Aug 5, 2023

Delhivery expects to turn in net profits by FY 2025: CEO Sahil Barua New-age logistics firm Delhivery is expected to breakeven on an adjusted EBITDA level during the current financial year, cofounder and chief executive Sahil Barua said in post earnings call on Saturday. This comes a day after its losses narrowed 78% year-on-year to Rs 89.4 crore for the quarter ended June 30. The Gurgaon-headquartered company will look to hit net profitability by the end of fiscal year 2025 or the beginning of FY 2026. It is expected to have grown at a higher scale than the broader market, leading it to believe that it has gained about 1-2% in market share, Barua added. On Friday, Delhivery reported a net loss of Rs 89.4 crore on revenue from operations of Rs 1,929.8 crore. On a sequential basis, quarterly losses narrowed to almost half from Rs 158.7 crore in the January-March quarter. Quarter-on-quarter revenue grew 3.8%. Discover the stories of your interest Also read | Zomato Delhivers profits, Freshworks en route; and other top tech & startup stories this week Delhivery said the largest share of its yearly cost of expansion have already being incurred in this quarter, and will therefore see its costs stabilize or fall for the succeeding quarters as gross margins keep improving, the firm’s senior management said on Saturday. It is pulling out “low-margin” and “unprofitable” customers to improve the company’s customer mix. In April, a report from Bernstein said Delhivery had seen its market share in ecommerce shipments slip to an estimated 21.5% in 2022-23 (April-March), from 23% in FY22, and that the same is expected to further fall to 19% by FY30. Bernstein ’s report also said that while the year-on-year growth in Delhivery’s ecommerce parcel volumes are expected to stay in the 14-17% till FY30, its market share will continue to slip with other third-party logistics players looking at potential gains. The logistics company said it was also rolling out its SaaS (software-as-service) product to help clients organize their own logistics in India, the Middle East, and the United States, adding that it already was in conversations with ten potential clients. It further added that it was still not a major participant in ONDC but was watching the project with interest. When asked about the entry of e-commerce firms like Flipkart into the B2B delivery space, the company’s said they were “not worried” and that the “ability (of the new players) to scale up their B2B business is uncertain”. “It doesn’t make sense for a captive player (like Flipkart) for whom the core job is to provide, theoretically, higher customer experience to be going out and, let’s say, delivering spare parts for Tata motors to their dealers… I don’t see the logic to this at all and I don’t see how this is capital efficient for them. So there is a strategic misalignment, and an economic misalignment”, Barua further added. On Friday, Delhivery said its express parcel shipment volumes grew 19% year-on-year (YoY) to 182 million in the quarter, and went up by over 2 million shipments from the preceding March quarter. As a result, revenue from express parcel services grew 14% YoY to Rs 1,202 crore in the first quarter of fiscal 2024. At the same time, part truckload volumes grew 44% YoY to 343,000 tons for the quarter, leading to revenue from the division growing 34% YoY to Rs 347 crore, up from Rs 259 crore a year ago. Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.