Delhivery bullish on part truckload business growth and margins
Sahil Barua, CEO of Delhivery, underscored the significance of robust margins in both the express and part truckload segments, aiming for margins to exceed the 15-16% range when operating at full efficiencies.
Delhivery, a prominent player in India's integrated 3rd Party logistics service provider, is gearing up for substantial growth in its part truckload (PTL) business, emphasising the immense opportunities in the country.
Sahil Barua, Co-Founder & CEO of Delhivery, articulated the company's ambitious vision, stating, "While e-commerce and express will remain an important and very, very important part of our business, part truck and full truck and warehousing and supply chain are really where the broader opportunity in a country like India is."
Barua underscored the significance of robust margins in both the express and part truckload segments, aiming for margins to exceed the 15-16% range when operating at full efficiencies.
"As we get larger, our expectation is that we will make EBITDA margins, which are close to about let us call it 15-16%. So that's sort of normative for PTL business. Our view on both of our businesses eventually is that given our efficiencies, we will make more than that going forward," Barua affirmed.
Delving specifically into the part truckload (PTL) business, Barua anticipates substantial growth, projecting revenues in the range of $600-700 million within the next 3-4 years.
He assured stakeholders that Delhivery's margins would witness notable improvement within the next two years, reinforcing the company's commitment to a thriving PTL sector.
Expressing confidence in Delhivery's growth trajectory, Barua predicted that the company's revenues would multiply several times over the next four years.
Delhivery's commitment to growth is evident in its substantial capital expenditures (capex) to enhance its network and technological capabilities. Over the last five years, the company has invested ₹8,000 crore, with nearly 80% of this investment occurring in the last two years alone.
Barua disclosed that Delhivery anticipates a significant reduction in capex intensity within the next 6-8 months, signaling a strategic shift in the company's approach.
The market cap of Delhivery is ₹29,352 crore and it competes with industry rivals such as Blue Dart, Shadowfax, Xpressbees, and Shiprocket.
First Published: Dec 6, 2023 3:49 PM IST
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