Delhivery’s Dynamic Growth: Navigating Through Challenges Towards a Profitable Horizon

January 28, 2024



Delhivery, a leading logistics and supply chain company in India, has demonstrated remarkable growth and strategic evolution since its inception in 2011. With a diversified business model, the company offers a wide range of services, including express parcel delivery, heavy goods delivery, and comprehensive supply chain solutions. In fiscal year 2024, Delhivery reported significant revenue growth, reaching Rs 1,929.8 crore in the quarter ending June 2023, marking a 10.55% increase from the previous year. This performance reflects not only an increase in revenue but also improved operational efficiency, evidenced by a substantial 77% reduction in losses during the same period.

Delhivery is an Indian logistics and supply chain startup that has made significant strides in revolutionizing the logistics sector in India. Founded in 2011 by Sahil Barua, Mohit Tandon, and Suraj Saharan, Delhivery started as a local on-demand delivery service but quickly transformed into a full-fledged logistics company.

Business Model and Operations: Delhivery operates across five primary business verticals: Express Parcel, Part Truck Load Services, Truck Load Service, Supply Chain Services, and Cross Border Services. This diverse service range allows Delhivery to cater to a broad spectrum of logistics needs, from express parcel delivery to comprehensive supply chain solutions. The company’s approach is centered around an asset-light business model, which involves leasing vehicles and infrastructure related to logistics and collaborating with network partners for service delivery. This model has enabled Delhivery to scale up rapidly without incurring substantial fixed costs​​.

Financial Performance: In terms of financial performance, Delhivery has demonstrated commendable growth. For the quarter ending June 2023 (Q1 FY24), the company reported a revenue of Rs 1,929.8 crore, marking a 10.55% growth from the previous year. Additionally, Delhivery’s losses have significantly decreased, shrinking by over 77% to Rs 89.5 crore in Q1 FY24 compared to the same period in the previous fiscal year. This improved financial performance indicates not only growth in revenue but also more efficient operational management​​.

Investors and Funding

Delhivery has attracted a significant amount of investment from national and international investors. Key investors include SoftBank Vision Fund, The Carlyle Group, Fosun International, and Tiger Global Management. These investments have been crucial in enabling Delhivery to scale its operations, invest in technology, and expand its service offerings. The funding rounds have also helped in boosting the company’s valuation and market presence.

Strategic Developments: Strategically, Delhivery has been focusing on improving its service efficiency and expanding its market reach. The company’s decision to enter the hyperlocal delivery space, a sector with increasing demand due to the rise of quick commerce, is a testament to its adaptability and forward-thinking approach. This diversification aligns with the evolving landscape of logistics and e-commerce, potentially opening new revenue streams and partnerships.

Financial Performance: Delhivery’s financial performance shows a complex scenario. The company has experienced an annual earnings growth of 8.3% over the past five years. However, it is currently not profitable, with a trailing twelve months (TTM) profit after tax reported at ₹-547 Cr. This aligns with the larger trend in the logistics industry, where companies often invest heavily in infrastructure and technology, impacting short-term profitability.

Valuation Ratios: In terms of valuation ratios, Delhivery’s Price/Sales (ttm) ratio stands at 3.88, and its Price/Book (mrq) ratio is at 3.24. These ratios provide insight into how the market values the company relative to its sales and book value. The Price/Earnings (P/E) ratio is not available due to the company’s current lack of profitability.

Market Dynamics: Delhivery’s stock has shown volatility over the past year, with a 52-week high of ₹452.40 and a low of ₹291.00. The company’s stock price has undergone various changes, influenced by market trends and company-specific developments.

Competitive Landscape: In the competitive logistics sector, Delhivery competes with firms like Blue Dart Express, TVS Supply Chain Solutions, Allcargo Logistics, and Transport Corporation of India. Each of these competitors has its unique strengths and market positions, contributing to a dynamic and competitive environment.

Future Outlook: Delhivery is forecasted to reach breakeven in 2026, indicating potential future profitability. This forecast is based on the company’s growth trajectory and strategic initiatives. Delhivery’s expansion into various logistics services and continual investment in technology may position it well for long-term growth and profitability.


Strategy Boffins Team