Festival season boosts Delhivery to second consecutive profitable quarter
- Delhivery's daily average volumes rose around 25% more than the pre-festive sale period
- Supply chain services saw a dip in revenues sequentially on account of client business seasonality
Bengaluru: Delhivery reported a net profit of ₹10.2 crore in the September quarter against a loss posted a year ago. The logistics firm has logged profit for the second consecutive quarter on robust volume during the festival season.
The company's revenues grew 12.8% to ₹2,190 crore in the second quarter of FY25, the logistics firm said in a statement on Thursday. The company had posted a consolidated net loss of ₹103 crore in the September quarter of last year. It swung to black in the June quarter, posting a net profit of ₹54.35 crore.
“The stable volume performance during Q2 FY25 along with the planned seasonal capacity additions we undertook towards the end of the quarter set us up well for the festive season. We saw a significant increase in the express volumes in October with daily average volumes being ~25% higher than the pre-festive sale period,” said Sahil Barua, MD & chief executive officer of Delhivery said in the statement.
Express parcel service revenue grew 7% to ₹1,298 crore in the second quarter, while express parcel shipments grew 3% YoY to 185 million in Q2FY25. Part Truckload’s revenue also grew 27% to Rs. 474 crore in the same period. Cross border service also saw higher growth during the period as compared to a year earlier.
Meanwhile, supply chain services saw a dip in revenues sequentially on account of client business seasonality. Its revenue fell to ₹197 crore from ₹259 crore in the previous quarter. However, the company said the pipeline will continue to be strong in supply chain services with multiple active dialogues across electricals, FMCG, e-commerce, auto and other industry verticals.
"We've had a significant growth overall, in terms of the number of active customers across all of our business lines and we continue to grow strongly in the SME and d2c segments in e-commerce," Barua said in a post earnings call with analysts.
Delhivery’s active customer base increased to 38,000 in Q2, up from about 30,000 in the same period last year.
Due to the festival season, the company experienced a mild expansion in team size, partners, agents, and fleet towards the end of the quarter. The workforce grew from 67,900 to 73,800 to support peak season demand, while the fleet expanded from 15,800 to 16,400.
With its second consecutive profitable quarter, Delhivery expects this positive trend to continue for the remainder of the year. Recently, the company lost some market share to Meesho’s in-house logistics partner, Valmo, launched earlier this year. However, Barua sees limited further impact on Delhivery’s business.
"A bulk of that has already been experienced in terms of the growth of Valmo. I think in the last financial year, there was very significant growth overall in its contribution to Meesho's volumes. So I think outsourcing has a relatively smaller sort of impact this year as compared to what it did last year. We don't think that it will have as significant an impact going forward," Barua said.
He added that broadly ecommerce from a purely consumption perspective has become softer.
"There has been a softness in consumption and I think, you know, we'd be foolish to think that it wouldn't affect e-commerce. From a delivery standpoint, we've been buying all the time stabilizing our operations to make sure our margins are stable and our capacity Investments are in line," Barua said in the call.
As the peak festive season winds down, Delhivery aims to increase shipments over three kilograms and plans to introduce faster options for regional surface and national air shipping. The company is also set to launch a third-party shared quick commerce network, anticipated to gradually boost volumes.
Barua highlighted that quick commerce, while impacting Kirana stores, has a smaller effect on e-commerce compared to the broader retail market.
"There will be a marginal impact on e-commerce, certainly in the beauty and personal care space as there will be a demand for only certain kind of products, he said. "If you go from 15 min to four hour delivery and do a bigger range of SKUs in larger warehouses, you are essentially reverse engineering a warehouse. This concept already exists and is highly efficient so even as quick commerce expands its total number of skus, it's going to look a lot like e-commerce"
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Business NewsCompaniesCompany ResultsFestival season boosts Delhivery to second consecutive profitable quarter
First Published:14 Nov 2024, 06:03 PM IST
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