Delhivery’s revenue rose 13 percent to Rs 2,172 crore in the June quarter (Q1) and returned to black with Rs 54-crore net profit, amid a broader slowdown in the e-commerce sector which the logistics company primarily caters to.
The company logged revenue of Rs 1,930 crore in the year-ago period, while net loss was Rs 89 crore.
“Robust growth in PTL (part truckload ) and SCS (supply chain services) businesses and stable growth in express parcel continues and have enabled improvement in profitability as well”, said Sahil Barua, MD & Chief Executive Officer.
After posting a surprise net profit for the first time in the December quarter last year, which coincided with a seasonal spike in e-commerce sales due to festivities, Delhivery slipped back into the red in the March quarter this year.
Delhivery stock price on the BSE rose 2 percent during the day to close at Rs 416.1 apiece.
"Express Parcel shipments grew 4% sequentially to 183 million in Q1 FY25 from 176 million in Q4 FY24 while revenue grew sequentially by 5% to Rs. 1,276 crore in Q1 FY25 from Rs 1,217 Cr in Q4 FY24 and 6% YoY from Rs. 1,202 crore in Q1 FY24. Express Parcel service EBITDA profitability improved sequentially to 18.2% in Q1 FY25," the company said in a statement.
The company also claimed that it continues to make strong inroads into the larger B2B transportation and supply chain services markets.
"Part Truckload revenues grew 25% YoY to Rs.435 Cr in Q1 FY25 from Rs. 417 Cr in Q4 FY24 and Rs. 347 Cr in Q1 FY24. PTL volumes grew 16% YoY to 399K MT in Q1 FY25 from 384K MT in Q4 FY24 and 343K MT in Q1 FY24, despite Q1 having been a seasonally weak quarter for the industry. PTL service EBITDA profitability also continued to improve and expanded to 3.2% in Q1 FY25 from 2.2% in Q4 FY24," the company said.
"Supply Chain Services also showed robust growth in Q1 FY25. Revenue from SCS stood at Rs 259 Cr, growing 11% sequentially from Rs 234 crore in Q4 FY24 and 26% YoY from Rs 206 crore in Q1 FY24 on the back of a strong season and new accounts. Pipeline continues to be strong in SCS, with multiple active dialogues across electricals, FMCG, e-commerce, auto and other industry verticals," it added.
Delhivery’s shipment volumes are bound to be impacted for a while as Meesho, the largest customer in the third-party logistics space with about 50 percent market share, is moving its deliveries to an in-house system called Valmo, according to a recent report by brokerage firm Bernstein.
For this reason, coupled with management exits and issues with the company's business execution, the brokerage firm had downgraded Delhivery, calling it ‘volatile’ and an ‘unstable ship’.
“Delhivery is a volatile company. In some quarters, it has struggled with its PTL business, led by Spoton integration issues, and some due to weak Ecom business (Shopee exit, peak season execution issues, etc). Meesho's insourcing is now affecting it. This, coupled with senior management exits, suggests that the ship is still unstable,” Bernstein analysts wrote in the note.
According to the brokerage firm, Valmo currently handles 20 percent of Meesho's total volumes and plans to increase this to 40 percent in the next few months. Further, Valmo has established a reach of 5,000 pin codes and claims that its cost per parcel is about 5 percent lower than that of 3PLs, and it sees a scope of 5-7 percent more savings in the next 12-18 months.
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