BizReview Ep 2: The Delhivery Story

28 states, 8 Union Territories, over 6 lakh kilometres of roadways and a population north of 1.4 billion - no wonder logistics is one of the largest industries in the country, alas an unorganised one to a great extent. The coming of the Jio revolution, development of last mile infrastructure and an ever-increasing network of roadways have given rise to the logistics industry in our country, and the Covid-19 pandemic added fuel to this fire. In this ocean of trucks, the red and black livery emerged as one of the strongest players - this is the story of one of India’s youngest and most exciting logistics companies, Delhivery. 

Much like most iconic startups, Delhivery started off as something very different from what it eventually became, with its origins being credited to Delhi (hence the name Delhi-very.) When Sahil Barua and Suraj Suhasan, two Bain and Company consultants ordered food online late at night, they struck a conversation with the Delivery boy…and as things panned out, eventually reached the restaurant. Upon their arrival, they learnt that the eatery was approaching permanent closure. Impulsively, they decided to hire all employees of the food joint and that gave birth to Delhivery. 

The original idea was, however, to provide food delivery solutions to restaurants within an  hour - and so they did, in fact within half their target time. Soon, they were joined by Mohit Tandon, Bhavesh Manglani and Kapil Bharati. The boys found success in the food delivery segment, but were aware of the approaching saturation and stagnation in their business, and it is then that one of their investors helped them launch their Ecommerce segment. Now they weren't just delivering food, but also parcels. 

Upon entering the E-commerce market, they realised that there was a clear gap which their competitors weren’t able to fulfil. With an understanding of the immense potential of E-commerce, they pivoted completely to being a B2B logistics company, wherein the businesses pay for smooth services being provided to their customers. Delhivery now shifted from being hyperlocal, to being last mile. 

The biggest turning point in their journey came in March 2019 when a consortium of investors led by SoftBank Vision Fund wrote them a cheque of $413 million at a valuation of $1.5 billion, officially marking their entry into the elite Indian Unicorn Club. Since then, the company has refused to stop - rolling out constant innovations to service their customers better. The company now provides several services including but not limited to Express Parcel services, Warehousing, Part and Full Truckload Freight (PTF/FTF), Cross Border Services and Data Intelligence. 

With solutions for D2C Brands, Personal Courier and B2B Enterprises, Delhivery is now India’s largest fully integrated logistics provider - having completed over 2 billion deliveries, servicing over 18,600 pincodes with 24 state-of-the-art automated sorting centres, 94 gateways, 2880 direct delivery centres and a team of over 57,000 people. 

The startup, having managed to largely address the major problems prevailing in the logistics industry - Lack of Trust, Manpower Requirements in sorting, Warehousing, Operational Efficiency and Competition - went for an IPO worth INR 5235 crores in May 2022 and has been the flagbearer of startups making it big at the NSE along with Zomato, Nykaa and more recently Honasa. While the stock itself has underperformed, being down to Rs 397 from its original listing price of 542, the business seems to be doing just fine fundamentally. 

Being EBITDA Positive, Delhivery posted an Ebitda of 46 crores in Q4 2024, up from 13 crores in the same quarter last year. Losses narrowed to Rs 68.5 crores and revenue from operations increased to Rs 2076 crores. Having posted a surprise profit of 11.7 crores in Q3 last year, it is evident that sustainable profitability is imminent and the future looks good for the Gurugram based giant. While recent events like the resignation of Chief Business Officer (CBO) and underwhelming Q4 results due to flat express parcel volumes and unexpected externalities, Delhivery looks to march forward to a positive result in FY25, and stockbrokers expect the share prices to go up by around 42% from the recent lows. Let’s see what the future holds. 

References: 

• IIMCal

• Finowings

• Yubiquitous 

• Delhivery

• 5Paisa

• Business Today