Delhivery Limited — Q4 FY25 earnings call

Call held 16 May 2025

Management summary

Delhivery reported its highest-ever quarterly profitability in Q4 FY25, driven by strong PTL growth and significant margin expansion across segments. The company achieved its first full-year PAT positive result, demonstrating improved operating leverage and efficiency. Management also provided updates on the strategic acquisition of Ecom Express, highlighting early positive signs of volume retention and its impact on future Capex plans.

Highlights

  • Q4 FY25 Revenue from services stood at ₹2,192 crores, up 6% YoY.

  • Q4 FY25 EBITDA was ₹119 crores, with a 5.4% margin, expanding 320 bps YoY and 110 bps QoQ.

  • Q4 FY25 PAT reached ₹73 crores (3.1% margin), a swing of ₹140 crores YoY from a ₹69 crore loss.

  • FY25 Revenue from services was ₹8,932 crores, and total income ₹9,372 crores, growing nearly 10% YoY.

  • FY25 EBITDA was ₹376 crores (4.2% margin), an expansion of ₹250 crores YoY and 260 bps margin expansion.

  • FY25 PAT was ₹162 crores (1.7% margin), marking the first profitable year, a ₹400 crore expansion from FY24.

  • Part Truckload (PTL) business grew 24% YoY in Q4 to ₹517 crores, with tonnage up 19% YoY to 460,000 tons.

  • Q4 PTL service EBITDA margin significantly expanded to 10.8% from 3.8% in Q3 FY25.

Key financials

2 periods

Q4

  • Revenue
    ₹2,192 Cr
    YoY +6% QoQ -8%
  • EBITDA
    ₹119 Cr
  • EBITDA Margin
    5.4%
  • PAT
    ₹73 Cr
  • PAT Margin
    3.1%

FY25

  • Revenue
    ₹9,372 Cr
    YoY +10%
  • EBITDA
    ₹376 Cr
  • EBITDA Margin
    4.2%
  • PAT
    ₹162 Cr
  • PAT Margin
    1.7%

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
Express Parcel (FY25) ₹5,320 Cr 48.1%
Part Truckload (FY25) ₹1,889 Cr 17.1%
Express Parcel (Q4) ₹1,256 Cr 11.3%
Supply Chain Services (FY25) ₹900 Cr 8.1%
Truckload (FY25) ₹626 Cr 5.7%
Part Truckload (Q4) ₹517 Cr 4.7%
Supply Chain Services (Q4) ₹230 Cr 2.1%
Cross Border Services (FY25) ₹179 Cr 1.6%
Truckload (Q4) ₹151 Cr 1.4%

Capital allocation

high confidence
  • Capex Capex disclosed
    In FY25, Capex as a percentage of revenue has dropped to 5.2%.
  • M&A Ecom Express Acquisition · Pending regulatory · Consideration ₹[object Object] (cash)

    Acquisition to consolidate market, leverage incremental margins, and absorb qualified staff.

    Integration costs of ₹300 crores factored into purchase consideration. Ecom Express reported an adjusted PAT loss of ₹184 crores and adjusted EBITDA loss of ₹104 crores for 9 months of FY25. Cash outgo for acquisition will be about ₹1400 crores and the rest passes through P&L.

    As you're aware, we've also announced the proposed acquisition of Ecom Express, which is currently under discussion with the Competition Commission of India and we await approval. ... Our purchase consideration already includes or factors in about Rs. 300 crores of integration costs. ... The overall PAT loss for Ecom Express stood at Rs. 184 crores for nine months of FY25 and an adjusted EBITDA loss of Rs. 104 crores for the nine months of FY25. ... the cash outgo for the acquisition will be only about Rs. 1400 crores and the rest passes through P&L.
  • Liquidity Cash ₹5,493 Cr Cash and cash equivalents are prior to the consideration for Ecom Express.
    We have about Rs. 5,493 crores of cash and cash equivalents on the balance sheet. Obviously, this is prior to the consideration that will be paid out once we receive confirmation from CCI on our deal with Ecom Express.

Guidance & targets

Capex

  • Capex as % of Revenue Capex · long-term · High confidence 3.5-4%
    We anticipate going forward that Capex intensity in the business will continue to remain largely stable and slowly taper its way towards our long-term targets of between 3.5% and 4%.

    — Sahil Barua, MD & Chief Executive Officer

  • Capex as % of Revenue Capex · FY27 onwards · High confidence 4%

    Previously 5% → 4%

    FY27 onwards, our Capex would be in that 4% range rather than 5% range and will strive to maintain around that.

    — Amit Agarwal, Chief Financial Officer

Profitability

  • PTL Service EBITDA Margin Profitability · future · High confidence similar to Express Parcel margins
    we expect that PTL margins will be similar to the margins that we see in our Express Parcel business.

    — Sahil Barua, MD & Chief Executive Officer

  • Express Parcel Service EBITDA Margin Profitability · future · Medium confidence 18%
    there's no reason for us to believe that we won't be able to get back to our 18% margin level.

