Delhivery Limited — Q4 FY26 earnings call

Call held 16 May 2026

Management summary

Delhivery reported a strong Q4 and full year FY26, marked by significant revenue growth, a positive free cash flow achieved ahead of schedule, and substantial improvements in capital efficiency and profitability. The company saw robust performance across its Express and PTL segments, alongside a profitable turnaround in Supply Chain Services. Strategic investments in AI and automation continue, while management remains confident in its market position despite competitive pressures and rising fuel costs.

Highlights

  • FY26 Revenue reached ₹10,486 crores, demonstrating strong top-line performance.

  • The company achieved a positive Free Cash Flow of ₹89 crores for FY26, a year ahead of its internal target.

  • Net Working Capital Days significantly improved to 11 days, down from 38 days three years prior, indicating enhanced capital efficiency.

  • CapEx as a percentage of revenue reduced to 4.7% in FY26 from 7.8% in FY23, reflecting disciplined investment.

  • Core Transport ROIC stood at 16%, showcasing strong returns on invested capital.

  • Supply Chain Services (SCS) segment's EBITDA expanded four times to ₹79 crores (10.9% margin) in FY26, marking a decisive pivot to profitability.

Concerns

  • Management noted potential headwinds on consumption due to recent increases in fuel prices (₹3 increase in pump prices).

  • Competitive intensity from large e-commerce players (Amazon/Flipkart) entering 3PL was raised by analysts, though management downplayed its strategic value.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹2,848 Cr
  • PAT
    ₹87 Cr
  • PAT Margin
    3%
  • Core Transport ROIC
    16%
  • Adjusted EBITDA
    ₹151 Cr

FY26

  • Revenue
    ₹10,486 Cr
  • Adjusted EBITDA
    ₹457 Cr
  • Adjusted EBITDA Margin
    4.4%
  • PAT
    ₹347 Cr
  • PAT Margin
    3.2%
  • Free Cash Flow
    ₹89 Cr
  • CapEx as % of Revenue
    4.7%
  • Working Capital Days
    11 days
  • Cash & Equivalents
    ₹4,500 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

  • Transport (Full Year FY26)
    ₹8,939 Cr Revenue₹561 Cr Margin6.3% Margin %
  • Express (Full Year FY26)
    1 Bn Parcels Delivered
  • PTL (Full Year FY26)
    2 Mn Metric Tons₹2,254 Cr Revenue
  • Supply Chain Services (Full Year FY26)
    ₹729 Cr Revenue₹79 Cr Service EBITDA10.9% Service EBITDA Margin
  • Transport (Q4 FY26)
    ₹2,453 Cr Revenue₹194 Cr Adjusted EBITDA7.9% Adjusted EBITDA Margin
  • Express (Q4 FY26)
    ₹1,832 Cr Revenue46% YoY Revenue Growth72% Volume Growth306 Mn Volumes
  • PTL (Q4 FY26)
    20% Revenue Growth20% Volume Growth549 metric tons Metric Tons₹622 Cr Revenue

Capital allocation

high confidence
  • Capex ₹130 Cr
    • Investment in new initiatives, specifically on-demand intracity service ₹130 Cr
    Our anticipation of the investment for fiscal 27 is broadly between about 130 and 160 crores that we've guided to in our shareholder letter as well.
  • Liquidity Cash ₹4,500 Cr
    The company continues to be extremely well capitalized with over 4,500 crores of cash on the balance sheet.

Guidance & targets

Margin

  • Express Business Normative Margin Guidance Margin · Ongoing · High confidence 16-18%
    The express business remains firmly at the upper end of our normative margin guidance of 16 to 18%.

    — Sahil Barua

  • Express and PTL Service EBITDA Margin · Steady state · Medium confidence 18%
    Express and PTL service EBITDA getting closer to 18%. Express is already there, but PTL getting closer to 18%.

    — Vivek Pabari

Capex

  • CapEx as % of Revenue Capex · Ongoing · High confidence 4%
    We will get to our 4% target.

    — Sahil Barua

ROIC

  • Transport Business ROIC ROIC · Steady state · Medium confidence 25% plus

    From 16% today

    The steady state ROICs, currently we are at 16%, but in a steady state, this number for our transport business can certainly go to 25% plus.

