This article first appeared on GuruFocus .
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Revenue:Nearly INR3,000 crore in Q1, up 28% year on year.
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EBITDA:INR156 crore, up 5% year on year.
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Express Parcel Volumes:322 million packages in Q1, up 55% year on year.
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PTL Freight Volumes:Approximately 542,000 tonnes in Q1, up 18% year on year.
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PTL Yield:Improved to nearly INR12 for Q1 fiscal '27, driving revenue growth of over 20% year on year.
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Supply Chain Services Revenue:Nearly INR200 crore for Q1.
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Delhivery Direct GMV:Ahead of plan at nearly INR150 crore, with fiscal '27 target of INR250 crore expected to be exceeded.
Release Date: August 08, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Record volumes in Q1 FY27: Express business delivered 322 million packages, up 55% YoY, and PTL volumes grew 18% YoY to 542,000 tonnes.
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Strong revenue growth: Overall revenues increased 28% YoY to nearly INR3,000 crore, with PTL revenue growing over 20% YoY.
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PTL yield improvement: Yield rose to nearly INR12 per tonne, driven by organic improvements (not just fuel pass-through), and is expected to be sustainable.
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Delhivery Direct outperforming expectations: GMV is ahead of plan at ~INR150 crore, with higher contribution margins and lower-than-expected investments.
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Market share gains: The company is gaining share from both other 3PLs and in-house logistics, supported by service quality and a flight to quality in uncertain environments.
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Technology and automation investments: Launch of Delhivery Maps and continued automation investments are expected to sustain market share growth and mitigate labor shortages.
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Fuel cost pass-through nearly complete: Over 97-98% of contracts have been revised for fuel price hikes, with full benefit expected in Q2.
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No structural margin concerns: Management expects margins to recover in H2, with Express service EBITDA margins returning to the 16-18% range and PTL exiting FY27 at 15-15.5%.
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Strong new initiatives pipeline: Delhivery Local is growing faster than expected, with Ahmedabad set to break even in Q3, and contribution margins ahead of plan.
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Stable pricing environment: No significant pricing pressure in the e-commerce express market, with yields expected to hold or improve.
Negative Points
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Challenging external environment: Chronic labor shortages, election disruptions, weather-related issues, and geopolitical uncertainty impacted operations and increased costs.
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Margin pressure from fuel and wage inflation: Q1 service EBITDA margin was 13.1%, impacted by fuel price hikes and statutory minimum wage increases, with a combined impact of ~INR30-35 crore.
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Supply Chain Services profitability affected: Two new large contracts started in Q1, leading to a sequential decline in margins due to inventory buildup and commissioning costs, expected to stabilize by Q2/Q3.
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Delayed fuel cost pass-through: Fuel price increases were only partially passed on in Q1, with the full impact deferred to Q2, affecting quarterly margins.
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Corporate overheads remain elevated: Corporate costs as a percentage of sales stayed at ~9.3-9.4%, due to investments in business development teams and technology costs, delaying operating leverage.
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New initiatives still loss-making: Delhivery Local and other new services continue to incur losses, with a negative contribution margin of ~50% and a cost-to-revenue ratio of 1.5x.
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Integration costs persist: Ecom Express integration costs (INR17 crore cash, INR30 crore on statutory P&L) continue to weigh on reported PAT, with depreciation on unused assets adding to the drag.
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Labor cost pass-through is slower: Unlike fuel, minimum wage increases lack contractual pass-through clauses, leading to a lag in recovering these costs from customers.
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Weather-related disruptions continued into Q2: Some weather challenges from Q1 spilled over into Q2, potentially affecting early Q2 performance.
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Uncertainty in fuel prices: Management noted that future fuel price movements remain unpredictable, which could impact margins if prices rise again.
Q & A Highlights
Q: Can you provide more color on the Express volume growth guidance of 20% to 30%? What will drive growth towards the low or high end, and what kind of new customers are contributing? A: Sahil Barua (CEO): We are currently tracking towards the mid-to-upper end of the 20% to 30% range. Q1 saw record volumes with 55% YoY growth, though this includes the base effect from the Ecom Express acquisition. Even adjusting for that, growth was robust, and demand has continued strongly into Q2 and early August. The wide guidance range is due to the unusual strength seen in Q1, historically the slowest quarter. New customer growth is broad-based, with the majority coming from D2C and SME segments, where D2C volumes continue to grow at a 40% to 45% rate. We are also seeing contributions from structured SDD and NDD programs.