    — Sahil Barua, MD & Chief Executive Officer

  • Individual Dark Store Breakeven Profitability · per store · High confidence 4-5 months
    So our expectation is that it will take about four months to five months for an individual dark store to get to that point.

    — Amit Agarwal, Chief Financial Officer

  • Oldest Dark Store Cohort Breakeven Profitability · Q2 · High confidence close to breakeven
    The way we are looking at it is the oldest cohort of dark stores starting to turn close to breakeven in Q2.

    — Sahil Barua, MD & Chief Executive Officer

Capacity

  • Dark Stores Capacity · entire fiscal · High confidence 50
    we're planning an overall number of 50 dark stores over the entire fiscal.

    — Ajith Pai, Chief Operating Officer

What to watch in Q1 FY26

Ecom Express Integration Progress & CCI Approval

Next quarter
Current Pending CCI approval, early volume shifts observed
Target CCI approval, faster network consolidation, initial margin expansion

Why it matters

Crucial for realizing M&A benefits, achieving stated volume retention targets, and driving overall margin expansion.

best to make more definitive statements once we have the CCI approval and things play out a little more.

Risks & concerns

  • Competitive Pricing Pressure

    medium

    Competitors took 'suicidal' pricing actions in the past to gain market share, which impacted Delhivery's numbers in Q4 FY24 and FY25. Management believes this aggressive pricing is now ending.

    Management acknowledged

  • Survival of Unprofitable 3PL Players

    medium

    There are still too many unprofitable players in the market, and it's unclear how long they can survive. The Ecom Express acquisition signals consolidation for loss-making networks.

    Management acknowledged

  • Client Concentration

    low

    Analyst raised concern about volume aggregation risk from concentrated customers. Management stated no major swing in percentage of business from the largest customer, and PTL growth has reduced its contribution.

    Analyst downplayed

Q&A highlights

8 direct
PTL Business Growth and Margin Drivers Direct
Our PTL business has obviously been a great story for the last two financial years, especially after the Spoton integration, we've outgrown the industry quite comprehensively. I think it's a testament to the overall quality of the network. ... PTL margins will be similar to the margins that we see in our Express Parcel business.

Analyst questioned the sustainability of PTL growth and margin expansion. Management provided a detailed explanation of the drivers, including yield management, operating leverage from automation, and fleet utilization, reinforcing confidence in future PTL profitability.

Asked by Krupa Shankar

Express Parcel Margin Outlook post-Ecom Express Direct
Our primary reason for acquiring Ecom Express obviously was because we have extremely high incremental margins... As our network continues to fill up with the volumes that we retain, we do anticipate that there will be some expansion in overall margins. ... normative margins will go up.

Analyst inquired if the current 16% Express Parcel margin is the new normal. Management clarified that with Ecom Express integration and volume fill-up, they expect overall and normative margins to increase, leveraging high incremental margins.

Asked by Krupa Shankar

3PL Industry Consolidation and Delhivery's Position Direct
Delhivery has always been more than 100% of the profit pool of this industry. That position has only been strengthened over the last financial year. ... Our acquisition of Ecom Express has not changed that dynamic. There are still too many players in this market. ... this deal has done is it does signal that if you are a loss-making network in Express Parcel with no path to profitability, consolidation or exit is an inevitable outcome.

Analyst asked about the evolving 3PL industry structure post-Ecom Express acquisition. Management asserted Delhivery's unique profitable position and views the acquisition as a catalyst for consolidation of unprofitable players, strengthening its market leadership.

Asked by Sachin Dixit

Rapid Commerce (Dark Stores) Progress and Breakeven Direct
We are in three cities as of this quarter and about 18 dark stores. ... older dark stores are now clocking at about 350 to 400 orders per day... Our expectation is that it will take about four months to five months for an individual dark store to get to that point [breakeven].

Analyst sought an update on the rapid commerce initiative. Management provided specific metrics on dark store count, order volume, and a clear timeline for individual store breakeven, indicating steady progress and future profitability.

Asked by Sachin Dixit

Ecom Express Integration Costs Breakdown Direct
It's a combination of two things, Vijit. One of them is going to be the lease liabilities, which contain lock-ins. ... The second is, yes, you're right. As the core part of this network, which cannot be shut down, continues to survive and some volumes flow though. There will be some operating losses that we had factored in.

Analyst asked for clarification on the ₹300 crore integration costs. Management detailed that these costs primarily cover lease liabilities for redundant facilities and anticipated operating losses during the integration phase, providing transparency on the acquisition's financial impact.

Asked by Vijit Jain

Ecom Express Volume Retention and Early Trends Direct
I think what exactly is happening is clients are moving their volumes into Delhivery's network. And as expected, it has been a very seamless transfer... Our estimation when we did the calculation of our consideration was that we would retain close to about 30% of the volumes within the core Ecom Express network. ... as of now, we are very happy.

