Delhivery net loss widens in Q3 as revenue declines 8.5%

Logistics and supply-chain startup Delhivery’s loss widened for the quarter that ended December as the company reported an 8.5 percent decline in its revenue from a year earlier.

Delhivery reported a net loss of Rs 195.7 crore for the third quarter of FY23 (2022-23) against a net loss of Rs 127 crore a year earlier, the company said in a stock exchange filing on February 10. Delhivery’s operating revenue fell to Rs 1,823.8 crore for Oct-Dec 2022 from Rs 2,019 crore a year earlier, the filing showed.

Sequentially, the logistics unicorn reported a marginal growth in revenue as revenue from the partial truckload freight segment declined more than 5.5 percent from a quarter earlier to Rs 277 crore. However, the company reported a 7 percent sequential growth in the express parcel services business, which bolstered the revenue number. During Q3 FY23, the logistics platform reported a 1.5 percent sequential rise in its consolidated revenue to Rs 1,823 crore

"We are confident of continued improvement in our transportation business, especially PTL (part truckload), and overall profitability metrics”, said Sahil Barua, Managing Director, and Chief Executive Officer, of Delhivery.

During Q3, Delhivery’s freight handling and services costs declined marginally to Rs 1,409 crore from a year earlier, while its employee benefit expenses rose slightly to nearly Rs 400 crore from the same period a year earlier.

Delhivery claimed that its adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) loss narrowed 47 percent from Rs 125 crore in Q2 FY23 to Rs 67 Cr in Q3 FY23. The company also claimed to have clocked an adjusted cash profit of Rs 34 crore in the quarter that ended December 2022 versus an adjusted cash loss of Rs 32 crore in Q2 FY23.

Adjusted EBITDA is a metric that many tech companies use even as each one of them defines it differently. Typically, costs that are not considered operational for the business such as employee stock option expenses are kept out of it.

Truckload and supply chain services businesses remained stable in the seasonality-driven Q3 FY23 period, Delhivery said. The supply chain services customer pipeline continued to expand, with new clients added in the auto ancillary and parts, healthcare, home furnishing & furniture, beauty and personal care, consumer electronics, and construction sectors, along with the expansion of existing contracts in auto, industrial and consumer
segments, the company said.

Starting in June 2011, Delhivery is the largest fully integrated logistics services company in India by revenue and provides a full range of logistics services, including delivery of express parcel and heavy goods, warehousing, supply chain solutions, cross-border express freight services, and supply chain software.

The company claims to have built a network covering every state, servicing 17,045 PIN codes, or 88 percent of the 19,300 PIN codes in India. The Gurugram-based company became a unicorn – valued at over $1 billion – when it raised $413 million in a Series F round led by SoftBank Vision Fund in 2019.

In May, the company got listed on the stock exchanges as it raised Rs 5,235 crore through an initial public offering (IPO). Its shares rose 10 percent to Rs 537 against the issue price on its listing day (May 25). The company, however, was aiming to raise almost a billion dollars earlier, when it filed draft papers with India’s markets regulator.