Q: Is the meaningful increase in PTL yield sustainable, or is it just a seasonal or fuel-related blip? A: Sahil Barua (CEO): This is not a seasonal improvement but a planned and delivered improvement in yields, driven by better network quality and scale. Of the INR0.37 improvement in yield, only about INR0.06 is attributable to fuel inflation; the rest is organic and sustainable across all distances. We see no reason this will not continue.
Q: How should we split the 300 bps QoQ gross margin decline between fuel and minimum wage impacts? A: Vivek Pabari (CFO): The direct fuel impact is roughly 0.6 percentage points, but the overall oil price impact is higher as it also affects consumables, airline charges, and last-mile rider expectations. The manpower cost hit is in a similar range, but since there is no contractual pass-through for minimum wages, the impact is larger and more direct. The full benefit of fuel pass-throughs will be visible in Q2.
Q: Is the market share gain in Express due to 3PL consolidation or a shift from in-sourced logistics arms of e-commerce companies? A: Sahil Barua (CEO): We have seen both. We are gaining share relative to other 3PLs and also from customers with in-house logistics. Uncertain environments are typically good for Delhivery as there is a "flight to quality." We made deliberate investments in Q1 to maintain network service quality, which has paid off in volume gains. While it's not conclusive evidence of a structural shift, the strong volumes over the last few quarters are encouraging.
Q: What would normalized Q1 margins have been absent the external cost pressures, and how much will be recouped? A: Sahil Barua (CEO) & Vivek Pabari (CFO): Normalized service EBITDA would have been approximately INR30-35 crore higher. This includes the delay in fuel pass-throughs, which will be recovered in Q2, and investments made to maintain service quality. We do not anticipate a significant difference to our overall FY27 margin trajectory despite the Q1 outcome.
Q: Can you clarify the margin expectations for Express and PTL for FY27? A: Vivek Pabari (CFO): For Express, we maintain our 16% to 18% service EBITDA target and remain confident of being in that range, closer to the higher end, in H2 FY27. For PTL, we typically exit each financial year 1.5 to 2 percentage points better than the previous year. We exited last year at 13.4% and our internal objective is to exit this year closer to 15% to 15.5%.
Q: Why did Supply Chain Services (SCS) margins decline sequentially despite scaling revenues? A: Sahil Barua (CEO): The decline is not due to structural changes in existing contracts, which remain profitable. It is due to the start of two new large contracts (an industrial player and a consumer durables player). During the initial buildup phase, there is a mismatch between inventory inbound and outbound, leading to negative margins as we incur rent and manpower costs before billing ramps up. This is factored into the project's IRR and should stabilize within 45-60 days as outbound volumes reach full potential.
Q: What is your strategy for the quick commerce opportunity? A: Sahil Barua (CEO): We play in the part of quick commerce where brands supply into mother warehouses or dark stores, which fits our PTL and SCS capabilities. We deliberately stay away from running dark stores and last-mile delivery for quick commerce players. We view these as undifferentiated, low-margin services with no network benefits. We believe quick commerce players will eventually keep these operations captive and squeeze costs, similar to what happened in food delivery. Our focus remains on the supply chain leading up to the dark stores.
Q: When will the sequential decline in B2C realization (yield) be arrested, and when will pricing power show up? A: Sahil Barua (CEO): The yield decline between Q1 FY26 and Q1 FY27 is purely a mix effect from the Ecom Express acquisition, which was a small-parcel network. The proportion of heavy consignments is now lower, materially impacting the blended yield. We do not anticipate any pricing cuts. In an inflationary environment, customers are not seeking price reductions, and with fewer players in the market, there is less irrational pricing. If statutory wages increase, pricing will be revised upward, and those negotiations are already underway.
Q: What is the investment and growth trajectory for new initiatives like Delhivery Local and financial services? A: Sahil Barua (CEO): The largest portion of new initiative investments is in Delhivery Local, which is growing faster than expected. We are already at a INR150 crore ARR in July, ahead of our original plan to reach INR250 crore by year-end, so we are revising that target upwards. Contribution margins are also better than expected, so we should stay within our earmarked investment range of INR160-175 crore for the year. Financial services is very new, having just received NBFC approval in July.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
