📈 Earnings Deep Dive,
Delhivery Ltd
#Q4FY26 #Nifty #DELHIVERY
Delhivery achieves profitability and ₹10,000 crore revenue in FY26, delivers a billion parcels! 🚀💰
A deep dive into their Q4 FY26 Concall ⬇️
Delhivery Ltd marked a significant FY26, crossing ₹10,000 crore in revenue from services and delivering over a billion parcels, alongside 2 million metric tons of freight in PTL.
Q4 also saw strong sequential growth in Express volumes.
The company achieved a notable turnaround in profitability, with FY26 adjusted EBITDA reaching 7.3% (₹764 crore) and PAT at ₹347 crore.
Critically, it became free cash flow positive with ₹89 crore, a year ahead of its initial target.
This robust performance, coupled with a strong balance sheet of over ₹4,500 crore in cash, positions Delhivery for disciplined reinvestment into new growth pillars while maintaining capital efficiency and improving returns on invested capital.
🔹 Outlook & Guidance 🎯💡
- Management anticipates e-commerce industry growth of 15-20% in the medium term.
- The competitive landscape is seen as more rational, favoring scaled 3PL providers over 1PL.
- SCS projects must pass an internal hurdle rate, ensuring margin-accretive growth.
- Capex intensity is projected to remain low at around 4%, with AI/robotics not altering this trajectory.
- Transport ROIC is targeted to reach 25% driven by profitability improvement towards 10% adjusted EBITDA.
- Significant investment of ₹130–160 crore is planned for FY27 into new growth pillars, notably intracity logistics.
🔹 Q4 Performance Highlights 📊💰
- FY26 revenue from services reached ₹10,486 crore, with Q4 contributing ₹2,848 crore.
- The company delivered over a billion parcels in FY26, with Q4 Express volumes at 306 million parcels.
- PTL freight volumes hit 2 million metric tons in FY26, and Q4 saw ~549k tons, reflecting 20% growth.
- FY26 adjusted EBITDA stood at 7.3% (₹764 crore), and PAT was ₹347 crore (3.2%).
- Free cash flow turned positive at ₹89 crore, achieving this milestone one year ahead of schedule.
- Express business maintained normative margins of 16–18%, while PTL gross margins expanded from 14% to 28%.
- Supply Chain Services (SCS) revenue was ₹729 crore with a 10.9% service EBITDA margin, marking a decisive turnaround.
- Net working capital days materially improved to 11 days from 38 days three years ago, due to enhanced billing and client selection.
🔹 Management Tone & Strategy 🧭🛡️
- Management attributes strong performance to structural cost advantages and operating leverage.
- Strategic calls included exiting specific non-scalable businesses, like mother warehousing for quick commerce, and renegotiating client contracts.
- Working capital improvement stemmed from faster billing through AI/systems and disciplined client selection based on payment philosophies.
- AI is strategically deployed for operational efficiency in areas like claims automation and PTL paperwork reduction, without increasing tech team size.
- In-house developed AGVs are scaling up in mega gateways to enhance facility movement and address labor market tightness.
- Reinvestment into new growth pillars, particularly Delhivery Direct (intracity/intercity SME logistics), aims to externalize internal capabilities.
- CEO emphasizes a disciplined approach, rejecting past industry "burn/capex frenzy" and focusing on sustainable, profitable growth.