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Delhivery reports a substantial increase in profits for Q1 FY26, with a net profit rise of 68.5% and improvement in profit margins. The company’s revenue grew modestly, driven by strong performance in its core logistics segments and introduction of new value-added services. Strategic acquisition of Ecom Express, along with a focus on diversification and asset deployment, positions Delhivery for disciplined growth amid macroeconomic challenges.

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Delhivery Reports 68.5% Jump in Q1 FY26 Net Profit with Improved Margins

India’s largest integrated logistics provider, Delhivery, kicked off fiscal 2026 with a sharp improvement in profitability. The company posted a net profit of Rs 91 crore for the June quarter, marking a 68.5% year-on-year increase from Rs 54 crore in Q1 FY25. Alongside substantial profit growth, profit margins expanded to 3.8% from 2.4%, reflecting a strong financial performance despite modest revenue growth.

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Financial Highlights: Profitability and Margin Improvements

Delhivery’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose significantly to Rs 149 crore, representing a 6.5% margin. This is up from Rs 119 crore in the prior quarter and Rs 97 crore a year ago. Revenue grew 6.2% year-on-year to Rs 2,424 crore, while service revenue—excluding other operating income—increased 5.6% to Rs 2,294 crore.

The company’s shareholder letter outlined that its infrastructure capital expenditure cycle peaked between FY22 and FY25, moving forward to a normalized capex of around 4% of revenue by FY28. This suggests a shift from aggressive expansion to efficient asset deployment.

Corporate overhead costs improved considerably, decreasing to 9.1% of revenue in the quarter from 11.4% in FY23. Management aims to reduce these further to 6–7% over the medium term. Additionally, working capital days improved to approximately 20 days, with expectations for further optimization in the next three years.

Growth Fueled by Core Logistics Segments

Express Parcel Segment

Delhivery’s express parcel shipments reached 208 million packages, growing 14% year-over-year and 17% sequentially. The segment’s growth benefited from price rationalization, an improved shipment mix, and controlled costs. Despite cautious external macroeconomic conditions, the express business remains a key growth engine.

Partial Truckload (PTL) Freight Segment

The PTL segment handled 458,000 metric tons, up 15% from the previous year, with sequential margin improvements of 1.9 percentage points. Delhivery reaffirmed its goal to expand PTL tonnage by 20% annually, aiming for steady-state EBITDA margins between 16% and 18%.

Supply Chain Services (SCS)

The supply chain services vertical matured further, achieving a 7.2% EBITDA margin in Q1 FY26. Delhivery’s medium-term plan targets scaling SCS revenue to Rs 1,800–2,000 crore annually within three years, with an EBITDA margin goal of 12% and return on capital employed exceeding 20%.

Diversifying Through Value-Added Services

Alongside its core operations, Delhivery has broadened its service portfolio with new offerings for consumers, SMEs, and freight operators.

• Delhivery Direct: A same-city, on-demand delivery service launched in Ahmedabad, Delhi NCR, and Bengaluru. Accessible through the Delhivery app, it targets local intra-city shipments by individuals and SMEs, an under-served market segment for national providers.
• Delhivery Protect: Integrated transit insurance in the company’s self-serve shipping platform Delhivery One, tailored for SMEs seeking enhanced shipment risk management and fulfillment reliability.
• Rapid Commerce Expansion: The dark store network increased from 20 to planned 35-40 locations by Q4 FY26, aiming for Rs 80-100 crore annualized revenue. This supports quick commerce with inventory-led delivery, attracting B2B and fast-turnaround brands.
• Cross-Border Economy Parcel: A new product set to launch in Q3 FY26, created in partnership with FedEx and Aramex, focusing on small-package export-import flows for Indian SMEs.
• Full Truckload (FTL) & Digital Freight: The Orion digital freight platform currently handles about Rs 110 crore in monthly freight volume. Upcoming offerings include fuel financing, asset loans, and working capital products, emulating successful U.S. logistics platform models.

Strategic Acquisition and Integration of Ecom Express

One of Delhivery’s major moves in 2025 was acquiring rival Ecom Express for Rs 1,407 crore. The deal closed on July 18, 2025, with financial results to be consolidated starting from Q2 FY26. Integration costs are capped at Rs 300 crore and expected to impact Q2 and Q3 FY26 margins.

This acquisition is expected to strengthen Delhivery’s last-mile and express delivery infrastructure and is the culmination of a multi-year consolidation effort in India’s fragmented logistics sector. With heavy past investments in warehousing and automation, Delhivery is now entering a phase focused on monetization, expanded services, and enhanced return on invested capital.

Outlook: Focus on Disciplined, Margin-Led Growth

Delhivery’s management expressed cautious optimism amid global macroeconomic uncertainties and rising costs. The company foresees strong medium-term prospects driven by its diversified core business lines — express parcel, PTL freight, and supply chain services — coupled with new value-added offerings.

While no explicit full-year revenue guidance was provided, priorities include improving unit economics, enhancing platform engagement, and increasing capital efficiency. For investors, these results highlight Delhivery’s transition from aggressive expansion to a more balanced, margin-focused growth strategy.

With its vast asset base, technology infrastructure, and broadened product suite, Delhivery is well-positioned to capitalize on India’s accelerating digitization of commerce and evolving logistics needs.

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