Delhivery

Delhivery reported a robust Q3 FY25 with revenue from services reaching ₹2,378 crores, marking an 8.6% quarter-on-quarter and 8.4% year-on-year growth. The company achieved an overall EBITDA of ₹102 crores (4.3% margin) and a PAT of ₹25 crores (1% margin), continuing its profitability trend despite industry headwinds^🌐. Cash and cash equivalents stood strong at ₹5,488 crores on the balance sheet.

The Express Parcel business generated ₹1,488 crores in revenue, delivering 206 million packages, with its service EBITDA margin improving to 15.6%. The Part Truckload (PTL) business grew 22% YoY in revenue to ₹462 crores, handling 412,000 tons of freight, and achieved its highest service EBITDA margin in 11 quarters at 3.8%. Supply Chain Services also showed strong growth, with revenues up 30% YoY to ₹222 crores and returning to profitability with a ₹5 crore service EBITDA.

While the Express Parcel business saw marginal growth in service EBITDA, its margins were slightly depressed compared to the previous year due to fixed cost build-up from new facilities like Bangalore Hoskote and an unanticipated bump in fleet sourcing costs. Management expects margins to return to the 17-20% range, driven by PTL growth improving line haul costs and a shift to fixed fleet contracts. Total shipments grew 11% QoQ to 206 million.

The PTL business continued its strong performance, with management targeting 25-30% volume growth for the next financial year. Despite sharing network costs with the Express Parcel business, PTL margins improved to 3.8%, driven by better yields and utilization. The company noted December was its highest month ever for freight tonnage since the Spoton integration, with 147,000 tons of freight.

Delhivery has launched its two-hour rapid commerce service in three cities (Bangalore, Hyderabad, Chennai) with plans for 50 dark stores in top eight cities. This segment is expected to contribute ₹80-100 crores in revenue this financial year, with margins similar to Express Parcel. The D2C and SME segments are growing rapidly (30% YoY for D2C, 50% YoY for SME), becoming a more material portion of volumes for Delhivery.

Infrastructure expanded to 20.6 million square feet, including temporary capacity for peak season. The company operates 112 major gateways, 45 automated sort centers, and 130 freight service centers. CapEx as a percentage of revenue is expected to be 5.6% or lower for FY25, with a long-term target of 3.5-4% for maintenance and upgrades, indicating sufficient capacity for future growth and rising capacity utilization.

Management believes the Express Parcel industry is heading towards a reckoning, with other 3PLs experiencing cumulative losses due to unsustainable pricing and insourcing by large e-commerce players. Delhivery's integrated network is positioned for superior cost and service metrics, and management anticipates industry correction or consolidation, which would be favorable for the company, potentially leading to increased pricing or volumes.