Profitable Growth and Operational Efficiency

Delhivery, India’s leading logistics player, reported a 67% jump in Q1FY26 net profit to ₹91 crore, on revenues up 6% YoY at ₹2,294 crore. Driven by scale, technology, and route optimization, the company saw its EBITDA margin improve to 6.5%—a robust expansion by 200 basis points.

• Express Parcel volumes grew 14% to 208 million shipments.
• Part Truckload (PTL) tonnage increased 15%, outpacing the industry average and reaching 4.58 lakh tonnes. PTL EBITDA margin reached an impressive 10.7%.
• Other verticals such as supply chain and cross-border logistics showed stability, while new initiatives like Delhivery Direct (intra-city) and Rapid (ultra-fast delivery) highlighted future opportunity.

Ecom Express Integration: Strategy and Impact

Delhivery completed its ₹1,369-crore acquisition of Ecom Express in July 2025, bringing over half of Ecom Express’s volumes onto its platform and consolidating customer contracts under rational, volume-linked pricing.

• Market Rationalization: Delhivery eliminated below-cost “irrational pricing” in Ecom’s network, focusing on sustainable, volume-discounted contracts and strengthening overall market pricing discipline.
• Synergy Realization: Client relationships across both B2B/B2C and direct-to-consumer (D2C) segments are being consolidated. Full integration is expected over the next two quarters, with revenue retention trending ahead of plan.
• Network Optimization: Only seven key Ecom facilities are planned for long-term retention, with temporary integration costs likely to be capped within ₹300 crore as per company estimates.

CEO Sahil Barua notes: “The irrational pricing that existed in the market has been cleaned out … balance sheet constraints will ultimately force every third-party logistics player to price sustainably.”

Growth Drivers & Segment Performance

• Express Parcel: Shipments rose 14% YoY, led by robust SME, marketplace, and D2C demand.
• PTL Freight: Supported by supplies to quick commerce “dark stores” and mother warehouses, tonnage grew 15% YoY with a margin leap to 10.7% (from 3.2%).
• Innovation: Investments of ₹14 crore in new services—Delhivery Direct (intra-city for SMEs/consumers) and Delhivery Rapid (sub-2-hour delivery)—signal a push into high-growth logistics niches.
• Cross-Border Plans: Preparing to launch economy shipping solutions for small exporters, tapping India’s surging e-commerce and global trade integration.

Barua added that July 2025 volumes were “materially higher” than June, and the company expects additional momentum from the Indian festive season in Q2/Q3.

Stock Performance & Market Sentiment

• Share Price: Delhivery shares are trading at ₹429–₹446, up 3% YoY as of August 2025.
• Analyst Ratings: Major brokerages like Motilal Oswal and Macquarie are bullish, lifting price targets to ₹480–₹500 citing scalable growth, synergy benefits from Ecom integration, and margin expansion.
• Risks: Company still trades at over 3.4x book value, with modest return on equity (ROE ~2%) and high growth expectation built into valuations.
• New Board Members: Strategic appointments—PB Fintech’s Yashish Dahiya and Dr. Padmini Srinivasan as independent directors—mark a fresh governance era, while a legacy director steps down in September 2025.

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