Delhivery's profit party cut short as express slump dents growth

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₹45.9 crore in Q4 from the previous quarter. The company, however, expects growth in express-parcel revenue to rebound. As it renegotiates contracts, management projects 15-20% year-on-year express-parcel revenue growth in FY25, after 12% growth in FY24.

Also read: Delhivery may hit a roadblock before delivering big success A bright spot is the continued improvement in PTL profitability. Management reiterated that the PTL service Ebitda margin, which stood at 2.2% in Q4, could eventually match the 18-20% margin of the express-parcel service and significantly boost the bottom line. For FY25, Delhivery guided for a lower capex range of 6.6% to 6.9% of annual revenue from 7.4% in FY24 as it looks to optimise existing resources.

While the huge upcoming facility in Bengaluru will require significant capex, the focus remains on expanding the tractor-trailer fleet. Delhivery is also exploring engineering solutions to maximise the potential of current facilities to further enhance capacity. While Delhivery's first year of Ebitda profitability and growth in non-core segments are positive signs, the immediate future seems uncertain.

The significant drop in express-parcel delivery highlights the volatility in its bread-and-butter business, and is a major cause for concern. In the near term, express volumes could be under more pressure owing to the insourcing of logistics by Meesho. Also read: Delhivery announces drone research plan as revenue grows, loss narrows in Q4 Emkay Global Financial Services reduced its FY26 sales and Ebitda estimates by 5% and 8%, respectively after factoring in the insourcing hit, but said it expected a profit-after-tax turnaround in FY25.