Analyst questioned the observed volume shifts from Ecom Express to Delhivery. Management confirmed that clients are proactively moving volumes, exceeding initial conservative retention estimates of 30%, signaling strong early success for the acquisition.

Asked by Vijit Jain

Impact of Ecom Express Acquisition on Future Capex Direct
over the next two years to three years, the Capex on automation equipment should be minimal. ... FY27 onwards, our Capex would be in that 4% range rather than 5% range and will strive to maintain around that.

Analyst asked about the future Capex outlook given the Ecom Express acquisition. Management indicated that the acquired automation assets would significantly reduce future Capex needs for sorting capacity, allowing them to hit long-term Capex intensity targets sooner.

Asked by Abhisek Banerjee

Self-Logistics vs. 3PL and Delhivery's Competitive Edge Direct
when looked at purely from a dispassionate lens of cost and service performance, self logistics businesses do not compare favorably with third-party logistics and certainly not with Delhivery's network. ... I think the worst from a self logistics standpoint is behind us. I think the industry will continue to consolidate. I think Delhivery will get its share and we will solidify our position in this market.

Analyst questioned how Delhivery plans to increase its share with captives and the future of self-logistics. Management reiterated that self-logistics is fundamentally less efficient than Delhivery's 3PL model, expecting further consolidation and Delhivery to gain market share as captives increasingly outsource.

Asked by Aditya Mongia

3 min read 6 chapters

Detailed narrative

Q4 and FY25 Financial Performance Highlights

Delhivery reported a strong Q4 FY25, with revenue from services at ₹2,192 crores, marking a 6% YoY increase. EBITDA for the quarter stood at ₹119 crores, achieving a 5.4% margin, which expanded by 320 basis points YoY and 110 basis points QoQ. The company recorded its highest-ever quarterly PAT of ₹73 crores (3.1% margin), a significant turnaround from a ₹69 crore loss in the same quarter last year. For the full fiscal year FY25, total income reached ₹9,372 crores, a nearly 10% YoY growth, with EBITDA at ₹376 crores (4.2% margin) and a PAT of ₹162 crores (1.7% margin), marking Delhivery's first profitable year.

Segmental Performance and Profitability Drivers

The Part Truckload (PTL) business was a key growth driver, with Q4 revenue increasing 24% YoY to ₹517 crores and tonnage growing 19% YoY to 460,000 tons. PTL's service EBITDA margin saw a remarkable expansion to 10.8% in Q4 from 3.8% in Q3 FY25, attributed to improved yield management, operating leverage from increased volumes, and enhanced fleet utilization. The Express Parcel business delivered 177 million packages in Q4, with a service EBITDA margin of 15.9%. Supply Chain Services revenue was ₹230 crores in Q4, achieving a 5.4% service EBITDA margin.

Ecom Express Acquisition and Integration Strategy

Delhivery announced the proposed acquisition of Ecom Express, which is currently awaiting CCI approval. The acquisition includes ₹300 crores in integration costs, factored into the purchase consideration, with a cash outgo of approximately ₹1,400 crores. Ecom Express reported an adjusted PAT loss of ₹184 crores and an adjusted EBITDA loss of ₹104 crores for the first nine months of FY25. Delhivery's initial conservative estimate for volume retention was 30% of Ecom Express's standalone network, but early trends show clients are seamlessly shifting volumes, exceeding expectations.

Capital Efficiency and Future Capex Outlook

Capex intensity, measured as a percentage of revenue, significantly declined to 5.2% in FY25 from 9% in FY19. The company aims to further taper this to a long-term target of 3.5% to 4%. Management expects Capex on automation equipment to be minimal over the next two to three years, largely due to the ₹200 crores worth of automation assets acquired from Ecom Express. This strategic move is anticipated to enable Delhivery to achieve its lower Capex intensity targets from FY27 onwards, enhancing capital efficiency.

Market Dynamics and Competitive Positioning

Management noted that Delhivery is the only profitable player in the 3PL industry, with competitors experiencing expanded losses. The Ecom Express acquisition is seen as a signal for consolidation of loss-making networks. Delhivery believes its material cost and service advantages will continue to limit breathing room for competitors. While past pricing pressures from competitors impacted margins, the company anticipates that such 'suicidal' pricing actions are ending, and Express Parcel margins are expected to recover towards the 18% level post-integration.

Rapid Commerce Foray and B2B Opportunity

Delhivery's rapid commerce initiative currently operates 18 dark stores across three cities, with older stores processing 350-400 orders per day. The company plans to expand to 50 dark stores over the fiscal year, with individual stores expected to reach breakeven within four to five months. The oldest cohort of dark stores is projected to turn profitable in Q2 FY26. An emerging opportunity is the application of this rapid commerce model to B2B clients for faster delivery of spare parts and time-critical machinery, which Delhivery is actively exploring.

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