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Informist, Friday, May 16, 2025

By Anjana Therese Antony

MUMBAI – The capital expenditure intensity, or capex as a percentage of revenue, across Delhivery Ltd.'s businesses declined sharply during 2024-25 (Apr-Mar) from FY19 and is expected to fall further to its long-term targets. "We anticipate, going forward, that capex intensity in the business will continue to remain largely stable and slowly taper its way towards our long-term targets of between 3.5% and 4.0%," its management said in a post-earnings virtual call.

In FY25, Delhivery's capital expenditure as a percentage of revenue declined to 5.2% from 9.0% in FY19. The capital intensity in automation business declined to 0.8% from 1.2% during the period; that in furniture, fixtures, and office equipment operations declined to 1.1% from 3.5%; and that in information technology services fell to 0.4% from 1.6%, the company said. It also expects minimal capital expenditure for its automations business over the next 2-3 years.

For the quarter ended March, the Haryana-based company reported a robust bottom line growth from the year-ago period, aided by falling employee costs and lower depreciation and amortisation. It posted a net profit of INR 725.57 million against a net loss of INR 684.68 million and beating market expectations of INR 226.14 million by a wide margin. However, its revenue rose just 6% to INR 21.92 billion and failed to meet the Street's estimate of INR 23.40 billion, as most segments saw weak growth. 

The management also said there is large headroom for delivery growth in part truckload business. Under part truckload, a single shipment occupies a portion of a truck's capacity, sharing space with other customers' shipments, therefore providing cost benefits for customers. During the March quarter, revenue from this segment rose 24% on year to INR 5.17 billion and volume increased 19% to 458,000 tonnes. The company also said it saw overall significant customer addition, particularly in part truckload as well as e-commerce segments. It also said revenue from its largest customer remained around 16%.

Delhivery is also looking at bringing down input cost of logistics. "...this is essential for our customers to be able to grow their businesses...and see whether there are ways for us to make it more affordable for our customers," the management said. 

Talking about fleet utilisation, the company did not give a specific figure for the March quarter, but said utilisation had improved significantly during the reporting quarter and the quarter before. Its utilisation prior to the December quarter was around 65% and it would have gone beyond 70%, the management said. "But the reality is, as we get better at engineering our truck routes, as we get better at engineering our facilities, as we get better at designing software that tells us what to load on the trucks, the definition of capacity itself is changing. So you'll have to excuse me for not giving you a highly specific point estimate (on fleet utilisation)."  

The company pegged INR 3 billion as integration cost related to the recently announced acquisition of Gurugram-based Ecom Express Ltd. It said lease liabilities and some operational losses are factored in this integration cost. The company announced the acquisition of logistics solutions provider Ecom Express for INR 14.07 billon in April. Delhivery had then said the acquisition is expected to be completed within six months of execution of the share purchase agreement and that it awaits approval from the Competition Commission of India. 

Delhivery announced its quarterly results after market hours Friday and its shares snapped a four-day winning streak to close 1% lower at INR 320.85 on the National Stock Exchange. The stock has risen almost 7% in seven days and 22% in 30 days.  End

Edited by Ashish Shirke

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