Delhivery Limited — Q3 FY26 earnings call

Call held 31 Jan 2026

Management summary

Delhivery reported an excellent Q3 FY26, marked by record volumes across its transportation businesses and significant improvements in profitability. Revenue grew 18% YoY, driven by strong performance in Express and PTL segments. The company achieved its highest-ever Service EBITDA for the nine months, demonstrating the success of its focus on profitable growth and operational efficiencies, including technology-driven improvements and cost discipline.

Highlights

  • Revenue from services grew 18% YoY to nearly ₹2,800 crores.

  • Express parcel shipments reached a record 295 million, up 43% YoY.

  • PTL metric tons crossed 500k, up 23% YoY.

  • Service EBITDA for Q3 was ₹421 crores, translating to 15.1% margin.

  • Adjusted EBITDA for Q3 was ₹147 crores (8.4% of revenue), more than 2x YoY.

  • PAT before Ecom integration costs was ₹110 crores (3.8% of revenue).

  • 9M FY26 Service EBITDA crossed ₹1,000 crores, reaching ₹1,053 crores.

  • 9M FY26 PAT reached ₹260 crores.

Key financials

  1. Revenue from Services ₹2,798 Cr +18%YoY
  2. Service EBITDA ₹421 Cr
  3. Service EBITDA Margin 15.1%
  4. Adjusted EBITDA ₹147 Cr
  5. Adjusted EBITDA Margin 8.4%
  6. PAT (before integration costs) ₹110 Cr
  7. PAT Margin (before integration costs) 3.8%
  8. PAT (after integration costs) ₹40 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

SegmentRevenueEBITDA Margin
Express Parcel₹1,839 Cr18.1%
Part Truckload (PTL)—11%
Supply Chain Services (SCS)₹171 Cr13%
Cross-border Services₹33 Cr—
Overall Transport Business—16.4%
Corporate Overheads——

Capital allocation

high confidence
  • Capex Capex disclosed
    • Investments in new businesses (Delhivery Direct, rapid stores expansion) ₹20 Cr
    • Annual investments for intracity on-demand services (Delhivery Direct) ₹60 Cr
    • Annual investments for intracity on-demand services (Delhivery Direct) ₹70 Cr
    • Investments in new businesses (next fiscal) ₹60 Cr
    • Investments in new businesses (next fiscal) ₹80 Cr
    • Vehicular capex (LNG trucks, tractor trains)
    Vani Venkatesh: "Overall corporate overheads came in at about 9.1% and we invested 20 crores in our new businesses. Notably Delhi, Hyderabad for our intra-city services and expansion of rapid stores." Sahil Barua: "My sense is that at this stage, our annual investments will be in the range of 60, 70 crores a year or so." Sahil Barua: "So net net in terms of new businesses, I think it's safe to assume somewhere in our sort of 60 to 80 crore kind of range that we will invest next fiscal." Sahil Barua: "Capex will decline down to the sort of, you know, 4% to 4.3%, 4.4% of revenue over the not so medium term." Sahil Barua: "We're not saying that we're going to go from, you know, 5% of revenue to 6% of revenue next year. That's not going to happen. All that we're saying is that the decline that you might expect to see may be sort of a little slower than you might expect otherwise, largely because we might have to build out some vehicular capex a little earlier than we would have done otherwise in anticipation of higher volumes." Sahil Barua: "And that will largely be linked to LNG trucks or tractor trains."
  • Liquidity Liquidity disclosed Company is comfortable on working capital and cash reserves. Working capital days are down to 15 days.
    Vani Venkatesh: "We've been disciplined in investments in new businesses and comfortable on working capital and cash reserves." Vivek Pabari: "Our working capital is already down to 15 days."

Guidance & targets

Profitability

  • Service EBITDA Margin Profitability · High confidence 16-18%
    In transportation, we've maintained that we want to get to a 16% to 18% goal.

    — Vani Venkatesh

  • Express EBITDA Margin Profitability · Medium confidence 22-23%
    The network has stably operated up to, you know, 22-23% margins as well in the past.

    — Sahil Barua

  • PTL EBITDA Margin Profitability · High confidence 16+%
    PTL is in good double digits and diligently marching to the 16+% goal that we spoke about.

    — Vani Venkatesh

  • SCS EBITDA Margin Profitability · Medium confidence above 13%
    Will margins continue to improve? We're already at 13%. We are nowhere near the full potential margins of this business.

