Delhivery Limited

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.

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.

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.

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.

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.

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.