Delhivery: Sequential improvement in ecommerce volumes and profitability metrics

On Feb 11, 2023

Mumbai, February 10, 2023: Delhivery Limited (NSE: DELHIVERY, BOM: 543529) reported revenue from services of Rs. 1,822 Cr in Q3 FY23, up 1% sequentially from Rs. 1,796 Cr in Q2 FY23. Adjusted EBITDA loss narrowed by 47% from Rs 125 Cr in Q2 FY23 to Rs 67 Cr in Q3 FY23. Loss after Tax in the same period narrowed from Rs. 254 Cr in Q2 FY23 to Rs. 196 Cr in Q3 FY23. The company reported an adjusted cash profit of Rs 34 Cr in this quarter versus negative Rs 32 Cr in Q2 FY23.

Overall business economics continued to improve with Adjusted EBITDA margin improving 330bps from -7.0% in Q2 FY23 to -3.7% in Q3 FY23. This improvement was driven by a combination of factors. In line with Q2 FY23, the incremental gross margin in the Express Parcel and PTL businesses combined continued to be approximately 50% in Q3 FY23 as well. Additionally, improved capacity utilization in the network, ongoing cost optimization measures and continued focus on revenue quality & margin improvements across customer segments also contributed to improvement in Adjusted EBITDA.

Revenue from Express Parcel services grew 7% QoQ from Rs. 1,125 Cr in Q2 FY23 to Rs. 1,200 Cr in Q3 FY23. Express Parcel volumes grew by 9 million shipments QoQ from 161 million shipments in Q2 FY23 to 170 million shipments in Q3 FY23 despite festive season sales starting in Q2 this year, unlike FY22. Revenue from Part Truckload services stood at Rs 277 Cr in Q3 FY23 versus Rs 293 Cr in Q2 FY23. The PTL business demonstrated robust volumes and consistently high service levels through November, December and January, providing a strong momentum as the business enters the busiest part of the year.

Truckload and Supply Chain Services businesses remained stable in the seasonality driven Q3 FY23 period. The SCS customer pipeline continued to expand, with new clients added in the auto ancillary & parts, healthcare, home furnishing & furniture, beauty & personal care, consumer electronics and construction sectors, along with expansion of existing contracts in auto, industrial and consumer segments.

“Leading indicators of our business – service precision, network speed and quality parameters all continue to show positive traction. We have had a good end to the year and this momentum has carried into 2023. We are confident of continued improvement in our transportation business, especially PTL, and overall profitability metrics”, said Sahil Barua, Managing Director & Chief Executive Officer, Delhivery.

Delhivery will host its earnings call to discuss Q3 FY23 results at 4:00 p.m. IST on Saturday, February 11, 2023. The registration link for the call has already been shared with the stock exchanges and the link to the audio replay will be made available on the Investor Relations page of the company’s website at https://www.delhivery.com/investor-relations/ following the earnings call.

Non-GAAP measures

Adjusted EBITDA is calculated by adding back to the Company’s PAT any non-recurring expenses, any non-cash expenses, depreciation & amortization, finance costs, tax as well as adjusting for any IndAS 116 related adjustments to lease rentals.

This metric reflects the operating cash profitability of the Company’s business and is used by the management team for overall assessment of the business, to make operating decisions, preparation of annual operating plans, and to communicate to the stakeholders about the financial performance.