    — Vivek Pabari

Profitability

  • Overall Adjusted EBITDA Profitability · Steady state · Medium confidence 10%

    From 6.3% today

    The adjusted EBITDA, which is today at 6.3%, has a potential to go all the way up to at least 10%.

    — Vivek Pabari

  • Supply Chain Services Pipeline Margin Profitability · Ongoing · High confidence Accretive
    The answer is yes. There is an internal hurdle rate that every SCS project needs to pass. We do not pick up projects which do not meet that hurdle rate.

    — Sahil Barua

Cost Efficiency

  • Corporate Overheads as % of Revenue Cost Efficiency · Steady state · Medium confidence 7%
    corporate overheads going down to, say, 7% of revenue

    — Vivek Pabari

New Initiatives

  • On-demand Intracity Logistics Run Rate New Initiatives · Ongoing · High confidence 200 crores
    I think this gets us to north of about a 200-crore run rate in terms of on-demand intracity logistics.

    — Sahil Barua

Market Growth

  • E-commerce Industry Growth Market Growth · Medium term · High confidence 15-20%
    we anticipate that they should see nothing less than 20% kind of growth rate, 15 to 20% growth rates for the industry as a whole.

    — Sahil Barua

Market context

  • Free Cash Flow Profitability · FY26 · High confidence Positive

    Previously End of FY27 → Positive

    We have 89 crores of free cash flow this year and we're really happy about this. A couple of things, this is one year ahead of plan. We'd given guidance of this coming up in the next year.

    — Sahil Barua

What to watch in Q1 FY27

Impact of Fuel Price on Consumption

Next quarter
Current Management noted potential headwinds from ₹3 increase in pump prices.
Target Stable or improving consumption trends despite fuel price increases.

Why it matters

Directly impacts volume and revenue, especially in the Express business, and overall market demand.

But I think in terms of impact on consumption, etc., let things play out a little more over this quarter, and then I'll have a better answer for you.

Risks & concerns

  • Impact of increased fuel prices on consumption

    medium

    Recent ₹3 increase in pump prices could lead to headwinds on consumption, though pass-through mechanisms exist.

    Management acknowledged

  • Labor shortages and inflating labor costs

    medium

    Minimum wages, gig worker laws, and productivity-adjusted labor costs are inflating, necessitating automation investments.

    Management acknowledged

  • Regulatory changes impacting 1P logistics networks

    medium

    Regulatory changes are making it harder for 1P networks to operate in 'gray areas', potentially favoring 3PLs.

    Management acknowledged

  • Competitive intensity from large e-commerce players entering 3PL

    low

    Management views Amazon/Flipkart's 3PL offerings as strategically limited due to scale, cost, and prioritization issues.

    Analyst downplayed

Q&A highlights

7 direct, 1 evasive
Impact of fuel price increase on consumption and pricing strategy Direct
We have a natural pass-through process, where our prices are indexed to diesel prices at the pumps, especially in the PTL business... In the e-commerce or express business, the relative sensitivity to increase in fuel prices is actually not as high. That said, we still are covered with DPH clauses, which are diesel price hike clauses with customers.

Clarifies how Delhivery manages fuel price volatility across its different business segments and its impact on customer pricing.

Asked by Sachin Salgaonkar

Competitive intensity from Amazon/Flipkart's 3PL offerings Evasive
I'm not really certain what strategic value it serves for anybody at all. Because the relative scale of Amazon's in-house operations compared to any client who onboards themselves onto Amazon Logistics is going to be absolutely minuscule, which is problem number one. So, how exactly do you get customer service at all?

Management downplays the threat, questioning the strategic viability and customer service capabilities of large e-commerce players' 3PL offerings.

Asked by Sachin Salgaonkar

Impact of AI/Robotics investments on OpEx and CapEx Direct
Not significant enough for us to have to report anything unusual. On the AI front, look, there's been a lot of, you know, people have been experimenting left, right and center across, variety of industries, even within logistics, but our approach has been more focused. One is our approach has been focused on making our technology teams themselves more productive outside of certain use cases within our operations.

Provides insight into the specific applications of AI (productivity, documentation, claims) and robotics (AGVs for labor) and clarifies that these investments are not materially impacting OpEx or CapEx guidance.

Asked by Sachin Salgaonkar

Market share dynamics between 1P and 3P logistics providers Direct
I think the share of 1P has declined a little bit over the last year... I do maintain this, costs in 1P networks are higher than costs in 3P networks when fully loaded up. There's absolutely no question about that.