    — Sahil Barua

  • Corporate Overheads as % of Revenue Profitability · short term · High confidence 6-7%

    Previously 9.1% → 6-7%

    We have said we expect this to settle in the 6, 6.5%, you know, maybe up to in the sort of more short term, 6-7% kind of range.

    — Sahil Barua

  • Adjusted EBITDA for FCF Breakeven Profitability · High confidence 6%
    at about 6% we will be free cash flow breakeven.

    — Vivek Pabari

  • ROIC on Tangible Assets Profitability · High confidence 25-30%
    our business can generate 25 to 30% kind of ROICS.

    — Vivek Pabari

Capex

  • Capex as % of Revenue Capex · medium term · High confidence 4-4.4%
    We continue to expect that Capex will decline down to the sort of, you know, 4% to 4.3%, 4.4% of revenue over the not so medium term.

    — Vani Venkatesh

Volume

  • PTL Volume Growth Volume · longer run · Medium confidence 20%
    I think we'll continue to stick to our guidance wherein in a longer run, you can expect a ballpark 20% growth to play out.

    — Varun Bakshi

  • Express Parcel Volume Growth Volume · High confidence 15-20%
    we'd still be able to grow at 15 to 20%.

    — Sahil Barua

What to watch in Q4 FY26

PTL EBITDA Margin Improvement

next quarter
Current ~11%
Target Continued increase towards 16+%

Why it matters

Demonstrates the impact of increased network utilization, sales team expansion, and repricing efforts on PTL profitability.

Sahil Barua: "PTL margins will not improve with increasing loads. I think that will continue to happen. And you should see that."

Risks & concerns

  • Inflating costs (labor, real estate)

    medium

    Labor and real estate costs are reliably inflating, but Delhivery's margins have increased despite this due to cost structure advantages.

    Management acknowledged

  • Market volatility and regulatory changes

    medium

    Increased volatility in volumes, difficult climate, and changing regulations (e.g., labor code for gig workforce) make the operating environment more complex.

    Management acknowledged

  • Competitive funding for less efficient players

    medium

    Private equity funding for less efficient players (e.g., 'number four player') is seen as unsustainable in the long run, leading to eventual consolidation.

    Management acknowledged

  • Client concentration

    low

    Delhivery has an extraordinarily low client concentration compared to industry peers, protecting it from individual client strategy changes.

    Management acknowledged

Q&A highlights

8 direct
Express Parcel Margin Expansion Potential Direct
The network has stably operated up to, you know, 22-23% margins as well in the past. Beyond that, of course, we can expand margins, but that usually comes at the cost of some service quality in some locations.

Clarifies the historical and potential ceiling for Express margins, indicating further room for expansion through utilization and cost discipline without significant yield increases.

Asked by Sachin Salgaonkar

Sustainability of Q3 Performance and Customer Outsourcing Trends Direct
Our margins are sustainable. They do not depend on variations in volume. Delhivery's advantage is in its cost structure and its model. It is not in a tactical decision to price lower for any given quarter.

Addresses concerns about the sustainability of strong Q3 results and the impact of large customer outsourcing changes, emphasizing Delhivery's structural cost advantage and diversified client base.

Asked by Sachin Dixit

Ecom Express Integration Costs Direct
I think we learned from our Spoton integration, which wasn't something that went to plan. And this time, you know, we had a very, very sharp integration plan and a full integration team working on this. And, you know, they've done a fantastic job and it reflects that.

Highlights the successful and efficient integration of Ecom Express, leading to significantly lower integration costs (₹150-160 crores vs. initial ₹300 crores forecast) due to improved execution.

Asked by Sachin Dixit

Supply Chain Services (SCS) Growth and Margins Direct
We've gone from 2.1% margin to 13% in this quarter. And that was something that was strategically very important to us. As you heard from Vani earlier, you know, we have a couple of big mandates coming up.

Explains the strategic shift in SCS to prioritize margins over growth, resulting in significant margin improvement, and signals future growth with new client mandates.

Asked by Sachin Dixit

PTL Margin Bridge to 16-18% and FCF Breakeven Direct
PTL margins will not improve with increasing loads. I think that will continue to happen. And you should see that. At about 6% we will be free cash flow breakeven. The math is simple. The CapEx will be in the 5% zip code area.

