Delhivery bets on improving H2 demand to deliver earnings

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₹1,942 crore, rose 8% year-on-year, falling short of consensus estimates. The crucial Express Parcel business with 12% volume growth at 181 million, lagging expectations, was a dampener. Importantly, the adjusted Ebitda loss of ₹13 crore, although narrowing, was another concern.

The management attributed lower growth in the first half of the year to a slew of factors such as integration of Spoton Logistics, expanding its presence across geographies. Ebitda is earnings before interest, taxes, depreciation, and amortization. That said, a comforting factor is that the second half of the year tends to be stronger for Delhivery.

The festive season and end-of-year sale season in December attract higher volumes not just from platforms such as Amazon, and Flipkart, but also from brands that have an omni channel presence, the management said in the Q2FY24 earnings call. The management continues to expect the e-commerce industry to grow by 15-20% going ahead with Delhivery seeing volume growth at the higher end. In October, Express Parcel volumes likely exceeded 70 million and daily Part Truck Load (PTL) volumes are beginning to touch 4,600-5,000 tonne levels, the management added.

The PTL business, which caters to the B2B segment, saw 22% volume growth in Q2FY24 to 348,000 tonnes. Further, the company is also taking steps to revive margins and boost its market share. For instance, its strategy to pass on efficiency gains in the B2C segment (where customers are price-sensitive) bodes well for future market share gains, said Emkay Global Financial Services report dated 5 November.