Delhivery Limited (NSE: DELHIVERY) India’s largest integrated logistics provider achieved ₹1,000 crore in Service EBITDA for fiscal year 2026 following a record festive season. The company reported an 18% year-over-year increase in revenue, supported by surging express parcel volumes and improving margins in its part-truckload segment.
The company reported revenue from services of ₹2,798 crore for the third quarter ended December 31, 2025, representing an 18% year-over-year and 10% quarter-over-quarter increase. During this period, the company surpassed the ₹1,000 crore Service EBITDA milestone for the full fiscal year for the first time. Net profit for the quarter, prior to integration costs and exceptional items, stood at ₹110 crore, up from ₹25 crore in the same period last year.
Key Development
The primary driver of the results was a record festive season performance, with express parcel shipments reaching 295 million, a 43% Y-o-Y increase. This growth was managed through an automated capacity management system that re-routed loads across the network to maintain service levels during peak demand. Furthermore, the integration of Ecom Express is largely complete, with total integration costs now expected to be materially lower than the initial ₹300 crore estimate. The company also provided for a ₹21 crore one-time impact related to the implementation of the new national labor code.
Financial Performance
Delhivery’s profitability metrics showed significant expansion in Q3 FY26:
• Adjusted EBITDA: Reported at ₹147 crore (5.3% margin), compared to ₹45 crore (1.9% margin) in Q3 FY25.
• Transportation Profitability: Service EBITDA for the combined Express and PTL segments reached 16.4%, up from 12.8% YoY.
• Segmental Revenue: Express Parcel revenue grew 24% YoY to ₹1,839 crore, while Part Truckload (PTL) revenue rose 25% YoY to ₹578 crore.
• Reported PAT: Including Ecom Express integration costs (₹35 crore) and exceptional items (₹27 crore), consolidated profit after tax was ₹40 crore.
• 9-Month Context: For the first nine months of FY26, total revenue reached ₹7,638 crore, a 13.3% increase over the prior year.
Business Outlook & Strategy
Management indicated that capital expenditure intensity is expected to continue its downward trend toward a steady-state level of 4.0% of revenue, although high growth in PTL may require pulling forward some investments. The company is scaling several new initiatives:
• Delhivery International: An economy air-parcel service launched in December 2025 to facilitate SME exports.
• Delhivery Direct: The on-demand intra-city service now operates in five cities with an annual revenue run-rate of approximately ₹40 crore.
• Automation: The company is deploying agentic AI for customer support and developing in-house mobile robotics to automate truck loading and unloading.
Integration Timeline
The Ecom Express integration process is largely complete, with core client, technology, and operational systems integrated by Q2 FY26. Most redundant network infrastructure and contracts were exited during Q3 FY26. The remaining legacy contracts are expected to run off by Q1 FY27, in line with the original integration timeline. The company expects to incur a final ₹20–30 crore in one-time integration costs in Q4 FY26, after which no further material integration expenses are anticipated. Overall integration costs are now expected to be materially lower than the initially estimated ₹300 crore, reflecting a smooth transfer of revenues, assets, and personnel.
Sector Dynamics
The company operates in India’s e-commerce market, which management expects to grow at 15–20% annually over the medium term. The industry continues to see consolidation, as smaller operators face rising operating costs and tighter capital availability. The rollout of the national labor code is expected to increase recurring employee-related expenses, including gratuity and insurance. The company has indicated that these incremental costs have been absorbed within operating margins.
Investment Thesis: Bull vs. Bear
Bull Case
• Operating Leverage: Significant margin expansion in the transportation segment (16.4% Service EBITDA) suggests the integrated network model is effectively absorbing higher volumes at lower incremental costs.
• PTL Market Share: Consistent 23% YoY tonnage growth in PTL, combined with repricing unprofitable accounts, positions the segment to reach target margins of 16-18% within 5-8 quarters.
• Inorganic Efficiency: The Ecom Express integration is being executed more cost-effectively than originally projected, potentially freeing up capital for further consolidation.
Bear Case
• Yield Pressure: Express yields saw a 4.8% QoQ reduction due to a shift in shipment mix toward smaller, lighter parcels.
• Regulatory Risks: While the initial impact of the new labor code is quantified, recurring costs and future requirements for the government-administered social security fund remain uncertain.
• Capex Uncertainty: Accelerating growth in Supply Chain Services (SCS) and PTL may result in higher-than-planned capex outlays, potentially delaying the achievement of the 4% intensity target.