Delhivery

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.

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.

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.

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.

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.

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.