GuruFocus -
- Revenue: INR2,190 crores, 13% year-on-year growth, broadly flat quarter-on-quarter.
- EBITDA: INR57 crores, 3% positive EBITDA compared to negative INR16 crores in the previous year.
- PAT (Profit After Tax): INR10 crores, compared to a loss of INR103 crores in the previous year.
- Cash and Cash Equivalents: INR5,488 crores on the balance sheet.
- Express Parcel Business Revenue: INR1,298 crores, 7% year-on-year growth.
- Part Truckload Business Revenue: INR474 crores, 27% year-on-year growth.
- Supply Chain Services Revenue: INR197 crores, 21% year-on-year growth.
- Cross-Border Services Revenue: INR59 crores, 43% year-on-year growth.
- Service EBITDA Margin: 9.3% in Q2 fiscal '25.
- Net Working Capital Days: Reduced to 22 days from 27 days in March '24.
- Customer Base: 38,000 customers, 30% year-on-year growth.
- Infrastructure: Increased from 18.73 million to 19.49 million square feet.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Delhivery (NS:DELH) Ltd (BOM:543529) achieved its second consecutive quarter of PAT profitability, indicating financial stability.
- The Part Truckload (PTL) business showed robust growth with a 23% year-on-year increase in freight tonnage.
- The company expanded its customer base to 38,000, a year-on-year growth of nearly 30%, reflecting strong market penetration.
- Delhivery Ltd (BOM:543529) maintained a strong cash position with INR5,488 crores in cash and cash equivalents.
- The company is well-prepared for the peak festive season, having expanded capacities in real estate, people, and vehicles.
- Express Parcel business margins declined from 18% to 15% year-on-year, raising concerns about profitability in this segment.
- Overall revenue growth was relatively flat quarter-on-quarter, indicating potential challenges in scaling operations.
- Supply Chain Services experienced a decline in service EBITDA from INR11 crores to negative INR9 crores due to a one-time provision.
- The company faces challenges from a consumption slowdown, impacting growth in the Express segment.
- Labor market conditions in India remain challenging, potentially affecting operational efficiency and costs.
A: The decline in Express margins is primarily due to capacity investments made in Q2 for the peak season, which began earlier this year. These investments impacted margins by about INR10-12 crores in September alone. We expect Express service EBITDA margins to remain in the 17-18% range going forward. - Sahil Barua, CEO
Q: How is the festive season impacting Delhivery's performance, and what are your expectations for Express growth?
A: October saw a 30% growth in shipment closures, indicating a strong festive season. While consumption slowdown affects growth, we are focusing on increasing market share through new initiatives, such as launching a third-party shared e-commerce network and faster regional shipping products. - Sahil Barua, CEO
Q: What is the reason for stable PTL margins despite good quarter-on-quarter growth?
A: PTL margins remain stable as the network shares capacity with Express and heavy segments. Capacity expansions for the entire network impact PTL margins, but we expect them to improve as volumes grow. - Sahil Barua, CEO
Q: Can you elaborate on the impact of in-sourcing by major e-commerce players on Delhivery's growth?
A: The bulk of in-sourcing impact was felt last year, particularly from Valmo. This year, the impact is smaller, and we are seeing stable growth in our SME and D2C segments. We expect industry growth to normalize once consumption recovers. - Sahil Barua, CEO
Q: What are Delhivery's plans for third-party quick commerce services?
A: We are launching third-party warehouses for rapid delivery, starting with a pilot in Bangalore. These will be smaller, in-city warehouses linked to our transportation network, enabling deliveries within 1 to 4 hours. This service will cater to e-commerce companies looking to offer quick delivery options. - Sahil Barua, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.