Provides clarity on the drivers for PTL margin expansion (utilization, repricing) and quantifies the Adjusted EBITDA margin required for Free Cash Flow breakeven, linking it to capex and working capital efficiency.

Asked by Gaurav Rateria

Corporate Overheads and Future Trajectory Direct
It's come down from 11.4% in Q1 FY24 to 9.1% in Q3FY26... We have said we expect this to settle in the 6, 6.5%, you know, maybe up to in the sort of more short term, 6-7% kind of range.

Details the significant reduction in corporate overheads as a percentage of revenue and sets a clear future target, indicating continued operational leverage.

Asked by Aditya Bhartia

Competitive Landscape and Sustainability of Business Models Direct
express only models and models which have high client concentration and models which are not built the way ours are, which have the wrong network structure, will never achieve network efficiencies, will never have operating leverage and will never be able to generate incremental margin no matter how much revenue they grow.

Offers a strong qualitative assessment of the competitive environment, highlighting the structural advantages of Delhivery's integrated network and cost structure over less diversified or asset-light competitors.

Asked by Aditya Bhartia

Yield vs. Margin in Express Parcel Business Direct
On yield, just very quickly, there is no new normal or old normal. The yield in any given quarter is dependent on the mix of volumes that we carry... the normality that we look for is in the margin and not the yield.

Clarifies that while yield may fluctuate due to volume mix (e.g., more small parcels post-Ecom acquisition), the company's focus remains on maintaining and improving margin, which is the true indicator of profitability.

Asked by Achal Lohade

2 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Highlights and Profitability

Delhivery reported an 'excellent' Q3 FY26 with overall revenue from services growing 18% YoY to nearly ₹2,800 crores. The quarter saw record volumes across transportation businesses, with Express parcel shipments reaching 295 million (up 43% YoY) and PTL metric tons crossing 500k (up 23% YoY). Profitability significantly improved, with Service EBITDA at ₹421 crores (15.1% margin) and Adjusted EBITDA at ₹147 crores (8.4% margin), more than double the previous year. PAT before Ecom integration costs stood at ₹110 crores, or 3.8% of revenue.

Express and PTL Business Growth Drivers

The Express business, contributing two-thirds of total revenue, grew 24% YoY to ₹1,839 crores, driven by a 43% YoY volume growth. This performance was sustained beyond the festive peak, with strong contributions from D2C, SME, and channel partners. PTL revenue grew 25% YoY, with volumes up 23% YoY, indicating continued yield improvement. Management attributed this growth to high-quality service, technology-driven efficiencies, and expansion of sales teams into new geographies.

Supply Chain Services (SCS) Margin Transformation

While SCS revenue remained flat at ₹171 crores, the segment saw a 'massive improvement' in profitability, with EBITDA margins increasing from 2.1% last year to 13% this quarter. This was a result of a strategic focus on 'earnings over growth' and exiting unprofitable portfolios, such as mother warehousing for quick commerce. The company is now seeing traction with new mandates, including for a large engineering company and a home and fashion player, signaling future growth.

Operational Efficiency and Technology Integration

Delhivery's operational metrics include covering 18,838 pincodes, serving over 51,000 customers, and utilizing 21.9 million square feet of infrastructure. Significant technology investments, such as auto-docking solutions, have led to real savings and improved productivity. The successful integration of Ecom Express assets, with costs significantly lower than initial forecasts (₹150-160 crores vs. ₹300 crores), further enhanced network utilization and efficiency.

Capital Allocation and ROIC Targets

The company maintains its capex guidance, expecting it to decline to 4-4.4% of revenue in the medium term. Investments in new businesses like Delhivery Direct (intracity on-demand services) are projected to be ₹60-70 crores annually, with a total new business investment of ₹60-80 crores next fiscal. Delhivery aims for Free Cash Flow breakeven at 6% Adjusted EBITDA, driven by 5% capex and 1% working capital increase. The business is expected to generate 25-30% ROIC on tangible assets, with asset turns of 3x in the steady state.

Competitive Landscape and Strategic Positioning

Management asserted Delhivery's competitive advantage stems from its unique cost structure, integrated network, and ability to deliver high reliability and speed at the lowest cost. They believe their model is superior to 'express-only' models or those with high client concentration, which struggle with network efficiencies and operating leverage. The company's low client concentration protects it from individual customer strategy changes, and it expects to continue gaining market share despite inflating labor and real estate costs.

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