Partnership Direct
That is related to our cross-border business. That is a commercial arrangement between us and FedEx. So, there is a change to the commercial structure of our arrangement with FedEx... But this is a one-time charge, this Rs. 20 crore charge.

Indicates a strategic shift in the cross-border business, moving away from exclusive reliance on FedEx and developing proprietary offerings, with a one-time financial impact this quarter.

Asked by Achal Lohade

2 min read 6 chapters

Detailed narrative

Q2 FY26 Performance Overview

Delhivery reported a strong Q2 FY26, with revenue from services reaching ₹2,546 crores, reflecting a 16% YoY and 11% QoQ growth. The company achieved an EBITDA of ₹150 crores, translating to a 5.9% margin, a significant improvement from the previous year. Profit After Tax (PAT) stood at ₹59 crores, or 2.2% of revenue, demonstrating consistent expansion in profitability. The company maintained a robust financial position with ₹4,200 crores in cash and cash equivalents.

Ecom Express Acquisition and Integration Progress

The acquisition of Ecom Express was successfully completed on July 18, 2025, with a final purchase consideration of ₹1,369 crores. Integration costs of approximately ₹90 crores were recognized in Q2 FY26, which is well within the initial estimated envelope of ₹300 crores. Management anticipates total integration costs to be materially lower than originally forecasted, due to faster network consolidation and higher-than-expected customer retention. The integration has been seamless, with network rationalization completed and seven facilities retained.

Segmental Growth and Profitability Drivers

The Express Parcel segment saw significant growth, with shipments increasing 32.5% YoY to 246 million and revenue growing 24% YoY to ₹1,611 crores, achieving a 15.3% margin. The PTL segment's revenue grew 15% to ₹546 crores, with tonnage up 12%, and an 8.5% margin. Notably, Supply Chain Services (SCS) improved its margin drastically to 12.8% from -4.4% last year, despite a 14% YoY revenue drop to ₹170 crores. This improvement is attributed to structural changes, enhanced operational processes, and tighter integration with other transport businesses.

Operational Efficiency and Infrastructure Expansion

Delhivery expanded its infrastructure to approximately 22.05 million square feet, including 123 gateways and 50 automated centers. The company's team size reached 75,000, supported by 64,000 partner agents and a fleet of 18,600 vehicles. Operational efficiency was further enhanced by improved working capital management, with net working capital days falling to under 20 days, marking the best performance to date. Capex intensity for H1 FY26 was 5.1%, with a long-term goal of 4%.

New Services Expansion

The company invested approximately ₹15 crores in two new services: Rapid Commerce and Delhivery Direct. Rapid Commerce, offering sub-two-hour same-day delivery, is currently operational in three cities with 20 dark stores and is expected to expand to five cities, aiming for an ₹80-100 crore business at minimum. Delhivery Direct, an on-demand intracity service, is live in three cities and is projected to grow into a ₹1,000-1,500 crore business in the next couple of years, with further expansion planned.

Cross-border Business Strategy

Delhivery is re-evaluating its commercial arrangement with FedEx as their five-year contract approaches renegotiation. The company plans to service certain zones non-exclusively and intends to launch its own economy cross-border shipping product. A one-time charge of ₹20 crores was incurred in Q2 FY26 due to this change in commercial structure, signaling a strategic shift towards greater independence and new product offerings in the cross-border segment.

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