Delhivery- Research Report

Delhivery provides a full range of Logistics services, including delivery of express parcels and heavy goods, PTL freight, TL freight, warehousing, supply chain solutions, cross-border Express, freight services, and supply chain software. The company also offers value-added services such as e-commerce return services, payment collection and processing, installation & assembly services, and fraud detection.Apart from this, the Company provided supply chain solutions to a diverse base of 38044 Active Customers such as e-commerce marketplaces, direct-to-consumer e-tailers and enterprises and SMEs across several verticals such as FMCGs, consumer durables, consumer electronics, lifestyle, retail, automotive and manufacturing. It is the largest and fastest-growing fully integrated logistics company in India by revenue in FY24. It provides full range of logistics and value-added services serving over 220 countries and territories.Its express parcel delivery network, which serviced 18,775 PIN codes is capable of handling consignments of up to 10 kilograms with same-day and next-day capabilities and 48–96-hour deliveries for long-distance orders.

Delhivery has infrastructure of 19.49 million sq. ft. across India which includes 45 automated sortation centers and 119 gateways across India, with a rated automated sort capacity of 7.1 million shipments per day.It has 80+ applications through which they provide various services, orchestrated by their platform to govern end-to-end transaction flows. It has 3,645Number of Express delivery centres, 853 Partner centres, 159 processing centres and Team Size of 73,748members serving 38044Active Customers and manages a daily average fleet size of 16,357 overall. It has also expanded its offering to cross-border air-cargo services, powered by their global shipping service, “Starfleet” which provides international air cargo services through a mix of charter and block space agreements through partnerships with major airlines on certain trade corridors of India, such as the US, Europe, and China.The company has also added 150+ 46-foot tractor-trailers, boosting its line-haul capacity for long-distance, bulk transport.The company has also commissioned a 1.2 million sq. ft. mega-gateway in Bhiwandi, Maharashtra, one of its largest hubs to manage rising parcel volumes.

Company’s clientele includes brands as Mama Earth, urbanic, Smytten, Heads Up for tails, The souled store, Decathlon, helios, mother sparsh, Myglamm, Mylo, Wow, Royal Enfield, Xiomi, Paytm, Swiggy, ola, Godrej, Hitachi, Havells, Nykaa, Pantaloons, Mahindra, Voltas, Hitachi and many more.

Fundamentals:

CMP	Rs 322.60
52 - week high	Rs.488
52 – week low	Rs.320
Dividend % (consolidated)	0%
ROE	-2.94%
BV(Rs.)	125
Sales (Rs.)	8632cr.
Debt to Equity	0.15
P/E ratio	757
EPS (consolidated)	0.1
P/B ratio	2.64
Market Cap	23826 Cr.
Face value	Rs.1
PEG Ratio	57.9

 

 

Financial Results:

In Q2Fy25, company managed 427k tons of freight tonnage marking 7% and 22% growth in QoQ and YoY basis and 185 Mn Express Parcel Shipments marking 1.5% and 2.5% YoY growth respectively.

Company has reported 2190Cr. revenue from services which is 0.8% and 12.8% higher on QoQ and YoY basis. Company has also turned PAT positive in Q2Fy25 by reported 10Cr. PAT against net loss of 103Cr in previous year and its PAT margins also reached 0.4% from -5% in Q2Fy24.

It has also reported EBITDA of 57Cr. against negative EBITDA of -16Cr. in previous years along with 2.6% EBITDA margins from -0.8% in Q2Fy24.

On service basis company’s Express parcel revenue grew by 7% on YoY and 2% on QoQ basis in Q2FY25 and reached 1298Cr., its PTL freight revenue also reached 474Cr. with 27% growth on YoY basis and 9% growth on QoQ basis.

Company TL Service revenue grew by 5%, Supply chain services revenue grew by 21% and cross border services revenue grew by 43% on YoY basis in Q2FY25.

Key Highlights:

• Delhiveryhas partnered with Truecaller, the global platform for verifying contacts and blocking unwanted communication. This collaboration aims to enhance communication efficiency for Delhivery’s customers by using Truecaller’s Customer Experience Solution.
• Delhiveryis expanding its cross-border services with a strategic partnership with Teamglobal Logistics. Teamglobal Logistics, is a leader in the fast-growing ocean freight sector, offering transportation services between all major international cargo centers using a combination of land, sea and air modes.This strategic partnership will provide an expanded reach of 120+ countries for Delhivery’s Less than Container Load (LCL) service. Delhivery, in turn, will enable in- land services of its Part Truckload (PTL) shipping solution within India to Teamglobal with its reach of 18,700+ pin codes.
• Delhiveryhas also partnered with Sugar Cosmetics to spearhead the pan-India end-to-end B2B operations for leading beauty brand SUGAR Cosmetics, further cementing the relationship. The logistics company has been a long-standing partner for the brand’s D2C express parcel shipping.In addition to its robust online presence, the brand operates over 45,000+ retail touchpoints across more than 550+ cities in India.
• RTO (Return to Origin) Predictor, an AI-led solution developed by Delhivery, India's largest fully integrated logistics service provider, will significantly reduce risk of returns, solving a major pain point for D2C brands.The solution has already successfully enabled over 4800 e-commerce businesses, counting notable brands such as Heads up for Tails, Healthkart, W for Woman, Be Minimalist, and Kapiva, to reduce their RTO (Return to Origin) shipments for cash on delivery orders, significantly improving margins for its clients.
• New-age logistics services provider Delhivery has operationalised its largest gateway in Bhiwandi, Maharashtra one of the biggest logistics hubs in the country, housing warehouses of Amazon, Flipkart, and Samsung.The new terminal consolidates Delivery's existing operations in Bhiwandi and includes an automated hub, sortation, freight handling, and ecommerce returns operations. In the logistics industry, a gateway is the central point at which freight moving from one region to another is interchanged between transport vehicles heading into different directions.Spanning over 1.2 million square feet of land, the terminal has 196 docking stations and is designed to transact over 8,000 tonnes of freight, with 1,600 vehicles passing through it daily.This is the company's second such large facility after its first in Tauru, Haryana, launched in 2021. The company also expects its third such facility in Bangalore to become operational in 2024.

The logistics industry in India is growing rapidly, and is expected to continue to do so in the coming years. The logistics industry in India has experienced a compound annual growth rate (CAGR) of 11% from 2019 to 2024, it was valued at $317.3 billion in 2024, and is expected to grow to $484 billion by 2029.With a shift towards greater digitization and online payment mechanisms, medium and small enterprises are expanding their businesses, with 1.5-2.5 Mn MSMEs marking their online presence and India’s emergence as a leader in the Global Retail Innovation Index 2023 showcases the country's commitment to serving consumers beyond boundaries and opening to more trade, envisaging an increase in e-commerce exports to ~$300 Bn by 2030. Delhivery is one of the preferred delivery partner for these new entrants and even many big players which creates a market leading position for the company and keeping itself a step ahead from its peers. Considering proven track record of the company, turnaround conditions, growth of logistics industry in India supported by the growth of new age startups related to customer centric products and tech driven companies, investors can invest in this company for long term period with buy in dips strategy.

HET ZAVERI

info@smartinvestment.in

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