Management reiterates its long-held view that 3PL will gain share over 1P due to cost advantages and regulatory changes, providing a positive outlook for Delhivery.

Asked by Aditya Suresh

Sustainability of the reduction in net working capital days Direct
I think 11 days is sustainable. I mean, it would be very difficult to crunch it precisely for one quarter, right? So, we are confident that it's quite sustainable.

Confirms the durability of a key capital efficiency improvement, which is crucial for free cash flow generation.

Asked by Aditya Suresh

Margin accretion of the Supply Chain Services (SCS) pipeline and investment in new initiatives Direct
The answer is yes. There is an internal hurdle rate that every SCS project needs to pass. We do not pick up projects which do not meet that hurdle rate.

Assures investors that future growth in SCS will be profitable and that new investments are strategically aligned with margin targets.

Asked by Vijit Jain

Single customer concentration risk Direct
Blunt answer, I think if any single customer were to cross 35% of revenues, and I don't really have a very scientific basis for that, to be honest, Aditya, but I think, let me put it this way, at the moment, while it's higher than the 16% that we were at last year, we are absolutely nowhere close to even my made up 35% threshold at this point in time.

Provides a clear threshold for customer concentration risk and indicates that current levels are well within management's comfort zone.

Asked by Aditya Mongia

Potential for ROIC expansion and drivers Direct
The steady state ROICs, currently we are at 16%, but in a steady state, this number for our transport business can certainly go to 25% plus... The adjusted EBITDA, which is today at 6.3%, has a potential to go all the way up to at least 10%.

Outlines the significant upside potential for ROIC, driven by further improvements in capital intensity and overall profitability across segments and corporate overheads.

Asked by Aditya Mongia

2 min read 6 chapters

Detailed narrative

Robust Financial Performance and Early Free Cash Flow Positivity

Delhivery concluded FY26 with a strong financial performance, reporting a total revenue of ₹10,486 crores and a PAT of ₹347 crores, translating to a 3.2% margin. A significant highlight was achieving a positive free cash flow of ₹89 crores, which was accomplished one year ahead of the previously guided timeline of end-FY27. This demonstrates effective operational management and capital discipline.

Significant Improvements in Capital Efficiency

The company showcased remarkable improvements in capital efficiency during FY26. Net working capital days were sharply reduced to 11 days, a substantial decrease from 38 days three years ago, driven by better billing and collection processes. Furthermore, CapEx as a percentage of revenue declined to 4.7% in FY26, down from 7.8% in FY23, indicating a more optimized approach to infrastructure investments.

Segmental Growth and Supply Chain Services Turnaround

Both core transport segments demonstrated strong growth. In Q4 FY26, the Express business recorded ₹1,832 crores in revenue, a 46% YoY growth, with volumes increasing by 72-73% to 306 million. The PTL business also grew 20% in both revenue and volume terms, reaching ₹622 crores and 549 metric tons in Q4. The Supply Chain Services segment achieved a decisive pivot to profitability, with its service EBITDA expanding four times to ₹79 crores (10.9% margin) in FY26.

Strategic Investments in AI and Automation

Delhivery continues to invest in its technology moat, leveraging AI and automation across its operations. AI applications focus on enhancing tech team productivity, streamlining documentation in PTL, improving consignee communication, and making claims handling more efficient. Robotics, particularly Automated Guided Vehicles (AGVs) in mega gateways, are being deployed to mitigate risks from tightening labor markets, with these investments not expected to materially alter the overall CapEx trajectory.

Market Dynamics and Competitive Positioning

Management observed a more settled market structure, anticipating a gradual shift towards 3PL services due to higher costs in 1P networks and evolving regulatory landscapes impacting labor. While acknowledging Amazon's entry into 3PL, Delhivery downplayed its strategic threat, citing scale disadvantages and inherent prioritization of first-party orders. The company aims to maintain its dominant market share in the long tail and heavy shipping segments.

Future Growth Initiatives and Industry Outlook

Delhivery is expanding its new growth initiatives, including the Delhivery Direct on-demand intracity logistics service, which is already live in six cities and is projected to achieve a ₹200 crore run rate. The company plans to invest ₹130-160 crores in these new initiatives for FY27. Management anticipates the broader Indian e-commerce industry to grow at a robust 15-20% in the medium term, providing a strong foundation for Delhivery's continued expansion.

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