Delhivery’s Revenue Grew By 63 % Year On Year To Rs 7,241Crore In FY22
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The company’s FY22 revenue increased by 63 percent year on year to Rs 7,241 crore. The company reported a net loss of Rs 120 crore, but the company remains well capitalized, with cash and investments totaling Rs. 3,846 crore. Besides its FY22 net loss, the company invested in capacity expansion and efficiency, as well as scale and effectivity.
Delhivery Maintains Its Investments And Finances
Despite this uptick in revenues, Delhivery continues to be extremely well-capitalized. As of March 31, FY22, it had cash and investments of Rs 2,512 crore. The company raised Rs 3,846 crore through its internet IPO in May 2022. Its FY22 investments were focused on capacity expansion, working capital requirements, scale, and efficiency.
The company has recently listed its logistics technology arm in Singapore. The stock has seen strong growth since it went public. The company’s FY22 revenue grew 63 percent year on year to Rs 7,241 crore, and its underlying reported income climbed 89 percent to Rs 6,882 crore. Overall, the stock is up more than 50 percent and the IPO raised Rs 5,235 crore, more than three times its FY21 revenue.
The company is heavily dependent on e-commerce companies in India. Most of them have their delivery networks, and they only use Delhivery when they’re unable to handle the delivery themselves. However, this could change as e-commerce companies expand their captive delivery capability. Currently, 59% of Delhivery’s revenue comes from e-commerce websites, while 41 percent comes from third-party delivery providers.
As a result, the company posted a net loss of Rs 120 crore during the fourth quarter of FY22. However, sequential losses decreased by 5.5%. This is due to an increase in volume in the express parcel sector. Even though the company’s operating results were weaker than its peers, it is still profitable. Its share price increased by more than four-fold.
For its part, Delhivery is also a savvy technology company. It has created 80 applications that help it manage operations efficiently. Its investments in technology have paid off, especially in terms of scale. While traditional logistics companies are heavily dependent on the hub and spoke model. Delhivery has leveraged technology to help them improve efficiencies in the delivery of packages. The company also relies on automated sorting facilities and high-speed internet.
Its Net Loss Came In At Rs 120 Crore In FY22
The company’s net loss increased by one percent in the March quarter of FY22, from Rs 118 crore to Rs 120 crore. But overall income increased by 83 percent year-on-year to Rs 7,038 crore. Despite the narrower net loss, the company’s profits widened, increasing to Rs 6,882 crore for the fiscal year. Still, the company’s net loss per share widened to Rs 1,011 crore.
Despite being a loss-making entity, Delhivery continues to grow at a rapid pace. Revenue increased by seventy-five percent in the last year. However, the company continues to suffer from losses. The company’s net loss per share widened to Rs 120 crore in FY22. But it has immense growth potential in a fragmented industry. To continue its growth trajectory, it needs to better control costs and increase its unit economics.
Despite these results, the company is facing a tough challenge in the market. High inflation and rising interest rates have worried investors, and no peer group has the same business model as Delhivery. Even though it’s a loss-making company, it’s likely to turn around over the next few years. But there’s no rush to invest in the company. It may take years to turn a profit, so it’s best to wait and see.
Despite its poor performance, the company’s revenue rose 112% to Rs 26,968 crore in FY22, up from Rs 15,549 crore in FY21. Profits before taxes increased 113% to Rs 13,590 crore in FY22 compared with Rs 6,386 crore in FY21. It’s a good sign. The company’s revenue is close to Reliance Industries Limited’s quarter-over-quarter revenue.
The company’s growth has helped it become one of the biggest logistics companies in India. Its reach across seventeen thousand postcodes, the infrastructure of 14.2 million square feet, and 3,836 delivery points make it one of the largest in the country. Its revenue is mainly driven by Express Parcel and Part Truck Load services. With over 60% of its total revenue coming from these segments. The company also has tie-ups with Aramex and FedEx.
Its Investments Are Projected To Extend Scale And Effectivity
FedEx Express, a subsidiary of the US delivery services company, has announced a $100 million investment in Gurgaon-based startup Delhivery. FedEx is a major investor in India and is seeking to expand its presence in the country. Delhivery is valued at approximately $3 billion and is expected to go public in the coming quarters. In February, the startup secured $277 million in funding.
The company’s broad portfolio includes storage management, fulfillment, Omni-channel, and data services. With these services, it aims to meet the requirements of its customers in the overall supply chain reliability and effectiveness. The company’s integrated approach enables network synergies and reduces the cyclicality of operations. The company’s recent acquisition of Spoton expands its customer base.
While building out its network infrastructure, Delhivery focuses on increasing efficiency in cost and reach across the country. It has over 10,000 customers and plans to increase its reach to cover more areas. By leveraging its global network and scale, the company aims to establish itself as India’s largest fulfillment platform. The company aims to be India’s largest fulfillment platform and to provide high-quality items to its customers.