Delhivery Limited (NSE: DELHIVERY, BOM: 543529), a leading logistics and supply chain solutions provider, has announced a significant upswing in profitability and transportation volumes for the fourth quarter of the fiscal year 2023.
The company reported a sequential increase in revenue from services, along with improved adjusted EBITDA and narrowed loss after tax.
In Q4 FY23, Delhivery recorded revenue from services amounting to Rs. 1,860 Crores, up from Rs. 1,822 Crores in the previous quarter (Q3 FY23). The adjusted EBITDA turned positive at Rs. 6 Crores, a marked improvement from the Rs. 67 Crores loss in Q3 FY23. Furthermore, the loss after tax decreased to Rs. 159 Crores in Q4 FY23 from Rs. 196 Crores in Q3 FY23.
One of the key drivers behind the improved profitability was the enhancement of the adjusted EBITDA margin, which rose to 0.3% in Q4 FY23, reflecting a 397 basis point increase compared to the -3.7% margin in Q3 FY23. The core Express Parcel and PTL (Part Truckload) businesses experienced incremental gross margin above 50%. Delhivery attributed this margin improvement to several factors, including enhanced network capacity utilization, technology-driven cost optimization in fleet operations, and improved revenue and margin quality across customer segments.
To further optimize its operations, Delhivery extended its Full Truckload Exchange, known as Orion, to internal and third-party brokers and fleet owners. This move resulted in pricing benefits in both long-haul and short-haul trucking through competitive bidding and increased vehicle utilization for partners.
Delhivery’s Express Parcel volumes witnessed significant growth, with an increase of 10 million shipments quarter-on-quarter, reaching 180 million shipments in Q4 FY23 compared to 170 million shipments in Q3 FY23. Despite Q3 being a seasonally strong quarter due to festive sales, Delhivery managed to maintain positive growth in volumes. The corresponding revenue from Express Parcel stood at Rs. 1,177 Crores in Q4 FY23, slightly lower than the Rs. 1,200 Crores recorded in Q3 FY23.
Moreover, revenue from PTL services experienced a 19% quarter-on-quarter growth, reaching Rs. 328 Crores in Q4 FY23 compared to Rs. 277 Crores in Q3 FY23. This growth was primarily driven by increased volumes achieved through consistently high service quality. PTL volumes also rose by 23% quarter-on-quarter, reaching 318,000 tonnes in Q4 FY23 from 258,000 tonnes in Q3 FY23.
While the Truckload and Supply Chain Services businesses witnessed robust quarter-on-quarter revenue growth of 8% and 6%, respectively, the Cross-Border services business experienced a revenue decline of approximately Rs. 9 Crores. This decline was attributed to falling global yields in air and ocean freight, as well as the volume impact of the Chinese New Year holidays.
Speaking on the results, Sahil Barua, the Managing Director & Chief Executive Officer of Delhivery, expressed confidence in the company’s performance, stating, “Critical leading indicators like service precision, network speed, and delivery quality parameters are at all-time high levels and are driving greater customer confidence and share of wallet growth.”
“Delhivery’s aggressive infrastructure and capability expansion plans, expecting the strong performance in April and the first half of May to continue throughout the year,” he further added.
Delhivery will be hosting an earnings call to discuss the results on May 20, 2023, and the details can be found on the Investor Relations page.