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Informist, Saturday, Aug. 8, 2026

 

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--Delhivery: Some weather-related challenges have continued into Q2 
--CONTEXT: Comments by Delhivery management in post-earnings analyst concall 
--Delhivery: Profitability in Q1 affected by start of 2 new large contracts 
--Delhivery: See no major challenges to near, medium term targets 
--Delhivery: Expect overall environment to remain benign ahead 
--Delhivery: Demand for express service strong in Q2 as well 
--Delhivery: See client growth across segments 
--Delhivery: Expect minimum wage revision ahead 
--Delhivery: Will pass on minimum wage revision impact via price increase 
--Delhivery: Do not see major change in margin trajectory for FY27 
--Delhivery: Deliberately stayed away from dark store model in Q-commerce 
--Delhivery: Largest portion of new initiatives in local delivery

 

By Shakshi Jain and Shruti Nair

 

NEW DELHI/MUMBAI – Logistics major Delhivery Ltd. anticipates further revisions in minimum wages at the state level and will accordingly undertake a price increase to pass on the impact to customers, Managing Director and Chief Executive Officer Sahil Barua told analysts in a post-earnings conference call Saturday. He later added that the company does not see a significant change in the anticipated margin trajectory for the ongoing financial year 2026-27 (Apr-Mar). The company anticipates the overall environment to be more benign going forward and does not see major changes to either the FY27 or medium or long-term growth and profitability targets either, according to Barua.

 

Revision of statutory minimum wages across key states of Haryana, Karnataka, Uttar Pradesh, and Punjab led to a meaningful increase in labour costs across the network and at the company's key operating facilities at Tauru, Haryana, and Hoskote, Karnataka, Delhivery said in an exchange filing. "We began revising pricing across client contracts in response to this increased input cost and expect this to continue through Q2FY27," it added.

 

In the June quarter, the Haryana-based company's consolidated net profit dived 65% year-on-year to INR 319.6 million, marred by fuel and labour wage inflation. The start of two new large contracts also dented the profitability for the quarter. "I think there have been chronic labour shortages across the industry throughout the period of April, May, and June. We also had significant disruptions due to both elections as well as weather in this quarter, some of which, especially weather-related challenges, have continued a little bit into Q2 (Jul-Sept)," Barua said, adding higher fuel costs and labour-code changes to the list.

 

Meanwhile, the consolidated net revenue from operations for the reporting quarter rose 28% on year to INR 29.31 billion. "Profitability was affected by the start of two new large contracts, which we expect will stabilise over a combination of Q2 and early Q3 (Oct-Dec)...new client starts expected in obviously e-commerce, which is one of our core sectors, but also in automotives and consumer durables," Barua said.

 

The company's new initiatives are growing rapidly and Delhivery Direct is growing faster than initially anticipated, according to Barua. He added that the company expects to exceed its original gross merchandise value target of INR 2.5 billion by the end of the ongoing financial year in this business. The current gross merchandise value is ahead of plan at around INR 1.5 billion. "Contribution margins have also expanded compared to where we originally thought it would be and our anticipated investments in this year therefore will be somewhat lower," Barua said.

 

Delhivery Direct is an on-demand doorstep courier service for parcels up to 50 kilograms. The Delhivery Direct service, available on the Delhivery: Courier App, allows customers to book both rapid intracity or local shipments and pan-India intercity courier orders. According to Barua, the largest portion of the company's new initiatives is being channelled towards local delivery. 

 

 

Delhivery is eyeing a service earnings before interest, tax, depreciation, and amortisation margin of 16% to 18% for its core express parcel business and expects to reach closer to the higher end of this range in the second half of the ongoing financial year. For the part truck load operations, the company said it typically ends up exiting each financial year with roughly 1-2 percentage points higher margins year-on-year and that is the target with which it continues to execute business this financial year as well. "...The long-term target there also is 16 to 18 percentage," a senior official said.

 

Express parcel volumes grew 55% year-on-year in the June quarter through share gain with existing customers as well as new customer addition and the company anticipates this momentum to continue and expects overall volume growth of 20-30% for FY27. "Demand has continued to remain strong even in Q2," Barua said earlier on the call.

 

Part truck load freight tonnage grew more than 18% on year to 542,000 tonnes for the three months ended June and the company is confident of delivering the overall target of 18-22% volume growth for FY27 with continued improvements in yield as well.

 

Investors will react to Delhivery's June-quarter earnings Monday. Friday, shares of the company ended at INR 473.30 on the National Stock Exchange, up 2% from the previous close. End

 

Edited by Akul Nishant Akhoury

 

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