Categories LATEST, Research Summary

Delhivery Limited’s Net Loss Increased Up To ₹196 Crore In Q3 FY23

“Quarter 3, from a management team standpoint, has been a positive quarter in terms of improvement in profitability, consolidating market share on the e-commerce side and stabilizing the part truckload business. We’ve seen improvement as a logistics business — service quality, reach, speed are the three major metrics that we look at. We have seen improvements across all of these. We are well-positioned in quarter 4. The momentum from the end of quarter 3 has continued. And we’re confident about quarter 4 and the financial year ahead.”
-Sahil Barua, Co-founder & CEO, Delhivery

Stock Data

ExchangeNSE & BSE

Price Performance

Last 1 Month-6.6%
Last 6 Months-43%
Last 12 Months-40%

Business Basics Of Delhivery

Delhivery Limited is one of India’s leading logistics companies that provides end-to-end logistics solutions for e-commerce, retail, healthcare, and other industries. The company aims to leverage technology and data-driven insights to continuously improve its services and stay ahead of the competition. It operates on a platform-based business model that connects various stakeholders in the logistics ecosystem, including merchants, carriers, warehouses, and customers. The company provides end-to-end logistics solutions, including transportation, warehousing, fulfilment, and last-mile delivery. Its customer base includes some of India’s largest e-commerce companies, such as Flipkart, Amazon, and Paytm, as well as small and medium-sized businesses across various industries. Delhivery generates revenue primarily from transportation and logistics services, including last-mile delivery, warehousing, and value-added services. It also generates revenue from technology and data services, such as its logistics management software and analytics tools, which it offers to its customers.

Q3 FY23 Financial Performance

Delhivery Limited posted a Operating Revenue which was down to ₹1,823.83 Crores from ₹1,995.04 Crores, a decline of 9% year on year. The company’s adjusted EBITDA margin was -3.7% for Q3 FY23. The Net Loss increased up to ₹195.65 Crores from ₹126.51 Crores in the same quarter previous year. The Earnings per Share was -₹2.65 for this quarter.

Updates In Delhivery & SpotOn Integration

Early in FY 22, Delhivery acquired SpotOn, a company involved in the part-truck load freight business. The final phase of the integration was scheduled for Quarter 1 of this year, having started in Quarter 3 of the previous fiscal year. As per the management, the integration of Delhivery and SpotOn’s system & infrastructure continues as intended. Delhivery had 96 gateways, 21 automated sort centres, 189 processing centres, approximately 3,000 delivery centres, and 237 freight service centres totalling 18.9 million square feet of real estate. This has now been consolidated to 17.9 million square feet of real estate with 92 gateways, 22 automated sort centres, 172 processing centres, 2,750 express delivery centres, and 150 freight service centres. The team size remains around 52,800 people across the country.

Expansion Of Supply Chain Services

The Supply Chain Services generated a Revenue of ₹178 Crore up from ₹133 Crore year on year, a growth of 33%. This has been driven by both the expansion of existing accounts and the opening of new accounts. Delhivery has kept growing its clientele, which now includes businesses in the auto, auto parts, healthcare, home furnishings, beauty, personal care, and consumer electronics industries. Due to seasonality in the underlying business, this business has stayed relatively flat sequentially, but it has increased 33% since this time last year. Additionally, the business finished acquiring Algorhythm Technologies in January 2023. The acquired company has a dozen products that were thoughtfully created to address different issues in the manufacturing, supply chain, and sales & distribution processes. As a result, Delhivery’s Supply Chain offering should be enhanced, giving it a competitive advantage in the market.

Contraction In Express Parcel & PTL Services

At the service level, the company’s Express Parcel business has consistently enjoyed margins that are exceptionally high when compared to the competitors. The profits generated in this business, is used to fund the expansion of other companies that are essential to the overall strategy. The Express Parcel business in Q3 FY23 generated a Revenue of ₹1,200 Crore, a slight decline of 1% year on year. It continues to be the major business, which contributed 66% of Total Revenue in this quarter. Commenting on the performance of this business, the management said,
“We delivered close to 170 million shipments in Q3FY23. This is despite the fact that the high season in e-commerce this year was earlier than in the previous year. This year the high season was in quarter 2. So we’ve seen a 6% growth sequentially.”

Future Opportunities For Delhivery in PTL Business

Revenues from Delhivery’s Partial-Truckload (PTL) services have decreased when compared to the Q3 FY22 and the Q2 FY23. In this quarter, the PTL services generated ₹277 crores in Revenue, compared to ₹293 crores in the previous quarter. Moreover, the Freight tonnage has also been declined to 258,000 tons in Q3 FY23 from 286,000 tons in Q2 FY23.
According to the management, the market for partial-truckload services is unorganised and highly fragmented. The market is, however, shifting significantly away from unorganised players and towards organised players. The top ten organised PTL players in India today will account for less than 20% of the market. The company’s PTL business can grow significantly as long as it keeps providing high-quality service to a broad clientele and bringing on new clients. Additionally, as PTL volumes increase, the overall unit economics should improve significantly.
We should anticipate PTL business making a larger top-line contribution in the future, as well as improving the company’s bottom line.

Most Popular

Cochin Shipyard Ltd (COCHINSHIP) Q4 FY22 Earnings Concall Transcript

Cochin Shipyard Limited (NSE:COCHINSHIP) Q4 FY22 Earnings Concall dated May. 26, 2022 Corporate Participants: Madhu S Nair -- Chairman & Managing Director Jose V J -- Director Finance Analysts: Vastupal Shah

All you need to know about Antony Waste Handling Cell in one article

Can you guess the name of the company that was listed during the IPO frenzy in 2020 and is the second largest player in the Indian municipal waste management industry?

Demystifying the Leading Non-Ferrous Recycling Company of India

“Hey, how is the market doing today?” “Oh!, its falling tremendously since morning” I am sure news like these might be a common topic of discussion for you nowadays. Interestingly,