Delhivery Q1 Profit Falls 65% Due to Rising Costs

Logistics giant Delhivery has reported a significant 65% year-on-year drop in its first-quarter profit, which fell to ₹31.9 crore. The company faced pressure on its profitability due to macroeconomic shocks and fixed cost structures, despite achieving healthy revenue growth.

In Q1 FY27, Delhivery’s operating revenue rose by 28% year-on-year to ₹2,931 crore. However, total expenses increased by 29% year-on-year to ₹3,012 crore. Despite these challenges, the company saw an improvement in its EBITDA, which grew by 6.5% year-on-year to ₹156 crore.

The decline in profit was attributed to factors such as labor shortages, increased fuel costs, weather disruptions, and revised statutory minimum wages in several states. These issues necessitated increased spending on additional staff and network capacity to maintain service quality.

On a positive note, Delhivery experienced strong traction in its transport businesses. Express parcel volumes saw robust growth, driven by market share gains and new client acquisitions across various segments. Part-truckload (PTL) volumes also improved, supported by the expansion of its business development teams.

The company is also focusing on new growth avenues. Its B2C offering, Delhivery Local, crossed an annual recurring revenue (ARR) of ₹100 crore, and it plans to invest ₹50 crore in its NBFC arm. Additionally, Delhivery has introduced an AI-powered tool to reduce return-to-origin shipments, an automated storage system, and AI-native Delhivery Maps.

Looking ahead, Delhivery anticipates that pricing revisions will offer some relief in the coming quarters. The company projects its express parcel volumes to grow by 20-30% and PTL volumes by 18-22% in FY27. Delhivery Local is expected to reach an ARR of ₹200 crore by the end of the fiscal year.

The company is leveraging tech-driven cost optimizations to counter persistent inflation, aiming to improve its financial performance in the upcoming quarters.